Industrial Relations
and
Labour Welfare
UNIT I
UNIT I INDUSTRIAL RELATIONS
Concepts – Importance – Industrial Relations problems in the Public
Sector – Growth of Trade Unions – Codes of conduct
IR Need
• Employees and employees
• Employer and employees
• Employer and govt
DEFINITION
According to Kapoor defined as the ―Industrial Relations is a
developing and dynamic concept and such no more limits itself merely
to the complex relations between the unions and management but also
refers to the general web of relationships normally obtaining between
employees – a web much more complex than the single concept of
labour capital conflict.
According to V. Agnihotri, “The term industrial relations explains the
relationship between employees and management which stem directly
or indirectly from union-employer relationship.”
Industrial Relations – Scope
• Industrial relations are relation between employee and
employer in their day-to-day work. Hence, it is continuous
relationship.
• Relationship among employees, between employees and their
superiors or managers.
• Collective relations between trade unions and management. It is
called union-management relations.
• Collective relations among trade unions, employers’ associations
and government.
Features of Industrial Relations
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Industrial Relation do not emerge in vacuum they are born of employment relationship in an
industrial setting. Without the existence of the two parties, i.e., labour and management, this
relationship cannot exist.
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It provides the environment for industrial relations.
Industrial Relation are characterized by both conflict and co-operations.
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The focus of Industrial Relations in on the study of the attitudes, relationships, practices and
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procedure developed by the contending parties to resolve or at least minimize conflicts.
The main objectives of industrial relations system are
To safeguard the interest of labor and management by securing the highest level of
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mutual understanding and good-will among all those sections in the industry which
participate in the process of production.
To avoid industrial conflict or strife and develop harmonious relations, which are an
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essential factor in the productivity of workers and the industrial progress of a country.
To raise productivity to a higher level in an era of full employment by lessening the
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tendency to high turnover and frequency absenteeism.
To establish and promote the growth of an industrial democracy based on labor
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partnership in the sharing of profits and of managerial decisions, so that ban
individuals personality may grow its full stature for the benefit of the industry and of
the country as well.
To eliminate or minimize the number of strikes, lockouts and gheraos
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by providing reasonable wages, improved living and working conditions,
said fringe benefits.
To improve the economic conditions of workers in the existing state of
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industrial managements and political government.
Ø Socialization of industries by making the state itself a major employer
Vesting of a proprietary interest of the workers in the industries in
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which they are employed.
Scope of industrial relations
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Protecting the interest of the employees
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Providing reasonable wages to employees
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Providing safe and hygienic working conditions
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Providing social security measures
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Maintaining strong Trade Unions
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Collective bargaining
The main aspects of Industrial Relations
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Labor Relations, i.e. relations between union and management
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Employer-employees relations, i.e. relations between management and employees
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Group relations, i.e. relations between various groups of workmen
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Community or Public relations, i.e. relations between industry and society.
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Promotions and development of healthy labor-managements relations.
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Maintenance of industrial peace and avoidance of industrial strife
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Development of true industrial Democracy
Importance of industrial relation
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Uninterrupted production
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Reduction in Industrial Dispute
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High morale - Industrial relation improves the morale of employees
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Mental revolution
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Economic growth and Development
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Discourages unfair practices
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Enactment of statutory provisions
Industrial relations problems in the public sector
Public Enterprise
Company whose shares are available and traded on the stock market or other over-the-counter market.
Subject to more regulation than a privately owned company, a public enterprise has greater access to
financing. Shareholders own a percentage of the company based on the amount of stock they own.
Wage differentials
It is an area where comparison between the public and private sectors is becoming common.The policy
of settlement of wage structure,equal pay for equal work,wage differentials due to levels of
responsibilities etc are all the issues that concern the labour in public enterprises.
Industrial relations
―Industrial Relations is a developing and dynamic concept and such no more limits itself merely to the
complex relations between the unions and management but also refers to the general web of relationships
normally obtaining between employees – a web much more complex than the single concept of labour capital
conflict‖.
