Industrial Relations - Unit I

8/3/2019 Industrial Relations - Unit I

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Industrial RelationsIndustrial Relations IntroductionIntroductionIndustrial relations constitute one of theIndustrial relations constitute one of the

most delicate and complex problems ofmost delicate and complex problems ofthe modern industrial society. Thisthe modern industrial society. Thisphenomenon of a new complex industrialphenomenon of a new complex industrialsetset--up is directly attributable to theup is directly attributable to the

emergence of Industrial Revolution. Theemergence of Industrial Revolution. Theprepre--industrial revolution period wasindustrial revolution period wascharacterized by a simple process ofcharacterized by a simple process of

manufacture, small scale investment, localmanufacture, small scale investment, localmarkets and small number of personsmarkets and small number of personsemployed. All this led to close proximityemployed. All this led to close proximitybetween the manager and the managed.between the manager and the managed.


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Due to personal and direct relationshipDue to personal and direct relationship

between the employer and the employeebetween the employer and the employeeit was easier to secure cooperation of theit was easier to secure cooperation of thelatter. Any grievance or misunderstandinglatter. Any grievance or misunderstanding

on the part of either party could beon the part of either party could bepromptly removed. Also, there was nopromptly removed. Also, there was nointerference by the State in the economicinterference by the State in the economicactivities of the people. Under such a setactivities of the people. Under such a set--up industrial relations were simple, directup industrial relations were simple, directand personal.and personal.


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This situation underwent a marked changeThis situation underwent a marked changewith the advent of industrial revolutionwith the advent of industrial revolution size of the business increased needingsize of the business increased needinginvestment of enormous financial andinvestment of enormous financial andhuman resources, there emerged a newhuman resources, there emerged a new

class of professional managers causingclass of professional managers causingdivorce between ownership anddivorce between ownership andmanagement, and relations between themanagement, and relations between theemployer and the employer becameemployer and the employer becameentrangedentranged and gradually antagonistic. Thisand gradually antagonistic. Thisnew setnew set--up rendered the old philosophy ofup rendered the old philosophy ofindustrial relation irrelevant and gave riseindustrial relation irrelevant and gave rise

to complex, indirect, and impersonalto complex, indirect, and impersonal


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industrial relations.

Industry today is neither viewed as a ventureof employers alone nor profit if considered asits sole objective. It is considered to be aventure based on purposeful cooperationbetween management and labor in theprocess of production and maximum socialgood is regarded as its ultimate end and both

management and employees contribute in


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in their own way towards its success.in their own way towards its success.

Similarly, labor today is no more anSimilarly, labor today is no more anunorganized mass of ignorant works readyunorganized mass of ignorant works readyto obey without resentment or protest theto obey without resentment or protest thearbitrary and discretionary dictates ofarbitrary and discretionary dictates ofmanagement. The management has tomanagement. The management has todeal with employees today into asdeal with employees today into as

individuals but also as members ofindividuals but also as members oforganized social groups who are veryorganized social groups who are verymuch conscious about their rights andmuch conscious about their rights and

have substantial bargaining strength.have substantial bargaining strength.


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Each country has sought to find theEach country has sought to find thesolution, depending upon its economic,solution, depending upon its economic,

social and political environment. However,social and political environment. However,industrial conflict still arises and thereforeindustrial conflict still arises and thereforeestablishment and maintenance ofestablishment and maintenance of

satisfactory industrial relations forms ansatisfactory industrial relations forms animportant plank in the personnel policiesimportant plank in the personnel policiesof modern organization.of modern organization.

Meaning

Meaning

In the broad sense, industrial relationsIn the broad sense, industrial relationscover all such relationships that a businesscover all such relationships that a businessenterprise maintains with various sectionsenterprise maintains with various sections


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of the society such as workers, state,of the society such as workers, state,customers and public who come into itscustomers and public who come into its

contact.contact.

In the narrow sense, it refers to all typesIn the narrow sense, it refers to all typesof relationships between employer andof relationships between employer and

employees, trade union and management,employees, trade union and management,works and union and between workersworks and union and between workersand workers. It also includes all sorts ofand workers. It also includes all sorts ofrelationships at both formal and informalrelationships at both formal and informallevels in the organization.levels in the organization.


