Evolution of Industrial Relations

What are Industrial Relations?

Industrial relations define relationships between employers and employees toward each other in terms of supervision, direction, planning and coordination of organizational activities, with minimal human effort and functions; all this done with an enthusiastic spirit taking into consideration the safety of all employees. Industrial relations may also be defined as relations between employees and management.

Evolution of Industrial Relations:

The evolution of industrial relations in India began a long time ago. The caste system greatly influenced the ancient industries and their development. Due to successive foreign invasions in India, the living conditions of slave and artesian couldn't be differentiated. Furthermore, under the autocratic regime of Muslim rulers, the conditions of employees worsened. Wages were not guaranteed, the living conditions of workers were harsh, and there was no proper management. The coming of the British didn't improve the working conditions. After some time, however, most Indian industries were modeled after the British system of business, and this led to growth in various sectors.

Industrial Relations under British Rule:

During British rule, India was expected to be a colonial market for British goods up until a cotton mill was established in Mumbai in 1853 and a jute mill was established in Kolkatta in 1955. The working conditions of workers, however, were still very harsh with low pay, and this gave rise to various disputes involving the management and employees. On the other hand, Tata Iron and Steel industry was also established in Jamshedpur in 1911. While there was great demand of iron and steel before and during the First World War, the working conditions of workers hadn't improved. Hence, the Factories Act of 1881 was established, and it granted workers certain rights.

Industrial Relations in First World War:

The First World War was an opportunity in disguise for local factories in India. Prices of virtually all products went up and profits soared, however, wages of lower employees were still the same. There were various strikes and disputes between management and employees. During this time, the Workmen's Compensation Act (1923), the Trade Union Act (1926), and the Trade Disputes Act (1917) were established. While the wages of employees remained the same, they were given a certain share of profits made by their hiring industry. Strikes, however, were sometimes prohibited under the Emergency Rules. The years following World War II involved the most workers' upheaval, and saw the establishment of Industrial Employment Act (1946) and Industrial Disputes Act (1947).

Post-Independence Industrial Relations:

The post-independence era saw a developing relation between industry and labor. A conference called the Industrial Truce Resolution took place in 1947, and foresaw the establishment of the Minimum Wages Act, Factories Act, and Employees State Insurance Act in 1948. This ensured peace between labor and industry. While industrial relations in India have evolved a long way, some features of the early system still exist today. Modern industrial relations are dynamic, and may integrate industrial policies of American and British businesses.

Tripartite , Bipartite Bodies, and Industrial Settlement

Tripartite Bodies:

The principals and policies of the tripartite body have been a machinery of consultancy at the industrial and national levels. The tripartite body was established to make peace and improve relations between management and unions, and maintain smooth functioning of union management relations. It began as a statutory organization by the recommendation of the Whitey Commission to the ILO in 1931. The tripartite body had to be sufficiently large to ensure sufficient representation of the various interests involved; encourage representatives of employers, labor and government to meet regularly; and disallow individual members from making individual contributions to meetings.

Purpose of Tripartite Body:

a. Bring the aggravated parties together for mutual settlement of differences, and encourage a spirit of cooperation and goodwill.

b. Promote uniformity in labor laws and legislation.

c. Discuss all matters of All India importance as between employers and employees.

d. Determine a plan for settlement for all disputes.

Bipartite Bodies:

With the beginning of industrialization of India, labor relations in Indian industries have also been largely influenced by Indian democracy. Groups like Works Committee and Management Council were established to democratize Indian industrial relations. The bipartite consultation machinery was established around 1920, during the time when a few joint committees were setup by the Government of India. These joint committees were also introduced in TISCO in Jamshedpur.

Fundamentals of Industrial Settlement:

1. Both parties have to realize that the country is breaking away from the past, and this is going to put continuous pressure on the quality of man-power and demands from human resources.

2. Both parties have to realize that to run a successful and profitable business, team work is extremely important. This gives rise to timely response and supply of goods to the society.

