Class Notes on Employee Relation

18 MBA 302 C. Credit : 3, Class Hours : 30

Introduction
An organization can’t perform only with the help of chairs, tables, fans or other non living entities. It needs
human beings who work together and perform to achieve the goals and objectives of the organization.

The human beings working together towards a common goal at a common place (organization) are called
employees. Infact the employees are the major assets of an organization.

The success and failure of any organization is directly proportional to the labour put by each and
every employee.

The employees must share a good rapport with each other and strive hard to realize the goal of the
organization. They should complement each other and work together as a single unit. For the employees,
the organization must come first and all their personal interests should take a back seat.

Module- I

What Does 'Employee Relations' Mean?

The term 'employee relations' refers to a company's efforts to manage relationships between employers and
employees. An organization with a good employee relations program provides fair and consistent treatment
to all employees so they will be committed to their jobs and loyal to the company. Such programs also aim to
prevent and resolve problems arising from situations at work.
Employee relations programs are typically part of a human resource strategy designed to ensure the most
effective use of people to accomplish the organization's mission. Human resource strategies are deliberate
plans companies use to help them gain and maintain a competitive edge in the marketplace. Employee
relations programs focus on issues affecting employees, such as pay and benefits, supporting work-life
balance, and safe working conditions.
One of the most effective ways for a company to ensure good employee relations is to adopt a human
resource strategy that places a high value on employees as stakeholders in the business. Stakeholders are
people who are committed, financially or otherwise, to a company and are affected by its success or failure.
When employees are treated as more than just paid laborers, but as actual stakeholders with the power to
affect outcomes, they feel more valued for the job they do.
Think about the last job you truly loved. Was it because you were treated like an important part of the team?
You probably had an interest in seeing the business succeed, like a stakeholder.

Overview to Employee Relations

Economists have traditionally identified four factors of production viz. land, labour, capital and
organization. The role of labour as a factor of production is becoming increasingly important in the
modern society.

“Human beings are the active agents who accumulate capital, exploit natural resources, build social,
economic and political organizations and carry forward national development”.

Growing Industrialization and the rapid expansion of the services sector resulted in the galloping
demand for skilled labor after 50s. The emergence of the concept of human resource management and
human resource development contributed to the growing importance of labor.

The issue of industrial relations arose from the issue of divorce of the workers from the ownership and
management of the production process. This has brought about a sense of depriviation and loss
independence on the part of workers and is probably the primary cause of industrial disputes. All these
factors have led to growing unrest among the ranks of workers.

The term industrial relations refers to relationship between management and labor or among
employees and their organizations that characterize or grow out employment. Theoretically speaking,
there are two parties in the “employment relationship”. i.e. labor and management. Both parties need
to work in a spirit of cooperation, adjustment and accommodation. In their own mutual interest certain
rules for coexistence are formed and adhered to.

The four main parties who are actively associated with any industrial relations system are the workers,
the managements, the organizations of workers and managements, and the state.

According to the ILO, “ IR deals with either the relationships between the State and the employers and
the workers in organization or the relation between the occupational organizations themselves.”
Importance of Employee Relations - Why Employee Relations at Workplace?

Every individual at the workplace shares a certain relationship with his fellow workers. Human beings are not
machines who can start working just at the push of a mere button. They need people to talk to, discuss ideas with
each other and share their happiness and sorrows. An individual cannot work on his own, he needs people around.
If the organization is all empty, you will not feel like sitting there and working. An isolated environment
demotivates an individual and spreads negativity around. It is essential that people are comfortable with each
other and work together as a single unit towards a common goal.

It is important that employees share a healthy relation with each other at the work place. Let us find out why
employee relations are important in an organization:

 There are several issues on which an individual cannot take decisions alone. He needs the guidance and
advice of others as well. Sometimes we might miss out on important points, but our fellow workers may
come out with a brilliant idea which would help us to achieve our targets at a much faster rate. Before
implementing any plan, the pros and cons must be evaluated on an open forum where every employee
has the right to express his opinions freely. On your own, you will never come to know where you are
going wrong, you need people who can act as critic and correct you wherever you are wrong. If you do
not enjoy a good relation with others no one will ever come to help you.
 Work becomes easy if it is shared among all. A healthy relation with your fellow workers would ease the
work load on you and in turn increases your productivity. One cannot do everything on his own.
Responsibilities must be divided among team members to accomplish the assigned tasks within the
stipulated time frame. If you have a good rapport with your colleagues, he will always be eager to assist
you in your assignments making your work easier.
 The organization becomes a happy place to work if the employees work together as a family. An
individual tends to lose focus and concentration if his mind is always clouded with unnecessary tensions
and stress. It has been observed that if people talk and discuss things with each other, tensions
automatically evaporate and one feels better. Learn to trust others, you will feel relaxed. One doesn’t feel
like going to office if he is not in talking terms with the person sitting next to him. An individual spends
around 8-9 hours in a day at his workplace and practically it is not possible that one works non stop
without a break. You should have people with whom you can share your lunch, discuss movies or go out
for a stroll once in a while. If you fight with everyone, no one will speak to you and you will be left all
alone. It is important to respect others to expect the same from them.
 An individual feels motivated in the company of others whom he can trust and fall back on whenever
needed. One feels secure and confident and thus delivers his best. It is okay if you share your secrets with
your colleagues but you should know where to draw the line. A sense of trust is important.
 Healthy employee relations also discourage conflicts and fights among individuals. People tend to adjust
more and stop finding faults in each other. Individuals don’t waste their time in meaningless conflicts and
disputes, rather concentrate on their work and strive hard to perform better. They start treating each
other as friends and try their level best to compromise and make everyone happy.
 A healthy employee relation reduces the problem of absenteeism at the work place. Individuals are
more serious towards their work and feel like coming to office daily. They do not take frequent leaves and
start enjoying their work. Employees stop complaining against each other and give their best
 It is wise to share a warm relation with your fellow workers, because you never know when you need
them. You may need them any time. They would come to your help only when you are nice to them. You
might need leaves for some personal reasons; you must have a trusted colleague who can handle the
work on your behalf. Moreover healthy employee relations also spread positivity around.
It is essential that employees are comfortable with each other for better focus and concentration, lesser conflicts
and increased productivity.

The Importance of Employee-Employer Relation

Employee relations can make or break an organization. Great employee relations will make a
business successful in the long run. A good understanding between employees and employers is
important to reduce industrial disputes.

A positive relationship between employers and employees leads to higher motivation and
employee engagement. When employees are happy, they are more productive. They will put
more effort into their work, and this translates into satisfied customers and more revenue.
While developing and maintaining good employee relations can be challenging in most
workplaces, healthy relationships among workers are beneficial not only to the individuals but
to the entire organization. Managers should set a good example when it comes to employee
relations. Managers who have a good working relationship with their employees help establish
a culture that encourages great employee relations.

Establishing and strengthening the employee and employer relationship can be achieved by
measuring employee satisfaction, identifying and resolving workplace issues, and providing
input and support to the performance management system of the company. The most
successful organizations around the world are those that pay attention to labor management,
creating an environment where the employees can use their skills to the fullest. It is only when
employees feel that their contribution is valued and respected that such an environment is
created. Workers who don’t get any recognition for their efforts are much more likely to
become disillusioned. Organizations that invest in good employee relations, however, can
witness numerous benefits.

1. Growth and Development

A harmonious relationship between employees and employers contributes to economic growth
and development, which then leads to an increase in efficiency. Greater efficiency, in turn,
leads to higher productivity and growth. It is important to keep the employees motivated if
organizations want to get the best from them. Workers lacking in motivation will reduce
productivity in a workplace.

When employees have a positive relationship with their managers, they will work more
efficiently. They will put their best efforts (not the minimum effort) to ensure the success of the
project. Organizations that have harmonious relationships will be able to ensure continuity of
production. Proper use of resources ensures maximum production. Employees will be
motivated to work hard, and this will help the organization grow.

2. Reduction in Turnover
Employee relations are the backbone of any business. Poor employee relations will affect
productivity and result in high employee turnover. It is only when employees feel valued that
they will use their skills and experience to the fullest to contribute to the growth of the
company.

Organizations that have good employee relations provide higher wages and other attractive
benefits, making it in the best interest of the employee to stay. Even if the employee is not
100% satisfied with their company, they are less keen to suddenly abandon a company for
another when they are happy with their work environment. A pleasant work environment
improves employee morale and motivation.

Most employees who work in companies are in the high-retention-risk category. The critical
skills that they possess help the company progress, and the cost of replacing a skilled employee
can be extremely high.

Employees are less likely to leave an organization, however, if those skills are recognized and
rewarded.

It is the responsibility of the company to create an engaging work environment to make the
employees feel valued. The cost of recruitment, hiring, and training will come down with lower
employee turnover.

3. Employees Have Extensive Knowledge of Company

Practices
The reduction in turnover ensures that employees stay with a company for longer, which
enables them to gain extensive knowledge of company policies, practices, and processes.
Employees with substantial institutional knowledge are an excellent resource. They are highly
skilled, very efficient, and can provide training for new employees. Most companies find it hard
to replace experienced employees, and this is especially true in industries that rely on
employees with highly specialized skills.

4. Enhanced Motivation
Disengaged employees can cost organizations millions of dollars in lost productivity. Companies
that have engaged workers experience higher productivity. Organizations need to ensure that
their workers feel empowered and appreciated to increase morale and motivation.

5. Increase in Revenue
Great employee relations will have a positive impact on the growth and revenue of a company.
The benefits of a happier, healthier work environment are not only felt within the business but
by the customer or end-user, too. Having more engaged and motivated employees tends to
result in greater customer satisfaction and better products and services, which also tends to
point to an increase in sales.

6. Conflict Reduction
Workplace issues and conflicts are common. Conflicts are inevitable in any organization and can
range from complaints about discriminatory employment practices to working conditions.
Conflicts at the workplace will have an adverse impact on the productivity of a company and
are likely to contribute to an environment of distrust between employees and employers,
which can affect efficiency.

Investigating, mediating, and resolving employee complaints will help create a good work
environment, which will reduce conflict in the workplace. Conflict reduction will help
employees concentrate on their work and will increase productivity. Resolving conflicts
becomes easier when managers work on fostering relationships with employees so that they
are on the same page. Organizations that have fewer conflicts have higher morale, motivating
employees to give their best.

Employee turnover also slows down when there is less conflict in the workplace. The work
environment becomes stable and happy, which improves the overall work culture.

7. Employee Loyalty
A pleasant and productive work environment will have an effect on the loyalty of the employee,
encouraging a loyal workforce. Companies that have such a workforce will be able to improve
employee retention.

The most valuable asset of a company is its employees. The success of the company will depend
on how they work. If they are engaged and motivated, they will strive to meet the expectations
of the company. A strong employee and employer relationship will benefit the employee and
the organization as a whole.

Great employee relations are the key to success for any company. Regardless of the size and
number of employees, all businesses need to pay attention to employee relations. This will help
them achieve success. Employee relations are important, as the success of an organization is
highly dependent on the engagement and productivity of the workforce.

Investing in employee relations is as important as investing in any other business practice. Well-
managed employee relations will help deal with the challenges and changing of any business
environment.

Employee Relations Tools

The responsibilities of an employee relations specialist include everything from determining

whether the company’s performance management system is appropriate for the workplace size
and employee occupations to planning an employee recognition banquet. Specialized tools
allow the employee relations specialists to stay up to date on the latest staff viewpoints and
workforce trends.

Employee Opinion Surveys

One of the most valuable tools for employee relations specialists is an employee opinion
survey. These surveys have two functions: They measure the workplace climate in terms of
employee satisfaction and they serve as a tool to create action plans for managers in modifying
work conditions to improve overall job satisfaction. Questions examine employee opinion in
specific areas such as compensation and benefits; general employee opinion survey questions
ask for feedback from employees on a variety of workplace issues, such as leadership,
performance, pay and overall work attitudes.

Training Aids
Supervisors and managers frequently consult employee relations specialists for advice on how
to determine when to administer employee discipline or when to consider termination. Before
effecting decisions concerning the employment relationship, leadership training may be in
order. The benefits of leadership training are improved relationships between supervisors and
their employees as well as more effective workforce management skills. When employee
relations specialists are called on to help improve supervisor and manager performance, they
general use one-on-one guidance based on their expertise supplemented by materials such as
tapes and books.

Legal Resources
Employee relations specialists keep current on labor and employment laws, as well as
legislation that can potentially affect the work environment. Therefore, legal resources
available for researching labor and employment laws are an oft-used employee relations tool.
Legal resources include subscription-based services as well as publicly available resources such
as legislative summaries and news feeds. In addition, knowledge of labor and employment laws
permits employee relations specialists to perform the basic duty for which they are hired:
protect the interests of the employer while maintaining a productive employer-employee
relationship. Although legal counsel is another resource for employee relations specialists, too-
frequent dependence on legal counsel can drive up employer costs.

Human Resource Information Systems

Human resources information systems are tools employee relations specialists use regularly.
HRIS generate employee census reports and assist employee relations specialists in analyzing
workforce trends, compensation structure, pay practices and recruitment and selection
processes. Annual reports to federal agencies such as the U.S. Equal Employment Opportunity
Commission, the U.S. Department of Labor and the Occupational Safety and Health
Administration are based on data compiled and stored via complex HRIS.

