Characteristics of Industrial Relations in INDIA

CHARACTERISTICS OF INDUSTRIAL RELATON SYSTEM IN INDIA

GROUP MEMBERSNAME ROLL NO

SAGNIK MUKHERJEE 79 PRATIK LAHIRI 63

RUPAM MAZUMDER 75

RIMJHIM BARUAH 70

SUBHODEEP GHOSH 110

REHANA AKTER 124B

SUROJIT DEBNATH 118

RANAK DEY 124

IntroductionWhat is IR ?• refers to all types of relationships between employer and employees, trade union and management, works and union and between workers and workers.• the complex interrelations among managers, workers and agencies of the governments• the process of management dealing with one or more unions with a view to negotiate and subsequently administer collective bargaining agreement or labour contract

Characteristics of IR in India

• Employer/Management in Retrospect and Historically used to consider Trade Unions as a necessary evil of the Industrial System• The trade union perceive their main task is to challenge and oppose decisios of employer/mangement• Trade unions are poorly organised in the country• The parties are largely in disagreement over the cope of collective bargaining and various issues to their negotiation process• Bargaining between employers and unions is very much centralized• The employers are highly organized• The Indian Industrial Relations is changing over time

First Phase ( 1947-66; 1st & 2nd five-year plans):• Import-Substitution Industrialization• National Capitalism• Formation of large employment-intensive public enterprises• Largely centralized bargaining with static real wages.• Relative industrial peace• Growth of public sector unionism.• Government controlled & regulated IR.

Second Phase ( 1967-80; 4th & 5th five-year plans):• Considerable slowdown in employment growth & declining real wages.• Crisis in IR system : massive strikes & industrial conflict, multiple unionism & decline in

strength.• Government loosing control over the IR system.

Third Phase ( 1981-91; 6th & 7th five-year plans):• Variation in wage growth: skilled versus unskilled, labour productivity increases, period of

“jobless” growth.• Rise of ‘independant enterprise unionism, several city/regional IR systems operating • Government slowly withdrawing from IR system

Evolution of IR in India

Central Labour Acts

Laws related to Industrial Relations

The Trade Unions Act, 1926The Trade Unions (Amendments) Act, 2001The Industrial Employment Act, 1946The Industrial Disputes Act, 1947

Laws related to Wages

The Payment of Wages Act, 1936The Payment of Wages (Amendment) Act, 2005The Working Journalist Act, 1958 The Minimum Wages Act, 1958 The Payment of Bonus Act, 1965

Laws related to Working Hours, Conditions of Services and Employment

The Factories Act, 1948The Plantation Labour Act, 1951The Mines Act, 1952The Contract LabourAct, 1970The Sales Promotion Employees Act, 1976

Laws related to Equality and Empowerment of Women

The Maternity Benefit Act, 1961The Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the Society

The Bonded Labour System (Abolition) Act, 1976The Child Labour (Prohibition & Regulation) Act, 1986

Laws related to Social Security

The Employees’ State Insurance Act, 1948The Unorganised Worker’s Social Security Act, 2008

Laws related to Employment and Training

The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 The Apprentices Act, 1961

Trade Unions Act, 1926:• Till 2001, any 7 workers can form a union; amended in 2001; 10% or 100 workers in a unit,

whichever is less, minimum still 7• Distinction between ‘registration’ (with the government) & ‘recognition’(by the employer as

bargaining agent); neither mandatory under this Act, (but some states have laws).• Bargaining agent: ‘secret ballot’ versus ‘check off’ (government verifies membership)

Industrial Disputes Act, 1947:

Objective: To settle industrial disputes & secure industrial peace

Problems:

1. No procedures to determine the ‘representative’ union wihin a single bargaining unit

2. Employers not legally obliged to bargain with unions

3. Thus, no incentives for either party to engage in collective bargaining

Most contentious issue:

1. Firm employing more than 100 (reduced form 300) will need state government’s ‘prior permission’ before any prposed layoffs

2. Since nearly impossible to downsize during downturns, firms reluctant to hire permanent employees during upturns

3. These laws partly responsible for pushing newly created jobs into low productivity firms

4. Recent OCED computation (2007): India’s laws more stringent than Brazil, China & all but two OCED countries.

IR Acts and Laws

Trade Union

What is a Trade Union?• According to Lester, a trade union is “an

association of employees designed primarily to maintain or improve the condition of employment of its members”.

• A trade union performs two types of functions- militant(strikes,lockouts,gheraos) and ministrant (to provide the employees with benefits in times of need).

Evolution of Trade Union in India

1890-

1918

•Trade unions were largely sectarian in character, they lacked definite aim and had no striking power.

1919-

1923

•During this period many ad hoc unions disappeared and several large and medium sized unions came into existence.

•India’s first central organisation of labour, the AITUC was set up in 1920

1924-

1935

•This period saw the rise of Left-wing Trade unions as the political situation in India was favourable for the reception of Communist ideology.

•Number of Acts like Mines Act,Trade Unions Act,Workmen’s Compensation Act were passed

1936-

1939

•There was phenomenal increase in the number of trade unions and their members due to the passing of the Government of India Act which gave increased representation of labour in the Legislative Assemblies.

