10. Industrial Relations—Main Aspects, Models and Developments – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 10

Industrial Relations—Main Aspects, Models and Developments

Chapter Objectives

This chapter will enable students to:

  1. Understand the concept of industrial relations and its dominant aspects
  2. Describe the approaches to industrial relations
  3. Explain Dunlop’s model of industrial relations system along with its limitations
  4. Describe IILS’ model of industrial relations
  5. Present an account of the development of industrial relations in India
  6. Appreciate the role of employers’ federations in the field of labour and industrial relations
  7. Explain the salient features of industrial relations in India

Significance of Tripartite Resolutions for Maintaining Harmonious Industrial Relations

In December 1947, the industries conference consisting of representatives of government, employers and workers unanimously adopted an important resolution on industrial truce. Some notable extracts from the resolution are as follows:

  1. Increase in production which is so vital to the economy of the country cannot be achieved without the fullest cooperation between labour and management and stable and friendly relations between them.

  2. The employers must recognize the proper role of labour in industry and the need to secure for labour fair wages and working conditions.

  3. Labour for its part must give equal recognition to its duty in contributing to the increase of the national income without which a permanent rise in the general standard of living cannot be achieved.

  4. Mutual discussion of all problems common to both and a determination to settle all disputes, without recourse to interruption in or slowing down of production should be the common aim of employers and labour.

  5. Fullest use should be made of statutory and other machinery for the resolution of industrial disputes in a just and peaceful manner; where it does not exist, it should be created without delay. Such machinery should as far as possible be uniform throughout India.

  6. There should be establishment of machinery for the study and determination of fair wages and conditions of labour, and fair remuneration for capital and methods of association of labour in all matters concerning industrial production.

  7. There should be constitution in each industrial undertaking of works committee representing management and duly elected representatives of labour for the settlement of any dispute which may arise from day-to-day.

  8. The conference invites labour and management to assist government to secure, promote and guarantee such agreements between the parties as will usher in a period of contented and orderly advancement towards a cooperative commonwealth.

Definition of Industrial Relations

The Labour Dictionary defines ‘industrial relations’ as ‘the relation between employers and employees in industry’.1 According to Dale Yoder, ‘industrial relations’ describe ‘relationships between management and employees or among employees and their organizations, that characterize or grow out of employment’.2 In order that the term ‘industrial relations’ could cover every sector of the labour force in all parts of the world, the International Institute of Labour Studies has defined it as ‘social relations in production’.3 According to John T. Dunlop, ‘Industrial societies necessarily create industrial relations, defined as the complex of interrelations among managers, workers and agencies of government’.4 Today, this term stands for such a wide variety of practices and institutions and has been used in such divergent contexts, that to define just an essence of it, is an extremely complicated task. However, a few elements of this term are clear. These are as follows:

(i) Originally, the term stood for employer–employee relations in industry. (ii) Later on, when the workers organized themselves into trade unions and the latter started dealing with employers, trade union activities also came to be included under this term. (iii) Still later, when the relations between employers and employees came to be vested with public importance and ceased to be private, the state had to be involved in such relations. Therefore, the activities of the state designed to modify, regulate and control relations between employers and employees also became a part of industrial relations. (iv) The term ‘industry’ is no longer confined to a small segment of economic activity, but has come to include all gainful employments, including service under the state. The relationship between the state and its employees has also come to acquire many of the characteristics and features of employer–employee relationship in the industry. Therefore, employer–employees relationship under public services has also come to be covered by the term.

 

Industrial Relations

Industrial relations stand for employee(s)/union(s)—employer(s)/management—government relationships in employment.

Considering all the elements mentioned above the term ‘industrial relations’ can be taken to stand for employee(s)/union(s)—employer(s)/management—government relationships in employment. As the term indicates, industrial relations spring from the contacts between employers, employees and their trade unions. Such relations and contacts prevail at various levels and in various forms such as the relations between a single employer and a single union of his employees, between a single employer and more than one union or between many employers organized on one side, and many unions grouped under federations, on the other.

The modern industrial organization is based upon two large aggregates: (i) accumulation and aggregation of large capital, and (ii) aggregation of large number of workers organized under trade unions. The availability and supply of a large quantity of capital and a large number of workers divorced from any ownership of means of production is sine quo non of the establishment and growth of modern industries. The centre of industrial relations is coming together of these two big aggregates. Used narrowly, the term ‘industrial relations’ covers industrial employments only, but in a wider sense, it covers public employments also.