3.Both the parties accept the charters of "Human Resources Policy" summarized below:

a. Individuals must make every effort to improve their job skills through training and participating in developmental activities.

b. Each employee must keep his/her job skills up-to-date with changing business practices and operations.

c. Machineries should be used throughout the year with trained staff readily available to operate it.

d. Indirect employees may be converted to direct employees for increasing business efficiency.

e. Absenteeism and unnecessary delays must be reduced through planning.

f. Short-term employment must be avoided. Long-term employment should be encouraged and highly trained employees must be hired.

g. The above steps must be utilized to increase company productivity; exploitation of employees must be disallowed.

h. High emphasis must be placed upon the quality of work. The Zero Defect policy must be always followed.

i. Employees must make a stand to follow the "Human Resources Policy" individually or collectively.

j. Both the parties should closely and routinely monitor change in productivity, and take necessary steps to avoid undesirable consequences.

Concepts in Industrial Relations

Industrial relations is a post-industrial revolution term that replaced the expression "master-servant" used to define the relationship between a worker and an employer. Its origins are, as the term indicates, based on the proliferation of large-scale industry from the mid-18th to the mid-19th century. Contemporary industrial relations still refers to the employment relationship and the business unit that manages the employment relations, personnel or human resources. It often includes labor unions as parties to that relationship.

Industrial Relations Versus Employee Relations

Creating a distinction between industrial relations and employee relations is a fundamental concept in this area. Industrial relations generally refers to the laws, duties and employer and labor union obligations in a union work environment. Employee relations typically refers to laws, duties and employer obligations in a nonunion work environment. Industrial relations commonly involves three parties: the employee, employer and the union. With employee relations, just the employee and employer are parties to the working relationship.

Employment Laws Versus Labor Laws

Many HR practitioners and lawyers make the distinction between employment laws and labor laws. Labor laws -- such as the National Labor Relations Act of 1935, the Taft-Hartley Act of 1947 and the Labor-Management Reporting and Disclosure Act of 1959 -- are most applicable to industrial relations matters. Employment laws distinguished from labor laws include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 and the Americans with Disabilities Act of 1990. Both types of laws apply to union and nonunion work environments, but in a unionized work environment, labor laws are often more relevant in resolving labor-management issues. Despite the distinction, the terms "labor laws" and "employment laws" may be used interchangeably to refer to all workplace laws and regulations.

Concerted Activity

The National Labor Relations Act protects the rights of union and nonunion employees to engage in or refrain from concerted activity. Concerted activity refers to employees addressing their concerns as a group -- regardless of whether they have union representation -- rather than individually. The act protects the rights of employees who want union representation as well as the rights of employees who would rather handle workplace issues without union representation. The act prohibits employers and labor unions from engaging in misconduct or coercive tactics to influence employees to support management or organized labor.

Collective Bargaining

Collective bargaining is the process that labor unions and employers participate in to negotiate a labor union contract. These contracts also are called collective bargaining agreements. They are negotiated for a finite period, usually two to four years, and intended to be renegotiated upon expiration of the multiyear term. The employer, labor union and employees are bound by the terms and conditions of a labor union contract, which sets out employees' wages, benefits, working conditions and seniority-based matters.

Gandhian approach to industrial relations

Gandhiji can be called one of the greatest labour leaders of modern India. His
approach to labour problems was completely new and refreshingly human. He held
definite views regarding fixation and regulation of wages, organisation and functions
of trade unions, necessity and desirability of collective bargaining, use and abuse of
strikes, labour indiscipline, workers participation in management, conditions of work .
and living, and duties of workers. The Ahmedabad Textile Labour Association, a
unique and successful experiment in Gandhian trade unionism, implemented many of
his ideas.
Gandhiji had immense faith in the goodness of man and he believed that many of the
evils of the modern world have been brought about by wrong systems and not by
wrong individuals. He insisted on recognising each individual worker as a human
being. He believed in non-violent communism, going so far as to say that “if
communism comes without any violence, it would be welcome.”
Gandhiji laid down certain conditions for a successful strike. These are: (a) the cause
of the strike must be just and there should be no strike without a grievance; (b) there
should be no violence; and (c) non-strikers or “blacklegs” should never be molested.
He was not against strikes but pleaded that they should be the last weapon in the
armoury of industrial workers and hence should not be resorted to unless all peaceful
and constitutional methods of negotiations, conciliation and arbitration are exhausted.
His concept of trusteeship is a significant contribution in the sphere of industrial
relations. According to him, employers should not regard themselves as sole owners of
mills and factories of which they may be the legal owners. They should regard
themselves only as trustees, or co-owners. He also appealed to the workers to behave
as trustees, not to regard the mill and machinery as belonging to the exploiting agents
but to regard them as their own, protect them and put to the best use they can. In
short, the theory of trusteeship is based on the view that all forms of property and
human accomplishments are gifts of nature and as such, they belong not to any one
individual but to society. Thus, the trusteeship system is totally different from other
contemporary labour relations systems. It aimed at achieving economic equality and
the material advancement of the “have-nots” in a capitalist society by non-violent
means.
Gandhiji realised that relations between labour and management can either be a
powerful stimulus to economic and social progress or an important factor in economic
and social stagnation. According to him, industrial peace was an essential condition
not only for the growth and development of the industry itself, but also in a great
measure, for the improvement in the conditions of work and wages. At the same time,
he not only endorsed the workers’ right to adopt the method of collective bargaining
but also actively supported it. He advocated voluntary arbitration and mutual
settlement of disputes. He also pleaded for perfect understanding between capital and
labour, mutual respect, recognition of equality, and strong labour organisation as the
essential factors for happy and constructive industrial relations. For him, means and
ends are equally important .