Departmental Expertise
Employee relations specialists are usually human resources generalists with a broad knowledge
base. Nevertheless, despite their exceptionally broad understanding of topics such as
compensation, safety, recruitment and employee development, they rely heavily on the
expertise of HR department employees who handle employee issues in these areas day in and
day out. An employee relations tool, therefore, is the expertise of colleagues who lend
additional expertise and knowledge whenever required.

Employee Relation Management

Employee relationship management is a process that companies use to effectively manage all
interactions with employees, ultimately to achieve the goals of the organization. The human
resources department can play a critical role in this process, both in terms of training and
coaching managers and executives on how to effectively establish and nurture relationships
with employees and in measuring and monitoring those relationships to determine whether
objectives are being met.

Identifying Objectives
Employee relationship management is a general term that means a lot of different things to a
lot of different people. At the outset, it is important to define what is meant by employee
relationship management and, specifically, what areas of the relationship will be managed. For
most companies, relationship management centers around items like attracting and retaining
employees. Common measures of the effectiveness of these relationships include time to hire,
turnover and employee satisfaction.
Determining Employee Needs
It is not enough to assume that a company or even its HR professionals know what is important
to employees. Needs vary greatly depending on employee characteristics--age, gender, etc.--as
well as the type of job being performed. It is a good idea to find out directly from employees
what their needs are. You can do this in one-on-one conversations that take place informally
throughout the year, during formal employee evaluation meetings and through surveys and
polls that can provide a quantitative indication of employee needs.

Balancing Work and Life Needs

There is a widespread recognition in the 21st century that effective employee relationship
management requires consideration of the whole employee. That means taking steps to ensure
that the employee's work-life needs are well balanced. This can occur through creative staffing
that might involve part-time, flextime or even off-site work assignments.

Open, Honest Communication

Communication is critical to establishing strong employee relationships. Managers must be
committed to communicating regularly and honestly with employees about the issues that
impact their work. The more open organizations can be, the more likely they are to establish
strong relationships that lead to increased loyalty and productivity among employees and
decreased turnover and dissatisfaction.

Measuring and Monitoring Results

Effective employee relationship management requires ongoing attention. That means that
managers and their HR departments should be alert at all times for signs of discontent, which
can be subjective, as well as carefully monitoring the results of more formal assessments. These
results should also be shared with employees. Too often employees are asked to complete
surveys and are not informed of the results--or what will be done with the results.

Relationships Are Interpersonal

Ultimately, employee relationship management requires the same skills and processes required
to manage any relationship; a clear understanding of employees' needs and a desire to meet
those needs is foundational. Then steps must be taken to interact effectively with employees
through a variety of communication channels, both interpersonal and formal (e.g., intranet site,
employee newsletters, etc.). Finally, measurement of the effectiveness of these efforts should
be frequent and ongoing, with improvements and adjustments made when results are not
showing continual improvement or satisfactory levels of performance.
 Some of the core issues that can be controlled with effective employee relationship management are:

1. Communication – Open communication both amongst your employees and between the employees and the
management team is imperative. When employees feel that they can’t be heard, they may become frustrated, leading to
lowered employee morale. Lowered morale can result in lowered productivity and an uncomfortable, or even hostile,
work environment. Employee surveys can give you a thorough understanding of how your employees feel about
communication in your work environment.

2. Conflict management – When problems arise, it is important to understand how to handle them. This is a fundamental
aspect of employee relationship management. Sometimes those conflicts occur between employees and employers.
Employee Surveys can provide you the necessary tools to help you negotiate and manage conflicts in your business.

3. Employee growth – Employees that feel they are only required to put in their hours and go home will do just that.
Employees that feel they can become a valuable asset based on their work, as well as their ability to provide important
ideas, offer input, and perhaps pursue growth opportunities within the company, will create a positive atmosphere within
the corporate culture.

4. Focusing on employee relationship management can have profound effects on how your business operates. Conducting
employee surveys is a useful tool towards reaching a beneficial level of employee relationship management because they
provide an opportunity for candid feedback and analysis that isn’t achievable in typical business communication.

50 Employee Relations Issues You Should Be Documenting

Here goes. You should be documenting if your employee:

1. Gets into a dispute with a co-worker

2. Has a hygiene problems that can no longer be ignored

3. Views sexually explicit material over the company internet

4. Frequently uses the phone or internet for personal reasons

5. Lacks attention to detail in his work

6. Is slow to get her work done…missing assignments and quotas

7. Receives poor customer feedback

8. Has a dip in expected sales production

9. Struggles during the probationary or training period

10. Covers up for a co-worker

11. Has a hard time following through and never seems to get anything done

12. Uses company equipment or facilities without proper authority

13. Works unapproved overtime

14. Has poor time management skills

15. Has excessive unscheduled absences from work

16. Is frequently late for work

17. Proselytizes religious or political beliefs to co-workers or subordinates

18. Comes and goes as he/she pleases

19. Uses the company credit card for personal expenditures, even if he/she pays it back

20. Calls the women in the office “dear”, “sweetie”, and “girls”

21. Has one too many at the company holiday party

22. Doesn’t have the required technical skills to get the job done

23. Shows up inappropriately dressed or with questionable body piercing/art

24. Has inadequate problem solving skills

25. Demonstrates weak written or oral communication skills

26. Keeps office space a mess

27. Violates a safety rule, even if no one gets hurt

28. Swears – either in casual conversation or when things get heated

29. Frequently sends, receives and forwards inappropriate jokes over e-mail

30. Is the office bully

31. Makes discriminatory comments or racial epithets, even once

32. Has a tendency to have “elevator eyes” when talking to women

33. Gossips – all day long

34. Displays a lack of commitment to her job or the company

35. Carelessly leaves confidential information out in the open

36. Can’t seem to get along with anyone on the team

37. Makes a veiled threat of physical harm to a co-worker

38. Neglects to communicate to management what he is doing

39. Appears to have an alcohol or drug problem that is influencing her work

40. Cannot accept constructive criticism

41. Shows a lack of respect when speaking to his supervisor

42. Is going out on a leave of absence

43. Is constantly late for meetings

44. Always has an excuse for not getting things done

45. Shares confidential or proprietary information

46. Has an unwillingness to confront problems head-on

47. Is beginning or modifying a flexible work arrangement

48. Telecommutes but never seems to be reachable when needed

49. Is being placed on a performance plan or receiving a disciplinary warning

50. Is exiting the business either voluntarily (resignation) or involuntarily (termination)

Proper and timely documentation of these employee relations issues protects your organization and
provides clear expectations to your employees. We hope these employee relations examples will help
guide your documentation process.

Strategic employee relations

The key to successful human resource management is understanding how it fits within the
overall objectives of your business. Strategic Employee Relation include:

 Workplace agreements
 Managing the introduction of change in the workplace
 Human resource management audits to ensure compliance with relevant awards and
other statutory obligations
 Remuneration strategy
 Performance management systems
 Occupational health & safety measures and systems
 Managing termination of employment
 Development of employment policies

The benefits

 A clearer vision of the importance of the employees to the success of the business
 Consistent policies and practices
 Certainty in compliance with relevant laws, regulations and awards

Employee Relations Strategy Example

An ER Strategy is an expression of an enterprise’s capacity to develop and implement a sound
industrial relations management plan which ensures that industrial relations issues and risks
are identified, assessed and managed. The ER Strategy should demonstrate the integration of
Employee relations requirements with the normal procedures, practices and performance
standards of the enterprise.

It involves an enterprise:

 developing a policy statement on industrial relations management that has the total
support of management.
 defining responsibilities for industrial relations management within the enterprise.
 identifying resources and procedures for implementing required industrial relations
management measures.
 having planning processes and procedures in place that enable identification of
potential industrial relations issues and facilitate the development of measures to
minimize impacts.
 outlining methods used to assess the capacity of subcontractors to understand and
comply with their industrial relations responsibilities, and
 establishing procedures to review and monitor the implementation of measures which
support the IR Strategy and to initiate corrective action when required.

Factors Affecting Employee Relations Strategy:

Two sets of factors, internal as well as external, influence an IR strategy.

The internal factors are:

1. The attitudes of management to employees and unions.

2. The attitudes of employees to management.
3. The attitudes of employees to unions.
4. The inevitability of the differences of opinion between management and unions.
5. The extent to which the management can or wants to exercise absolute authority to
enforce decisions affecting the interests of employees.
6. The present and likely future strength of the unions.
7. The extent to which there is one dominating union or the existence of multiple unions
leading to inter-union rivalry.
8. The extent to which effective and agreed procedures for discussing and resolving
grievances or handling disputes exist within the company.
9. The effectiveness of managers and supervisors in dealing with problems and disputes
related to IR.
10. The prosperity of the company, the degree to which it is expanding, stagnating or
running down and the extent to which technological changes are likely to affect
employment conditions and opportunities.
The external factors affecting ER strategy are:

1. The militancy of the unions-nationally or locally.

2. The effectiveness of the union and its officials and the extent to which the officials can
and do control the activities of supervisors within the company.
3. The authority and effectiveness of the employer’s association.
4. The extent to which bargaining is carried out at national, local or plant level.
5. The effectiveness of any national or local procedure agreements that may exist.
6. The employment and pay situation-nationally and locally.
7. The legal framework within which IR exists.

IR - STRATEGIES

1. Trade unionism

Unions have a crucial role to play in ER. Unions have broad objectives which are:'

1. To redress the bargaining advantage of the individual worker vis-a-vis the

individual employer, by substituting joint or collective action for individual
action,
2. To secure improved terms and conditions of employment for their members and
the maximum degree of security to enjoy these tern1S and conditions,
3. To obtain improved status for the worker in his or her work, and
4. To increase the extent to which unions can exercise democratic control over
decisions that affect their interests by power sharing at the national, corporate
and plant levels.

The union power is exerted primarily at two levels-at the industry level, to establish joint
regulation on basic wages and hours with an employer's association or its equivalent;
and at the plant level, where the shop stewards' organizations exercise joint control
over some aspects of the organization of the work and localized terms and conditions of
employment.' Unions arc a party to national, local and plant level agreements which
govern their actions to a greater or lesser extent, depending on their power, and on
local circumstances (read the next chapter for more details on unions).

Employers too, are directly involved in any dispute between them and the employees.
Employers are endowed with certain inalienable rights vis-a-vis labor. The management
has the right to hire and fire any worker, Not withstanding union restrictions. It is not
just firing a worker here or there, but the management' s ability to control the economic
destiny of the workers that matters The management has the right to relocate, close ,
merge, takeover or sell a particular plant- these actions affect workers' interests. The
management has another powerful weapon-introducing or threatening to use
technological change. Technological change can displace labour or annihilate skills.
 Armed with these rights, the management resorts to several tactics to break a strike,
some of them even unethical. The management is known to adopt dubious means to
forego a strike, call off a strike, or tone down union demands. The management often
breaks a powerful union, sets one faction against another, and favours the more
satisfied and the less militant workers. Loyal workers from sister concerns arc brought
in. on the pretext of a factory visit, and are induced into the plant and advised to break
the strike

2. Grievance Procedure

Grievance procedure is a formal communication between an employee and the

management designed for the settlement of a grievance. The grievance procedures
differ from organization to organization.

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an
established grievance procedure for the country which would be acceptable to unions as
well as to management. In the 16th session of Indian Labor Conference, a model for
grievance procedure was drawn up. This model helps in creation of grievance
machinery. According to it, workers’ representatives are to be elected for a department
or their union is to nominate them. Management has to specify the persons in each
department who are to be approached first and the departmental heads who are
supposed to be approached in the second step. The Model Grievance Procedure
specifies the details of all the steps that are to be followed while redressing grievances.

These steps are:

STEP 1:In the first step the grievance is to be submitted to departmental representative,
who is a representative of management. He has to give his answer within 48 hours.

STEP 2:If the departmental representative fails to provide a solution, the aggrieved
employee can take his grievance to head of the department, who has to give his
decision within 3 days.

STEP 3:If the aggrieved employee is not satisfied with the decision of departmental
head, he can take the grievance to Grievance Committee. The Grievance Committee
makes its recommendations to the manager within 7 days in the form of a report. The
final decision of the management on the report of Grievance Committee must be
communicated to the aggrieved employee within three days of the receipt of report. An
appeal for revision of final decision can be made by the worker if he is not satisfied with
it. The management must communicate its decision to the worker within 7 days.

STEP 4:If the grievance still remains unsettled, the case may be referred to voluntary
arbitration.
 3. Disciplinary Procedure

Maintenance of harmonious human relations in an organization depends upon the

promotion and maintenance of discipline. No organization can prosper without
discipline. Discipline has been a matter of utmost concern for all organizations.
Maintenance of effective discipline in an organization ensures the most economical and
optimum utilization of various resources including human resources. Thus, the objective
of discipline in an organization is to increase and maintain business efficiency. Effective
discipline is a sign of sound human and industrial relations and organizational health.

. Approaches to Discipline
i. human relations approach,
ii. human resources approach,
iii. group discipline approach,
iv. the leadership approach, and
v. judicial approach.