Evolution of Industrial Relations

The origin of industrial relations lies in the employer–employee relationships. The moment workers are divorced from any ownership of the instruments, materials and means of production, they become wage-earners depending for their livelihood upon wages alone. The people who own the instruments and materials of production become their employers and own the products. In the beginning of the industrial society, the economic system consisted of a large number of small competitive businesses and industrial establishments, each employing a small number of workers. The relationship between an employer and his employees was informal, personal and intimate, but with the growth of the giant-sized joint-stock companies and business corporations, each employing in many cases thousands of workers, the relationship between the employer and his employees became no longer intimate and informal. Formal institutions grew up to regulate this relationship. Such factors as the intervention of the state, the growth of trade unions and their federations, employers’ associations, the growth of the sciences of personnel management, industrial psychology and industrial sociology all have tended to influence the spirit and the course of the relationship between employers and employees.

These factors have changed the nature of employer–employee relationship and have converted this private relationship into a relationship of public importance, affecting the welfare of the community as a whole. One can no longer talk of the employer–employee relationship as the private concern of the employer and his employees only. The maintenance of industrial peace and the smooth functioning of industrial relations are the basic requirements of public welfare. The trade unions and their federations of today, as well as the large business corporations separately command an aggregate of power, which can be used for the welfare as well as for the disruption of society. The struggle between these two wings of industrial relations fighting for the sharing of the joint products of labour and capital is not a scene which one can view with equanimity. The result is that the problems of industrial relations, such as strikes and lock-outs, industrial discipline, hiring and firing, promotion and transfer, payment of wages, bonus and fringe-benefits have become essentially acute and demand understanding and constructive solutions.

Dominant Aspects of Industrial Relations

There are two important aspects of industrial relations’ scene in modern industrial society. These are: (i) cooperation and (ii) conflict.

Cooperation

Modern industrial production is based upon cooperation between labour and capital. Here, labour stands for the workers who man the factories, mines, and other industrial establishments or services. Capital stands for the owners of business enterprises who supply the capital and own the final products. The cooperation between the two is one of the basic requirements for the smooth functioning of modern industries and growth of industrialization. This needs no further elaboration as it is clear that large factories and other business establishments cannot run successfully unless there is close cooperation between labour and capital. The very fact that the present industrial organization and the economic structure has been able to turn out a quantity of goods and services unprecedented in the history of mankind, is an index of the extent of cooperation between the two. Cooperation is the normal feature of industrial relations. However, this cooperation flows from the pursuit of self-interests both by the owners of capital and the owners of the labour power, that is, the workers. The owners of business enterprises offer employment, wages and other amenities of life to the workers. The workers in their turn offer their services. Thus, there is a fair degree of give and take and serving of mutual interests which is at the base of cooperation between the two.

But this cooperation is of a minimal degree and is nothing more than the mere coming together of labour and capital or the union and the management, and is devoid of any voluntary choice of, and regard for, the other as a partner. It flows from the necessity that some sort of working relationship has to be reached in order that the factory operations, on which both are dependent, may continue. Thus, it is necessary and functional cooperation, in the absence of which, neither of the parties can satisfy its needs. The aspect of labour–management cooperation has been examined in detail in Chapter 14.

Conflict

The second aspect of the system of industrial relations obtaining today is the existence of conflict. Conflict, like cooperation, is inherent in the industrial relations set up of today. It becomes apparent when industrial disputes resulting in strikes and lock-outs become frequent. The prevailing industrial unrest, the frequency of work-stoppages resulting either from strikes or lock-outs, and the slowing down of production, are the occasional expressions of the ever present conflict between workers and management.

The daily newspapers give enough indication of the existence of industrial conflict. The maintenance of an elaborate machinery by the state for the prevention and settlement of industrial disputes flowing from industrial conflict is an indication of its extent and depth. In the case of physical health, we rarely pay attention to it so long as we are healthy; similarly, so long as industrial peace prevails and production of goods and services continues uninterrupted, there is little talk of cooperation between labour and management, but any work-stoppage caused by strikes or lock-outs is hotly discussed and debated; and solutions are suggested and remedies adopted. Thus, it is clear that the industrial relations’ picture consists of two dominant aspects: cooperation and conflict.