Industrial Relations

Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).

Definition of Industrial Relations

Industrial relation defined as relation of Individual or group of employee and employer for engaging themselves in a way to maximize the productive activities.

Concept of Industrial Relations:

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.” The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship. Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. 

The term industrial relations has a broad as well as a narrow outlook. Originally, industrial relations was broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations covers all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers. 

The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.

Need for Industrial Relation

Need of Industrial Relation arises to defend the interest of workers for adjusting the reasonable salary or wages. It also help the workers to seek perfect working condition for producing maximum output. Workers/employees are concerned with social security measures through this. Industrial Relation also needed for achieving the democracy by allowing worker to take part in management, which help to protect human rights of individual. 

Concept, Scope and Objectives of Industrial Relations (IR) .

What are Industrial Relations?

The concept of Industrial relations has been defined using various terminologies, but in the strictest sense, it is essentially the relationship between management and labor. The full concept of industrial relations is the organization and practice of multi-pronged relationships between labor and management, unions and labor, unions and management in an industry. Dale Yoder defines it as a "whole field of relationships that exists because of the necessary collaboration of men and women in the employment process of an industry."

Role of Industrial Relations:

Industrial relations are associated with labor, management, labor unions, and the state. The scene of industrial relations has grown tremendously, and cannot be represented merely by relations between management and labor. It has become a comprehensive and total concept embracing the sum total of relationship that exists at various levels of the organizational structure. Additionally, it connotes relationships between workers themselves within the labor class, and relations among the management within the managerial class. In an open sense, industrial relations denote all types of relations within a group and outside a group - both formal and informal relations.

Objectives of Industrial Relations:

1. Protect management and labor interests by securing mutual relations between the two groups.

2. Avoid disputes between management and labor, and create a harmonizing relationship between the groups so productivity can be increased.

3. Ensure full employment and reduce absenteeism, hence, increasing productivity and profits.

4. Emphasize labor employer partnership to establish and maintain industrial democracy. This is done to ensure the sharing of profit gains, and personal developmental of all all employees.

5. Provide better wages and living conditions to labor, so misunderstandings between management and labor are reduced to a minimum.

6. To bring about government control over plants where losses are running high, or where products are produced in the public interest.

7. To bridge a gap between various public factions and reshape the complex social relationships emerging out of technological advances by controlling and disciplining members, and adjusting their conflicts of interests.

THE TRADE UNIONS (AMENDMENT) ACT, 2001

THE TRADE UNIONS (AMENDMENT) ACT, 2001

ACT NO. 31 OF 2001

[3rd September, 2001.]

An Act further to amend the Trade Unions Act, 1926.

BE it enacted by Parliament in the Fifty-second Year of the Republic

of India as follows:-

1. Short title and commencement.-(1) This Act may be called the Trade

Unions (Amendment) Act, 2001.

(2) It shall come into force on such date as the Central Government

may, by notification in the Official Gazette, appoint.

2. Amendment of section 4.-In section 4 of the Trade Unions Act, 1926

(16 of 1926) (hereinafter referred to as the principal Act), in

sub-section (1), the following provisos shall be inserted at the end,

namely:-

''Provided that no Trade Union of workmen shall be registered unless

at least ten per cent or one hundred of the workmen, whichever is

less, engaged or employed in the establishment or industry with which

it is connected are the members of such Trade Union on the date of

making of application for registration:

Provided further that no Trade Union of workmen shall be registered

unless it has on the date of making application not less than seven

persons as its members, who are workmen engaged or employed in the

establishment or industry with which it is connected .'’

