MMPH-004 Industrial and Employment Relations PDF

MMPH-004 Industrial and Employment Relations School of Management Studies Indira Gandhi National Open University New Delhi COURSE DESIGN AND PREPARATION TEAM Prof. K Ravi Sankar Prof. Anjali Ramteke Director, School of Management Studies, School of Management Studies, IGNOU, New Delhi IGNOU, New Delhi Prof. Kamal Vagrecha Prof. Prabhakar Jha School of Management Studies, Retd. Professor, IGNOU, New Delhi University of Patna, Patna, Bihar Prof. Rajeev Shukla School of Management Studies, Prof. B.P. Rath IGNOU, New Delhi Retd. Professor, Berhampur University, Dr. Leena Singh Berhampur, Odisha School of Management Studies, IGNOU, New Delhi Prof. K. R. Shyam Sunder XLRI, Jamshedpur Prof. A.M. Sarma Retd. Professor, TISS Prof. Mamata Mahapatra Mumbai IMI, New Delhi Prof. Manoranjan Dhal Prof. G.C. patro IIM, Kozhikode Retd. Professor, Berhampur University Prof. Srilatha Berhampur School of Management Studies, IGNOU, New Delhi Prof. P.K. Singh IIM, Indore Prof. Neeti Agrawal School of Management Studies, Dr. Babu P. Ramesh IGNOU, New Delhi SOITDS, IGNOU COURSE COORDINATOR AND EDITOR Prof. Nayantara Padhi School of Management Studies, IGNOU, New Delhi Acknowledgement: Parts of this course have been adapted and updated from the course MS-24: Industrial Relations, SOMS, IGNOU. MS-24 was prepared by the experts (names mentioned in Italics) and their profile given is as it was on the date of initial print in the year 2017. MATERIAL PRODUCTION Mr. Tilak Raj Assistant Registrar, MPDD, IGNOU, New Delhi-110 068 April, 2022  Indira Gandhi National Open University, 2022 ISBN : All rights reserved. No part of this work may be reproduced in any form, by mimeograph or any other means, without permission in writing from the Indira Gandhi National Open University. Further information about the School of Health Sciences and the Indira Gandhi National Open University courses may be obtained from the University’s office at Maidan Garhi, New Delhi-110 068. Printed and published by The Registrar, MPDD, IGNOU, New Delhi on behalf of the Indira Gandhi National Open University, New Delhi. Laser Typesetting : Akashdeep Printers, 20-Ansari Road, Daryaganj, New Delhi-110002 Printed at : Course Contents Pages COURSE INTRODUCTION 5 Block I INDUSTRIAL AND EMPLOYMENT RELATIONS: AN OVERVIEW 7 1. Concept and Approaches 9 2. Evolution 23 3. Constitution, ILO and Legal Framework 35 4. Labour Administration in India 52 5. Global Trends 65 Block II TRADE UNIONISM 77 6. Development and Functions of Trade Unions 79 7. Trade union Structure, Leadership and Recognition 93 8. Managerial Unionism 107 9. Employment Relations in Non Union Firms 115 Block III COLLECTIVE BARGAINING 127 10. Collective Bargaining 129 11. Bargaining Structure, Process and Agreements 138 12. Negotiation 149 Block IV GRIEVANCE, DISCIPLINE AND CONFLICT RESOLUTION 161 13. Grievance Handling 163 14. Discipline in Organisations 182 15. Industrial Conflict 200 COURSE INTRODUCTION MMPH-004: Industrial and Employment Relations Industrial and employment relations mean the relationship between employers and employees in course of employment in organisations. According to International Labour Organisation (ILO), industrial and employment relations comprise relationships between the state on one hand and the employers and employees’ organisations on the other and the relationship among the occupational organisations themselves. This course is prepared in order to understand the concept, need and functions of industrial and employment relations. The course has got four blocks and fifteen units in total. The following is the course outline. I. INDUSTRIAL AND EMPLOYMENT RELATIONS: AN OVERVIEW 1. Concept and Approaches 2. Evolution 3. Constitution, ILO and Legal Framework 4. Labour Administration in India 5. Global Trends II. TRADE UNIONISM 6. Development and Functions of Trade Unions 7. Trade union Structure ,Leadership and Recognition 8. Managerial Unionism 9. Employment Relations in Non Union Firms III. COLLECTIVE BARGAINING 10. Collective Bargaining 11. Bargaining Structure, Process and Agreements 12. Negotiation IV. GRIEVANCE, DISCIPLINE AND CONFLICT RESOLUTION 13. Grievance Handling 14. Discipline in Organisations 15. Industrial Conflict Block-I Industrial and Employment Relations : An Overview Industrial and Employment Relations An Overview 8 Concept and Approaches UNIT 1 CONCEPT AND APPROACHES Objectives After completion of this unit, you should be able to:  understand the concept of industrial and employment relations;  understand the actors in industrial and employment relations;  comprehend the definitions of industrial relations;  gain insight into approaches of industrial and employment relations;  understand the need and significance of industrial relations; and  understand the factors affecting employment relations. Structure 1.1 Introduction 1.2 Concept and nature of industrial and employment relations 1.3 Actors in industrial relations 1.4 Definition of industrial relations 1.5 Need and significance of industrial and employment relations 1.6 Approaches to industrial relations 1.7 Factors affecting employement relations 1.8 Issues and challenges for industrial and employment relations 1.9 Summary 1.10 Self Assessment Questions 1.11 Further Readings and References 1.1 INTRODUCTION Growth of a nation is dependent upon its industrial development to a large extent. A number of factors are important for the expansion of industrial system. Ever since the factory system began in the world, workers have been the most important element for ensuring production and productivity of an organization. Interface between the workers and factors like technology, finances, materials result into production of goods and services. Increasing competitiveness, technological advancements, customer expectations have made the workforce of an organization a source of competitive advantage. Employers expect them to contribute to the growth of orgnaisation by putting in hard labour. Hence, managing workforce effectively has become a vital part of the present-day of management. Workers have their own goals, objectives, attitudes etc. It is essential that work goes on in the organization in a harmonious manner for maximizing the productivity. To achieve harmony in functioning it is imperative that interests of employer as well as employees are fulfilled and none of the parties feel 9 Industrial and Employment exploited. Ignoring the human element leads to poor relations between the management Relations An Overview and workers. The outcomes of poor relation manifest in the form of increased labour turnover, absenteeism, indiscipline, poor quality of output, increased cost of production, among others. Cordial industrial relations are essential for boosting industrial growth and productivity which is essential not only for building self-reliance but also for increasing GDP of the nation. Industrial harmony cannot be regarded as a matter in which only the employers and employees are concerned; it is of vital importance to the community as a whole. That is how the concept of industrial harmony involves the cooperation not only of the employers and the employees, but also of the community at large. Poor relations between management and workers may result in industrial unrest which affects the economic growth of a nation. Therefore, maintaining cordial relations between management and workers is of paramount importance anywhere in the world. Several changes in recent years have been responsible for more attention being paid to employment relations within organizations. Impact of globalization has had a significant impact on the way enterprises are managed and work is performed. Competitiveness has increased due to which firms need to enhance their quality of goods and services and reduce the cost of production to be able to offer best quality product at competitive prices. To achieve this and innovation and workers’ skills become important besides cost cutting. The quality of the workforce and training have become critical factors. There is a need for multiskilled easily trainable employees. Technology has been another important factor that has shifted attention to workplace relations. Technology management is possible only through people. Technology is also displacing traditional jobs and creating new jobs requiring different skills. Further information technology, the limits of which are not known in terms of its potential to effect change, is exerting a tremendous impact on the structure of organizations, the nature and location of work and the way it is organized. This has resulted in management effected less by command and supervision, and more through emphasis on cooperation, information-sharing and communication, and with a more participative approach to managing people. Modern technology now makes it possible for aspects of work to be performed outside the enterprise, for example from home, and even outside national borders. Part-time work is increasing particularly due to the influx of more females into employment and their preference in some cases for part-time work. Developing countries are also feeling the impact of these changes. In this unit, we shall cover the concept of industrial and employment relations. 