Nature of Industrial Conflict

Industrial conflict is human conflict. It is just one aspect of the general conflict inherent in the capitalist society, based upon the pursuit of self-interest in the economic life by every individual and the group to which he belongs. If an economic and social order is based upon the open acceptance of the principle that each individual is the best judge of his self-interest and he should be free to pursue this interest, conflict becomes inherent in that order. The industrial conflict between labour and capital is one manifestation of this all-pervasive conflict in the capitalist society. The coming together of workers motivated by their urge of obtaining the highest possible wages and the owners of capital motivated by profit maximization is the basic cause of industrial conflict in the capitalist economic system. The products of the joint efforts of labour and capital, that is, the output or proceeds of an enterprise being limited at a particular time, if more goes to labour in the form of higher wages and other amenities of life, less is available for profits to the owners of capital resources. Thus, at a particular moment of time, the satisfaction of the interests of labour conflicts with the pursuit of the interests of capital and the two groups become antagonistic to each other.

It has to be realized that this conflict is like the conflict between any buyer and seller. The seller seeks to sell his commodity at the highest possible price that he can extract and the buyer seeks to pay the lowest possible price. The workers are the sellers of the commodity—their labour power; and the employers buy this commodity. Even though the ILO may declare that ‘labour is not a commodity to be sold and purchased’, it continues to be so. Naturally, the determination of the price of labour including other terms and conditions of employment becomes the chief source of conflict between the employer and his employees.

Further, it has to be appreciated that the conflict is not personal, but results from the capitalist system itself. In a competitive market situation, the constant drive for cost reduction is needed for the mere survival of a business enterprise. The employer attempts to economize on wages also because they constitute an important element in the cost of production. But what is cost to the employer is the main source of income to the workers who seek to maximize their wages and industrial conflict is the result.

It is not that the employer is cruel and enjoys the sight of misery, disease, squalor and want among his workers. The point is that he cannot afford to be liberal and altruistic. He has his own limitations of the system.

Moreover, labour power is fundamentally different from any other commodity. Not only is the labour power a function of time and is, therefore, most perishable but also that it cannot be separated from the labourer. The labourer sells his labour power but retains it in his person. A seller is least concerned with what happens to the commodity after he has sold it. But a labourer is very much concerned with the way the employer uses the labour power, with the temperature under which it is used, speed with which it is worked, and the tension and the pressure that the use creates. Thus, the conditions under which the work is performed are also of utmost importance to the life and happiness of the labourer and do become a source of conflict.

Conflict of interests is found not only in the spheres of wages and profits alone, rather it bedevils the totality of relationship arising out of coming together of labour and capital in the capitalist form of economic organization. The profit maximization goal of management may demand change in the types of goods produced, installation of new machineries, adoption of newer methods of production involving loss of hard-earned skills, transfers, retrenchment and compulsory retirement of workers. On the one hand, the workers expect and demand stability in their income, security of employment, protection of skills and improvement in their status.

Profit maximization may also require authoritarian administration of the enterprise, closer supervision of workers, maintenance of strict discipline and complete obedience to the rules of the enterprise. On the contrary, workers may demand a share in the management of the enterprise, a voice in the formulation of standing orders and scope for self-expression and a respect for the dignity of their individuality. Hence, it is not only the sharing of the fruits of the industry that generates conflict; the very fact of how production is to carried on and how costs are to be shared also becomes a major source of conflict between labour and capital.

Results of Industrial Conflict

It requires not a very imaginative mind to realize the consequences of a situation full of conflicts. It is surprising that the existing set-up of industrial relations, whose roots lie in an all-pervasive conflict, functions at all. It is clear that such conflicts have adverse effects on industrial production, efficiency, costs, quality, human satisfaction, discipline, technological and economic progress and finally on the welfare of the society. Even in the absence of open strifes resulting in strikes and lock-outs, where the production machinery comes to a halt and the costs and losses are apparent, the corrosive effect of industrial conflict is much too widespread and deep to be neglected. A discontented labour force, nursing in its heart mute grievances and resentments, cannot be efficient and will not possess a high degree of industrial morale. Under such conditions, absenteeism and labour turnover increase, plant discipline breaks down, both the quality and quantity of production suffer, and costs mount up to the detriment of all concerned—workers, employers and consumers. In the end, the accumulation of these individual and collective resentments and dissatisfaction finds expression in violent strikes and lock-outs. Then, the realization comes that something is vitally wrong with the relation between the workmen and the employer and preventive and curative measures are urgently needed. The problems of industrial disputes and strikes have been discussed in detail in Chapter 11.