3. Amendment of section 5.-In section 5 of the principal Act, in

sub-section (1), after clause (a), the following clause shall be

inserted, namely:-

''(aa) in the case of a Trade Union of workmen, the names, occupations

and addresses of the place of work of the members of the Trade Union

making the application;''.

4. Amendment of section 6.-In section 6 of the principal Act,-

(a) for clause (ee), the following clause shall be substituted,

namely:-

''(ee) the payment of a minimum subscription by members of the Trade

Union which shall not be less than-

(i) one rupee per annum for rural workers;

(ii) three rupees per annum for workers in other unorganised sectors;

and

(iii) twelve rupees per annum for workers in any other case;'';

(b) in clause (h), for the word ''appointed'', the word ''elected''

shall be substituted;

(c) after clause (h), the following clause shall be inserted, namely:-

''(hh) the duration of period being not more than three years, for

which the members of the executive and other office-bearers of the

Trade Union shall be elected;''.

5. Amendment of section 9.-After section 9 of the principal Act, the

following section shall be inserted, namely:-

"9A. Minimum requirement about membership of a Trade Union.-A

registered Trade Union of workmen shall at all times continue to have

not less than ten per cent. or one hundred of the workmen, whichever

is less, subject to a minimum of seven, engaged or employed in an

establishment or industry with which it is connected, as its

members.''

6. Amendment of section 10.-In section 10 of the principal Act, after

clause (b), the following clause shall be inserted, namely:-

"(c) if the Registrar is satisfied that a registered Trade Union of

workmen ceases to have the requisite number of members.''.

7. Amendment of section 11.-In section 11 of the principal Act, in

sub-section (1), after clause (a), the following clause shall be

inserted, namely:-

''(aa) where the head office is situated in an area, falling within

the jurisdiction of a Labour Court or an Industrial Tribunal, to that

Court or Tribunal, as the case may be;''.

8. Substitution of new section for section 22.-For section 22 of the

principal Act, the following section shall be substituted, namely:-

'22. Proportion of office-bearers to be connected with the

industry.-(1) Not less than one-half of the total number of the

office-bearers of every registered Trade Union in an unorganised

sector shall be persons actually engaged or employed in an industry

with which the Trade Union is connected:

Provided that the appropriate Government may, by special or general

order, declare that the provisions of this section shall not apply to

any Trade Union or class of Trade Unions specified in the order.

Explanation.-For the purposes of this section, ''unorganised sector''

means any sector which the appropriate Government may, by notification

in the Official Gazette, specify.

(2) Save as otherwise provided in sub-section (1), all office-bearers

of a registered Trade Union, except not more than one-third of the

total number of the office-bearers or five, whichever is less, shall

be persons actually engaged or employed in the establishment or

industry with which the Trade Union is connected.

Explanation.-For the purposes of this sub-section, an employee who has

retired or has been retrenched shall not be construed as outsider for

the purpose of holding an office in a Trade Union.

(3) No member of the Council of Ministers or a person holding an

office of profit (not being an engagement or employment in an

establishment or industry with which the Trade Union is connected), in

the Union or a State, shall be a member of the executive or other

office-bearer of a registered Trade Union.'.

9. Amendment of section 29.-In section 29 of the principal Act, after

sub-section (2), the following sub-sections shall be inserted,

namely:-

''(3) Every notification made by the Central Government under

sub-section (1) of section 22, and every regulation made by it under

sub-section (1), shall be laid, as soon as may be after it is made,

before each House of Parliament, while it is in session for a total

period of thirty days which may be comprised in one session or in two

or more successive sessions, and if, before the expiry of the session

immediately following the session or the successive sessions

notification or regulation, or both Houses agree that the notification

or regulation should not be made, the notification or regulation shall

thereafter have effect only in such modified form or be of no effect,

as the case may be; aforesaid, both Houses agree in making a y

modification in the o, however, that any such modification or

annulment shall be without prejudice to the validity of anything

previously done under that notification or regulation.

(4) Every notification made by the State Government under sub-section

(1) of section 22 and every regulation made by it under sub-section

(1) shall be laid, as soon as may be after it is made, before the

State Legislature.''.