Strategic Approach to Industrial Relations

The different approaches to discipline include,

The employee is treated as human being and his acts of indiscipline will be dealt from the
viewpoint of values, aspirations, problems, needs, goals behavior etc. Under human relations
approach the employee is helped to correct his deviations. The employee is treated as a
resource and the acts of indiscipline are dealt by considering the failure in the areas of
development, maintenance and utilization of human resources under the human resources
approach. The group as a whole sets the standards of discipline, and punishments for the
deviations. The individual employees are awarded punishment for their violation under the
group discipline approach. Every superior administer the rules of discipline and guides, trains
and controls the subordinates regarding disciplinary rules under the leadership approach.

In Judicial approach, in disciplinary cases are dealt on the basis of legislation and court
decisions. The Industrial Employment (Standing Orders) Act, 1946, to a certain extent,
prescribed the correct procedure that should be followed before awarding punishment to an
employee in India. No other enactment prescribed any procedure for dealing with disciplinary
problems. But over a period of time, a number of principles regarding the basic formalities to
be observed in disciplinary procedures emerged, gradually resulting from the awards of several
Industrial Tribunals, High Courts and the Supreme Court. Principles of Natural Justice.

The Future Challenges in Employee Relation

Industrial relations is a fancy word that really means the ways in which senior- and mid-level
managers at your company interact with rank-and-file employees. Regardless of your
organizational structure, there will always be challenges in employee relations that you must
handle before these challenges become major problems. These challenges are the result of the
divide that exists at your company between those who make decisions and those who must
implement those decisions. Understanding the common problems faced by employees in
organization is the key to maintaining a harmonious relationship between management and
staff.

Lack of Privacy
One of the biggest challenges of employee relations is the fact that there is no presumption of
privacy when business owners hire employees. Many companies have policies that allow
security personnel to monitor internet use, phone calls, voicemails, and email correspondence.
Technology has also increased the problems faced by employees in organization because of the
increased intrusion of video and audio surveillance. When employees feel as if every move they
make is being monitored, they lose trust in upper management and company leaders.

It's an "Us Against Them" Mentality

Another of the pressing problems faced by employees in organization is that many workers
believe that a significant divide exists between a company's workers and managers. This is a
natural reaction by a group of people who understand that they must often subordinate their
own desires to implement the will of management. This division can cause a number of issues,
such as contract negotiation problems and strikes, which can require the intervention of trade
and labor unions. However, if you establish the proper balance between empowering your
employees, and maintaining a chain-of-command, you can help resolve one of the biggest
challenges in industrial relations.

Inflexibility of Employer
Business owners that run their companies like an autocracy, can trigger challenges in industrial
relations because they create an inflexible environment. When an employer is inflexible, it can
stifle employee creativity, especially if employees believe that management doesn’t solicit their
ideas and suggestions, and is hostile to any suggestions or ideas that employees do make. The
problem is that when management restricts creativity and imagination, it can also stifle
innovation and compromise the company’s competitive position within its industry. Employers
that allow employees to participate in running the company by soliciting, and using their ideas
and suggestions often find a more productive business environment.

Gender Wage Disparity

In some companies, the gap between what a woman earns for a position versus what a man
earns for the same position, is another significant challenge in industrial relations. Although the
latest research suggests that the gender pay gap is narrowing, many instances still exist in
which women discover that they are being paid less than a male colleague for the same work.
This can create conflict, especially if a company’s management is predominantly male. Although
there are multiple factors that can lead to a gender pay gap, the usual perception of female
employees is that management may not value their contribution as much as they do that of
male employees. Business owners that are proactive at ensuring that those men and women
who have similar skills, talents, and prior experience, will earn the same wage -- and this can
help prevent this problem.

Narrow Focus of Employees

Another issue that arises out of industrial relations is the narrow focus that some employees
have about their role in a company. An employee might regard his task as only a job that he
must complete, rather than a role he can examine as to how he benefits the organization. Many
employees see their managers as people who give orders, rather than as facilitators who can
help employees achieve professional goals. Forward-thinking business owners, who embrace a
team concept and who give employees latitude to develop ideas and make important decisions
without oversight, can offset this problem.

Psychological Contract

The psychological Contract refers to a un written set of expectations of the employment

relationship as distinct from the formal, codified employment contract. Taken together, the
psychological contract and the employment contract define the employer-employee

relationship.

Originally developed by organisational scholar Denise Rousseau, the psychological contract

includes informal arrangements, mutual beliefs, common ground and perceptions between the

two parties.

The psychological contract develops and evolves constantly based on communication, or lack

thereof, between the employee and the employer. Promises over promotion or salary

increases, for example, may form part of the psychological contract.

Managing expectations is a key behaviour for employers so that they don’t accidentally give

employees the wrong perception of action which then doesn’t materialise. Employees should

also manage expectations so that, for example, difficult situations or adverse personal

circumstances that affect productivity aren’t seen by management as deviant.

Perceived breaches of the psychological contract can severely damage the relationship

between employer and employee, leading to disengagement, reduced productivity and in some

cases workplace deviance. Fairness is a significant part of the psychological contract, bound up

in equity theory – employees need to perceive that they’re being treated fairly to sustain a

healthy psychological contract.

The psychological contract came to be identified in 1960 by Argyris. However, only within the
last ten to fifteen years has it become more popular and more research been done on the
subject. As studies in industrial relations developed and grew more complex, it was revealed
that employees are more likely to perform better in certain work environments. The early
works of Frederick Winslow Taylor focused on how to enhance worker efficiency. Building upon
this, Douglas McGregor developed Theory X and Theory Y to define two contrasting types of
management styles that were each effective in attaining a certain goal. These differing
management types hold different psychological contracts between employer and employee, as
described in more detail under "formation of the psychological contract."
Works by Denise M. Rousseau and later went more in-depth on the details and perspectives of
the psychological contract Sandra L. Robinson indicated employees commonly reported a
breach of the psychological contract within several years of beginning their position, and that
the effects of contract breach negatively effected employee productivity and retention. [11]
Maslach, Schaufeli and Leiter stated in 2001:
"Now employees are expected to give more in terms of time, effort, skills, and flexibility,
whereas they receive less in terms of career opportunities, lifetime employment, job
security, and so on. Violation of the psychological contract is likely to
produce burnout because it erodes the notion of reciprocity, which is crucial in
maintaining well-being."[
Psychological contract formation is a process whereby the employer and the employee or
prospective employee develop and refine their mental maps of one another. According to the
outline of phases of psychological contract formation, the contracting process begins before the
employment itself, and develops throughout the course of employment. As the employment
relationship grows the psychological contract also grows and is reinforced over
time.[13] However, the psychological contract is effective only if it is consented to on a voluntary
basis.[7] It is also useful in revealing what incentives workers may expect to receive in return for
their employment.[7] There are two types of contracts depending on the nature. These are
relational psychological contracts and transactional psychological contracts.

 Transactional psychological contract: focuses more on the explicit elements of the contract
without accounting much for intrinsic qualities of workers. These are more common in
organizations with authoritative management styles and hierarchal control. Transactional
contracts are found to be "related to careerism, lack of trust in employer, and greater
resistance to change. They tend to be shorter term in nature.
o Some scholars consider McGregor's Theory X to be closely related to transactional
employer-employee relationships or authoritarian management, which are bound by
transactional psychological contracts that aim to keep people working for extrinsic
reasons and maintain the status quo.
 Relational psychological contract: stresses interdependence of the organization and level of
social exchange. These psychological contracts tend to be longer term in nature.
o McGregor's Theory Y is seen in participative management that emphasizes leadership
and has similarities with relational psychological contracts in their common emphasis
on commitment and belief in the intrinsic values of people to want to work for
something beyond than monetary reasons. Relational contracts are found to be
associated with trust and increased acceptance of change.
The content of psychological contracts varies widely depending on several factors including
management style, as discussed earlier. It also depends on the type of profession and differs
widely based on stage in career; for example, between graduates and managers. [13] Denise
Rousseau is credited with outlining these 5 phases of contract formation:

1. Pre-employment- The initial expectations of the employee form through professional

norms and societal beliefs that may be influenced by information gathered about the
organization and how certain occupations are portrayed by the media.
2. Recruitment- The first instance of two-way communication involving promise exchanges
between employer and prospective employee during the recruiting process.
3. Early socialization- Promise exchanges continue with both parties actively continuing
their search for information about one another through multiple sources.
4. Later experiences- The promise exchange and search for information processes slow
down as the employee is no longer considered new. There may be changes to the
psychological contract introduced at this stage.
 5. Evaluation- The existing psychological contract is evaluated and possibly revised and it is
determined whether revision is needed. Incentives and costs of change impact
revision.[13]

Module- II : Industrial Relations :---Concept, Scope and Approaches to Industrial Relations—

Unitary, Pluralistic and Radical approach, Industrial Relations System(IRS), Trade Unionism:
Concept, structure and function. Industrial Dispute, Code of Discipline and Grievance
Management, Dispute Resolution and Industrial Harmony. Collective Bargaining.

Economists have traditionally identified four factors of production viz. land, labour, capital and
organization. The role of labour as a factor of production is becoming increasingly important in the
modern society.

“Human beings are the active agents who accumulate capital, exploit natural resources, build social,
economic and political organizations and carry forward national development”.
Growing Industrialization and the rapid expansion of the services sector resulted in the galloping
demand for skilled labor after 50s. The emergence of the concept of human resource management and
human resource development contributed to the growing importance of labor.

The issue of industrial relations arose from the issue of divorce of the workers from the ownership and
management of the production process. This has brought about a sense of depriviation and loss
independence on the part of workers and is probably the primary cause of industrial disputes. All these
factors have led to growing unrest among the ranks of workers.

The term industrial relations refers to relationship between management and labor or among
employees and their organizations that characterize or grow out employment. Theoretically speaking,
there are two parties in the “employment relationship”. i.e. labor and management. Both parties need
to work in a spirit of cooperation, adjustment and accommodation. In their own mutual interest certain
rules for coexistence are formed and adhered to.

The four main parties who are actively associated with any industrial relations system are the workers,
the managements, the organizations of workers and managements, and the state.

According to the ILO, “ IR deals with either the relationships between the State and the employers and
the workers in organization or the relation between the occupational organizations themselves.”

The following points emerge from a close examination of the above definition :-

1. Employer –employee interactions

2. Web of rules :- It include the relations between employer and employed and between
employer’s associations, trade unions as well as the state.

3. Multidimensional:- IR is multi dimensional because they are influenced by a complex set

of institutional, economic and technological factors.
 4. Dynamic and changing :- IR change with times, expectations of employees, Trade
unions, employer’s associations etc.

5. Spirit of compromise and accommodations :- In the larger interests of society, both the
employer and employees must put out fires amicably and get along with each other in a
spirit of compromise and accommodation.

6. Government’s role :- the governments influences and shapes industrial relations with
the help of laws, rules, agreements, awards of courts and emphasis on usages, customs,
traditions, as well as the implementations of its policies and interference through
executive and judicial machinery.

7. Wide coverage :- The scope of IR is wide enough to cover a vast territory comprising of
grievances, disciplinary measures, ethics, standing orders, collective bargaining,
participatory schemes, dispute settlement mechanisms etc.

8. Interactive and consultative in nature :- IR includes individual relations and joint

consultation between labor, management, unions, the state etc.

Objective of IR :- The fundamental objective of IR is to maintain sound relations between employees

and employers.

1. To enhance the economic status of the workers.

2. To regulate the production by minimizing industrial conflicts through state control.
3. To socialize industries by making the government an employer.
4. To encourage and develop trade unions in order to improve the workers’ collective strength.
5. To avoid industrial conflicts and their consequences.
6. To extend and maintain Industrial democracy.

Approach to Industrial Relations :-

1. Psychological Approach :- Dissatisfaction with pay, benefits, services, conditions of work compel
workers to turn aggressive and resort to strikes, gheraos etc. Apart from economic issues,
 motives such as the need to gain prestige, power, status, recognition also compel people to go
in different directions, sacrificing the broader organizational interest.

2. Sociological approach :- A number of sociological factors such as the value system, customs and
traditions affect the relations between labor and management. Problems such as urban
congestion, chronic shortage of affordable dwelling units, Convenient transportation system,
such sociological changes impact industrial life significantly, forcing parties to assess, analyse
and find solutions to conflict full situations on a continuous basis.

3. Human Relations Approach :- People do not like the idea of being treated as machines. To
reduce friction and conflict in the work place, managers need to possess effective social skills.
They must explain why a particular job is important , allow workers to participate in work
processes fully, encourage work groups to flourish and try their best to keep workers happy.

4. HRD Approach :- It recognizes employees as the greatest assets in an organization , believes that
they can be developed to an unlimited extent with proper incentives, atmosphere and
treatment. It is possible to integrate human needs with organizational requirements.
To overcome some of the troubling IR issues, managers should focus on aspects like :-

a. Clarity goals
b. Reward performance
c. Empower people at all levels
d. Follow two-way communication channels.
e. Settle issues in an atmosphere of trust and understanding.

5. The Radical Approach(Marxists Approach):- Marxism is essentially a method of social enquiry

into the power relationships of society and a way of interpreting social reality. The class conflict
analysis of industrial relations derives its impetus from Marxist social thinking and
interpretations. To Marxist, industrial relations are essentially politicized and part of the class
struggle. The Radical approach is primarily oriented towards the historical developments of the
power relationship between capital and labor. It is also characterized by the struggle of these
classes to consolidate and strengthen their respective positions with a view to exerting greater
influence on each other. In this approach, industrial relations is equated with a power struggle.