Some Approaches to Industrial Relations

The foregoing discussions have shown the complexity of relationships among workers and their unions, employers and their organizations and governmental agencies. It has also been emphasized that there are two dominant aspects of industrial relations—cooperation and conflict. All these may exist at various levels and in different forms. The basic elements of industrial relations as well as the relationships among the parties are influenced by a set of economic, sociological, political, psychological and cultural factors operating in different countries at different intervals of time. All these aspects have been viewed with different angles which have led to the emergence of certain approaches to industrial relations. Most of these approaches have been related to situations prevailing in particular establishments, but a few of them have also taken into consideration the wider horizons of the issues involved. In the paragraphs that follow, an attempt has been made to explain the prominent features of some of the oft-quoted approaches to industrial relations.

The Economic Approach

Industrial relations devolve basically round economic issues. From the very inception of trade unionism, the workers and their organizations have been concerned primarily with the protection and promotion of their members’ economic interests in the form of higher wages and other monetary gains. These involve cost to the employer whose main aim has been to maximize profit and reduce cost. This element of conflicting interests, if not amicably resolved, gives rise to industrial disputes, strikes, lock-outs and other forms of industrial action. This approach to industrial relations has found expression in the writings of most of the pioneers of trade unionism including Sidney and Beatrice Webb, G. D. H. Cole, John R. Commons and Karl Marx. Marx has gone to the extent of advocating replacement of capitalism by communism dominated by the proletariat under which each would work according to his ability and get according to his needs. A few others, like guild-socialists and syndicalists, have in their own way suggested replacement of capitalism by some other arrangements in order to provide a panacea to the ills of free economies. It should be noted that economic aspects in industrial relations are directly or indirectly related to social tangibles, and both produce their impact on each other.

The Sociological Approach

The sociological approach considers industrial relations as a product of the industrial society, which is itself a part of the broad social milieu. The various components of the society such as social institutions, associations, values and standards, customs and traditions, and beliefs all have their impact on the state of industrial relations. These sociological factors play a significant role in conditioning the behaviour pattern of the parties to industrial relations and their mutual relationships. In case the points of view of the parties to sociological factors are in harmony or adjustable, industrial relations tend to be smooth. If there are differences in the approaches of the parties to these factors, industrial relations may tend to become disturbed. For example, the workers and their unions may expect improvement of their status, proper recognition of their role by management, adequate participation in the decision-making and rational supervision. If these expectations do not materialize, the workers and their unions may develop an antagonistic attitude against the management, which eventually may result in disturbed industrial relations.

The Psychological Approach

The psychological approach to industrial relations devolves mainly round the perception of the parties to the same problems. These perceptions may relate to particular situations, persons or issues. If the perceptions of the parties to the same subject are similar or easily reconcilable, industrial relations tend to be smooth. If they are opposed or in contradiction, situations of conflict arise. The perception of workers may be influenced by several factors such as their educational level, amount of wages and other monetary gains, extent of job security, their social background, desire for recognition and enhanced status and nature of supervision. Similarly, the perception of employers and managers may be influenced by their social status, financial condition of the enterprise, governmental policies and pattern of behaviour of union leaders and workers.

The Political Approach

The political approach to industrial relations may be viewed in two ways, one in the wider political perspective, and the other in the narrower perspective of formation of government jointly by the employer and the trade union by mutual agreement in regard to the terms and conditions of employment of the workers. It is well-known that ever since the advent of modern trade unions, the state has been in the field of industrial relations to regulate the relationships between the parties primarily with a view to safeguarding the interest of the community or the nation. Many aspects of industrial relations such as determination of bargaining agents, industrial disputes, strikes and lock-outs, status of collective agreements, and unfair labour practices have increasingly been brought under the coverage of law. This has resulted in the curtailment of the freedom of both the parties in deciding the issues in a complete free manner. They have to operate within the limits set by the government or governmental agencies. Besides, the political activities of unions and their association with political parties are also important factors to be reckoned with.

In a narrower perspective, the power-structure of the union–management relationship is also an important factor to be considered in industrial relations. This power-structure may be related to internal power relationships within the management and trade union themselves, and also to the balance of power between them. Further, collective agreements reached between the employer and the union may be construed as the embodiments of rules governing terms and conditions of employment of workers. This is comparable to the rules framed by governmental agencies which have a binding character.

As a matter of fact, the approaches to industrial relations may be viewed in both wider and narrower perspectives. The broader perspective can be easily discerned from the writings of scholars and appraisal of concrete policies and programmes of trade unions, employers and government. However, a proper understanding of the approaches in regard to particular firms or establishments calls for objective case studies.