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The term industrial relations has beenThe term industrial relations has beenvariously defined. J.T. Dunlop definesvariously defined. J.T. Dunlop definesindustrial relations as the complexindustrial relations as the complexinterrelations among managers, workersinterrelations among managers, workersand agencies of the governments.and agencies of the governments.

According to Dale Yoder industrialAccording to Dale Yoder industrialrelations is the process of managementrelations is the process of managementdealing with one or more unions with adealing with one or more unions with a

view to negotiate and subsequentlyview to negotiate and subsequentlyadminister collective bargainingadminister collective bargainingagreement or labor contract.agreement or labor contract.


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Significance of Industrial RelationsSignificance of Industrial Relations

Maintenance of harmoniousMaintenance of harmoniousindustrialsindustrials relations is on vitalrelations is on vitalimportance for the survival and growth ofimportance for the survival and growth ofthe industrials enterprise. Good industrialthe industrials enterprise. Good industrial

relations result in increased efficiency andrelations result in increased efficiency andhence prosperity, reduced turnover andhence prosperity, reduced turnover andother tangible benefits to the organization.other tangible benefits to the organization.The significance of industrial relations canThe significance of industrial relations canbe summarized as below:be summarized as below:

It establishes industrial democracy:It establishes industrial democracy:Industrial relations means settlingIndustrial relations means settling

employees problems through collectiveemployees problems through collective


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bargaining, mutual cooperation andbargaining, mutual cooperation andmutual agreement amongst the partiesmutual agreement amongst the parties

i.e., management and employees unions.i.e., management and employees unions.This helps in establishing industrialThis helps in establishing industrialdemocracy in the organization whichdemocracy in the organization which

motivates them to contribute their best tomotivates them to contribute their best tothe growth and prosperity of thethe growth and prosperity of theorganization.organization.

It contributes to economic growthIt contributes to economic growthand development:and development: Good industrialGood industrialrelations lead to increased efficiency andrelations lead to increased efficiency andhence hi her roductivit and income.hence hi her roductivit and income.


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This will result in economic developmentThis will result in economic developmentof the economy.of the economy.

lead to increased efficiency and hencelead to increased efficiency and hencehigher productivity and income. This willhigher productivity and income. This willresult in economic development of theresult in economic development of the

economy.economy. It improves morale of he work force:It improves morale of he work force: GoodGood

industrial relations, builtindustrial relations, built--in mutualin mutual

cooperation and common agreedcooperation and common agreedapproach motivate one to contribute onesapproach motivate one to contribute onesbest, result in higher productivitybest, result in higher productivity


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Causes of Poor Industrial RelationsCauses of Poor Industrial Relations

Mental inertia on the part of managementMental inertia on the part of managementand labor;and labor;

An intolerant attitude of contempt ofAn intolerant attitude of contempt ofcontempt towards the workers on the partcontempt towards the workers on the partof management.of management.

Inadequate fixation of wage or wageInadequate fixation of wage or wage

structure;structure;

Unhealthy working conditions;Unhealthy working conditions;

Indiscipline;Indiscipline;


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Unfair labor practices, like victimizationUnfair labor practices, like victimizationand undue dismissal;and undue dismissal;

Retrenchment, dismissals and lockRetrenchment, dismissals and lock--outs onouts onthe part of management and strikes onthe part of management and strikes onthe part of the workers;the part of the workers;

InterInter--union rivalries; andunion rivalries; and

General economic and politicalGeneral economic and politicalenvironment, such as rising prices, strikesenvironment, such as rising prices, strikes

by others, and general indiscipline havingby others, and general indiscipline havingtheir effect on the employees attitudes.their effect on the employees attitudes.


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Objectives of Industrial RelationsObjectives of Industrial Relations

To bring better of communication betweenTo bring better of communication between

workers and management. understandingworkers and management. understandingand cooperation between employers andand cooperation between employers andworkers.workers.

To establish a proper channelTo establish a proper channel To ensure constructive contribution ofTo ensure constructive contribution of

trade unions.trade unions.