1.2 CONCEPT AND NATURE OF INDUSTRIAL AND EMPLOYMENT RELATIONS Industrial Relations deals with the worker- employer relation in an industry. This relationship emerges out of work-related interactions between management and workforce. It applies to both government- owned and privately- owned organizations. State plays an important role in shaping industrial relations as it makes laws and sets regulatory framework for labour. Government has attempted to make Industrial Relations more healthy through various statutory and non-statutory methods. Legal framework constitutes various labour legislations which provide basis for management 10 and workers not only for creating efficient work conditions but also for maintaining good relationship. Industrial relations in a country are affected by various factors, the Concept and Approaches prominent being political ideologies, economic factors, strength of trade unions, awareness level of workers, and management beliefs. Workers have been the weaker of the two parties ever since the factory system began. Industrial relations function with the objective to bringing equality and equity between the two parties, i.e., workers and management. It helps in standardizing terms and conditions of working within organization, within industry and across industries. Characteristics of industrial relations of a nation are determined by social structure, attitudinal structuring, historical background, political structure, economic patterns. Thus, the concept of industrial relations is dynamic, which is dependent upon the pattern of society, economic system and political set-up of a country. Besides, the workers and management, State is an important part of industrial relations since it influences these relations substantially. Thus, industrial relations is tripartite in nature. Industrial relations is multidisciplinary in approach. Understanding the origin and nature of industrial relations involves the study of history. Government interventions can be understood through the concepts of political science. Since industrial relations is governed by a legal framework and evolves through the decisions of various lawsuits, law has important bearing on it. It integrates the concepts of economics as it involves issues related to wages, benefits, social security measures; it involves understanding the conflicts, disputes, formation of workers’ unions, which involves sociology; it also involves negotiations, understanding attitudes, ensuring workers’ safety-which may involve psychology and social psychology. In today’s networked world, changes, events and upheavals in one country can have significant implications for industrial relations as well. Moreover, international bodies like International Labour Organisation have an important impact upon labour related issues. Thus the discipline of international relations also contributes towards understand industrial relations today. 1.3 ACTORS IN INDUSTRIAL AND EMPLOYMENT RELATIONS Industrial and employments relations has three actors:  The workers and their organisations;  Employers and their organisations; and  The state The three actors of industrial relations are discussed in detail as following paragraphs. 1) Workers and their organizations: The characteristics of workers like their educational level, awareness level, level of skills acquired, poverty level, rural/ urban background, migrant nature, cultural characteristics, attitudes -all play an important role in industrial relations. The objective of workers to work in an establishment is to earn a living and provide for themselves and their families a decent living. They want maximum financial and non-financial benefits so as to have a comfortable living. Since individual worker is weak and his/her voice may not be heard by management, therefore they often associate to form organisations that give them strength. Such associations are generally known as trade unions, which may or may not have political affiliations. The main purpose of formation of 11 Industrial and Employment trade unions id to give voice to workers and strengthen them to stand up for their Relations An Overview rights. Thus, trade unions safeguard the interests of the workers by putting pressure on the management. 2) Employers and their organizations: the employers are important actors in industrial relations. They create employment and provide remuneration to workers in return for their labour. They regulate the work of employees so as to achieve maximum productivity. Their objective is to generate maximum profits at minimum cost. Since the cost includes expenditure on workers as well, therefore cutting down this expenditure on workers may also be an objective for employers. To pressurize management to accept their demands, workers often resort to pressure tactics like strikes, gherao, pelting etc. which results into industrial unrest. To strengthen themselves and increase their bargaining power, employers also organize into associations. 3) State: Since maintaining harmonious employer-worker relations is important for the growth of the economy of nation, therefore the State makes active efforts to create a healthy work environment. Government’s role becomes important as it frames policies, regulations and legislations for maintaining healthy employer- employee relations so that productivity remains high. The state also creates platforms for bringing together the representatives of employer, worker and the State for discussions pertaining to labour policy issues. State also intervenes in when conflicts cannot be resolved between management and trade unions through mutual negotiations. State also intervenes in regulating wages, bonus and working conditions through various laws relating to labour. Thus, the state is an important actor in industrial relations in India. 1.4 DEFINITION OF INDUSTRIAL RELATIONS Numerous definitions of industrial relations have been proposed. Some of the important are: Industrial relations is a concrete system of interaction between workers and management in industry’ (Walker, 1967). ‘Industrial relations may be described as a study of institutions of job regulations’ (Flanders, 1970). ‘Industrial relations is concerned with bargaining, explicit and implicit between and among employers and employees, over the making of the rules of work and with factors that affect this bargaining’ (Laffer, 1974). ‘Industrial relations is the study of all aspects of job regulation and making and administering of rules which regulate employment relationship - regardless of whether they are seen as formal and informal, structured or unstructured’ (Bain and Clegg, 1974). ‘Industrial relations can be simply defined as management of labour problems in an industrial society, or more operationally, as the theories, techniques and institutions for the resolution of contending money and power claims in an employment relationship’ (Barbash, 1984). 12 Thus, it may be understood that industrial relations is concerned with relations formed Concept and Approaches between workers and their organisations, employers and their organisations and the State, which are based on economic or social interests and may extend to the industry, sector, ultimately leading to production of goods and services by regulating work related human activities and behaviours. OBJECTIVES OF INDUSTRIAL AND EMPLOYMENT RELATIONS The primary objective of industrial relations is to bring about good and healthy relations between the labour and the management so as to enhance productivity for economic growth of the nation. Other objectives are derived from this main objective. Kirkadly divides objectives into four.  Improving the economic condition of workers  Regulate of production by the State Nationalization of industries by making the State the employer; and  Vesting the proprietorship of the industries in the workers. In today’s time the objectives of industrial and employment relations include:  To safeguard the interest of labour and management  Securing mutual understanding and harmony between different players in industry  To avoid industrial conflicts and disputes to enhance efficiency  To maximise productivity for the growth of nation  To maintain industrial discipline  To establish and maintain Industrial Democracy, by ensuring workers’ participation in management  To maintain industrial peace by bring down strikes, lockouts  Ensuring fair and reasonable wages to workers to improve their standard of living  Evolving a healthy social order.  Promotion and development of healthy labour-management relations Activity 1: Go through same existing literature and write a comprehension on the concept of industrial and employment relations in your own words................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 13 Industrial and Employment Relations An Overview 1.5 NEED AND SIGNIFICANCE OF INUSTRIAL AND EMPLOYMENT RELATIONS  The most important benefit of industrial relations is that this ensures continuity of production and also the resources can be fully utilized, resulting in the maximum possible production.  It reduces the industrial disputes. Strikes, lockouts, and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace.  Good industrial relations improve the morale of the employees as a resulted productivity can be enhanced. Wastages of man, material and machines are reduced to the minimum.  