Some Models of Industrial Relations

Ever since the growth and development of industrial relations, efforts have been made by scholars to explain its nature and characteristics in their own ways. Most of these approaches have been piece-meal and based on their perception of the subject and remained confined to the conditions prevalent at particular points of time. However, in this process of espousal of theories, there have emerged a few models which have a greater measure of general applicability. Out of these, the models developed by John T. Dunlop and International Institute of Labour Studies (IILS) deserve particular mention.

Dunlop’s Model of ‘Industrial Relations System’

John T. Dunlop has developed a ‘system’ approach to industrial relations in the form of a general theory. According to him, the central task of industrial relations is ‘to explain why particular rules are established in particular industrial relations systems and how and why they change in response to changes affecting the system’.5 Dunlop’s focus of attention has been on the formulation of rules governing workplace and the community involved in the work. He holds that these rules are established as a result of the interplay of certain specific factors namely, actors, environmental context and ideology. This may be presented in the form of the following equation:

 

Rules

Rules in the industrial relations system may be in various forms such as policies and regulations of management, rules framed by workers and their organizations, collective agreements, labour laws and regulations of governmental agencies, industrial awards, decrees and decisions of courts, governmental orders, decisions of agencies mutually created by management and workers’ organizations, and customs and traditions. These rules may be written or unwritten, and may be of certain types as explained below.

Dunlop has put these rules in three broad categories namely, (i) substantive rules, (ii) procedural rules and (iii) rules relating to their administration and enforcement. The substantive rules relate to a wide variety of subjects concerning terms and conditions of employment and rights and obligations of workers such as compensation, rules of discipline, adjustment of workforce, social security and welfare benefits, physical working conditions and so on. The procedural rules are concerned with the procedures and manner in which substantive rules are framed and established. Rules may also be framed for enforcement of substantive and procedural rules. All these rules may be framed at various levels such as workplace, locality, region and industry.

Actors

The actors in the industrial relations system are (i) management and hierarchy of managers, (ii) workers and the hierarchy of their organizations, and specialized governmental and mutually agreed non-governmental agencies concerned with workers, enterprises and their relationships. The managers have the main responsibility of giving orders and ensuring their compliance. Managers may be at various levels and may be private, public or a combination of both. The hierarchy of workers may be formal organizations or informal groups. The formal hierarchy of workers may be organized into several competing organizations such as trade unions or committees. The specialized governmental agencies may be of different types, some of them having broad coverage, while others may operate within limited areas. In many cases, they override the hierarchy of management and workers, while in others they play a very limited role.

 

Actors in Industrial Relations

Actors in industrial relations comprise management and hierarchy of managers, workers and hierarchy of their organizations and specialized governmental and mutually agreed non-governmental agencies concerned with workers, enterprises and their relationship.

Environmental Context

Dunlop has made a mention of three aspects of environmental contexts in which the three actors in the industrial relations system interact. These are (i) the technological characteristics of workplace and work community, (ii) the market and budgetary constraints and (iii) the locus and distribution of power in larger society. In Dunlop’s view, these contexts are decisive in shaping the rules established by the actors.

The Technological Characteristics of Workplace and Work Community: Dunlop has identified seven types of workplaces. These are (i) a fixed or variable workplace, (ii) relation of workplace to residence, (iii) stable or variable workforce and work operations, (iv) size of the workgroup, (v) the job-content, (vi) locus of attention of the actors at the workplace and (vii) hours of operation of the workplace.6 The differences in the technological contexts of different sets of workplaces and work communities have their distinct impact on the roles of the actors, the structure of their organizational hierarchies and the contents of the rules. According to Dunlop, the technological context is decisive ‘both to the substantive rules established for the workplace in the industrial relations system and to the organizational configuration and interaction of the actors’.7

The Market Context or Budgetary Constraints: The product markets or budgetary situations pertaining to enterprises at various levels such as plant, region, industry and nation vary. These variations have their own impact on their respective industrial relations system and the roles of the actors. Some specific features of budgetary constraints mentioned by Dunlop include competitive position of enterprises and extent of budgetary control, scope of market or budget, homogeneity or heterogeneity of market or budget among amongst enterprises, size of enterprises, expansion or contraction of demand, characteristics of labour force, labour market situations and ratio of labour cost to total cost of production.8 He holds that the market or budgetary contexts are significant determinants of complex of rules governing the workplace.

