Chapter One

Introduction
Concept: - Industrial relations pose one of the most delicate and complex problems to
modern industrial society. With growing prosperity and rising wages, workers have
achieved a higher standard of living. The organizations in which they are employed have
ceased to be individually owned and have become corporate enterprises. At the same
time , however , a progressive , status dominated, secondary group oriented ,
universalistic, aspirant and sophisticated class of workers has come into being, who have
their own trade unions and who have thus gained a bargaining power which enables them
to give a tough fight to their employers to establish their rights in the growing industrial
society. As a result the government has to step in and play an important role in
establishing harmonious industrial relations .
DEFINITION: Industrial relations refer to a dynamic and developing concept which is
not limited to the complex of relations between trade unions and management but also
refers to the general web of relationships normally obtaining between employers and
employees a web much more complex than the simple concept of labour capital
conflict.
According to ILO, industrial relations are an integral aspect of social relations arising out
of employer employee interaction in modern industries, which are regulated by the state
in varying degrees , in conjunction with organized social forces and influenced by the
existing institutions. This involves a study of the state, the legal system, and the workers
and employers organizations at the industrial level, and of the patterns of industrial
organization including management, capital structure, compensation of the labour force ,
and a study of market forces- all at the economic level.
According to Encyclopedia Britannica, the concept of industrial relations hs been
extended to denote the relations of the state with employers , workers and their
organizations .. The subject therefore includes individual relations and joint
consultation between employers and workers at their places of work; collective relations
between employers and their organizations and trade unions, and the part played by the
state in regulating these relations.
John Dunlop:- Labor relations are the complex of inter relations among workers ,
managers and government.
H.A. CLEGG:- Labor relations are the study of workers and their trade unions,
management, employers association and the state institutions concerned with the
regulation of employment.
OBJECTIVES:
In addition to their primary objective of bringing about good and healthy relations
between employers and employees , industrial relations has the following objectives:
a. To safeguard the interests of labour and of management by securing the highest
level of mutual understanding and goodwill among all those sections in the
industry which participate in the process of production.
b. To avoid industrial conflict or strife and develop harmonious relations, which are
essential factors in the productivity of workers and the industrial progress of a
country.

c. To raise productivity to a higher level in an era of full employment by lessening

the tendency to high turnover and frequent absenteeism.
d. To establish and nurse the growth of an industrial democracy based on labour
partnership in the sharing of profits and of managerial decisions , so that an
individuals personality may grow to its full stature for the benefit of the industry
and of the country as well.
e. To eliminate , as far as is possible and practicable, strikes, lockouts and bandhas
by providing reasonable wages, improving and working conditions etc.
f. To establish government control of such plants and units as are running at a loss
or in which production has to be regulated in the public interest.
Process of industrial relations:
a.
b.
c.
d.
e.

Unionization
Dispute or conflict situation
Collective bargaining: Negotiation at the bargaining table.
Settlement of contract
Administration of contract.

a. Unionization:- A union is an organization of workers. The process of labor

relations begins with the formal establishment of labor unions and its recognition
by employer. The unionization process consisting of legal basis, organizing drive ,
registration, election and recognition should be followed.
b. Dispute or conflict;- disputes are the conflicts between workers and management
They serve as the starting point for labor relations .The key issues which lead to
dispute or conflict relate to rights and interests. The cause of disputes can be
economic , managerial and political.
c. Collective bargaining:- It refers to negotiation or agreements between two parties.
The unions and management negotiate at the bargaining table .Unions put their
list of demands. Through negotiations, a compromise is reached between them.
d. Contract settlement:- The compromise between union and employer is converted
into a written contract. This contract is approved by union members.
e. Contract administration:- It is the primary responsibility of management. The
agreed upon agreement is administered by communicating it to all union members
and management personnel, implementing the contract, interpreting the contract
for grievance handling and monitoring activities during the contract period.
ACTORS OF INDUSTRIAL RELARIONS:
A. WORKERS AND THEIR ORGANIZATIONS:- They are the sellers of labor and
skills. Industrialization and the recent growth in service industry have greatly
increased the number of workers. The workers working in the organized sector are
the key actors in the labor relations. Workers are represented by trade unions. A

union is an organization or workers working collectively, seeking to promote and

protect mutual interests through collective bargaining.
B. EMPLOYERS AND THEIR ASSOCIATIONS :- they are the buyers of labor and
skill. They hire and fire workers. They negotiate terms and conditions of
employment with the unions. Employers are represented by their association.
They promote and protect the interests of the employers.
C. SOCIETY:- society in labor relations is represented by the government and
pressure groups.
GOVERNMENT:-The government can be at national or local level. It regulates the
relationships between workers and employers. It promotes and protects the interests
of both groups through labor legislation, regulations, labor courts, tribunals, wage
boards etc. It enforces the compliance of laws in labor relations.
PRESSURE GROUPS:-They are special interest groups. They lobby and pressurize
government to enact or withdraw laws to protect the interests of labor or employers.
APPROACHES TO LABOR RELATION
A. UNITARY APPROACH : under this approach IR is grounded in mutual co
operation, individual treatment, team work and shared goals. Work place conflict is
seen as a temporary aberration, resulting from poor management, from employers
who do not mix well with the organizations culture. Unions co operate with the
management and the managements right to manage is accepted. There is no we
they feeling. The underlying assumption is that every one benefits when the focus is
on common interest and promotion of harmony. Conflict in the form of strikes is not
only unnecessary but destructive.
B. PLURALISTIC APPROACH: This approach perceives organizations as coalitions
of competing interests where the management s role is to mediate amongst the
different interest groups ,trade unions as legitimate representatives of employee
interests and stability in IR as the product of concessions and compromises between
management and unions.
Legitimacy of the managements authority is not automatically accepted. Conflict
between management and workers is inevitable. Employees oin union to protect their
interests and influence decision making. A strong union is not only desirable but
necessary. Similarly the interests of the society are protected by state interventions
through legislation and industrial tribunals which provide orderly process for
regulation and resolution of conflict. According to pluralists , industrial conflict is
inevitable and it needs to be contained within the social mechanism of collective
bargaining , conciliation and arbitration.
C.MARXIST APPROACH : Like pluralists, Marxists also regard conflict as
inevitable but they take it as a product of capitalist society. Adversarial relation in the
workplace are simply one aspect of class conflict. Conflicts asise not just because of
competing interests within the organization but because of the division within society
between those who own or manage the means of production and those who have only
their labor to offer. Industrial conflict is synonymous with political and social unrest.

Trade unions are seen both as labor reaction to exploitation by capital as well as a
weapon to bring about a revolutionary change in society. The unions focus on
improving the position of workers within the capitalist system. All strikes are
political. Marxists regard state intervention through legislation as supporting to
managements interests rather than ensuring the balance between the competing
groups.