6. The Pluralist Approach :- Pluralism is a major theory in labor-management relations which has
many powerful advocates. The focus is on the resolution of conflict rather than its generation.
When industrial jobs become more pleasant and employees get more integrated into the wider
society, strikes will become less frequent. Conflict is inherent in the industrial system. The
need for a formal system of collective bargaining is a method of conflict resolution. Industrial
 conflict is accepted by pluralist not only as being inevitable but also as requiring containment
within the social mechanism of collective bargaining , concillation and arbitration.
The major critics of the pluralist approach are the Marxist according to whom
exploitation and slavery will continue unabted in the institutional structure of
pluralism. The only difference is that in such a social structure, the worker will
be deemed to be a better paid wage slave.

7. Unitary Approach :- In unitarism the organization is perceived as an integrated and harmonious

whole with the ideal of “one happy family”, where management and other members of the
staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has
a paternalistic approach where it demands loyalty of all employees, being predominantly
managerial in its emphasis and application.

Consequently, trade unions are deemed as unnecessary since the loyalty

between employees and organizations are considered mutually exclusive, where
there can’t be two sides of industry. Conflict is perceived as disruptive and the
pathological result of agitators, interpersonal friction and communication
breakdown.

Significance of Industrial Relations :-

Good industrial relations implies peaceful, harmonious, fruitful relations between labor
and management. In such a situation, both labor and management realize their mutual obligations
towards each other and resort to actions that promote harmony and understanding the following
benefits :-

1. Industrial Peace
2. Industrial Democracy
3. Improved Productivity
4. Benefits to workers.

Industrial Relation System :-

A sound IR system is one in which relationships between management and employees and their
representatives on the one hand, and between the state on the other, are more harmonious and
cooperative than conflictual and creates an environment conducive to economic efficiency and the
motivation, productivity and development of the employee and generates employee loyalty and mutual
trust.

Three main parties are directly involved in industrial relations:-

Employers:- Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them.
Management can also affect workers’ interest by exercising their right to relocate, close or merge the
factory or to introduce technological change.

Employees:- Workers seek to improve the terms and conditions of their employment. They exchange
views with management and voice their grievances. They also want to share decision making powers of
management. Workers generally unite to form unions against the management and get support from
these unions.

Government:- The central and state government influence and regulates industrial relations through
laws, rules, agreements, awards of court and the like. It also includes third parties and labor and
tribunal court.

Scope of Industrial Relations are :-

The concept of IR has a very wide meaning . In the narrow sense, it means that the employer, employee
relationship confines itself to the relationship that emerges out of the date to day association of the
management and the labour. In its wider sense, IR include the relationship between an employee and
an employer in the course of the running of an industry and may project it to spheres, which may
transgress to the areas of quality control, marketing, price fixation and disposition of profits among
others. The main issues involved here are :-

a.. Collective Bargaining

b. Machinery for settlement of industrial disputes

c. Standing orders
d. Workers participation in management

e. Unfair labor practices.

IR are relations between employee and employer in their day-to-day work. Hence, it is continuous
relationship. The scope of IR include :-

Relationship among employee between employees and their superiors or managers.

Collective relations between trade union and management. It is called union-management

relations.

Collective relations among trade unions, employees associations and government scott, clothier and
Spiegel remarked that the industrial relations has to attain the maximum individual development,
desirable working relationship between management and employees and effective moulding of human
resources. They have also arrested that either industrial relations or personnel administration is
primarily concerned with all functions relating man of industrial relations seems to be very wide. It
includes the establishment and maintenance of good personnel relations in the industry, ensuring
manpower development, establishing a closer connect between persons connected with the industry
and that between the management and the workers, creating a sense of belongingness in the minds of
management, creating a mutual affection, responsibility and regard for each other, stimulating
production as well as industrial and economic development, establishing a good industrial climate and
peace and ultimately maximizing social welfare.

Values in IR :- The Values that govern sound industrial relations are :

a. Equity and fairness :- Equity refers to equal treatment to one and all under
comparable circumstances. The notion of fairness becomes relative when one
considers whether or not one is getting a fair share of pay in relation to what
others with similar qualifications and experience are receiving.
b. Power and authority:- Power is the ability to influence, impose or control.
Authority is the right to expect and command obedience.
c. Individualism and collectivism
d. Integrity, trust and transparency.:- Integrity is adhering to what is professed,
Trust is established between and among people and transparency is promoted
 through sharing of information, openness in communication and willingness
to explain and reason out the motives behind decisions and actions.

Trade unionism :- Trade unions have become an integral and powerful factor in the contemporary
system of production and distribution of goods and services. Trade unions are now exercising a strong
influence on the methods of production of goods and services, their distribution, the allocation of
economic resources, the volume of employment and unemployment, the character of rights and
privileges, policies of governments, the attitude and status of large masses of population, and the very
nature of economic and social organizations.

Definition:-

According to Webbs “A Trade Union is a continuous association of wage earners for the purpose of
maintaining or improving the conditions of their working lives”.

According to Clyde E. Dankert “A trade union is a continuing organization of employees established for
the purpose of protecting or improving, through collective action, the economic social status of its
members”.

Origin :- Trade Unions have grown in response to the peculiar needs and problems which the wage-
earners have had to face in the course of industrialization under the capitalist economic system. The
features of the process of industrialization that necessitated the origin of trade unions are :

1. Separation between Capital and labor :- The capitalist economic order is based upon the notion
that the pursuit of self-interest by every individual leads to the establishment of an economic
and social order that serves best the interest of all concerned. The workers tried to protect their
economic interests and status by submitting petitions to kings, courts and parliaments for the
implementation of protective regulations of the medieval period.
2. Philosophy of Laissez-Faire :- The dominant philosophy of laissez-fair and economic liberalism
prevented the state from coming to the rescue of the suffering mass of industrial workers.
3. Lack of Bargaining Power on the Part of Workers :- In reality, an individual workman, was a tool
in the hands of the employers. Being economically dependent on the employer, he had neither
the bargaining skill, nor the trade acumen to have his demands met.
 4. Individual Dispensability but Collective Indispensability :- The individual workman was
dispensable to the employer but workmen, collectively, were indispensable to him. The
employer could easily and always get rid of the services of a few workmen and replace them by
others, but he could not dispense with the services of all his workmen and readily replace them.

Objectives of Trade Unions :- This generic goal of protecting and promoting worker’s interests consists
of such specific objectives are :-

A. Improved economic status

B. Shorter working days
C. Improvement of working and living conditions
D. Income security
E. Better health, safety and welfare standards
F. Respect for the personality of the workers
G. A greater voice in industrial administration
H. Improving political status.

Theories of Trade Unionism.:- Trade unions are voluntary organizations of workers formed to promote
and protect their interests through collective action. The theories of trade union movement are in fact
some abstract principles or ideologies that seek to explain the basic motivating factors behind union
organization, its goals and the means to accomplish them

A. Karl Marx: Class conflict and communist manifesto :- According to Karl Marx, trade unions are
the natural outcome of capitalism. They perform a necessary and useful task in protecting
wages and improving working conditions and use their power to emancipate the working class
by putting an end to the capital system. Marx felt that unions should not be content with the
conservative motto, His revolutionary dictum was to abolish the wage system itself. He
emphasized a role for intellectuals to imbue and inspire in workers a class and political
consciousness, outside the economic struggle, and outside the sphere of relations between
workers and employers.
B. Sydney and Beatrice Webb : The Socialist Pattern of Society :- The Webbs viewed the role of
trade unions as more than first winning economic benefits for their members. They saw a role
for unions to usher in socialism through political action. They observed that market pressure
drove workers to organize into unions to protect their economic interests. The Webbs were
opposed to the capitalist system. They advocated different paths to bring its downfall. Marx,
along with Engels, played a key role in drafting the communist manifesto in Germany. The
webbs played an instrumental role as intellectual leaders of the labor party in Britain, drafting
the Socialist Manifesto for converting capitalist Britain into a mixed economy, thus laying the
foundations for the nationalization of major industries. Marx and his followers prescribed a
rapid, revolutionary and radical, even violent, change to a new order. The Webbs advocated a
non-violent, gradual evolution to a socialist form of government.
C. Robert Hoxie :- Was the advocate of social psychological environmental context of unionism. He
considered American unions less dogmatic and more pragmatic and opportunistic. He identified
five functional type of unionism:
 i) Business unionism: Business unions are trade-conscious rather than class conscious,
they stress on immediate goals and display an instrumental orientation. They seek to
achieve their goals primarily through collective bargaining and industrial action(strikes).
ii) Friendly or uplift unionism:- The goal of such unions is to elevate the moral, intellectual
and social life of the worker. Their means of action include collective bargaining and
political action.
iii) Revolutionary unionism :- These unions are class conscious rather than trade conscious.
Again it subdivided into two types: one focusing on socialist(unionism) ideals and the
other perpetrating quasi anarchy(unionism) through strikes, sabotage and violence.
iv) Predatory unionism :- Such unions are leader based, not member based, while
attempting to secure higher wages and other benefits for their members, they do not
hesitate to collude with employers to squeeze out competition for mutual benefit.

D. Mahatma Gandhi : The concept of Trusteeship:- Gandhi understood the limitations of capitalism
and socialism and tried to synthesize their virtues in his concept of trusteeship. Gandhi’s
concept of trusteeship is not based on class conflict or on the ideology that nationalization of
resources promotes/provides equity rather on voluntarism. Trusteeship is stewardship of one’s
possessions to increase wealth using one’s talent and deploying the surplus wealth in public
causes. The concept of trusteeship presupposes provision of incentives for the creation and
development of enterprises while eliminating the defects of capitalism.

Trade Union Movement In India:-

In India the Trade union movement emerged some time between the 1850s and 1870s.

The First national Federation, The All India Trade Union Congress(AITUC) was established in the year
1920. It comprised of different ideological persuasions broadly united in a struggle against colonial rule
and exploitation by foreign and local capitalists.

With the change in the political context on the eve of and after independence in 1947 the Indian
National Trade union congress was established with the support of the leader of National Congress
those who are against the revolutionary ideology of the AITUC and believes in peaceful and non-violent
reformist solution.
In the late 1960s the socialist too broke away from the AITUC to form the Hind Mazdoor Sabha (HMS).
There was a split in the congress, followed by a division of the communist and other political parties.

After the general elections in 1967, non-congress governments came into power in Kerala and west
Bengal, subsequently, regional parties emerged in several states and formed the government at various
points of time. Each political party set up its own trade-union wing.

Today, there are over a dozen “National Centres” of trade unions in the country with five of them having
a membership of over 5,00,000 in at least four states and four industries/sectors, Though the official
number of registered unions is around 50,000 the actual number may well exceed 1,00,000 unions. The
strong nexus between trade unions and politics in Indian stems are :-

A. Trade unions played a major role in the freedom struggle, some of those who led the freedom
struggle also led the trade union movement.
B. Political leadership in the early part of twentieth century, pursued policies of a welfare state.
C. The Indian Constitution envisages justice, liberty, and equality for all and an activist role for the
state in guaranteeing the same.
D. In the post independence, the state pursued socialist objectives, assigning the public sector the
dominant role of attaining high economic growth.
E. In a democracy, politicians need the support of the masses, working people being strong vote
banks, political parties began to depend on trade unions. The trade unions aligned with the
ruling party may be able to defend their members’ interests.

This nexus between political parties results in some negative consequences.

A. The Trade unions become fragmented whenever there is fragmentation in political parties.
B. Trade Union unity suffers due to political polarization, The public sector suffers most if the ruling
party in a state is different from one ruling at the centre.
C. In the context of liberalization and globalization, having their own party in power is becoming a
liability for trade unions because political parties of all ideological hues tend to follow policies of
wooing investors and encouraging cost-based competition, workers bear the brunt of those
neo-liberal policies.

Trade Union s Act, 1926- Salient features

Section 2(h) of Trade union Act, 1926 defines a trade union as “any combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between workmen and
employers or between workmen and workmen, or between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or business, and includes any federation or two or
more trade unions.

Workmen means any person working in the industry. But the persons working in Civil, police, and
defence and persons who are dismissed and retrenched are barred from forming unions.

Children are prohibited from joining unions, but there is no upper age bar.

Under the Act, 1926, seven members could form a trade union. But it was amended in 2001 and the
limit for registering a union increased to 10% or 100 which ever is less, subject to a minimum of seven.

The law is silent on craft, category and caste unions.

Section 15 of the act mentions that trade unions do not just pursue economic interest, but are also
oriented towards political, social and welfare objectives.

Act 1926, mentioned that, 50% of outsiders can lead unions, but in 2001 it reduced to 1/3rd of the
office-bearer positions in a union.

Registration of Trade Union:- A trade union can be made permanent and stable only if it is registered
under the Trade Union Act. A registered trade union enjoy various privilege, benefits and immunities,
and therefore, most sponsors of a trade union are tempted to register it. After registration, a trade
union is entitled to represent its members.

Procedure for Registration :- As per section 4 of the trade Union Act, a minimum of 10 members of a
trade Union shall apply for registration, with the total number being 100 or less. In all other cases, at
least seven members of a union shall apply for registration.
However, in case where less than half the number of applicant who originally applied for registration
with draw their membership from the union after submitting the application of registration, the
application shall not be considered invalid.