Surplus labour
This problem is the outcome of indiscriminate recruitment on account of political pressures,reduction of
activities,structural changes and improvement in technology.
Over centralization
Management decisions taken at local shop level are turned down by the higher authorities.This
type of over centralization the local management lose the prestige and confidence.
Multipricing of unions
The existence of multiple union has brought the evils of inter union rivalaries.
Political and bureaucratic influence
Public enterprises are highly prone to be influenced by political and bureaucratic set
up.Generally political people influenced decision making process
Growth of Trade Union
Trade Union
In the words of Indian Trade Union Act, 1926,
―A trade union is any combination, whether
temporary or permanent, formed primarily for
the purpose of regulating the relations
between workmen and employers, or between
workmen and workmen, between employers
and employers, or for imposing restrictive
conditions on the conduct of any trade or
business, and includes any federation of two
or more trade unions‖.
Define Trade Union.
According to Dale Yoder defined as ―A trade union is a continuous association of wage
– earners for the purpose of maintaining or improving the conditions of their working lives‖.
The growth and development of the labour movement, and for that part of the trade unions, in
India, can be divided into following periods, each of them revealing different tendencies that mark
it from others.
Functions of Trade Unions
To secure fair wages for workers.
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To safeguard the security or tenure and improve conditions of service.
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To enlarge opportunities for promotion and training.
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To improve working and living conditions.
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To provide for educational, cultural and recreational facilities.
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To cooperate and facilitate technological advancement by broadening the understanding of workers in the issues involved in their jobs.
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To promote identity of interests of the workers with their industry.
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To offer responsive cooperation in improving levels of production and productivity, discipline and high standards of quality.
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To promote individual and collective welfare.
Features
• The main characteristics of the trade unionism are:
• Small size of membership,
• Lack of adequate finance,
• Non fulfillment of welfare schemes,
• Control of political parties,
• Outside interference in the activities of labor unions
Social Welfare period, from 1875 to 1918
The development of industries led to large scale production on the one hand and social evils like
employment and exploitation of women and child labour and the deplorable working
conditions, the government‘s attitude of complete indifference in respect of protection of
labour from such evils, on the other
Early Trade Union period, from 1918 to 1924
The year 1918 was an important one for the Indian trade union movement. ―It market the start
of a new era, an era of growth and one in which the leadership of the trade unions was to pass
from the hands of the social workers into the hands of the politicians
Left-wing Trade Unionism period, from 1924 to 1934
• In 1924, a violent and long-draw-out strike by unions led to the arrest, prosecution, conviction and
imprisonment of many communist leaders. The AITUC (All India Trade Union Congress)
emerged as the representative of the Indian working class. By 1927 it united 57 unions with a
membership of 150,555. the rapid growth of the trade unionism was facilitated by the growth anti-
imperialist national movement;
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The brutal violence and repressive measures let loose by the British government, particularly the
Jallianwala Bagh massacre, Rowlatt Act, indiscriminate arrest and imprisonment of national leaders
and Satyagrahis;
The phenomenal profits earned by the capitalist in the face of falling real ages during the post-war
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period.
Trade Unions’ Unity period from 1935 to 1938
In mid-thirties of the 20th century the state of divided labour movement was natural thought undesirable
and soon after the first split, attempts at trade union unity began to be made through the efforts of the
Roy Group on the basis of ‗a platform of unity‘. The imitative taken by All-India Railwaymen‘s
Federation (s neutral body) had shown fruitful results.
This Federation in its conference at Bombay, formed a Trade Union Unity committee in 1932. The
Committee adopted the following ―platform of unity‖. ―A trade union is an orange of class-struggle;
its basis task is to organize the workers for advancing and defending their rights and interests.
Negotiation, representations and other methods of collective bargaining must remain an integral part of
the trade union activates.‖
Second World War period from 1939 to 1945
The Second World War, which broke out in September 1939, created new strains in the united
trade union movement. These strains arose because of the different political factions in the
AITUC related in different ways to the role of India as a protagonist in the war.
