INDUSTRIAL RELATIONS AND LABOUR WELFARE
Meaning of IR
Industrial relations encompasses ‘the processes of regulation and control over workplace relations, the organisation of tasks, and the relations between employers and their representatives, and employees and their representatives, and is the sum of economic, social and political interactions in workplaces where employees provide manual and mental labour in exchange for rewards allotted by employers, as well as the institutions established for the purpose of governing workplace relations’
Objectives of IR
- Understand the key strategic issues in industrial relations.
- Explain the unitary, pluralist and radical approaches to industrial relations.
- Appreciate the role of employers, trade unions and governments in industrial relations.
- Understand individual and collective bargaining, conciliation and arbitration
Theories of IR
•Dunlop’s System Theory (1958) The credit for applying the systems concept to industrial relations goes to Dunlop.
•“He analyses industrial relations systems as a sub-system of society. “An industrial relations system at any one point time in its development is regarded as comprised of certain actors, contexts, ideology which binds the industrial relations system together and a body of rules created to govern the actors at the workplace and work community”.
•Dunlop’s System model
•IR=f(a,t,m,P,I)
•A= actors-Labour, Employers Govt.
•T=Technological Context
•M=Market Context
•P=Power Context
•I=Ideological context that helps to bind together
•The IR system as a web of rules formed by the interaction of the government, business and labour, influenced by the existing and emerging economic, socio-political and technological factors.
•The Structural Contradictions Theory of Hyman, 1971
•Marxian analysis of industrial relations and trade unionism has also taken several forms broadly categorical into pessimistic and optimistic approaches.
•The pessimistic school talks of limitations of trade union consciousness and feels that unless the working class joins hands with intellectuals, it is not possible, to bring in a new social order.
•Optimist school, however, sees the role of working classes as not only maintenance and enhancement of wage level, but also to carry class struggle against capitalist class in thrust towards creating a classless society.
•The pluralist Theory of Flanders(1970)/ Oxford Model
•According to him, Conflict is inherent in an industrial system. Hence, collective bargaining is required a s formal system to settle conflicts. Collective bargaining central to the industrial relations system.
•It can be expressed in the form of an equation
R=f(b) or r =f (c )
Where r = the rules governing industrial relations
b = collective bargaining
c = conflict resolved through collective bargaining
•Human Relations theory
•The main proponent of this theory is Keith Davis. According to him, human relations are “the integration of people into a work-situation that motivates them to work together productively, cooperatively and with economic, psychological and social satisfactions.
•The goals of human relations are
•1. to get people to produce
•2. to co-operate through mutuality of interest and
•3. to gain satisfaction from their relationships. The human relations approach highlights certain policies and techniques to improve employee morale, efficiency and job satisfaction.
•4. Focussed on to remove labour-management relations.
•The Trusteeship theory of Mahatma Gandhi
•Gandhi had immense faith in the goodness of man and he believed that many of the evils of the modern world have been brought about by wrong systems and not by wrong individuals. He insisted on recognising each individual worker as a human being. He believed in non-violent communism, going so far as to say that “if communism comes without any violence, it would be welcome”. He laid down certain conditions for a successful strike.
•They were:
•a. the cause of the strike must be just and there should be no strike without a grievances;
•b. there should be no violence; and
•C. non-strikers or “blacklegs” should never be molested.
Difference between IR and HRM
S.No / Dimension / TIR / EER/HRM1. / Nature of relations / Pluralist / Unitarist
2 / Contract / Emphasis on terms of contract defined rules,contract / Beyond contract, innovative ways
3 / Conflict / Institutionalised / De-emphasised ispatholoigical
4 / Union legitimacy / Unions are acceptable / Not considered desirable Nurturing.
5. / Managerial task in relation to labour / Monitoring / Nurturing
6 / Key relation / Labour-management / Customer
7 / Pay / Standardised, based on job evaluation / Performance related
8 / Basis of labour-mgt relations / Collective bargaining contract / Individual contract
9 / Job design / Division of labour / Team work
10 / Conflict handling / Reach temporary truce, reactive / Managing climate and culture-proactive
11 / Key people / PM/IR / Line specialists
12 / Focus of attention / Personnel procedures / Various culture and structure-related personnel strategies.
Approaches to IR
Unitary approach
•Industrial relations is grounded in mutual cooperation, individual treatment, teamwork and the sharing
of common objectives.
•The underlying assumption is that it is to the benefit of all to focus on common interests and promote harmony.
•Conflict is regarded as destructive.
•Assumptions about workplace relations
•- management and employees share common interest
•- one source of legitimate authority (management)
•Assumptions about workplace conflict
•- inevitable, aberration, destructive, to be avoided
•- caused by poor management, dissidents, agitators or poor communication
•Assumptions about trade unions
•- a competing and illegitimate source of authority
•- an unwarranted intrusion in the workplace
•- create conflict where none would otherwise exist
•Assumptions about collective bargaining
•- creates and institutionalizes unnecessary divisions of interest
•- serves to generate workplace conflict rather than resolve it
•PLURALIST APPROACH
Regards conflict as inevitable because employers and employees have conflicting interests.