The application shall be submitted in Form A to the Registrar along with the rules of the union and other
mandatory details, such as name of the trade union, name addresses and occupations of the applicants
and the office bearers and address of the main office of the trade union.

As per section 6 of the Trade Union Act, a trade union cannot be registered unless it adheres to the
provisions of the Act, Here are some mandatory rules to be satisfied by a trade union to be eligible for
registration.

 Name of the Trade Union

 Objectives of its establishments
 The lawful purpose of spending the general funds
 Maintenance of list members, sufficient facilities for its scrutiny by the office bearers and union
members.
 Payment of monthly membership fee of 25 paise
 Safe custody of funds
 Conduction of annual audits

The Registrar, on being satisfied hat the trade union has complied with all the requirements of this Act
in regard to registration shall register the Trade Union by entering the particulars in a register.

Certificate of Registration :- The Registrar on registering a Trade Union as detailed earlier, shall issue a
certificate of registration in prescribed Form C which shall be conclusive evidence that the Trade Union
has been duly registered.

Cancellation of Certificate :- on an application from the Trade Union to be verified in such manner as
may be prescribed .

On satisfaction of the Registrar that the certificate has been obtained by fraudulent means or mistake or
that Trade Union has ceased to exist or has willfully and after notice from the Registrar contravened any
provision of the Trade Union act, 1926 or allowed any rule to continue in force which is consistent with
any such provision or has rescinded any rule providing any matter provision for which is required by
section 6. The Registrar has to provide not less than two months notice previous in writing specifying
the ground on which it is proposed to withdraw or cancel the certificate, before actually withdrawing or
cancelling the certificate.

Recognition of Trade Union:- A trade union is said to be recognized once an employer has agreed to
negotiate with it on pay and working conditions on behalf of a particular group of workers.

Trade Unions are recognized by Governments on the basis of membership verification(once on 10 years
or so) to determine which unions are to be invited for participation in national-and international level
consultations on social and labor matters.

There are several methods for recognition of trade union(s) by managements. These are

1. Closed Shop / Union Shop : Union membership is a prerequisite for employment in a firm or a
workshop. It is closed to all except members. First one has to a union before he/she could take
up employment in an enterprise. These prevails informally in wholesale markets and railway
stations among manual, headlock workers.

Union shop is a system whereby new entrants to employment, if they are not union members,
must join the union within a stipulated period.

2. Membership Verification :- An official of the Labor Department of the State or Central

government visits the enterprise/establishment, obtains the roster of employees from the
management and asks each employee individually whether or not they wish to become
members of a union and if so, which union. The membership claim of all unions is verified to
identify which union or unions individually or collectively have the support of the majority of the
employees. This becomes the basis for recognizing the collective bargaining agent.
3. Check-off:- Under check-off, employees are asked to state in writing whether or not they belong
to a union and if they do, to which. Along with this, employees should also undertake in writing
that they are willing to have the union membership subscription deducted from their salary
every year, in one or more installments, and credited to the account of the union concerned.
 The check-off system helps managements to know how many members each union has and
who are they . This not only enables an assessment of the relative strength of unions for the
purpose of recognition but such information can also be used by managements, in some cases,
to pressurize workers to stop patronizing unions which are not in good books of the
management.

4. Secret Ballot:- A more democratic method, election by secret ballot, enables employees to
exercise their option secretly, without fear or favor. Under this method, it is possible to elect the
President from union A, The secretary from Union B and the treasurer from union C. The
benefit of this method that leaders from various denominations have to work together.
5. Code of Discipline :- The Central trade union federations of workers at the conference held in
Nainital in 1957 deliberated on the code of conduct for maintaining harmonious inter-union
relationship and laid down a set of principles :
Every employee in an industry or unit shall have the freedom and right to join
the union of his/her choice.
There shall be no dual membership of unions.
There shall be unreserved acceptance of and respect for the democratic
functioning of trade unions.
There shall be regular and democratic elections of executive bodies and office
bearers of trade unions.
Ignorance and backwardness of workers shall not be exploited by an
organization.
Casteeism, Communalism and provincialism shall be eschewed by all unions.
There shall be no violence, coercion, intimidation or personal vilification in inter
union dealings.

White Collar Trade Union. :-

There was a time when unions and strikes were known only to Blue-collar workers in
factories, mines, railways docks, etc. White-collar employees and professional people like
doctors, engineers, lawyers, professors and senior executives and managerial staff thought
it below their dignity to band themselves in unions, march the high streets, and yell
slogans. Today it is different. Trade unions exist among most professionals, whitecollar
employees, officers, senior executives, and managers, and so do strikes and gheraos.
Highly paid employees in banks, in the Life Insurance Corporation and in many other
establishments are organised, and so the Central Government and semi-government
employees. They take recourse to strikes, mass casual leaves, work to rule, dharnas, and
gheraos for securing their demand and thus creating some embarrassing problems for their
employers/managements requiring serious consideration.

Both blue and white-collar workers are employees, but are of different status, and holding
different positions at different levels. The differences between these two categories of
unions are as summarised in the Table below.
s. Blue-Collar Worker White Collar Worker
No.

1 All shop-floor workers (Pari of All clerical or office staff who do not work
production system who operate on the shop floor, are termed as white-
machines and related systems) are collar workers as their work and working
termed as blue-collar workers, as places are clean. They are generally
their work is not generally clean. involved in a desk job or providing service
over the counter.

2 They are manual workers with lower They are non-manual workers forming a
literacy and education, and have distinct social ground characterised by
their own social and economic divergent socio-economic backgrounds,
background. level of education, manner of speech,
social custom and ideology. They are
better educated and have jobs requiring
mental capabilities to a greater extent.

3 They may be paid by time, or by They are time workers paid on monthly
piece, or results, either on daily, or basis. They enjoy longer holidays and
weekly, or fortnightly, or monthly leave facilities and better privileges.
basis. They are generally wage
earners, and may have lesser
holidays, and leave facilities and
other privileges than white-collar
workers.

4 They are nor so inclined towards They hold such jobs that they are
management. On the other hand, regarded as part of the management, and
they may be caring for their unions so they are more inclined towards it than
than for the management. the blue-collar workers.

5 Excepting highly skilled categories Because of their professional and social

who are in greater demand and can standing they are generally better paid
manage to have higher wages and have better terms and conditions of
income, the blue-collar workers are employment including better perquisites
not so well paid. Their fringe and fringe benefit
benefits and perquisites are lower
than that of white-collar

6 They have better union protection They have no union protection if they are
and job security by labour not unionised, and also job security if they
legislation, such as Industrial are not covered by the Industrial Disputes
Disputes Act, 1947. Act, 1947 as may be the case with not a
few of them.
 7 They are mostly engaged in They are concentrated in the fields of
production processes. commerce, transport, storage and
communication. They are engaged in
different occupations that fall under the
category of professional, administrative,
executive and managerial workers, clerical
and related workers, sales staff, technical,
and supervisory and other workers,
engaged in transport and Communication
services, or in sports and recreational
facilities, artists and musicians.

8 They have no authority, and nor They are linked with their employers by
they associated with decision being associated with that part of the
taking. productive process where authority is
exercised and decisions are taken.

Disputes ;- Conflict, as one of the features of industrial relations, is a general concept, when it acquires a
concrete and specific manifestation, it becomes an industrial dispute, that is, industrial conflict is
general, where industrial dispute is specific.

Dispute may be said to be disagreement or controversy between management and labor with respect to
wages, working conditions, other employment matters or union recognition.

Causes of Industrial dispute :-

Economic causes :-

1. Division of the fruits of the industry

a. Wage structure and demands for higher wages
b. Methods of job evaluation
c. Deduction from wages
d. Incentives
e. Fringe benefits
2. Methods of production and physical working condition
a. Working condition
b. Technology and machinery
c. Layouts
 d. Change in products
3. Terms of employment
a. Hours of work, shift working, promotion, demotion, layoff, retrenchment,
dismissal, job security, retirement etc.
Institutional causes :-

a. Recognition of unions
b. Membership of union
c. Subjects of collective bargaining
d. Bargaining units
e. Union security
f. Unfair practices
Psychological :-

a. Clash of personalities
b. Behavioural maladjustments
c. Demands for recognition of workers’ personality
d. Authoritarian administration
e. Lack of scope for self expression and participation
f. Undue emphasis on discipline.
There is an interesting discourse between individual and industrial dispute and Rights issues and interest
issues.

Under section 2(k) of the industrial disputes Act, if there is a dispute or difference and if that dispute or
difference is connected with the employment or on-employment or the terms of employment or with
the conditions of labor or any person, it becomes an industrial dispute.

In such cases, only the Labor court and Industrial Court have been given jurisdiction, but if the dispute is
under general or common law, civil court has the jurisdiction.

Industrial disputes can be either over interest issues or right issues. Interest issues concern claim for
future rights. They usually concern wages and working conditions. For instances, workers asking for an
increase in wage/salary will become an interest issue.

Rights issues involve interpretation or application of an existing rights, as laid down in the labor
legislation, a collective agreement, an individual labor contract, or an existing practice. If a worker is
paid less amount than is contracted it becomes a rights issue. Similarly, if a worker feels that he/she
was unfairly dismissed, it becomes a right dispute.
Methods of Settling industrial dispute :-

When certain demands are made by the workers and the employers resist them, industrial disputes
arise. There are two ways in which the basic parties to an industrial dispute – the employer and the
employees can settle their disputes. These are :-

1. Without state intervention

a. Collective Bargaining
b. Voluntary arbitration.

Again, Collective bargaining is subdivided into

i. Without conciliation
ii. With conciliation

Collective Bargaining :-

The emergence and stabilization of the trade union movement has led to the adoption of collective
bargaining as a method of settling differences and disputes between the employer and his employees.
Collective bargaining implies the following main steps :-

1. Presentation in a collective manner, to the employer, their demands and grievances by the
employees.
2. Discussions and negotiations on the basis of mutual give and take for settling the grievances and
fulfilling the demands.
3. In the event of the failure of negotiations, a likely resort to strike or lock-out to force the
recalcitrant party to come to terms.

The second way in which the parties can settle disputes without any state intervention, is voluntary
arbitration, The parties feeling that mutual negotiations will not succeed and realizing the futility and
wastefulness of strikes and lockouts, may decide to submit the dispute to a neutral person for
arbitration. The neutral person hears the parties and gives his award which may or may not, be binding
on them. At the time of submitting a dispute to arbitration, the parties may agree in advance, to abide
by the award of the arbitrator and thus, industrial peace is maintained and the dispute is resolved.
Sometimes, however, the parties may agree to submit the dispute to an arbitrator but at the same
time, reserve their right to accept or reject the award it comes. Under such a condition, voluntary
arbitration loses its binding force.

2. With State intervention

a. Compulsory establishment of bipartite committees :- Here the state has passed enactments
requiring the establishment of bipartite committees consisting of the representatives of workers
and their employer at the plant or industrial level. These bipartite committees are given the
power to settle difference between the workers and the employers as soon as they appear, and
thereby they prevent them from growing into big conflagrations.

b. Establishment of compulsory collective bargaining:- As the state encourage and requires the
establishment of bipartite committees for the purpose of composing grievances and differences
between workers and their employer, it may also think it advisable to encourage and, if
necessary, to force workers and employers to enter into formal collective bargaining through
their representatives. The idea behind such a policy is to force the parties to seek to settle their
differences through mutual negotiations and discussions before they decide to resort to strikes
or lock-outs.

c. Compulsory investigation:- many government have assumed power under laws relating to
industrial relations, to setup a machinery to investigate into any dispute. The purpose behind
the appointment of a court of Inquiry , is essentially to find out the relevant facts and issues
involved and to give them wide publicity so that the pressure of public opinion may force the
recalcitrant party to give up its obstinate attitude.

d. Compulsory conciliation and mediation:- In many countries, the state does not rest content with
the mere creation conciliation service. It imposes an obligation on the parties to submit their
dispute to the conciliation service and makes it a duty of the latter to seek to conciliate the
dispute. Meanwhile, the state requires the parties to refrain from causing any work stoppage
for the purpose of resolving the dispute, so long as the conciliation proceeding is going on.
There are three main considerations for prohibiting the parties from causing work stoppage and
imposing this time limit.
i) It is, felt that conciliation will provide a cooling off period during which emotional tensions
may subside and a settlement can be arrived at.
ii) It is felt that the freedom of the parties to settle their disputes even by causing work
stoppage, should not be taken away from them for a long period.
iii) It is argued that, if conciliation does not achieve an early break-through, it is not very likely
to succeed later.

e. Compulsory arbitration or adjudication.:- Despite all the efforts to settle amicably the disputes
the employees may go for strike & lock out, because there is no forcibly imposition. In the
opinion of the government such strikes and lock-outs may appear to be injurious to national and
 public interest and may cause irreparable damages. Under such conditions, the government
may decide to refer the dispute to adjudication and force parties to abide by the award of the
adjudicator and at the same time, prohibit the parties from causing work stoppage.

Machinery for the prevention and settlement of Industrial Disputes In India :-

Keeping with the requirements of a parliamentary democracy and of the private enterprise economy,
the state in India does not interfere with the basic freedom of the employers, their employees and the
trade unions to conduct their relations and to compose their differences in a manner they think best.
The Government has established a number of statutory and non-statutory bodies for the purpose of
working out the guiding principles of the relations between the employers and the employees, and
recommending actions so as to prevent industrial disputes from arising.