The Locus and Distribution of Power in the Larger Society: Dunlop has considered locus and distribution of power in the larger society as a significant factor in determining the statuses of the actors—workers and their organizations, managerial hierarchies and governmental agencies and also the complex of rules established. The status of workers and their organizations is influenced by a network of interrelations with managerial hierarchy, amongst the workers themselves and within their own organizations, organizations of rival unions and agencies of the government.9 Similarly, the status of management in the system is influenced by a network of interrelations with workers and their organizations, rival management hierarchy and governmental agencies. The management’s approach towards workers and their organizations may be dictatorial, paternalistic, constitutional or worker-participative.

The status of the governmental agencies exercises a significant influence on the roles of other actors and establishment of rules. The government may determine substantive rules directly or through interaction with workers and managers. The rules prescribed by the government are mainly of three types: (i) rules embodied in legislative enactments, industrial awards and decisions of the administrative authorities, (ii) rules specified as permissible by the government and then incorporated in collective agreements or actual rules governing employment and (iii) rules formulated by workers and managers requiring the approval of the government before they are implemented. The nature and extent of governmental intervention and the role of governmental agencies in interaction with other actors are generally complex. In many cases, the status of government in industrial relations system is defined under laws or constitution, but in some cases, the action of the government tends to be unrestrained, unpredictable and arbitrary.

Dunlop holds that in order to understand the rules and the operation of an industrial relations system, the full environment of that system consisting of the technological conditions, the market or budgetary context, the power context, and also the derived statuses of the actors is always to be appreciated.

Ideology

Ideology in the context of industrial relations system represents a set of ideas and beliefs held by the actors in the system together as an entity. It is essentially a body of ideas which defines the role of each actor and the perception which each actor holds towards the place and function of others in the system.10 Sharp differences in the ideologies are not congenial to the establishment of a stable industrial relations system. Only when there is compatibility among the ideologies of actors, the system can be stable.

Thus, Dunlop has developed a general theory of industrial relations system based on the interplay of certain factors contributing to the establishment of rules concerning workplace and work community. These factors comprise: the actors on the system—workers and the hierarchies of their organizations, managerial hierarchies, environmental contexts and ideology held by the actors. Dunlop holds that his theory ‘seeks to provide tools of analysis to interpret and to gain understanding of the widest possible range of industrial facts and practices’.11

Criticism

Although Dunlop’s system approach to industrial relations has been widely discussed and quoted, it does not provide a convincing answer to some of the pertinent issues involved in industrial relations. Some of the more glaring limitations of the theory are as follows:

  1. Dunlop has not given adequate attention to the conflict aspect of industrial relations. The industrial actions resorted to by the parties in the event of industrial disputes such as strikes and lock-outs also have a potent impact on the formulation of rules governing workplace and work community and the roles of the actors, but this phenomenon has not been adequately covered by Dunlop.
  2. Dunlop has emphasized the roles of all the three groups of actors in combination in the formulation of rules. There are, however, several instances where these rules have been the outcome decisions taken by only one actor. For example, some rules are unilaterally laid down by the management and a few others by a governmental agency alone.
  3. Dunlop’s theory has a very limited applicability in small-sized establishments in which organizations of workers are non-existent and which are free from governmental intervention. In such establishments, unilateral decisions of employer or customary practices play the main roles in establishing rules.
  4. The theory does not provide an answer to the impact of the situations created by union rivalries and factionalism in the organizations of workers, which make the process of rule-making unpredictable and uncertain.
  5. Dunlop’s proposition does not have much applicability in extraordinary situations such as those created by wars, economic crises and political turmoil. In these situations, the industrial relations scene becomes completely abnormal and unpredictable.
  6. Although Dunlop has analysed the roles of actors and impact of environmental factors, he has not adequately covered the processes and procedures involved, and the manner in which rules are established.

In spite of these limitations, Dunlop’s contribution to the development of a theory of industrial relations has been acknowledged all over the world. The directions set by him provide bases for further studies and research in the field.

The IILS Model of Industrial Relations

The International Institute of Labour Studies has developed its own model of industrial relations. This model is similar to that developed by Dunlop in many respects. The IILS model has identified four elements in industrial relations. These are: (i) environment, (ii) parties, (iii) processes and (iv) rules.

Environment

According to IILS model, environment denotes the conditions under which industries or industrial establishments operate. Environment may be economic, social, cultural or political. The model has also specified the particular features of these environmental factors which have a bearing on the roles of the parties and the nature of rules established.

Parties

The parties in industrial relations are state, workers’ organizations or trade unions, and employers or managerial hierarchies. The model has also exemplified the status and features of each of the parties.