To avoid industrial conflicts and toTo avoid industrial conflicts and tomaintain harmonious relations.maintain harmonious relations.


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To safeguard the interest of workers andTo safeguard the interest of workers andthe management.the management.

To work in the direction of establishingTo work in the direction of establishingand maintaining industrial democracy.and maintaining industrial democracy.

To ensure workers participation inTo ensure workers participation in

decisiondecision--making.making. To increase the morale and discipline ofTo increase the morale and discipline of

workers.workers.

To ensure better working conditions, livingTo ensure better working conditions, livingconditions and reasonable wages.conditions and reasonable wages.

To develop employees to adaptTo develop employees to adapt


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themselves for technological, social andthemselves for technological, social andeconomic changes.economic changes.

To make positive contributions for theTo make positive contributions for theeconomic development of the country.economic development of the country.

ScopeScope

The scope of industrial relationsThe scope of industrial relationsincludes all aspects of relationshipsincludes all aspects of relationshipssuch as bringing labor managementsuch as bringing labor managementrelations, creating industrial peacerelations, creating industrial peaceand developing industrial democracy.and developing industrial democracy.


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The cordial and healthy labor managementThe cordial and healthy labor managementrelations could be brought inrelations could be brought in--

by safeguarding the interest of theby safeguarding the interest of theworkers;workers;

by fixing reasonable wages;by fixing reasonable wages;

by providing good working conditions;by providing good working conditions;

by providing other social securityby providing other social securitymeasures;measures;

by maintaining healthy trade unions;by maintaining healthy trade unions;

by collective bargaining.by collective bargaining.


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The industrial peace could be attainedThe industrial peace could be attained

by setting industrial disputes throughby setting industrial disputes throughmutual understanding and agreement;mutual understanding and agreement;

by evolving various legal measure andby evolving various legal measure andsetting up various machineries such assetting up various machineries such as

Works Committee, Boards of Conciliation,Works Committee, Boards of Conciliation,Labor Courts etc.Labor Courts etc.

The industrial democracy could beThe industrial democracy could be

achievedachieved by allowing workers to take part inby allowing workers to take part in

management; andmanagement; and

by recognition of human rights.by recognition of human rights.


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Principle of Good IndustrialPrinciple of Good Industrial

RelationsRelationsThe willingness and ability ofThe willingness and ability of

management and trade unions tomanagement and trade unions to

deal with the problems freely,deal with the problems freely,independently and with responsibility.independently and with responsibility.

Recognition of collective bargaining.Recognition of collective bargaining.

Desirability of associations of workersDesirability of associations of workersand managements with theand managements with theGovernment while formulating andGovernment while formulating and


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Implementing policies relating to generalImplementing policies relating to generaleconomic and social measures affectingeconomic and social measures affecting

industrial relations.industrial relations. FairFair redressalredressal of employee grievances byof employee grievances by

the managementthe management

Providing satisfactory working conditionsProviding satisfactory working conditionsand payment of fair wage.and payment of fair wage.

Introducing a suitable system ofIntroducing a suitable system of

employees education and training.employees education and training. Developing proper communication systemDeveloping proper communication system

between management and employees.between management and employees.


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To ensure better working conditions, livingTo ensure better working conditions, livingconditions and reasonable wages.conditions and reasonable wages.

To develop employees to adaptTo develop employees to adaptthemselves for technological, social andthemselves for technological, social andeconomic changes.economic changes.

To make positive contributions for theTo make positive contributions for theeconomic development of the country.economic development of the country.