Statutory Machinery :-

The statutory machinery consists of

a. Works Committee
b. Permanent conciliation services for particular geographical areas or industries both at the
central and state level
c. Adhoc Boards of conciliation at the central and state levels
d. Adhoc courts of inquiry at the central and state level
e. Adjudication authorizes consisting of tribunals and labour courts at the central and state levels,
f. National Tribunals at the central level.

Non- statutory Bodies

The work of these bodies influences the course and character of industrial relations in the country. The
important issues likely to cause tensions in industrial relations or result in specific industrial disputes,
are brought for discussions before these bodies which help the employers, workers and organizations to
clarify and modify the thinking and attitude.

The non statutory bodies exist at different levels such as the Indian Labor conference and standing Labor
Committee at national level, Wage Boards and Industrial Committees at the industry level, and State
Labor Advisory Boards at the state level.
Indian Labor Conference and Standing Labor Committee :- Both of the organization were setup in 1942,
with initial membership of 44 in the Indian Labor Conference and 20 in the standing Labor Committee,
patterned after ILO, are tripartite in character consisting of representatives of the central and state
governments, employers and workers. The main objectives of these two establishments were
promoting uniformity in labor legislation; laying down of a procedure for the settlement of industrial
disputes and discussing all matters of national importance as between employers and employees and
advises the government of India on matters brought to it by the Government.

The Indian labor Conference has contributed much by discussing and evolving a consensus in respect of
plan , proposals, particularly those having a direct relevance to labor.

In 1957 the standing labor committee had adopted the provision of the code of discipline which is later
endorsed by the Indian labor conference. The code has a direct bearing on the various aspects of
industrial disputes, strikes and lock-outs, recognition of trade unions, unfair labor practices and
redressal of grievance.

Code of discipline in Industry – The code of Discipline, as drafted by a tripartite sub-committee

appointed by the Indian Labor Conference in 1957 and modified by the standing labor committee the
same year, was unanimously adopted by the Indian Labor conference at its 16th session in May 1958.
The code, which came into force from June 1, 1958 had been ratified by the employer’s and workers’
organizations. The text are :-

To maintain Discipline in Industry(both in public and Private Sectors)

i. A just recognition by employers and workers of the rights and responsibilities of either
party, as defined by the laws and agreements.
ii. A proper and willing discharge by either party of its obligations consequent on such
recognition.

To Ensure Better Discipline in Industry :

The management and unions agree

i. That no unilateral action should be taken in connection with any industrial matter and that
disputes should be settled at appropriate level.
 ii. That the existing machinery for settlement of disputes should be utilized with the utmost
expedition.
iii. That there should be no strike or lock-out without notice
iv. That affirming their faith in democratic principles, they bind themselves to settle all future
differences, disputes and grievances by mutual negotiation, conciliation and voluntary
arbitration.
v. That neither party will have recourse to a.) Coercion, b.) Intimidation,
c.) Victimisation, or d.) Go-slow.

vi. That they will avoid a. litigation, b.Sit-down and stay –in-strikes and c. Lock-outs.

Vii. That they will promote constructive cooperation between their representatives at all levels as well
as between workers themselves and abide by the spirit of agreements mutually entered into.

viii. That they will establish upon a mutually agreed basis a grievance procedure which will ensure a
speedy and full investigation leading to settlement.

Ix. That they will abide by various stages in the grievance procedure and take no arbitrary action which
would bypass this procedure

x. That they will educate the management personnel and workers regarding their obligations to each
other.

The management agrees

i. Not to increase work-loads unless agreed upon or settled otherwise.

ii. Not to support or encourage any unfair labor practice, such as
a. Interference with the right of employees to enroll or continue as union members
b. Discrimination, restraint or coercion against any employee because of recognized
activity or trade unions
c. Victimisation of any employee and abuse of authority in any form.
iii. To take prompt action for
a. Settlement of grievances
b. Implementation of settlement awards, decisions and orders.
iv. To display in conspicuous places in the undertaking the provisions of this Code in local
languages
v. To distinguish between actions justifying immediate discharge and those where discharge
must be preceded by a warning, reprimand, suspension or some other form of disciplinary
action and to arrange that all such disciplinary action should be subject to an appeal through
normal grievance procedure.
 vi. To take appropriate disciplinary action against its officers and members in case where
enquiries reveal that they were responsible for precipitate action by workers leading to
indiscipline, and
vii. To recognize the union in accordance with the criteria evolved at the 16th session of the
Indian Labor Conference held in May 1958.
The Union(s) agrees

i. `Not to engage in any form of physical dures;

ii. Not to permit demonstrations which are not peaceful and not to permit rowdyism in
demonstration
iii. That their members will not encourage or cause other employees to engage in any union
activity during working hours, unless as provided for by law, agreement or practice
iv. To discourage unfair labor practices, such as
a. Negligence of duty
b. Careless operation
c. Damage to property
d. Interference with or disturbance to normal work,
e. Insubordination
v. To take prompt action to implement awards, agreements, settlements and decisions
vi. To display in conspicuous places in the union offices, the provisions of the code in the local
language(s) and
vii. To express disapproval and to take appropriate action against office-bearers and members
for indulging in action against the spirit of this code.

The standing Labor Committee in its 16th session held in October 1957, recommended the following
steps in regard to the action to be taken against their constituents committing breaches of the code :

i. To ask the unit to explain the infringement

ii. To give notice to the unit to set right the infringement within a specified time.
iii. To warn, and in cases of more serious nature to censure, the unit concerned for its actions
constituting the infringement
iv. To impose on the unit any other penalties open to the organization
v. To disaffiliate the unit from its membership in case of persistent violation of the code.

Wage Boards :- Non-statutory Central Wage Boards first came to be setup in 1957 primarily as a result
of the recommendations of the Second Five Year Plan observed that wages and allied matters are the
major source of frictions between employers and workers. The existing machinery for the settlement of
disputes namely Industrial Tribunals, has not given full satisfaction to the parties concerned.

A wage Board generally consisted of an impartial Chairman, two other independent members, and two
or three representatives of employers and workers each. The most important function performed by a
wage Board had been to determine the wage structure for the industry concerned and to specify the
categories of employees to be brought under the purview of the wage fixation. In some cases, they
were also asked to deal with such questions as gratuity, hours of work and bonus. A study of the
working of wage boards shows that they worked mainly as forums of collective bargaining at the
industry level. Now the wage board system has fallen in disuse.

Collective Bargaining:-

The advent modern trade unions, the workers have been pressurizing their employers in a concerted
manner for improving the terms and conditions of employment, but the term “Collective Bargaining”
was seldom used for this concerted action. Sidney and Beatrice Webb were the first to use the term
Collective bargaining in 1891.

According to Encyclopaedia of social sciences, “ Collective Bargaining is a process of discussion and

negotiation between two parties, one or both of whom is a group of persons acting in concert.

ILO considers collective bargaining as “negotiations about working conditions and terms of employment
between an employer and a group of employees or one or more employees’ organization with a view to
reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each
party in their employment relations with one another; fix a large number of detailed conditions of
employment; and during its validity, none of the matters it deals with can in normal circumstances be
given as a ground for a dispute concerning an individual worker.

Hoxie holds, “Collective bargaining is a mode of fixing the terms of employment by means of bargaining
between an organized body of employees and an employer or an association of employers usually acting
through organised agents. The essence of collective bargaining is a bargain between interested parties
and not a decree from outside parties.

During initial periods, the subject-matters of collective bargaining were confined mainly to wages and
other pecuniary gains. Subsequently, hours of work and certain aspects of physical working conditions
also became subjects of joint negotiations. As trade unions grew in strength, more and more subjects
came under the purview of collective bargaining. These includes : wages, allowances, hours of work,
physical working conditions, fringe benefits, incentive payments, welfare amenities, economic security,
job security, promotion, retiral benefits, discipline, training, leave holidays, discharge and dismissal, lay-
off and retrenchment, overtime work and payment, vacations, leave travel, technology and
technological changes, production and productivity, environment, and so forth.
The essential features of collective bargaining are :-

1. It is a process in which the terms and conditions of employment are determined jointly by the
employer and workers.
2. It is the representatives of workers and the employer or his agents who actually participate in
the bargaining is called Collective bargaining otherwise it is called individual bargaining.
3. The employer-employee relationship is a pre-condition for collective bargaining.
4. The main object is the determination of terms and conditions of employment through
negotiations and process of give and take.
5. The agreement arrived at during the course of bargaining may relate to number of subjects of
the terms of employment and working conditions or to only a single issue.
6. Collective bargaining is confined not only to employer and workers, but the state has also come
to play a notable role in regulating various aspects of collective bargaining.
7. The nature of collective bargaining is changeable and dynamic. With the changes taking place in
technology, economic order, political environment, structure of trade union organizations,
ownership of industrial enterprises, role of the government and so forth.

Process of Collective Bargaining :- The main steps usually involved in collective bargaining include :

1. Presentation in a collective manner to the employer their demands by the employees,

2. Discussions and negotiations on the basis of mutual give-and-take for fulfilling the demands.
3. Signing of a formal agreement or arriving at an informal understanding, when negotiations
result in mutual satisfaction
4. In the event of the failure of negotiations, a likely resort to strike or lock-out to force the
opposite party to come to terms.

Importance of collective Bargaining:- Collective bargaining has a significant in modern industrial

societies. The benefits it has conferred upon workers have been overwhelming. The institution has also
benefited the employers and managements in numerous ways. It has also wider implications for the
economy and society as a whole. The notable areas in which the influence of Collective bargaining can
be easily discerned are :

1. Improvement in conditions of workers :- It has considerably helped in securing a wide variety of

economic benefits for the workers in the form of higher wages, liberal allowances, fringe
benefits, economic security, shorter hours of work, better terms and conditions of employment
and physical working conditions.
 2. Check on autocracy in Industry :- “Hiring and firing” of work men was considered the
prerogative of the employer. Collective bargaining has put an effective check on employers’
autocracy in regard to the laying down of terms and conditions of employment. The CB has led
to the promotion of industrial democracy.

3. Promotion of Lasting industrial peace.:-Through CB the employers and workers are in a better
position to understand and appreciate the problems and difficulties of each other

4. Conducive to managerial Efficiency :- CB has also contributed towards improving managerial

efficiency and solution of specific problems. CB taking in a free and frank atmosphere also leads
to revelations of deficiencies in managerial policies and practices.

5. Development of Industrial Rules :- Successful conclusion of CB and incorporation of the terms in

collective agreements lead to the establishment of rules or standards to be observed by both
the parties and which may be legally enforceable documents.

6. Significant for society and economy :- CB has been exercising a potent influence on the
governmental policies and programs, social institutions, standard of living, distribution of
national income and economic and social development. CB has manifestations in politics,
legislation, government administration, religion, education and propaganda.

In the context of the importance of CB, Chamberlain has developed three theories, that is, Marketing
theory, Governmental Theory and Managerial Theory.

The Marketing theory views CB as contract for the sale of labor. According to this theory, employees sell
their labor on terms determined on the basis of contract, made through the process of CB. It constitutes
a process through which demand for and supply of labor are equated in the labor market.

The Governmental Theory considers CB as a form of industrial government. It constitutes a

constitutional system in which the trade union and management participate to regulate the terms and
conditions of employment. The management administers the provisions of the contract as an executive
authority. The contract is viewed as a constitution, adopted by the representatives of the trade union
and management, in the form of a compromise or agreement.

The Managerial Theory views CB as a method of management. As both the trade union and
management participate in the deliberations and decision-making, the union representatives are seen as
participating in the management of the organization.
The process of negotiation between unions and employers in respect of the terms and
conditions of employment of employees, and about the rights and responsibilities of trade
unions .

The term is reputed to have been coined by Beatrice Webb in the late nineteenth century to
describe a process alternative to that of individual bargaining between employer and individual
employees.

Other writers have emphasized the conflict-resolution aspects of collective bargaining, but in
Britain the most important refinement was that made by Allan Flanders, who defined it as a
process of rule-making, leading to joint regulation in industry.

The term is usually seen as necessarily containing an element of negotiation and hence as
distinct from processes of consultation , from which negotiation is absent, and where outcomes
are determined unilaterally by the employer.

In Britain collective bargaining for many years has been, and been endorsed as, the dominant
and most appropriate means of regulating workers' terms and conditions of employment, in line
with ILO Convention No. 84. Surveys indicate that in 1984 over 70 per cent. of all workers
working in enterprises employing more than 25 employees were covered by collective
bargaining: some 10.7 million employees. See bargaining structure .

Module- III : Tripartite and International Bodies : Tripartism and IR, ILC & SLC, ILO- Structure and
Functions, Conventions and Recommendations, Bipartism Link with Tripartism, Strengthening
Tripartite social Dialogue, Workers Participation in Management.

Tripartism is economic corporatism based on tripartite contracts between employers'

organizations, trade unions, and the government of a country. Each is to act as a social partner to
create economic policy through cooperation, consultation, negotiation, and compromise.
Tripartism is a common form of and favored by neo-corporatism.

Tripartism became a popular form of economic policy during the economic crisis of the 1930s

Origins[
First session of the International Labour Conference in Washington in 1919.