1940-

1946

• Second World War started in 1939 and it led to a rift in AITUC leadership wherein many leaders in AITUC wanted to form a seperate Union thus giving rise to INTUC in May 1947

After

1947

•There was large-scale unionisation of white-collar workers whereby white collar workers joined the already existing unions of blue-collar workers.

•National Commission on Labour was set up in 1966.

Case Study : Heavy Engineering Corporation• This case represented a typical problem on the crucial issue of recognition and the inadequacy

of legal provisions on recognition

Summary

• A new tripartite wage agreement was signed between the management of HEC, the Bihar Labour Commission and the Hatia Project Workers’ Union

• The other agreement rejected the agreement and declared a strike till the agreement was abrogated and few others terms and conditions were granted

• Then strike, lockout and confining followed claiming a complete disruption of normal functioning

• Then the CE justified the signing of the agreement with the HPWU and the production resumed after a long settlement

Case Study : Bharat Heavy Electricals Ltd.• This case upsets the traditional view of industrial relations as one between management and labour and how

the lack of recognition affected the organisation

Summary

• Initially there was a single union, BHEL Employees’ Association affiliated to the INTUC\• A union representative was elected and all the elected persons formed the union executive• A split occured in the union and by 1986 six unions emerged in the plant and it was decided that

the voting became based on the maximum numer of votes for a union• A year later INTUC split causing major problems and the recognised union was reduced to less

then the majority, but still INTUC refused to concede• The AITUC was joined by other non-recognised unions in feelings of frustration at the

management’s refual to listen to their grievances, who appeared to discuss issues with the INTUC union• The execcutive’s association organise a meeting of all unions but the INTUC unions refused

to attend and claimed that the executives couldnot enforce discipline because of their corruption• Althogh the association got some recognition form the top management, the feelings of frustration

and insecurity continued to haunt the managers

What is Collective Bargaining• a method by which problem of wages and conditions of employment are resolved peacefully and

voluntarily between labour and management• a process of bargaining between the employers and their workers by which they settle their disputes

among themselves relating to employment or non-employment or terms of employment or conditions of labour of the workmen

Subject-matter of Collective Bargaining :

Collective Bargaining has two pronged concerns• Chalking out a broad contract of employment relationship between employers and workers• The administration of the contract

Pre-requisites for Collective Bargaining :

Effective negotiations and enforacement requires a systematic preparation of the base or ground for bargaining which involves the following steps

• Recognition of the Bargaining Agent• Deciding the Level of Bargaining• Determining the Scope and Coverage of Bargaining• Spirit of Give and Take• Good Faith and Mutual Agreement

Collective Bargaining

History of Collective Bargaining in India

1920-

1950

•Bargaining was in the stage of infancy

•It was not a very common method of regulating labour-management relations in India

1951-

1969

•In this period actual emergence of bargaining was witnessed

•It was established as a method of settlement of industrial disputes and determination of terms and conditions of employment

1970 onwa

rds

•Collective bargaining took a more general form

•It widened its scope from plant or enterprise level to the industry or the national level

•During this period some new trends in Collective Bargaining also developed

Collective Bargaining with all Unions of AI8 recognized unions , Major problem with pilot

guild but other unions entangled in itGovt. intervention, allocate negotiator (N.I.T)Pilot guild negotiation success but other unions

revolted against it High court intervention and negotiation

completed after C.B. with all other unions

What are Industrial Disputes ? Any disputes or differences between employers and employees, or between employers and workmen,

or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person

It is disagreement and difference between two disputants, labour and management, on any matter concerning them individually or collectively

Weapons used by labour and management during times of industrial disputes

Industrial Disputes

Industrial Disputes

Weapons of Labour Weapons of Management

Employers’s Association Termination of ServiceLock Out

Strikes Boycott Picketing Gherao

Primary SecondaryEconomics

General

Stay-in

Slow down

Percentage Distribution of Industrial Disputes by Causes

Salar

y wag

es an

d allowan

ces

Bonus

Retren

chmen

t

Leav

e and hour o

f work

Indisciplin

e and divi

dend

Other

Cause

s0

5

10

15

20

25

30

35

19631973198319911992

Case Study : Reliance Industries• This case study depicts that how a single and simple decision can create an foreseen reaction in the company

Summary

• The company’s leading organiser was transferred from the regional office to company’s godown• As a result the workers get very agitated and were pressurized to resign• The union protested and the dispute thus raised was referred to conciliation• After several meetings and reference to the indsutrial tribunals, the problems was solved with the intervention of the Labour Secretary and Ministry of State for Labour

Employee Grievances

• A grievance means any sort of discontentment or dissatisfaction arising in an employee related to the enterprise where he is working. It happens when an employee feels something that has happened or is going to happen is unfair,unjust or inequitable.