Role of state in industrialRole of state in industrialrelationsrelations


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In recent years the State has played anIn recent years the State has played animportant role in regulating industrialimportant role in regulating industrial

relations but the extent of its involvementrelations but the extent of its involvementin the process is determined by the levelin the process is determined by the levelof social and economic development whileof social and economic development while

the mode of intervention gets patterned inthe mode of intervention gets patterned inconformity with the political systemconformity with the political systemobtaining in the country and the social andobtaining in the country and the social andcultural traditions of its people. Thecultural traditions of its people. The

degree of State intervention is alsodegree of State intervention is alsodetermined by the stage of economicdetermined by the stage of economicdevelop. For example, in a developingdevelop. For example, in a developing


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economy like India, workeconomy like India, work--stoppages tostoppages tosettle claims have more serioussettle claims have more serious

consequences than in a developedconsequences than in a developedeconomy and similarly, a free marketeconomy and similarly, a free marketeconomy may leave the parties free toeconomy may leave the parties free to

settle their relations through strikes andsettle their relations through strikes andlockouts but in other systems varyinglockouts but in other systems varyingdegrees of State participation is requireddegrees of State participation is requiredfor building up sound industrial relations.for building up sound industrial relations.

In India, the role played by the State is anIn India, the role played by the State is animportant feature in the field of industrialimportant feature in the field of industrialrelations and State intervention in thisrelations and State intervention in this

area has assumed a more direct form.area has assumed a more direct form.


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The State has enacted procedural as wellThe State has enacted procedural as wellas substantive laws to regulate industrialas substantive laws to regulate industrial

relations in the country.relations in the country.

Role of management in industrialRole of management in industrial

relationsrelations The management have a significant role toThe management have a significant role to

play in maintaining smooth industrialplay in maintaining smooth industrial

relations. For a positive improvement inrelations. For a positive improvement intheir relations with employees andtheir relations with employees andmaintaining sound human relations in themaintaining sound human relations in the


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organization, the management must treatorganization, the management must treatemployees with dignity and respect.employees with dignity and respect.

Employees should be given say in theEmployees should be given say in theaffairs of the organization generally andaffairs of the organization generally andwherever possible, in the decisionwherever possible, in the decision--makingmaking

process as well. A participative andprocess as well. A participative andpermissive altitude on the part ofpermissive altitude on the part ofmanagement tends to give an employee amanagement tends to give an employee afeeling that he is an important member offeeling that he is an important member ofthe organizationthe organization a feeling thata feeling thatencourages a spirit of cooperativeness andencourages a spirit of cooperativeness anddedication to work.dedication to work.


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Management must make genuine effortsManagement must make genuine effortsto provide congenial work environment.to provide congenial work environment.

They must make the employees feel thatThey must make the employees feel thatthey are genuinely interested in theirthey are genuinely interested in theirpersonal development. To this end,personal development. To this end,

adequate opportunities for appropriateadequate opportunities for appropriateprogrammesprogrammes of training and developmentof training and developmentshould be provided.should be provided.

Managements must delegate authority toManagements must delegate authority totheir employees commensurate withtheir employees commensurate withresponsibility.responsibility.


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They must evolve well conceived andThey must evolve well conceived andscientific wage and salary plan so that thescientific wage and salary plan so that the

employees may receive just compensationemployees may receive just compensationfor their efforts. They must devise,for their efforts. They must devise,develop and implement a proper incentivedevelop and implement a proper incentive

plan for personnel at all levels in theplan for personnel at all levels in theorganization.organization.

There must be a wellThere must be a well--plannedplanned

communication system in the organizationcommunication system in the organizationto pass on information and to get feedto pass on information and to get feedback from the employees.back from the employees.

Managements must pay personal attentionManagements must pay personal attention

to theto the


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problems of their employees irrespectiveproblems of their employees irrespectiveof the fact whether they arise out of jobof the fact whether they arise out of job

environment or they are of personalenvironment or they are of personalnature.nature.

They must evolve, establish and utilizeThey must evolve, establish and utilizeappropriate machineries for speedy reappropriate machineries for speedy re--dressaldressal of employees grievances.of employees grievances.

Managements must provide anManagements must provide anenlightened leadership to the people inenlightened leadership to the people in

the organization.the organization.An environment of mutual respect,An environment of mutual respect,confidence, goodwill and understandingconfidence, goodwill and understanding

on the part of both managementon the part of both management


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and employees in the exercise of theirand employees in the exercise of theirrights and performance of their dutiesrights and performance of their duties

should prevail for maintaining goodshould prevail for maintaining goodindustrial relations.industrial relations.

Industrial Relations - Unit I

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