Literature has explored the industrial relations impact on organizational performance, especially on the productivity dimension of performance. More recent studies state that performance is determined by IR practices. This study examines the impact of Industrial Relations strategies on organizational productivity and performance. The effects of Trade unions, Grievances, Collective Bargaining & Participative Management on RINL performance are tested here. 1.6 APPROACHES TO INDUSTRIAL RELATIONS Different theorists and professionals have viewed Industrial Relations differently. On the basis of the orientations of different practitioner different approaches have been developed to explain the concept of Industrial Relations. some of the important approaches are as following: 1. System’s approach 2. Unitary approach 3. Pluralistic approach 4. Marxist approach 5. The social action approach 6. The human relations approach 7. Mahatma Gandhi’s trusteeship approach 8. Socialistic approach 9. Minnesota model These approaches are discussed in the following section: 1. Dunlop’s system approach The systems approach of IR was developed by John Dunlop in 1958. Dunlop is regarded as father of industrial relations. He proposed that industrial relations system is a separate subsystem of society. There are three components of this sub-system. The interactions 14 and interrelationships of the three components of this sub-system constitute industrial Concept and Approaches relations. The three components are: i. Management (comprising managers) ii. Workers (as informal and formal organisations) iii. State (government bodies and organisations concerned with the relationship between workers and their organizations). The interactions and interrelationships between the three parties result into establishment of rules and regulations that governs the work-related behaviours of management and workers. These rules make the sub-system of industrial relations different from other sub-systems of society and determine the existence of industrial relations and are the important output of industrial relations. The three components of industrial relations are influenced by the forces of environment, i.e, technological factors, economic factors, market structures and other societal forces. Though management and workers have divergent interests yet they share some common objectives. These shared objectives drive them to resolve conflicts and work together for achieving the common goals. This provides stability to industrial relations system. There are certain inherent drawbacks in Dunlop’s approach. It assumes the stability of factors of internal and external environment. i. It does not explain how will the system function under dynamic conditions. Dunlop’s approach focuses on rule making institutions and the settlement of conflicts. It does not examine the causes of conflicts. ii. There is no agreement as to whether the central feature of an industrial relations system should be considered as a network of rules or as a process that makes rule. iii. Dunlop’s system concentrates on the process and ignores the role and impact of informal groups formed at workplace thus discounting behavioural dynamics. 2. Unitary approach Unitary approach perceives organization as an integrated system working in harmony. All the members of the organization share the same objectives, interests and purposes, working towards the common goals. Such an organisation ‘strives jointly towards a common objective, each contributing to the best of one’s ability. Every worker has a place in organization and willingly accepts his responsibilities for benefit of all, following the leader appointed by the system. Utitarismis based upon paternalistic approach and believes that there should be one source of authority in an organization and others should work under this authority to achieve common objectives. It demands loyalty of all employees. Management’s authority is regarded as legitimate and rational. Any opposition to it (whether formal or informal, internal or external) is seen as unwarranted. Workplace conflict is perceived as disruptive and therefore trade unions are deemed as unnecessary. It is normal for employees to cooperate with management. Conflict is as viewed as temporary aberration resulting from poor management of employees, or the mismatch between employees and organizational culture. This approach has the strength that it emphasizes on the significance of workers in the organization. 15 Industrial and Employment The approach has failed to consider different variables affecting IR within individual Relations An Overview organizations and the total industrial sector. This approach has been criticized on the basis that it is manipulative and exploitative. Also, it is argued that conflict is inevitable to industry. 3. Pluralistic-Perspective Pluralistic perspective also known as the Oxford Approach views society as containing multiple but related interests which must be maintained in equilibrium. On the same lines, organization is perceived as being made up of significant and divergent sub- groups, namely management and trade unions. Since interests are opposing therefore conflicts of interest and disagreements between management and workers/workers’ organisations over work-related issues and economic issues, like distribution of profits as normal and inevitable. According to pluralistic approach, management should be less authoritative and more cooperative as to maintain harmony. Trade unions are deemed as legitimate representatives of employees. They should anticipate and resolve this by securing agreed procedures for settling disputes. The focus is on the resolution of conflict rather than its generation, In contrast to the unitary approach, the pluralistic approach considers conflict between management and employees as rational and inevitable. Conflict is dealt by negotiations and mutual discussions and is not viewed as undesirable and something to avoid. In fact, if divergent views and conflicts are properly managed, it could lead to could lead to development and positive change. Thus, managers should be practical in accepting conflict as natural outcome of relations between management and workers. Industry has greater proclivity for conflict rather than harmony. Conflict is an important component of pluralistic approach. A conflict situation enhances power of trade unions as give them bargaining power in an effort to resolve the conflict. It is an essential ingredient for the pluralist approach. The pluralistic approach perceives organizations as combinations of competing interests, where the role of the management is to resolve differences between the opposing interest groups. Trade unions as considered as legitimate representatives of employee interests. Employees join unions to protect their interests and influence decision-making by the management. Unions, thus, balance the power between the management and employees. Stability in industrial relations is achieved through bargaining between management and unions. Pluralistic approach advocates the presence of a strong union as necessary. Role of the State is to guard society’s interests by enacting legislations and creating industrial tribunals that are responsible for resolution of conflicts and disputes. The stress is on a negotiated order, a voluntary reconciliation between opposing forces with minimal intervention from external agencies. Pluralist frame of reference has been criticized on the grounds that an equilibrium in relations between management and labour is difficult to attain and maintain. This is because neither management nor unions are always able to assert equal influence. A society may be free but power distribution is not necessarily equal among the competing forces. Therefore, some kind of State intervention has become necessary to bring two parties involved in a conflict on equal terms. It over-emphasises the significance of collective bargaining and gives inadequate weight to the role of the other influencing factors in the determination of rules. Institutional factors are viewed as of paramount importance, while variables such as technology, market, values, and ideology, are not given any prominence. 16 4. Marxist Approach Concept and Approaches This approach is based on the ideology of Karl Marx. Also known as the ‘Radical Perspective’, the Marxist approach is based on the proposition that the economic activities of production, manufacturing, and distribution are majorly governed by the objective of profit. Marxism questions the power relationships of society. The theory is based on premise that industrial relations represent class conflict and is more of market- relations. It proposes that the mode of wealth creation by capitalists determine the social relations at work and general character of society. The Marxist approach is primarily based on power relationship between management and labour and is characterised by the struggle of both the classes to gain supremacy so as to exert greater influence over the other party. it ascribes that the conflict is the product of the capitalist society which is based on classes. Labour and capital have essentially different interests in an organization, and these interests are conflicting. Both the parties get affected as an outcome of confrontation between conflicting interests. The objective of management is to enhance productivity by gaining control over the labour. The wages of the labour are seen as a cost and, therefore, management makes attempt to minimize it. Labour is viewed as a means of generating profit. Workers endeavour for maximum possible wages to improve their standard of living and resort to pressure tactics like strike to get their demand accepted. Systems like bargaining, participation, cooperation do not offer permanent solution for resolving the labour-management conflict. It can be solved by uprooting capitalistic system. Marxists view conflict as an essential feature of capitalism, a system where the society is divided between those who own and control the means of production and those who offer their labour to carry out production. Though plularists also consider conflict as inevitable but they differ from Marxists as they consider conflict as a natural process in any industry anywhere. Marxists believe that class-conflict is essential for social change to take place and trade unions are nothing but response of labour towards exploitation by capitalist. It acts as a weapon to bring radical a social change to improve the position of labour in the society. While pluralists argue that state intervention is necessary to protect the overall interest of society, Marxists believe that state intervention is supportive of capitalist’s interest rather than that of worker. The main drawback of Marxist approach of industrial relations is that it has a narrow focus as it only takes into account the relations between capitalist and labour in explaining industrial relations. 