Process

The model has covered the aspect of processes in some detail. The processes involved include negotiation, collaboration and resolution of conflict. In negotiation, the workers and employers make joint effort to establish rules. Generally, it is the representatives of workers and employers who take part in negotiations and arrive at agreements. They may take the help of a third party, but decisive negotiations are between the main parties—the employers and workers or their organizations. Collaboration involves joint determination of issues of mutual interest in a spirit of cooperation. It works as a measure which prevents industrial disputes from arising. In the process of settlement or resolution of disputes, the issues of contention between the parties are decided in the form of award or settlement.

Rules

The IILS model further asserts that industrial relations involve establishment of rules concerning terms and conditions of employment. There are three types of authorities for the purpose. These are: (i) monopolistic, (ii) dualistic and (iii) pluralistic. Under the monopolistic method, the rules are unilaterally laid down by the employer who considers setting of the rules as his prerogative. In the dualistic method, the power to establish rules vests in the employer and trade union, or the employer and the state or trade union and the state. In the pluralistic method, the representatives of the employer, workers and the state establish rules on the basis of mutual discussions and understanding.

The model also specifies two types of rules in industrial relations. They are (i) procedural rules and (ii) substantive rules. The procedural rules are concerned with the procedures involved in the process of collective bargaining or settlement of industrial disputes and related matters such as method of selection of bargaining agent, certification of collective agreements, holding of election for the determination of representative union, manner of referring industrial disputes to adjudication authority, strike-ballot and similar other matters. The substantive rules are related to the subject-matters of the terms and conditions of employment, rights of the employers and their organizations, rights of workers and their organizations and similar other matters. Generally speaking, the substantive rules lay down the minimum standards, and the parties are free to improve upon them.

 

Procedural Rules

Rules concerned with procedures involved in the process of collective bargaining or settlement of industrial disputes such as determination of bargaining agent, certification of collective agreements, manner of referring industrial disputes to competent authorities, holding of strike ballot and similar procedural matters.

Substantive Rules

These rules are related to the subject matters of terms and conditions of employment, rights of workers and their organizations and rights of employers and their organizations.

Criticism

The IILS model has also certain limitations, most of which are similar to those applicable to Dunlop’s model. The more notable of the limitations of the model are as follows:

  1. The IILS model does not clearly explain the impact of multi-unionism and union rivalries which have become a permanent feature of trade unionism in many countries, particularly India.
  2. The model also does not present a convincing assessment of the conditions prevalent in small-sized undertakings and unorganized sectors of employment.
  3. The classification of the environmental factors in the model has been rather broad. The model does not clearly explain the impact of a particular factor operating under variable conditions.
  4. The model also does not clearly explain the impact of extraordinary situations such as wars, economic crises, political instability, downswing of business activities and similar other situations on the formation of rules.
  5. A few scholars have highlighted the importance of behavioural aspects in industrial relations. The IILS model is generally silent over it.
Development of Industrial Relations in India and Changing Roles of the Parties

When compared to the position in the United States, United Kingdom and other European countries, the evolution of industrial relations in India was belated on account of a number of factors such as late beginning of industrialization in the country, absence of modern trade unions during early periods of industrialization, and indifference of the British government towards the problems of Indian labour. However, with the expansion of the labour force, spread of unionization, development of industries, increasing espousal of the cause of labour by many nationalist and political leaders and their active participation in the labour movement, changes in governmental policies and programmes relating to labour, and new developments in economic, political and social fields, industrial relations in the country also started developing and taking its own shape. Many features of industrial relations in the country obtaining at different stages of time can be discerned from Chapters 49, which are concerned with the study of various aspects of trade unionism in the country. In the lines that follow an attempt has been made to bring to the fore the more glaring features of industrial relations in the country obtaining at different intervals of time.

Position Prior to the First World War

Modern industries began to be set up in the country by the middle of the nineteenth century. Prior to the outbreak of the First World War, the country had witnessed the establishment of textile mills, jute mills, iron and steel factories, coal mines, plantations and a few other industries in a more or less scattered manner. During this period, majority of important industrial establishments were owned by British employers who had rather uncontrolled dominance over their workers, particularly in plantations, coal mines and railways. Deriving undue advantage of the protection accorded by the British government, they unilaterally laid down the terms and conditions of employment of their workers and subjected them to undue disabilities. The relationship between the employers and workers during the period could be said to be that of masters and servants.

Workers’ organizations during the period were either non-existent or in the nascent stage of emergence. A few workers’ organizations that came to be set up during the period were mainly philanthropic organizations and lacked elements of modern unions. Workers, no doubt, resorted to strikes here and there, but these were confined mainly to some immediate issues and were spontaneous and short-lived. (see Chapter 4) It was rather futile to expect from workers or their incoherent organizations to exert pressure on their employers or government for improving their terms and conditions of employment.