•Trade unions are seen as legitimate representatives of employee interests.
•Sees stability in industrial relations as the product of concessions and compromises between management
and unions.
•Assumptions about workplace relations
•- managers and employees have different objectives
•- multiple sources of legitimate authority
•Assumptions about workplace conflict
•- inevitable, caused by different opinions and values, benefit to an organization
•- avoid by accepting trade unions, include in decision-making
•Assumptions about the workplace role of trade unions
•- not the cause of conflict
•- areexpression of diverse workplace interests that always exist
•- a legitimate part of workplace relations
•Assumptions about the role of collective bargaining
•- deals with problems on a collective basis
•- most efficient means for institutionalising employment rules
•- fairer outcomes by balancing employee andmanagement power
•RADICALOR MARXIST APPROACH
•Marxists, like the pluralists, regard conflict between management and employees as inevitable.
•Seesindustrialconflictasanaspectof class conflict.
•The solution to worker alienation and exploitation is the overthrow of the capitalist system.
•Assumptions about workplace relations
•- reflectsa wider class conflictbetween capital and labour
•- reflects coercionof working class into dominant capitalist values
•Assumptions about workplace conflict
•- inevitable: capital seeks to reduce costs, workers seek fairer price for labour
•- will only cease byrevolutionary change in distribution of property and wealth
•Assumptions about trade unions
•- should raise revolutionary consciousness of workers
•- should not limit action to improving material lot of workers
• - union leaders who accommodate management betray the workers
•Assumptions about collective bargaining
•- merely offers temporary accommodations
•- leaves important managerial powers in tact
History of IR
•The relations between labour and management in the industry form the subject matter of industrial relations.
•The first labour legislation was in the form of the Factories Act.
•Industrial revolution in England acted as a landmark event in transforming the industrial situation all over
the world.
•This was followed by World war I, labour unrest and a mass awakening of a labour. This was followed by various legislations by the Government- Indian Industrial Commission, Indian Industrial Commission, Indian Factories Act, Trade Disputes Act etc.
•The Government also appointed the Royal commission on labour to enquire into and report on the existing conditions of workers in the country.
•The Second World War brought in unprecedented expansion of Indian industry with emphasis on maintenance of harmonious and peaceful relations between workers and management. Strikes and industrial disputes were brought under the compulsory arbitration of Government.
•In the post-independence phase the labour scenario underwent major change. The constitution of India provided for freedom of association to all citizens which gave rise to trade unions. ID Act was enacted in 1947 which regulated worker-employer relations. Other acts like ESI Act and Minimum Wages Act were enacted for workers welfare.
•The first five year plan emphasises setting up a tripartite body for sorting out matters of conflict with a mutually agreed grievance procedure.
•The Second plan also dealt with code of discipline and in building a strong trade union movement.
•The third five year \plan envisaged setting up tribunals for resolution of industrial disputes.
•IR in the Fourth plan continued to be regulated by legislative measures. National conference of labour was set up.
•The fifth plan envisaged improvements in worker participation, communication systems and incentive systems in addition to setting up of shop councils.
•The sixth plan promoted professional management in the industrial harmony, employee welfare and a cooperative attitude.
•Essential Service Maintenance Act was also promoted.
•Events like liberalisation and globalisation are continuously influencing the IR scene even today leading to increased recognition and importance being given to the human resources.
Understanding of IR
IR do not emerge in vaccum, they are born out of employment relationship in an industrial setting. Without the existence of two parties, i.e., labour and management, this relationship cannot exist.
IR are characterized by both conflict and co-operation.
As the labour and management do not operate in isolation but are part of a larger system which includes environmental issues technology of the workplace, country’s socio-economic and political environment, nation’s labour policy, attitude of trade unions, workers and employers and impact of the new wave of global markets, global supply demand and economy.
It also involve the study of conditions conducive to the labour, management co-operation as well as the practices and procedures required to elicit the desired co-operation from both the parties.
IR also study the laws, rules, regulations, agreements, awards of court, customs and traditions, as well as policy framework laid down by the government for eliciting co-operation between labour and management and defining rights obligation of both the parties.
Importance of IR
Prior to the IR, the problem of IR was literally non-existent as the owners were themselves producers or the production was carried out by the family members themselves. As with emergence of factories, the cottage industries were thrown in back gear, which compelled a large number of workers to leave the farms and become wage earners in factories with meager wages under tiring working conditions. Gradually two groups, the haves, the status dominated and aspiring class and other haves not, both having different interests and ideologies developed their own unions to give a tough fight to other.
The government came on the scene for regulating the working conditions of employees’ production, work methods, supply of better skilled workers etc. changed the complexion of industrial relations considerably. Further changes in the techniques and methods of production, work methods, supply of better skilled workers etc. changed the complexion of IR considerably.
IR patterns, Organized sector and their impact on unorganized.