5. Social Action Approach The social action approach is a modification of the system approach. In the system approach, external environment plays a dominant role while the actors such as employers, employees and their representatives play a passive role in the process. On the contrary, in the social action approach an active role is played by the workers and employers. The actors’ understanding of the work situation becomes more important than the social factors and their opinion determines their attitude and behavior towards industrial relations. The main protagonist of this approach is Max Weber. The theory considers negotiations as an important tool for resolving conflicts. The actors are willing to cooperate with each other and bargaining forms the basis for such cooperation. 17 Industrial and Employment The social action approach of Weber has laid considerable importance to the question Relations An Overview of control in the context of increasing rationalisation and bureaucratization. As per this approach, a trade union has both economic purposes as well as the goal of involvement in political and power struggles. Some of the major orientations in the Weberian approach have been to analyse the impact of techno-economic and politico-organisational changes on trade union structure and processes, to analyse the interpretation of workers’ approaches to trade unionism, and to analyse the power of various actors of the industrial relations environment – government, employers, trade unions and political parties. Thus, the Weberian approach gives the importance to “control” as well as to the power struggle to control work organisations. 6. Human Relations Approach The human relations school founded by Elton Mayo and later propagated by Roethlisberger, Whitehead, W. F. Whyte and Homans offers a comprehensive view of the nature of industrial conflict and harmony. The human relations approach focuses on ways to improve employee motivation and productivity. Keith Davis is the main proponent of this theory. According to him, human relations aim to integrate employees with the work-place such that they feel encouraged to cooperate with each other to work effectively and efficiently, deriving economic, psychological and social satisfactions. It creates an environment at work place where people’s productivity is enhanced through mutuality of interest. The human relations approach highlights certain policies and techniques to improve employee morale, efficiency and job satisfaction. Although human relations school has taken into consideration aspects like communication, group dynamics, employee participation in management, it received criticism on the ground that it encouraged dependence between employees, did not focus on individual development, and discounted the significance of technology in industry. 7. Mahatma Gandhi’s Trusteeship Approach Mahatma Gandhi applied the principle of trusteeship to industrial relations. Employers should not consider themselves as sole owners of enterprises, though they may be the legal owners. They should regard themselves only as trustees, or co-owners. Workers should regard themselves as trustees, and should consider themselves as the owners of the resources of the enterprise, protect them and put them to the best use. It means that only that amount of wealth should be used by capitalist as is necessary to satisfy his needs and wants. Excess wealth belongs to society so be used for benefit of all. This means that there should be no conflict of interest between capitalist and labour. Though legally wealth belongs to capitalists but morally it belongs to labourers and should be used for their welfare. Mahatma Gandhi believed in in philosophy of Sarvodaya, i.e. the good of all - benefit should reach even to the lowest stratum of the society. When this approach is applied to industry it refers to peaceful co-existence of capital and labour. Any conflict that arises is very natural in a society governed by self-interest, but it should be resolved by means of satyagraha i.e., non-violent non-cooperation. Labourers can pressurize capitalist for their grievances redressal through non-violent non-cooperation, is means peaceful strikes. He believed that it is the right of workers to go on strikes to secure 18 justice. He had himself led some strikes for Textile workers of Ahmadabad. He believed that strikes, if taking place, should before genuine reasons. He laid down certain Concept and Approaches conditions for a successful strike: (a) the cause of the strike must be just and and address only redressal of genuine grievances. (b) Workers should try all peaceful and constitutional methods of negotiations (c) Strikes should not be resorted to unless all efforts for peaceful negotiations are exhausted (d) Strikes should be peaceful and non-violent. The philosophy of trusteeship aims at achieving economic equality and the prosperity of workers in a capitalist society by non-violent means. Gandhiji believed that industrial peace was an essential condition not only for the growth and development of the workers, but also employers, industry and overall society. He proposed collective bargaining as an effective means of negotiations between workers and employers. He advocated mutual settlement of disputes through voluntary methods of dispute settlement which can be achieved through mutual arbitration and mutual settlement of disputes. Constructive industrial relations can be achieved through mutual respect, equality, and strong labour organisation. 8. Socialistic Approach Socialistic approach considers workers’ participation in management as an important factor in the development and perfection of socialistic democracy. This ensures fullest decentralization and participation in management as multi-dimensional program for socialist construction. The economic reconstruction is based upon the nationalization of the means of production and exchange. Under Communism, state machinery is abolished and the functions of the State are taken away by the society through public organization based on mutual consent and co-operation and the compulsion element in relation to members of the society is removed. In the process of taking away powers from the state and delegating its functions to the society, workers’ participation in management is of great importance. Workers’ self- governing bodies may be formed which can participate effectively and efficiently in management. Such bodies have actual experience of the activities of the people and are much aware of the local conditions prevailing there. These bodies initiate the taking away of powers of State. Socialist democracy is created from the workers of lower rank and they are trained in such a way that they can promote the professional interest of the workers in the most effective manner. The collective management of the means of production creates integrated personality and national integration. Activity 2: Make a pictorial representation showing the commonalities and differences between the above presented approaches................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 19 Industrial and Employment Relations An Overview 1.7 FACTORS AFFECTING EMPLOYMENT RELATIONS There are various factors that affect employment relations. Some factors are internal to the firm, while other factors may be related to external environment. 1. Internal Factors These are the factors within the organization. These pertain to management and workers/ trade unions of workers i) Management related factors  Attitudes of management towards workers and trade unions  Management belief in industrial democracy  Concern of management for worker welfare Style of leadership, i.e., autocratic, participative etc.  Effectiveness and capability of managers and supervisors in resolving grievances and handling disputes.  Management concern for worker welfare  Clarity of management policies related to work and workers ii) Workers related factors  Union attitudes towards management  Inter union rivalries in case of more than one union  Readiness of workers to work  Union leadership  Readiness to comply with policies Bargaining power of trade unions 2. External Factors  Influence of political parties on trade unions  Economic factors, for example, inflation, economic downturns etc.  Success of collective bargaining at national, local or plant level  State interventions  Labour laws of the nation  Regulatory framework  Effectiveness of dispute settlement machinery  Employment situation nationally or locally Legal framework within which IR exists 20 Concept and Approaches 1.8 ISSUES AND CHALLENGES FOR INDUSTRIAL AND EMPLOYMENT RELATIONS There are various issues and challenges for industrial and employment relations in India that have emerged after the introduction of structural changes under economic reforms and as a result of advancements of technology. Economic reforms have changed the business environment in various ways. There have been a number of changes in regulatory environment, aspirations of workers, expectations of employers. Thus, industrial relations system needs to adapt to these changes.Firms are changing their mode of working to meet the competition. Big firms are downsizing their operations for cost cutting and using contracting and sub-contracting to bring down costs. As a result, workers are being retrenched and laid off. Part-time and casual workers are employed for cost cutting. Unorganised sector is expanding, while organized sector is getting smaller in size. Due to casualization of labour, job insecurity is increasing. Adoption of technology in business operations and automation of processes is another reason for retrenchment of labour and job insecurity. Usage of technology in production and other business processes makes training of workers essential. Technology