While the ILO was established as an agency of the League of Nations following World War I, its
founders had made great strides in social thought and action before 1919. The core members all
knew one another from earlier private professional and ideological networks, in which they
exchanged knowledge, experiences, and ideas on social policy. Prewar "epistemic communities",
such as the International Association for Labour Legislation (IALL), founded in 1900, and political
networks, such as the socialist Second International, were a decisive factor in the institutionalization
of international labour politics.

In the post–World War I euphoria, the idea of a "makeable society" was an important catalyst behind
the social engineering of the ILO architects. As a new discipline, international labour law became a
useful instrument for putting social reforms into practice. The utopian ideals of the founding
members—social justice and the right to decent work—were changed by diplomatic and political
compromises made at the Paris Peace Conference of 1919, showing the ILO's balance between
idealism and pragmatism.[18]

Over the course of the First World War, the international labour movement proposed a
comprehensive programme of protection for the working classes, conceived as compensation for
labour's support during the war. Post-war reconstruction and the protection of labour unions
occupied the attention of many nations during and immediately after World War I. In Great Britain,
the Whitley Commission, a subcommittee of the Reconstruction Commission, recommended in its
July 1918 Final Report that "industrial councils" be established throughout the world. The British
Labour Party had issued its own reconstruction programme in the document titled Labour and the
New Social Order. In February 1918, the third Inter-Allied Labour and Socialist
Conference (representing delegates from Great Britain, France, Belgium and Italy) issued its report,
advocating an international labour rights body, an end to secret diplomacy, and other goals. And in
December 1918, the American Federation of Labor (AFL) issued its own distinctively apolitical
report, which called for the achievement of numerous incremental improvements via the collective
bargaining process.
IFTU Bern Conference
As the war drew to a close, two competing visions for the post-war world emerged. The first was
offered by the International Federation of Trade Unions (IFTU), which called for a meeting
in Bern, Switzerland, in July 1919. The Bern meeting would consider both the future of the IFTU and
the various proposals which had been made in the previous few years. The IFTU also proposed
including delegates from the Central Powers as equals. Samuel Gompers, president of the AFL,
boycotted the meeting, wanting the Central Powers delegates in a subservient role as an admission
of guilt for their countries' role in the bringing about war. Instead, Gompers favoured a meeting in
Paris which would only consider President Woodrow Wilson's Fourteen Points as a platform. Despite
the American boycott, the Bern meeting went ahead as scheduled. In its final report, the Bern
Conference demanded an end to wage labour and the establishment of socialism. If these ends
could not be immediately achieved, then an international body attached to the League of Nations
should enact and enforce legislation to protect workers and trade unions.
Commission on International Labour Legislation[

Meanwhile, the Paris Peace Conference sought to dampen public support for communism.
Subsequently, the Allied Powers agreed that clauses should be inserted into the emerging peace
treaty protecting labour unions and workers' rights, and that an international labour body be
established to help guide international labour relations in the future. The advisory Commission on
International Labour Legislation was established by the Peace Conference to draft these proposals.
The Commission met for the first time on 1 February 1919, and Gompers was elected chairman.

Issues of ILO
Forced labour
The ILO has considered the fight against forced labour to be one of its main priorities. During the
interwar years, the issue was mainly considered a colonial phenomenon, and the ILO's concern was
to establish minimum standards protecting the inhabitants of colonies from the worst abuses
committed by economic interests. After 1945, the goal became to set a uniform and universal
standard, determined by the higher awareness gained during World War II of politically and
economically motivated systems of forced labour, but debates were hampered by the Cold War and
by exemptions claimed by colonial powers. Since the 1960s, declarations of labour standards as a
component of human rights have been weakened by government of postcolonial countries claiming
a need to exercise extraordinary powers over labour in their role as emergency regimes promoting
rapid economic development.

Minimum wage law

To protect the right of labours for fixing minimum wage, ILO has created Minimum Wage-Fixing
Machinery Convention, 1928, Minimum Wage Fixing Machinery (Agriculture) Convention,
1951 and Minimum Wage Fixing Convention, 1970 as minimum wage law.
HIV/AIDS
The International Labour Organization (ILO) is the lead UN-agency on HIV workplace policies and
programmes and private sector mobilization. ILOAIDS is the branch of the ILO dedicated to this
issue.

The ILO has been involved with the HIV response since 1998, attempting to prevent potentially
devastating impact on labour and productivity and that it says can be an enormous burden for
working people, their families and communities. In June 2001, the ILO's governing body adopted a
pioneering code of practice on HIV/AIDS and the world of work, [54]which was launched during a
special session of the UN General Assembly.
Migrant workers
As the word "migrant" suggests, migrant workers refer to those who moves from one country to
another to do their job. For the rights of migrant workers, ILO has adopted conventions,
including Migrant Workers (Supplementary Provisions) Convention, 1975 and United Nations
Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families in
1990.
Domestic workers
Domestic workers are those who perform a variety of tasks for and in other peoples' homes. For
example, they may cook, clean the house, and look after children. Yet they are often the ones with
the least consideration, excluded from labour and social protection. This is mainly due to the fact that
women have traditionally carried out the tasks without pay. For the rights and decent
work of domestic workers including migrant domestic workers, ILO has adopted the Convention on
Domestic Workers on 16 June 2011.
ILO and globalization
Seeking a process of globalization that is inclusive, democratically governed and provides
opportunities and tangible benefits for all countries and people. The World Commission on the Social
Dimension of Globalization was established by the ILO's governing body in February 2002 at the
initiative of the director-general in response to the fact that there did not appear to be a space within
the multilateral system that would cover adequately and comprehensively the social dimension of the
various aspects of globalization. The World Commission Report, A Fair Globalization: Creating
Opportunities for All, is the first attempt at structured dialogue among representatives of
constituencies with different interests and opinions on the social dimension of globalization.[61]
Future of Workt
The ILO launched the Future of Work Initiative in order to gain understanding on the transformations
that occur in the world of work and thus be able to develop ways of responding to these
challenges. The initiative begun in 2016 by gathering the views of government representatives,
workers, employers, academics and other relevant figures around the world. About 110 countries
participated in dialogues at the regional and national level. These dialogues were structured around
"four centenary conversations: work and society, decent jobs for all, the organization of work and
production, and the governance of work." The second step took place in 2017 with the establishment
of the Global Commission on the Future of Work dealing with the same "four centenary
conversations". A report is expected to be published prior to the 2019 Centenary International
Labour Conference.

Some of the most important organisational structure of ILO are as

follows:

1. International Labour Conference (ILC)

2. Governing Body

3. International Labour Office (ILO).

1. International Labour Conference (ILC):

This is the Apex body of ILO which makes labour policies for
international labour. The ILC holds its sessions at a frequency not less
than once in a year. The delegates from three group’s viz. the
government, the employers’ and the workers attend ILC sessions in
the ratio of 2:1:1 respectively. Each representative has a vote. The
representatives from the Government are mostly ministers, diplomats
or officials.

The conference is empowered to appoint committees to deal with

different matters relating to labour during each session. Examples of
such committees are the selection committee, The Credential
Committee, The Resolution Committee, The Drafting Committee, The
Finance Committee, etc. All committees except Finance Committee are
tripartite in nature.

The functions performed by the ILC are to:

1. Formulate international labour standards.

2. Fix the amount of contribution to be paid by the member states.

3. Decide budget and submit the same to the Governing Body.

4. Study the labour problems submitted by the Director General and

assist in their solutions.

5. Appoint committees to deal with different problems during its

sessions.

6. Elect the president.

7. Select members of the Governing Body.

8. Develop policies and procedures.

9. Seek advisory opinion from International Committee of Justice.

10. Confirm the powers, functions and procedure of Regional

Conference.

2. Governing Body:
It is also a tripartite body. It implements decisions of the ILC with the
help of the International Labour Organisation. It consists of 56
members in the same ratio of 2:1:1, i.e. 28 representatives of the
Government, 14 of the employers and 14 of the workers. Of the 28
representatives of the Government, 10 are appointed by the members
of the States of Chief Industrial Importance and remaining 18 are
delegates of the other governments.

The functions of the Governing Body are to:

1. Co-ordinate work between the ILC and ILO.

2. Prepare agenda for each session of the ILC.

3. Appoint the Director General of the office.

4. Scrutinize the budget.

5. Follow up with member states in regard to implementation of the

conventions and recommendations adopted by the ILC.

6. Fix the date, duration, schedule and agenda for the Regional
Conferences

7. Seek as and when required, advisory opinion from the International

Court of Justice with the consent of the ILC.
3. International Labour Office:
This is the secretariat of the ILO in Geneva and is the third major
organ of the ILO. The Director General (DG) of the ILO is the Chief
Executive Officer of the Secretariat appointed by the Governing Body.
He also serves as the Secretary General of the ILC. His tenure is for 10
years and extendable by the Governing Body.

The Director General is assisted by two Deputy Director Generals, six

Assistant Director Generals, one Director of the International Institute
of Labour Studies, and one Director of the International Centre for
Advanced Technical and Vocational Training, Advisors, Chief of
Divisions from 100 nations.

Following are the main functions of this office:

1. Prepare briefs and documents for agenda of ILC.

2. Assist the Governments of the States to form labour legislation

based on recommendations of the ILC.

3. Bring out publications relating to industrial labour problems of

international nature and interest.

4. Carry out functions related to the observance of the conventions.

5. Collect and distribute information on international labour and

social problems.

Structure
ILO Tripartite Constituency
The International Labour Organization (ILO) is the only tripartite UN agency with
government, employer and worker representatives. This tripartite structure makes the ILO a
unique forum in which the governments and the social partners of the economy of its 187
member States can freely and openly debate and elaborate labour standards and policies.
International Labour Office

The International Labour Office is the permanent secretariat of the International Labour
Organization - its operational headquarters. Administration and management are
decentralized in regional, area and branch offices in more than 40 countries under the
leadership of a Director-General.
ILO Director-General

A Director-General is elected every five years by the Governing Body. Subject to the
instructions of the Governing Body, the Director-General is responsible for the efficient
conduct of the International Labour Office and other duties as may be assigned.
ILO Administrative Tribunal

The Administrative Tribunal examines employment-related complaints by officials of the

International Labour Office and of the other international organizations that have recognized
its jurisdiction. It is currently open to approximately 46,000 international civil servants who
are serving or former officials of some 60 organizations.
ILO Centres and Institutes

The ILO is universally regarded as an authoritative source of knowledge on the world of

work. The Organization has established institutes and centres that provide specialized
research, training and support for the ILO’s offices and constituents.

ILC & SLC

Indian Labour Conference (ILC) and Standing Labour Committee(SLC) have been constituted to
suggest ways and means to prevent disputes. The representatives of the workers and employers
are nominated to these bodies by the Central Government in consultation with the All-India
organizations of workers and employers. The Labour Ministry settles the agenda for ILC/SLC
meetings after taking into consideration the suggestions sent to it by member organizations.
These two bodies work with minimum procedural rules to facilitate free and fuller discussions
among the members. The ILC meets once a year, whereas the SLC meets as and when
necessary..

ILC and SLC are both important constituents of tripartite bodies and play a vital role in shaping
the IR system of the country.The function of ILC is to advise the Government of India matter
referred to it for advice, taking into account suggestions made by the provincial government, the
states and representative of the organizations of workers and employers´.The function of SLC is
to consider and examine such questions as may be referred to it by the central government and to
render advice, taking into account the suggestions made by various governments, workers and
employers.

The functions of ILC are

a. To promote uniformity in labour legislation

b. To lay down a procedure for the settlement of industrial disputes
c. To discuss matters of All-India importance as between employers and employee

According to the National Commission on Labour these 2bodies have contributed to attainment
of the objectives set before them. They have facilitated the enactment of central legislation on
various subjects to be made applicable to all the states and union territories in order to promote
uniformity in labour legislation.

Tripartite deliberations have helped reached consensus on statutory wage fixation, introduction
of a health insurance scheme, enactment of the Standing Employment Order Act1946,, Industrial
Disputes Act 1947, Minimum Wages Act1948, Employees· State Insurance Act 1948, Provident
Fund Scheme 1950, The Mines Act 1952 etc.

Other subjects processed by tripartite bodies are workers education, workers participation in
management, training, wage policy, Code of Discipline, criteria and procedures for the
recognition of unions. Though the recommendation of tripartite bodies is of advisory nature, they
carry considerable weight with the government, workers and employers, A detailed account of
various resolutions adopted by the ILC’s in their last two sessions is presented here:

a. The 30th Session of the Indian Labour Conference

The 30th Session of the ILC was held on September 7-8, 1993 at New Delhi. After
deliberations,it arrived at the following conclusions4.