The pattern of IR in the organized sector of economy has a definite impact on labor management relations in unorganized sector. The trends and pattern established in the organized sector spills over or influences the practices of even the most unorganized industries.
Unions are important force in the important force in the Indian political system: The impact of Indian trade unions on the political system is much wider than on industry. In addition, the unions sponsored by the ruling party do influence the legislative process through the intense lobbying activities.
Varying patterns of IR
In India, the patterns of industrial relations are not only in sharp contrast both in unorganized and organized sector, but also within the latter, they exhibit a considerable variation. In the unorganized sector due to non-unionization of the workers, the grievances are usually redressed bythe threat of dismissal, thus the problem of IR.
Status difference in the workers of public and private sector: The workers in the public sector were considered to be government employees and accordingly, were givea fair deal. In contrast to it, the workers in the private sector had to suffer on many counts, Though situation started changing due to liberalization.
Scope and aspects of IR
The IR are therefore, part and parcel of industrial life, such they include
iLabor relations i.e., relations between union and management
iiEmployer-employee relations i.e., relations between management and employees
iiiGroup relations,i.e., relations between various groups of workmen; and
ivCommunity or public relations, i.e., relations between industry and society.
The main aspect of IR:
iPromotion and development of healthy labor-management relations
iiMaintenance of industrial peace and avoidance of industrial strife
iiiDevelopment of industrial democracy.
The existence of strong, well organized, democratic and responsible trade unions and associations of employers. These organizations enhance the job security of employees help in increased workers’ participation in management.
Collective bargaining recognizes equality of status between two conflicting groups and prepares the ground in an atmosphere of trust and goodwill.
Welfare work, whether statutory or non-statutory, provided by the state, trade unions and employers create, maintain and improve labor management relations and thereby contribute to industrial peace.
The industrial peace can be largely nurtured through the following means:
Machinery should be set up for the prevention and settlement of industrial disputes: It can be brought about by developing various legislative and administrative enactments like Trade Unions Acts, Industrial Disputes act, etc.
The Government should have the power to refer disputes to adjudication when the situation tends to get out of hand and industry is faced with economic collapse due to continued stoppage of production on account of long strikes/lockouts.
The Government enjoys the power to maintain the status quo: This power is exercised when the government, after referring the dispute to arbitration, finds that either party is continuing the strike or lockout.
The provision of the bipartite and tripartite forums for the settlement of disputes. These forums act on the basis of the Code of discipline in industry, the code of conduct, the code of efficiency and welfare, model standing orders.
Development of Industrial democracy:
Establishment of the shop councils and joint management councils at the floor and plant level, which endeavor to improve the working and living conditions of employee, to improve productivity, encourage suggestions from employees to assist in the administration of laws and agreements, serve as a channel between management and employees.
Recognition of Human Rights in Industry: This implies that lab our is not a commodity of commerce which can be purchased and disposed. The workers are required to be treated as human beings whose sense of self-respect is to be fostered.
Increase in lab our productivity: The factors which contribute to higher productivity are: improvement in the level of efforts and skills of workers; improvement in production, process, materials, equipment, layout, work methods etc.
The availability of proper work environment is necessary so that he worker can effectively carry out his assignment , as it is this environment which stimulates or depresses, improves or destroys the relations between labor and management.
Components of IR system
An industrial relations system is made up of certain institutions, which are popularly known as ‘three actors” of the system.
1Workers and their Organization: When the bulk of workforce is employed in the production of goods and services, the relations between t hem impersonal and dehumanized. Further, if they are forced to work in an alienated, monotonous, unhygienic work environment where t heir activities are closely regulated and controlled by the managerial personnel, their dissatisfaction with system forces them to revolt against it, so workers form their unions.
2.The Management: The employer/management is the key actor in the system of IR around which the whole process revolves. As they not only provide jobs to workers but also lay down the terms and conditions of their employment, administer various social security and labor welfare programme over and above managing various aspects of industries that directly or indirectly influence the total system. Leadership styles that are commonly practiced by the managers to manage people at work.
They are an exploitative and authoritative system, benevolent authoritative system, with further growth of lab our legislation and the development of trade unions.
3. The Government: In the system of industrial relations, government acts as a regulator and judge. Till 19th century, the Government almost everywhere including India, adopted a policy of laissez faire, i.e. it did not bother to intervene between the employer and workers’ problems . As such, parties were left free to settle the score the way they liked to combine for a common cause-for protest against the inhuman conditions. Government attitude changed in the end of the 19th century, The Government was constrained to bring in some type of protective legislation relating to conditions of work etc.
In the early forties of the present century and after independence, the Government laid emphasis on the need for consultation between the representatives of labour, management and the Government in tripartite and bipartite forums.
These three actors in the system interact with each other to yield the basic output. Which si the set of rules that govern working conditions and the terms of employment.
Approaches/Perspectives of IR
The IR can be viewed from the various angles which may range from the economic andsoical, political to the legal, psychological and managerial.