and modern methods of working are making jobs redundant. Management must make efforts to educate and train workers on usage of technology driven machines and processes so as to prevent job obsolescence. Multiskilled workers are required in the modern day firm. The influence voice of international community on various aspects of business, including labour issues is increasing through international bodies like WTO, ILO, IMF. Mangement cannot ignore the demand and concern of such forces. The traditional industrial relations system and its institutions and practices were most suited to the tasks of protecting and promoting the interests of workers with secure permanent employment. The trend is towards increasing casualisation of labour, the restructuring process, and technology changes/ upgradation have made the problems of unemployment of labour more widespread and acute. The growing emergence of start- ups has added a new dimension to labour issues. The number of micro, small and medium-sized firms have increased. Most of these firms remain beyond the purview of labour legislation and the organizations of labour in these scattered units are weak and ineffective. Growing globalization of economy means greater opportunities for foreign firms to start operations in India. They need to understand and implement labour laws in India and understand workers’ expectations to maintain harmonious employee relations. As more and more workers are getting educated, they are becoming aware and conscious of their rights. Also, there is a growing concern about human rights and prevention of exploitation of labour. Thus, management must take all the measures to ensure fair and proper working conditions. 1.9 SUMMARY Maintaining cordial relations between management and workers is of paramount importance anywhere in the world. Poor relations between management and workers may result in industrial unrest which affects the economic growth of a nation. Industrial 21 Industrial and Employment Relations deals with the worker- employer relation in an industry. This relationship Relations An Overview emerges out of work-related interactions between management and workforce. The three actors of industrial relations are workers, employers and the state. The primary objective of industrial relations is to bring about good and healthy relations between the labour and the management so as to enhance productivity for economic growth of the nation. Different theorists and professionals have viewed Industrial Relations differently. On the basis of the orientations of different practitioner different approaches have been developed to explain the concept of Industrial Relations. There are various factors that affect industrial relations. Some factors are internal to the firm, while other factors may be related to external environment. Introduction of structural changes under economic reforms advancements in technology have posed various issues and challenges for industrial relations in India. 1.10 SELF ASSESSMENT QUESTIONS 1. Explain the concept of industrial and employment relations. 2. Discuss the role of the main actors of industrial relations. 3. What are the main objectives of industrial relations 4. Describe the systems approach to industrial relations 5. What are the salient features of pluralistic approach? 6. What are the causes of poor industrial relations? 7. Compare pluralist approach of industrial relations with unitary approach. 8. What are the challenges for industrial relations in India in post liberalization era? 9. Explain the factors affecting industrial relations in India. 10. What are the highlights of human relations approach? 1.11 FURTHER READINGS AND REFERENCES  Ghosh, P. & Nandan, S. (2015). Industrial relations and labour laws. McGraw- Hill Education.  Venkata Ratnam, C. V. & Dhal, M. (2017). Industrial relations. Oxford University Press.  Srivastava, S. C. (2012). Industrial relations and labour laws. Vikas Publishing House. 22 Concept and Approaches UNIT 2 EVOLUTION Objectives After completion of this unit, you should be able to:  get an overview of the evolution of industrial relations in India;  get insights into situation of labour in pre-independence period;  understand the situation of labour in post-independence period; and  comprehend the coverage of labour issues in the Five-year Plans. Structure 2.1 Introduction 2.2 Industrial Relations in pre-independence era 2.3 Industrial Relations in post-independence era 2.4 Five-year plans (pre-liberalization era) 2.5 Five-year plans (post-liberalization era) 2.6 Summary 2.7 Self-Assessment Questions 2.8 Further Readings 2.1 INTRODUCTION Due to dynamic nature of industrial relations, its nature and form has been changing over the decades. Industrial Relations are affected by the interplay of dynamics between workers, management it and government. Environmental factors like technology, socio- economic conditions government policies regulatory environment all affect the relationship between in workers and employers. Industrial Relations systems undergo transformation depending upon the external environmental factors. These changes have been evolutionary or incremental or discontinuous or revolutionary. Discontinuous changes occur when there are substantial changes and the basic structure. Basic structure includes attitudes of workers and Management towards the ownership of industry and its resources, relatives status of employer and employee, and the nature of labour market. Revolutionary changes on the other hand, are small changes in the structure and pattern that continuously take place with changes in the society and in the political systems of the country. The evolution of Industrial Relations can be traced back to ancient times. Principles of employee management can be found in ancient Indian scriptures, for example yajurved Sanhita and Shukra Niti Sara speak about maintaining and promoting peaceful relations between the employer and workers. Evidences show that even in the ancient times there were rules of conduct for promoting better relations between employer and workers. Methods of dispute settlement were also evolved. ancient text like 23 Industrial and Employment Manusmriti and Kautilya Arthshastra also makes mention of employer employee Relations An Overview relations. From the time of the beginning of factory system in Europe during the 17th century, e Ven work was done manually, to today’s time of digital technology, to Industrial Relations have undergone a huge change. From the time when labour was considered a tool of production, to today’s time am when workers are considered to be assets for organisation, are a number of changes have taken place in the nature of relationship between employer and workers. The concept of Industrial Relations in India has been in existence ever since the relationship between the worker and master has existed. Indian economy E has predominantly been dependent on agriculture, Trading and business were also practiced, emphasis vision maintaining good relations between workers and employers. Guilds of traders have been in existence since Olden Times. The evolution of Industrial Relations in India can be s broadly divided into two phases: 1. Pre-independence era 2. Post-independence era 2.2 INDUSTRIAL RELATIONS IN PRE- INDEPENDENCE ERA Industrial relations in the pre independence India can be further divided into two phases: 1. The first phase, beginning from the nineteenth century up to the first world war 2. The second phase, beginning from the end of the first world war the attainment of independence in 1947 Industrial Relations in British India were shaped by the economy of the British government, labour policies, ideologies of political leaders, values systems of freedom fighters and economic conditions prevailing in India. That time India was an important supplier of items like muslins, calico silk goods, salt, cotton goods and other products of Indian cottage industries to Europe, Africa, Middle East, Central Asia, and other countries. During the early years of British rule in India there was very little industrial activity in the country. The policies of the British government discouraged the development of industry in India though they took a keen interest in the export of raw materials from India. The British government worked for promoting its interest of using rich resources of India for the benefit of Britain. It worked for regulating the work conditions which was such that at eliminated indigenous capitalist. a number of labour legislation adopted during the second half of the 19th century. The first enactment to be framed was Apprentices Act 1850. The object of this Act was to enable destitute children to learn trades and crafts as apprentices to enable them to earn livelihood. However, legislation was acted in 1859 and 1860 making workmen liable to criminal penalties for branches of contract. In 1874, Major Moore, the Chief Inspector of Bombay Cotton Department, pointed 24 out in his report, that in Bombay Cotton factories women and children were employed in large numbers, that many of the children were hardly eight years old, who had to Evolution work for very long working hours with almost no rest. This report attracted public attention to the poor working conditions in Indian factories for the first time and the need for regulating them. The factory system of production became popular in the second half of the nineteenth century. The workers at that time had to face many hardships as their European counterpart. They had to work under poor working conditions, their wages were meagre and they hardly enjoyed any rights. They had to live under unhygienic conditions and suffered from malnutrition and many diseases. There were neither any proper labour legislations to regulate work conditions, nor were there any trade unions to protect their rights. The