Case Study : Indian Oil Corporation• This case revealed that politicalisation was a result more of an abdiction of responsibility by the

management in the matter of industrial relations

Summary

• The first recognised union demanded and signed an agreement with the management for payment of bonus based on profits and was not affiliated to any central organisations

• The dismissed employees formed another union affiliating to CITU, demanded reognition form the management, which was refused

• Elections were conducted, indicating the majority for the first union, but the second union claimed that the results were manipulated

• Following this, several troubles and agitations broke out again and the first union changes its affiliation form AITUC to INTUC

• The managemnt agreed to secret ballot elections once again but the corruption and collusion with agencies, serious violations of the promotion policy were in the list of grievances.

Worker’s Participation in Management

• Workers Participation in Management is a system of communication and consultation, either formal or informal, by which employees of an organisation are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to management decisions.

• It is distribution of social power in industry so that it tends to be shared among all who are engaged in the work rather than concentrated in the hands of minority.

Case Study : Fertilizers and Chemicals Travancore Ltd.• This case reveals that how several enterprises inroduced suggestions’ schemes or minor

consultation with the unions and held these up as examples of participative cultute

Summary

• The managers were easily accessible to employees and discussions were held with them without any formal agreements

• The management decided to open up organisational system, conducting sessions with senior managers, middle managers and employees – this increased the man power

• Several joint management action groups were constituted, persisted in bringing up new ideas related to grievances and conditions of service

• In complex issues, study teams comprising union office-bearers together with the management were established to collect data, analyse report, before decisions were taken

Case Study : Jaipur Metals and Electricals Ltd. • This case depicts that how the agendas of workers and their committees and their

proceedings became beneficial for the enterprise in aparticular context

Summary

•

• In 1923 the company flourished in the manufacture of house service metres inspite of the restriction on the raw materials

• In the mid 1940s the company made losses, a special scheme to rationalise employment was adopted to make partial recovery

• The government of Rajasthan took over its management and financial institutions, which had acquired majority share-holding in the undertaking through debt onversions and a marginal profit was earned

• Then new chief executive began negotiations with the workers which culminated the agreement – a majority of the equity was passed to the workers through a credit operative

• A major financial restructuring was achieved with highest-ever turnover of Rs 11 crore• The management created several other commitees for planning, production, sales and the

suggestions were made by the committee and was approved by the managing director

Labour Welfare What is Labour Welfare• Labour welfare activity in India was largely influenced by humanatarian principles and legislation• During early period of industrial development, efforts towards worker’s welfare was made largely by

social workers, and other religious leaders, mostly on humanatarian grounds.

Before Independance

The movement to improve the working conditions of Indian Labour started with the passing of the first Indian Factories Act in 1881

Provisions relating to the better ventilation, cleanliness and for preventing over crowding in factories were also made

The establishment of the International Labour Organization in 1919 was another important landmark in the history of labour welfare movement in our country

After Independance

The labour welfare movement acquired new dimensions and it was relaized that labour welfare had a

positive role to play in increasing productivity and reducing industrial tensions Various labour welfare activities were incorporated in diferent five year plans

Case Study : Durgapur Steel Plant

• This case discusses how the representatives of the union discusses with the management the varuous problems facing the industry

Summary

• The participation by the worker’s representatives before the reconstitution had not been of much significance

• The worker’s representative from Durgapur Steel Plant has been complaining that he has not been receiving notices and agenda of the meetings in time

• In 1972 Joint Consultative Machinery was established and it functioned for one year satisfactorily

• The Joint Consultative Machinery suggested that in view of the difficulty of the State Level Committee operating effectively, the Plant Level Commitee itself should be converted into tri-partite body with the Government participating in it in addition to the management and

unions

Case Study : Tata Iron and Steel Company

• This case discusses how the committees operate within defined areas and how they have helped in settlement of disputes

Summary

• The first committee, Joint Works Commitee ceased to function in 1919 due to the fact that the company felt that an increasing measure of association of employees with the management is desirable

• In 1957 the two committees were decentralized into five zonal committees each covering production problems

Future of IR in India • In our presentation we have discussed Industrial Relation Strategy vide which we could

know different strategies for industrial relations and could also know how the Industrial Disputes aree settld under the provisions of Acts as applicable to the concerned dispute.

• In our discussions “Future of Industrial Relation in India”, we shall discuss the current scenario of industrial relation in India and how workers influence such relations

• From the various reports certain issues are emerging which are posing challenges to the three factors viz., the employer, the employee and the government

- Strengthening collective bargaining by trying to determine a sole bargaining power for negotiation

- Gaps that are occuring as a result of the variations act as enacted by State and Central Government

- Workers participation in management and failure of these schemes to be looked into.

• Keeping in mind the above issue and the three factors we have to evaluate and decide future strategy, which is to be adopted in managing personnel and industrial relations. The strategy will depend on the values, objectives, structures available and the environment in which they have to work

Acknowledgements

We express our gratitude and heartful thanks to Professor (Mrs.) Tania Shaw for her co-operation, immense support and guidance in preparing this presentation.

We are also thankful to our Librarian for providing us valuable suggestions about books for preparing this presentation.

We are also grateful to all our team members in the project for their cooperation throughout the project .

And last but not the least we are very thankful to the internet.