1. On the impact of New Industrial Policy, the chairman referred to the assurance by
the Prime Minister that it would not lead to any human distress and the legitimate
interests of labour would be protected.
2. In regard to retraining and redeployment, the conference desired identification of
labour for such retraining and redeployment and a scheme for industry-wise and
occupation-wise redeployment. The conference also expressed the view that
Government should identify the agency for retraining and their redeployment. The
 conference also wanted to know how labour of one unit would be redeployed in
another unit.
3. For absorption of surplus labour, if any, as for maximizing capacity utilization,
the conference suggested diversification and broad-basing by working the units
round the clock and on all days of the week.
4. The conference expressed its serious concern at the low productivity of Indian
industry and expressed its determination to improve wherever necessary its
productivity, enhance its quality and reduce the price of goods to make them
internationally competitive. The conference decided to strive for improvement in
discipline and attitude to work at all levels. It also decided that bipartite efforts to
improve productivity and quality should be institutionalized.
5. The Trade Unions demanded:
i. The removal of ceiling on bonus both for eligibility and for computation
by promulgation of an ordinance;
ii. The immediate implementation of the DA rate of Rs.2 per point of the
Consumer Price Index (1960 series).
iii. Permission for the managements of the public sector units to commence
negotiations with the unions on their charter of demands immediately.
iv. Clearance by government to the agreement regarding pension and for the
pension scheme for its early introduction.
v. Enhancement of the rate of interest on Employees’ Provident Fund to at
least 13 per cent.
vi. Enhancement of the limits of exemption of income tax substantially.
6. The employers wanted postponement of the decision on removal of ceiling on
bonus both for eligibility and computation of bonus by one year so that a well-
thought out scheme could be evolved. They also wanted productivity linked bonus
as prescribed under the law.
7. The trade unions indicated that the first National Commission on Labour was
appointed about 25 years ago and a time had come to set up another National
Commission on Labour to examine the issues that labour was facing today in
view of the many changes that has occurred in the meantime.
8. The Labour Cell in the Planning Commission may be revived to facilitate
consultation with trade unions while formulating policies concerning labour. The
view expressed by the participants in the conference with regard to employment
policy may be conveyed to the Planning Commission for its consideration and for
the consideration of the two Sub-Committees of the Planning Commission/ NDC
which are considering strategies for implementation of the employment policy.
b. 31st Session of I.L.C

This session of I.L.C was held at Delhi on 3rd-4th January 1995.In this session various
problems of industrial relations in the context of changed economic environment were
discussed. The various resolutions adopted at the said conference are as under.

1. The institution of the Indian Labour Conference should be strengthened further

2. The Central and State Governments and the social partners should come together
in making the comprehensive industrial relations law a reality and an instrument
 of production, productivity, employment generation and enhancement of living
standards.
3. Productivity of economic enterprises as a whole is of paramount importance.
4. The government should give special attention to streamlining the public
distribution system, particularly in centers of concentration of working people.
5. The Government should review the situation arising out of the wage negotiations
in Central Public Sector Undertakings and should facilitate speedy conclusion of
wage negotiations and settlements.
6. The worker’s representatives demanded that the eligibility and calculation
ceilings under the Payment of Bonus Act should be scrapped, whereas the
employers’ representatives demanded that a quick decisions should be taken on
introduction of DA slabs.
7. The government should introduce the Pension for Provident Fund subscribers on
priority basis and there should be tripartite consultations before its introduction.
Management of Social Security Funds should be professionally handled so as to
maximize the returns on investments.
8. Steps should be taken for speedy and orderly investigation into the rehabilitation
of sick industrial enterprises registered with the BIFR,minimizing distress for the
workers and disabilities for the employers.
9. The constitution and the functioning of the National Renewal Fund should be
reviewed such that the Fund truly serves the purpose of industrial renewal and
regeneration and creation of employment opportunities.
10. Implementation of training programmes should be undertaken within the
framework of a well thought-out plan.
11. The Central and State Governments should give high priority to allocation of
resources for elementary and vocational education. Special attention should be
given to the education of women.
12. The government should enact, on priority basis, laws for covering agricultural and
construction workers.
13. The Labour Ministry should set up an Advisory Body to review, from time to
time, the status of women.
14. The Constitution of the Child Labour Advisory Committee should be reviewed to
ensure that it is fully representative of the social partners.
15. Representatives from workers’ and employers’ organizations should be included
in the National delegation to the World Summit for Social Development.
16. The Vocational Training System in the country should be reorganized.
17. The resolutions of the 32nd Session of the Standing Labour Committee in respect
of the social clause, child labour elimination and bonded labour were fully
endorsed. The social partners should take further follow up action on the
resolutions.18. The new International Economic Order holds out vast
opportunities for economic betterment and up gradation of the living standards of
the people. The risks involved in formulating and implementing economic
policies to avail of these opportunities should be so handled as to minimize
human distress.

Standing Labour Committee India

 a. The 31st Session of Standing Labour Committee

The 31st session of S.L.C was held in New Delhi on July 25, 1992. The Committee
arrived at the following conclusions:

1. It was resolved that future sessions of the Standing Labour Committee(SLC)

should carry fewer items on the agenda so that these could be discussed in greater
detail.
2. It was resolved that Government may bring specific proposals for new Industrial
Relations Law in the ensuring session of Indian Labour Conference which should
reflect the needs of the qualitative change in the industrial /economic scenario in
the national/global context.
3. It was resolved to set up a tripartite sub-committee to review the implementation
of important Labour laws.
4. It was resolved to set up an autonomous Bipartite Productivity Councils at the
national, regional, industrial and plant levels.
b. The 32nd Session of Standing Labour Committee

The thirty second session of the Standing Labour Committee was held in New Delhi on
October 27, 1994. It discussed various issues concerning employment, vocational
training, child labour, bonded labour, labour standards and international trade. It adopted
three important resolutions discussed below:

a. Social Clause: It was agreed that the government along with employers and
labour organizations would resist in I.L.O. and all other fora any attempt to
introduce “Social clause”, in relation to carrying our marketing at the international
level, contingent upon enforcement of labour standards. Further,it advocated
sustained national and international action for upgrading labour standards without
any trade linkage.
b. Child Labour: With respect to child labour, it remarked that the “Central and
State Governments and Organizations of employers and workers should take co-
ordinated action for the elimination of child labour in hazardous occupations by
the year 2000 and in other employments progressively”. It also emphasized that
both Central and State Governments should implement time bound and action
plans to take away children from work and provide them education, primary
vocational training, health and nutrition and concurrently provide to the parents of
such children gainful employment.
c. Bonded Labour: It exhorted that all states should take fresh surveys for the
identification release and rehabilitation of bonded labour.Besides this, measures
shall be initiated to check the relapse of bondage of such labour.

Committee on Conventions:

Once a country has ratified an ILO convention, it is obliged to report regularly on measures it has
taken to implement it. The government must submit reports regularly detailing the steps they
have taken in law and practice to apply any of the conventions they may have ratified.
Governments are required to submit copies of their reports to employers· and workers·
organizations. These organizations may comment on the governments· reports; they may also
send comments on the application of conventions directly to the ILO. Committee in Conventions
is a three-man tripartite committee set up in 1954. The object was To examine the ILO
conventions and recommendations which have not so far been ratified by India. To make
suggestions with regard to a phased and speedy implementation of ILO standards.

It is generally composed of eminent jurists appointed by the Governing Body for three-year
terms. The Experts come from different geographic regions, legal systems and cultures. The
Committee's role is to provide an impartial and technical evaluation of the state of application of
international labour standards. When examining the application of international labour standards
the Committee of Experts makes two kinds of comments: observations and direct requests.
Observations contain comments on fundamental questions raised by the application of a
particular convention by a state. These observations are published in the Committee's annual
report.

Direct requests relate to more technical questions or requests for further information. They are
not published in the report but are communicated directly to the governments concerned. The
Committee's annual report consists of three parts. Part I contains a General Report, which
includes comments about member states' respect for their Constitutional obligations and
highlights from the Committee's observations Part II contains the observations on the application
of international labour standards Part III is a General Survey.

Industrial Committees

Industrial Committees are tripartite bodies where the number of workers· representatives are
equal to the employers· representatives. These were set up to discuss various specific problems
special to the industries covered by them and suggest ways to overcome them. These committees
provide a forum for the discussion of proposals for legislation and other matters connected with
the labour policy and administration before they brought before the legislature.

Other committees

1. Steering Committee on Wages:

It was set up in 1956 and consists of representatives of state government, employers,

workers and an economist .Its functions were

i.To study trends in wages, production and price.

ii.To draw a wage map of India.
iii.To help laying down principles which will guide wage fixing authorities.
iv. Central Boards of Workers Education:
This was constituted to encourage growth of strong and well informed trade union
movement on responsible and constructive lines and comprised of representatives
of central & state government, employers and workers
2. National Productivity Council:
 It encouraged the productivity in the country and consists of the government, employers
associations, labourers association & organizations and independent experts.

3. Central Implementation and Evaluation Machinery:

This is setup to ensure proper implementation of labour awards, agreements and Code of
Discipline. It consists of 4 representatives each of central employers· and workers
organizations with union labour minister as chairman

Pictures on ILC & SLC & Code of Discipline

The Picture of 46th Indian Labour Conference held at New Delhi on 20th and 21st july 2015 at Vigyan
Bhawan . Inaugurated by the Prime Minister of India.
Introduction

The state of bipartite relations has an impact on the effectiveness of tripartism. However, it is
necessary to be clear about what is meant by bipartism in this connection.

In many Asian countries bipartism has been viewed as the relationship between each of the
social partners separately with the government and public authorities. This view has been
engendered by factors such as the power of some governments which have no equivalent in the
West, the politicization of unions, or the power of employers in business friendly countries. This
is not the sense in which the term bipartism is used. Bipartism in this context means the
relationship (dialogue, dealings, negotiation) between the organizations of employers and
employees, at the enterprise, industry and national levels.

Apart from the number of parties in the two relationships, there are several points of distinction
between them. First, tripartism operates at the national, industry or provincial levels. It cannot
simply that tripartism operates at that level, in the same way that though the State prescribes
rules relating to marriage, it does not mean that the marriage relationship involves State
participation. Even though labour inspection is a process undertaken by the State with a view to
ensuring the observance of laws and rules required to be observed by enterprises, or at the
enterprise level, it is not tripartism. Bipartism, on the other hand, operates at all three levels,
more particularly and frequently at the enterprise level.

A second distinction is based on the subject matter. In tripartite dialogue issues addressed are
policy-oriented. This is also the case in bipartite relationships when they occur at the national or
industry level. At the workplace level issues relate to the particular workplace, and are of a more
practical nature.
Third, in regard to parties to the dialogue, tripartite processes involve representatives of
employers and employees, as does bipartism at the national, industry or provincial level. But at
the enterprise level, there is less scope for the involvement of employers' organizations, though
such involvement does occur in countries where the employers' organization negotiates on behalf
of the employer in respect of workplace issues such as disputes and strikes, wages and terms and
conditions of employment. However, it may be argued that when an employers' organization
enters such negotiations, the matter is taken out of the enterprise level. Bipartism can take place
at the enterprise level even if there is no union. It is conceivable for bipartism to operate in the
same enterprise with or without a union at different levels. As in the case of joint consultation in
Japan, bipartism may operate in the form of workplace information-sharing through group
activities without the union, and at the corporate level through joint consultation committees
consisting of management and union representation.There is an interplay and interaction between
tripartism and bipartism. Since macro level decisions (which may be taken through tripartite
consultation) have little value if they are not translated into practice at the enterprise level,
bipartism can be a process for giving effect at the enterprise level to tripartite decisions. For
example, Singapore's decision in the second half of the 1980s to introduce a flexible wage
system was the result of a tripartite consensus. But implementation was determined on a bipartite
basis, thus leaving employers and employees (and their representatives) to opt between a
profitability or productivity model (or a combination of both). There are, of course, some
tripartite decisions which do not call for implementation at the enterprise level, as in the case of
social security schemes operative at the national level.

Bipartism is not a process intended only to give effect to tripartite decisions. With the increasing
emphasis on workplace relations, macro level policies and decisions are influenced by what takes
place, or what is needed to support practices, at the micro level. Further, the outcomes of
bipartite relationships at the national, industry or provincial levels can have a major influence on
tripartite consultation and macro level policies. A good example is Sweden, where in the 1960s
and 1970s the labour market was regulated by the social partners and national policies reflected
their agreements on labour market issues. In its most advanced form, bipartism may lead to
'social contracts' as evidenced in some of the Scandinavian countries and Germany, which define
the basic relationship and objectives of the social partners in the labour market.

Tripartism can become an important means to settle issues when bipartism does not result in a
consensus. When such failure leads to disputes, the State's involvement (including through
conciliation and adjudication) brings into play the tripartite process.
Tripartism and Social Dialogue
Sound industrial relations and effective social dialogue are a means to promote better wages and
working conditions as well as peace and social justice. As instruments of good governance they
foster cooperation and economic performance, helping to create an enabling environment for the
realization of the objective of Decent Work at the national level.

Social dialogue and tripartism covers:

 Negotiation, consultation and information exchange between and among the different
actors;
 Collective bargaining;
 Dispute prevention and resolution; and
 Other instruments of social dialogue, including corporate social responsibility and
international framework agreements.

Preconditions for sound social dialogue:

 Strong, independent workers' and employers' organizations with the technical capacity
and access to relevant information to participate in social dialogue;
 Political will and commitment to engage in social dialogue on the part of all the parties;
 Respect for the fundamental rights of freedom of association and collective bargaining;
and
 An enabling legal and institutional framework.

How the ILO helps:

The ILO aims to assist member States in establishing or strengthening legal frameworks,
institutions, machinery or processes for sound industrial relations and effective social dialogue in
member States. It also aims to promote social dialogue among member States and regional or sub
regional groupings as means of consensus building, economic and social development, and good
governance. It supports the development of knowledge on global industrial relations, in
particular the actors and institutions involved in cross-border social dialogue and agreements.