first instance of industrial unrest and work stoppage came to fore in 1877 among the Weavers of Empress Mills Nagpur. Several other instances of short-lived strikes occurred in other industrial centres like Bombay and Surat. Workers had no bargaining power and were very weak. They were dismissed and victimized by employers. The first Factories Act in India was passed in 1881. It required factories having 100 or more workers to provide certain minimum conditions for workers employed in their establishments. This was later amended and Factories Act, 1891 came into being. This Act required all factories employing 50 or more person to be registered. It also provided for certain welfare measures like weekly holiday, prohibition of employment of children below 9 years of age, limiting working hours for children and fixation of maximum working hours, among other provisions. This Act awakened the working class towards an organised approach. In 1890 the first labour Association, Bombay mill hands Association was established but during this period workers did not have much awareness about the power of joint action. In 1897 another organisation of employees called Amalgamated Society of Railway Servants of India was formed. It was more of a friendly society than a combination of workers for securing their rights. In 1905 Printers Union was formed in Calcutta and the Postal Union was formed in Bombay in 1907. These organisations were the initial organised labour associations in in India and acted as precursor of modern trade unions. First world War The industrial system expanded in the country after the first world war. it led to the development of capitalist class in India who owned large factories and employed labourers for production. The first world war (1914-18) brought many miseries for the workers and labourers as industry and production got affected due to the war. They suffered from job losses, non-payment of wages, hike in prices which made life difficult for these workers. The employers exploited the workers and the situation aggravated with the political development in the country. There was labour unrest throughout the country. They realised that strike was the only means to press employers for their demands. Their main demand was increase in wages and improvement of working and living conditions. During 1918 to 1919 a number of strikes and lockouts took place in different mills all over the country. The strikes took place in textile mills of Bombay, textile mills of Ahmedabad, and Buckingham and Carnatic Mills at Madras. The industrial disputes became common. This also led to solidarity among labour class who learnt to take joint actions to further their interest. There were no organised unions in the country during this period. 25 Industrial and Employment The end of the first world war brought changes in the social economic and political Relations An Overview conditions of common man and people hope for or a new social order. The labour unrest that had arisen because of low wages and prices rises prepared the grounds for a new order. Russian Revolution in the year 1918 and formation of International Labour Organisation (ILO) in the year 1919 influenced the thoughts of labour leaders and also affected the labour legislation and government’s policy towards Industrial Relations. To maintain a productive labour force after the first world war the government took a number of steps for regulating work condition and ensuring labour welfare. All India Trade Union Congress was formed in 1920. This was an important step towards the growth of Industrial Relations in India. After the first world war a number of steps were taken by the government to improve the condition of labour. A Commission was appointed in 1906 which provided recommendations on improvement of labour conditions. On the basis of these recommendations Factories Act 1911 was passed. Later, Indian Factories Act 1922 was passed. It had certain important provisions for labour welfare like registration of factories, prohibition of employment of children below 12 years of age and restriction of working hours for children between 12 to 15 years of age, maximum working hours of adult workers, working hours for women, and provisions on weekly holidays. It defined factory as a place employing not less than 10 persons for wages. Another legislation, the Trade Disputes Act 1924, came into existence with the objective of regulation of Industrial Relations. Labour movement in the country There was labour unrest all over the country. Important political development for independence was also taking place. The workers were demanding their rights. Indian Trade Union Act 1926 was enacted to regulate the worker movement and worker protection. It ensured formation of legitimate workers organisations that could raise demands for workers. Legal recognition was given to registered trade unions. This led to an era of formation and development of trade unions in the country and had important impact on Industrial Relations. It included taking measures for providing social security and regulating work conditions. Effort was made to enact laws for resolving trade disputes. Towards this end Trade Disputes Act 1929 was enacted to provide a dispute settlement machinery. Royal Commission of Labour was appointed in 1928 to enquire into and report on existing conditions of workers in industry and plantations. The report was expected to focus on health efficiency and the standard of living of workers and relations between employee and employer. It gave various recommendations to improve the health safety and welfare of workers. It suggested the formation of works committee, appointment of labour welfare officers, conciliation officer and emphasized on formation of strong trade unions. does the commission paved way for labour reform in the future. In the decade of 1930, large scale industries developed in India but at the same time the conflict between labour and capital also became prominent. Trade unions had not taken a proper form by this time therefore due to lack of unionism not much action could be taken to work on the problem of industrial unrest. Factories Act, 1934 was enacted to satisfy the demands of workers. Payment of Wages Act, 1936 was passed for regulation of wages and their payments. The industrial turmoil continued and there were a number of strikes. Trade unions 26 were consolidated and got impetus for generating awareness and political consciousness among the working class. Tripartite consultative machinery was developed during this Evolution phase of Industrial Relations in India. This was in line with objectives of the ILO. The first tripartite Labour Conference was held at New Delhi with Dr BR Ambedkar as the chairman. The conference comprised two organisations which were Indian labour conference and standing Labour Committee. At the state level state labour advisory boards were set up which were consulted on labour issues. The objectives of the tripartite bodies were to promote uniformity in labour legislation, develop a procedure for industrial dispute settlement, discuss the labour-management relationship issues of national importance. World War II The Second World War had a deep impact on Industrial Relations in India. It resulted into rise in inflation and fall in wages, which increased the cost of living. Working conditions in industry deteriorated. The condition of workers became poor and there was increasing labour unrest. Industry was making profits, workers demanded bonus but their demand was not accepted. The enactment of Defence of India rules 1935 made industrial disputes subject to compulsory arbitration. The strikes were banned. This disturb the Industrial Relations and there was a sharp increase in the number of industrial disputes. Labour conferences were convened by the government in the years 1940, 1941 1942 but this did not contribute to resolving industrial disputes. The tripartite conference of 1942 which had the participation of the employers, workers and the state initiated the tripartite structure of Industrial Relations and also had an impact on labour movement in India. Another development during this period included enactment of Indian Statistics Act in 1942. The act provided for collection of data concerning factories and condition of labour. In 1944 labour investigation committee known as Rege committee was set up with the objective to analyse working conditions of employment and other social economic conditions of workers. The period after the second world war was tough for labour class. There were large number of retrenchment which resulted into joblessness and further deteriorated the already poor condition of workers. As a result labour unrest increased and a large number of strikes and industrial disputes were witnessed during the year 1946. To find a solution to the problem a tripartite conference was organised with the participation of industry, labour representatives and the State. An attempt was made to find the peaceful solution to the problems in Industrial Relations. Industrial truce Resolution was adopted in the conference according to which labour and management agreed to maintain industrial peace and resolved to avoid strike, lockouts and other such tactics for three years. Both the parties would resolve to settle disputes through mutual discussions and it also provided for establishment of system for determining fair wages and conditions of labour and also for constitution of works committee. Activity 1: Browse through web resources and write a comprehension an Industrial Relations in Pre-independence era in your own words................