Post – independence period from 1947 to date.
As pointed out earlier, when attempts to restructure the AITUC failed, those believing in the aims
and ideals other than those of the AITUC separated from the organization and established the
Indian National Trade Union Congress (INTUC) in May, 1947
CODE OF CONDUCT
A code of conduct is a set of rules outlining the social norms and rules and
responsibilities of, or proper practices for, an individual, party or organization.
Related concepts include ethical, honor, moral codes and religious laws
Objectives of Code of Conduct
To ensures that the employers and employees recognize each other‘s rights and
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obligations.
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To avoid work stoppage.
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To facilitate the free growth of trade unions.
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To maintain discipline in industry.
Principles of code of conduct
Every employee in industry or unit shall have the freedom and right to join a union of his choice. No coercion
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shall be exercised in this matter.
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There shall be no dual membership of unions.
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There shall be regular and democratic elections of executive bodies.
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Casteism, communalism and provincialism shall be eschewed by all unions.
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There shall be no violence, coercion, intimidation, or personal vilification in inter – union dealings.
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All Central unions shall combat the formation or continuance of company unions.
What a Code Can Help to Accomplish
• A quality code of conduct can go a long way in improving a company‘s
success.
• Prevent legal and regulatory violations.
• Foster greater employee loyalty and retention.
• Encourage greater customer loyalty and retention.
• Build stronger relationships with suppliers and other business partners.
• Strengthen trust and respect of other stakeholders, such as local
communities, regulators, NGOs, even from competitors.
• Build a stronger reputation for integrity by helping the company to do
what it says it will do.
How a Code Works
• Articulates leadership’s expectations.
• Provides staff with a roadmap and tools for their daily work.
• Provides staff with comfort and confidence.
• Encourages staff to serve the company’s aspirations.
• A quality code of conduct helps a company‘s leadership to
accomplish
Elements of an Effective Code
• Foundations for a Program
• Leadership commitment to the program
• Ethics and compliance processes
• Company culture
• Understanding of risk
• Coordination with policies
Foundations for a Program
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These foundations serve as important considerations for a successful code of conduct program. While not all of
the foundations are mandatory – and in fact they will exist in each company in varying forms – the more firmly
that they are established, the more likely that the code (and the larger ethics and compliance initiative) will lead
to success.
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Leadership commitment to the program – Without senior leadership‘s commitment, any code initiative is
unlikely to truly engage employees and demonstrate to them the ―tone at the top‖ that is so critical to any
business initiative – especially one focused on ‗doing the right thing.‘
Ethics and compliance processes – Leadership‘s commitment means so much more when the organization
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can point to procedures and processes that support a code standards and expectations. Otherwise, employees are
right to wonder about how leadership expects to achieve adherence to the company‘s standards and address
concerns.
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Company culture – A company culture focused around an enduring mission or vision and supported
by lasting values sets the best foundation for a proper focus on long-term value and success. These core
foundations help a code rise about a narrow focus only on the law to other commitments, promises and
aspirations that the company seeks to achieve.
Understanding of risk – A company‘s awareness of the ethics and compliance risks that it faces is
central to a code of conduct. With the hundreds of issues that a code could possibly address, a more
targeted risk identification and assessment effort helps to focus the code‘s contents to those issues that
are most important to the company‘s operations and that will provide it with a higher chance of success.
Coordination with policies – A company‘s policies often provide the detail underlying its
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expectations. Policies also can provide the initial framework for a new code of conduct and serve as
additional resources to support a code‘s standards. Where policies exist, they provide important context
for a code development or revision effort.
Four Parts
Part 1: Contains the duties and responsibilities of employers, workers, and
the government in maintaining discipline in industry
Part 2: Enlists the common obligations of Management and unions
Part 3 : Deals with obligations of management only
Part 4: Relates to those unions only