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 27 Industrial and Employment Relations An Overview 2.3 INDUSTRIAL RELATIONS IN POST INDEPENDENCE ERA Post-independence, steps were taken for large scale industrialisation of the nation with the twin objective to become self-reliant and to provide employment to the people. Industrial Policy Resolution was adopted in the year 1948 on the basis of which industrial policy of the government was designed. This had a far reaching impact on industrial relations in India. The provisions of the Indian Constitution provided a framework for establishing workers rights. In pursuance of the national labour policy, the government has been attempting to encourage any disputes in industry through mutual settlement, collective bargaining and voluntary arbitration. Industrial Disputes Act, 1947 provided a legal framework of settling industrial disputes. It contains provisions for voluntary methods to resolve disputes, and contains the provisions for the intervention of court. Various other labour legislations were enacted post-independence for labour welfare and also for regulating the terms and conditions of working. A code of discipline was evolved in 1958.The code has laid down specific obligations for the management and workers with the object of promoting constructive cooperation between their representatives all levels. The vision behind the concept was to achieve industrial harmony. The was successful to some extent and led to decline in the number of man-days lost and reducing the inter-union rivalry. The code provides freedom to workers to join a union of their own choice. 2.4 FIVE YEAR PLANS IN PRE-LIBERALIZATION ERA The Government of India formulated Five-Year Plans immediately after independence for overall growth and development of the nation. Labour issues and industrial relations were important focus of the five year plans. Objective was to evolve practical ways in which labour and management can make a positive contribution to national development and national policy. First five-year plan Industrial truce Resolution was adopted at the Industrial Conference in December 1947. According to this resolution both the employers and workers refrain from strikes Lockout and other such tactics, a machinery for determination of norms and standards governing mutual relations between employers and employees and the settlement of industrial disputes was visualised. The first plan envisaged the significance of cooperation between employer and employee for improving labour relations and hence the economy of the country. Importance of setting up tripartite body comprising representatives of employers, workers and the State was recommended. Tripartite body was expected to resolve disputes and sort out conflicts and reach mutual agreements between employers and workers. 28 The plan stressed on setting up a grievance handling procedure in industry/ plant through Evolution mutual discussion. The plan also emphasized the use of arbitration machinery to resolve disputes between the two parties. Works committee at the plant level was seen as a significant system for sorting out issues between workers and Management and chalk out plans for labour welfare. The plan also recommended the setting up of joint committees at plant level and at industry level for improving Industrial Relations. The Plan viewed collective bargaining as an important means for arriving at every moment between the present ages of workers and that of management. It was also stressed that for the success of collective bargaining there is a need for single bargaining agent, as far as possible, and for creating uniform conditions in all the centres of an establishment. The plan also comprised the provision for setting up conciliation machinery by the state, to facilitate dispute settlement in case the disputing parties fail to reach to a mutual agreement, and voluntarily off for arbitration. if the parties do not opt for arbitration voluntarily, the plan recommended the use of compulsory arbitration by the statutory machinery. Second five year plan (1956- 1961) The code of discipline was adopted in 1958 in the tripartite labour conference attended by the representatives of employers, workers and the government this was a significant step towards establishing harmonious relations between workers and employers. The government encourage settlement of disputes through voluntary arbitration following the code of discipline industry, though adjudication is adopted as a final resort. The code of discipline has its origin in the recommendations made in the second five-year plan. The code of discipline included the rights and obligations of the workers and employers in the working of establishment. The Code provides that the trade union and management must settle all disputes, conflicts and grievances through mutual discussions, conciliation and voluntary arbitration. Workers must not resort to strike and management must not go for lockout without prior notice. The code also contained the criteria for recognition of unions and grievance handling. The code is based on the principle of industrial democracy and puts responsibility on both the parties to maintain peace in industry by fulfilling their obligations and duties and respecting the rights of the other party. The industrial relation showed an improvement with adoption measures like joint consultation at various levels, implementation of social security measures through employees State Insurance act 1948 and Employees Provident Fund Act, 1948. The Plan also emphasised on the need for strong trade unions, problems of multiplicity of trade unions, recognition of trade unions and need for finances of trade union so as to protect the interests of workers which would further lead to improving production. The plan recognised the significance of industrial peace and harmony for the growth of industry. It also stressed on mutual understanding of each other’s problems and resolving the issues through mutual negotiations between employers and trade unions. Such bipartite agreements between Ahmedabad Mill Owners Association and textile Labour Association, Bombay Mill Owners Association and Rastriya mill Mazdoor Sangh, 29 Industrial and Employment Bombay, and Tata Iron and Steel Company Limited Jamshedpur and trade unions of Relations An Overview workers were mentioned in the Second Plan as examples for achieving better Industrial Relations. Recommendation was made for setting up of standing joint consultative machinery at the Centre, in States and in individual units for promoting harmonious industrial relations in the country. During the Second Five Year Plan, the significance of workers’ participation in management was recognised and method of worker participation in management were evolved. Joint management councils were established on experimental basic. The Council was responsible for effecting mutual consultation between employers and workers over important issues which affected workers and employers. Another significant area was implementation of a scheme of workers’ education. This scheme has helped in enhancing awareness level of workers, boosted their self- confidence and helped increase their ability to comprehend the labour laws and take their advantage for their empowerment. It was suggested to evolve norms and standards to regulate labour-management relations. Works Committees were recommended for the settlement of conflicts and disputes. Third five year plan (1961- 1966) The Third Plan re- emphasized the importance of code of discipline and also joint consultative machinery, where the representatives of the government employees and employers participate. Such joint discussions have been instrumental in improving industrial relations in the country. The plan recommended setting up of tribunals, in case bipartite arrangements fail to settled disputes. This has helped in resolving disputes to a great extent. Code of Discipline accepted by the employee organisations and workers unions has helped in increasing cooperation and avoiding the use of adjudication disputes and grievances to a great extent. Acceptance of methods of resolving disputes through mutual negotiations on voluntary basis has been considered as important for achieving healthy and peaceful industrial relations. Joint Management Committee set up in several establishments during the Second five year plan reaped positive results as it was successful in bringing about mutual negotiations between employers and workers. The third plan recognised the significance of these committees and stressed on the setting of these committees to new industries. The plan highlighted the Code of Discipline as the basis of recognition of unions which will go a long way In creating a healthy environment for economic development. Under the Third Five Year Plan, labour policy was designed according to immediate and long term need of a planned economy. The concept of socialist society was kept in mind and it was mentioned that the outcomes of progress should be enjoyed by all in an equitable manner, In 1966, the Government of India set up a National Commission on Labour to study and make recommendations on various aspects of labour including wages, working conditions, welfare, trade union development and labour-management relations. The Commission submitted its report in 1969. The Government accepted 200 recommendations out of 300 made by the Commission. In the formulation of policies and in their implementation, the Government has set up joint committees consisting of the representatives of the Government, the employers and the employees and at the apex of this tripartite machinery is the Labour Conference. 30 Fourth Five Year Plan Evolution The labour policy in the Fourth Five Year Plan was evolved with reference to two basic concepts: (1) The relationship between workers and employers is one of partnership. (2) The employees are under obligation to protect the well-living of employees. Greater emphasis was placed on collective bargaining. Protective labour laws introduced earlier and the tripartite bodies played an important role in regulating industrial relations during the Fourth Plan period. Legislations like Payment of Bonus Act, 1965, labour welfare funds acts in states employee State Insurance Act, played an important role in ensuring welfare of workers. The Fourth Plan envisaged the extension of welfare activities of employees State Insurance Corporation to provide hospitalization to families of insured workers, to cover shops and commercial establishment, and to cover establishments having 500 or more insurable workers. National Conference of labour was set up by the government in 1966 with the purpose of studying and making recommendations on various aspects of labour like wages welfare trade unions and others. It emphasized the promotion of collective bargaining for increasing productivity and creation of healthy trade union movement. Fifth Five Year Plan Plan stressed the importance of maintaining healthy industrial relations for efficient performance of industry. The plan reviewed the progress of the previous plans in terms of industrial relation and observe the improvements in certain aspects like:  improving levels of worker participation in management  setting up of shop Council and works committee  improvement in communication channels between management and workers  positive results from introduction of productivity linked incentive scheme The plan mentioned about achieving good industrial relations through planning of legislative measures, and the need for healthy trade unionism essential for minimising loss of production due to strikes and lockouts. The recommended promoting profit sharing scheme linked with performance of employees in industrial undertakings, safeguarding the interest of employees and unorganised sector weaker sections and consumers at the same time. The Fifth Plan mentioned about the need to resolve labour issues through bipartite discussions. Creating an institutional framework for effective bargaining between representatives of employees and management was emphasised with the need for clear parameters for determination of bargaining agent. Promotion of conciliation machinery and voluntary arbitration was to be promoted at the centre and at the state. To promote workers participation in management, creation of Shop councils and other such bodies having participation of workers representative and management representatives, fully authorised to take decisions on issues of mutual interest was recommended. 31 Industrial and Employment The plan is oriented towards substantial employment opportunities. Relations An Overview Sixth five year plan (1980 - 1985) With respect to labour, the Sixth Plan aimed at achievement of the following objectives: (i) To establish harmonious relations between employers and workers. (ii) To accelerate the rate of industrial development and to create expanding opportunities for employment. (iii) To rise the living standard of workers in general and the weaker section in particular. The Plan laid observance about substantial increase in industrial production and a change in the type of consumers, products, and capital goods. On the basis of the industrial policy statement of the Government of India, 1980, need for growth in technological and managerial skills was emphasized. The plan stressed the need of strengthening industrial relations machinery for resolving disputes, and emphasized on the importance of collective bargaining. The Sixth Plan also stressed upon the importance of tripartite consultations with the participation of the representatives of workers employers and government for promoting cooperation between labour and Management. The plan also mentioned about non-uniform unionization. Inter-Union and intra-union rivalries were held responsible for weakening the bargaining power of trade unions and also weakening their financial positions. Weak trade unions lead to industrial unrest. Multiplicity of trade unions was required to be avoided and unions needed to assume roles for nation building. Trade unions needed to work for improving quality of life of workers and must involve in welfare programs of workers. The plan focused on loss of man days due to strikes and lockouts in the organised sector. The plan observed that dispute settlement machinery e as provided in Industrial Disputes Act, 1947 has not been very effective in preventing disputes for settling disputes and stressed on the urgency of evolving adequate consultant consultative machinery and grievance procedures so as to control industrial unrest. Seventh Five Year Plan(1986-91) The thrust of the Seventh Five-Year Plan (1986-91) was on improvement in capacity utilisation, efficiency and productivity. It laid emphasis on using the potential of human resources and improving their capabilities for development. The Plan stated the need evolve a sound policy for handling industrial sickness in future while protecting the interests of labour and also government, as it cannot bear the huge burden of losses. It stressed on the scope for improvement in industrial relations, which would eliminate the need for strikes and lockouts. In the proper management of industrial relations the responsibility of unions and employees has to be identified and inter-union rivalry and intra-union divisions should be avoided. 2.5 FIVE-YEAR PLANS IN POST LIBERALIZATION ERA India adopted the new industrial policy in 1991. It was characterized by disinvestment of PSUs, Foreign Direct Investment policy, focus on domestic production, export promotion policies, policies for MSMEs, among others. Liberalisation and globalisation 32 open theof the economy of India for foreign companies. The entry of multinational Evolution companies led to increase in competition, as a result the focus on quality of products, cost cutting, production methods, use of Technology increased. The opening up of economy resulted in the need for management and union to take on the New challenges together for the sustenance of the company and the benefit of both the parties. There was a paradigm shift in relation between employer and employee. The focus was on managing human resources in such a way that there provided competitive advantage to the form. The importance of worker welfare, worker training and education was realised and was taken as a priority by both management and union. The subsequent five year plans incorporated there these aspects so as to have healthy industrial relations in the open economy. Eighth Five-Year Plan (1992-97) The Eighth Five year plan highlighted workers participation in management and stressed that labour participation in management is a means of bringing about a state of industrial democracy. The plan also identified that though the government had been stressing the need to introduce workers’ participation in management and various schemes were notified, the results were not as expected. The need for a suitable legislation for effective implementation of the scheme, proper education and training of workers and cooperation from both employers and employees was accentuated. The plan also mentioned the problem of multiplicity of trade unions and inter-union rivalry and importance to obliterate them in promoting the system of participative management. Ninth Five-Year Plan (1997-2002) to twelfth plan The plan highlighted the need to improve labour productivity, provision of social security to supplement the operations of the labour market and skill formation and development. The planning commission observed that the situation of surplus labour, coupled with the employment of most of the workers in the unorganised segments of the economy, has given rise to unhealthy social practices like bonded labour, child labour, and adverse working conditions faced by the migrant labour. The Tenth Plan (2002-2007) focused on vocational training and skill building along with social security for vulnerable groups in labour force. Institutions of industrial relations did not find place excepting labour laws for rural establishments. Eleventh Plan (2007- 2012) also reflected the same trends. The Twelfth Plan (2012-2017) focused on human resource development, job creating and social protection. It also expressed the need to simplifying the laws. Improving Industry- workforce relationships, one union in one industry policy, strong institutions of workers participation, more state intervention to promote healthy industrial relations are the objectives of this plan in relation to the IR policy. 2.6 SUMMARY Industrial Relations are affected by the interplay of dynamics between workers, management and government. Industrial Relations systems undergo transformation depending upon the external environmental factors. These changes have been evolutionary or revolutionary. Industrial Relations in British India were shaped by the economy of the British government, labour policies, ideologies of political leaders, values systems of freedom fighters and economic conditions prevailing in India. The 33 Industrial and Employment factory system of production became popular in the second half of the nineteenth Relations An Overview century. The workers at that time had to face many hardships as their European counterpart. The end of the first world war brought changes in the social economic and political conditions of common man and people hope for or a new social order. The labour unrest that had arisen because of low wages and prices rises prepared the grounds for a new order. After the first world war a number of steps were taken by the government to improve the condition of labour. The Second World War resulted into increased cost of living. The condition of workers became poor and there was increasing labour unrest. Post- independence, steps were taken for large scale industrialisation of

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