Most of the labour laws enacted during the period such as Workmen’s Breach of Contract Act, 1859, Employers and Workers (Disputes) Act, 1860, Assam Labour Emigration Acts (1863–1901) were primarily intended to serve the interests of the British employers (see Chapter 15). Although the period witnessed the enactment of a few protective labour laws such as Factories Act, 1881, Merchant Shipping Act, 1859, Fatal Accidents Act, 1855, and Mines Act, 1901, they provided minor relief to the workers.

A notable feature of the then existing industrial relations in the country was the role of Jobbers or Sardars. In many industries, particularly mines and plantations, they were the main sources of labour supply. They were the leaders of the workers brought by them and took up their grievances with the employer and looked after their welfare. When the employer did not pay heed to the grievances or these could not be redressed to their satisfaction, they withdrew all the workers brought by them.

Position from the First World War to Independence

The pace of industrial development in the country was accelerated during the period following the end of the First World War. A number of industrial undertakings came to be established in different parts of the country. This was accompanied by an appreciable expansion of workforce most of which was drawn from the rural areas. The industrial workers had to face several sorts of problems relating to the terms and conditions of employment, the solution of which was possible only when their organizations were capable of exerting effective pressures on the employers and alien government.

This period witnessed the formation of a large number of trade unions at various levels such as enterprise, locality, region, industry and even at the national level. Trade unions at all the levels acquired considerable strength under the able leadership of renowned nationalist and other leaders. In a number of industrial establishments, trade unions were capable of exerting effective pressures on the employers for improving the terms and conditions of employment of their members, and quite a few of them contracted collective agreements with them. Such agreements were also contracted at region-cum-industry level (see Chapter 13). The period also witnessed increasing participation of trade unions in tripartite forums at various levels and reached unanimity with the representatives of employers and government on broader issues concerning labour and industrial relations (see Chapter 5).

As a consequence of growing strength of trade unions and increasing involvement of political parties and nationalist leaders in the trade union movement, the attitude of the employers towards workers and their organizations and their perception towards labour issues materially changed. They also started forming their organizations at different levels primarily with a view to facing new challenges in a united manner. The important employers’ federations formed during the period were: Federation of Indian Chambers of Commerce and Industry (FICCI: 1927), All India Organisation of Employers (AIOE: 1932), and Employers’ Federation of India (EFI: 1933). Although these federations primarily aimed at protecting and promoting the interests of the employers and their members, they actively participated in deliberations of tripartite bodies at national levels and tried to reach unanimity along with representatives of workers and government on broader labour issues. A few employers’ organizations formed at industry-cum-regional level also contracted collective agreements with corresponding unions at intervals (see Chapter 13). A detailed description of employers’ federations in the country has been given subsequently in the chapter.

The more notable measures adopted by the government to regulate industrial relations during the period included enactment of the Trade Unions Act, 1926, which is still in force in the country (see Chapter 20), and Trade Disputes Act, 1929; insertion of Rule 81A in the Defence of India Rules, 1942; enactment of Industrial Disputes Act, 1947, which incorporated many provisions of Rule 81A of the Defence of India Rules, 1942, and still in force with subsequent amendments (see Chapter 21); and establishment of tripartite bodies for deliberations on matters relating to labour and industrial relations (see Chapter 5). Most of the measures initiated by the government during the period continued to operate with modifications in the post-Independence period also.

Position Since Independence

The specific areas of industrial relations in the country during the period have been covered in detail in separate chapters of the book—industrial disputes and strikes in Chapter 11, methods of settling industrial disputes in Chapter 12, collective bargaining in Chapter 13, labour-management cooperation/workers’ participation in management in Chapter 14, various aspects of trade unionism in Chapters 59 and laws concerning industrial relations in Chapters 2022. In the lines that follow an attempt has been made to present a brief description of employers’ organizations with particular emphasis on their role in the field of labour and industrial relations followed by a summary of salient features of industrial relations in the country during the period.

Employers’ Organizations and Industrial Relations

A mention of the employers’ federations formed in the country prior to Independence has already been made in the preceding section. These federations became more active with enlarged functions after Independence and at the same time quite a few new federations were formed at various levels. There has also been re-structuring of their organizational set-up. The structure, objectives and activities of the more notable of these federations relevant to matters concerning labour and industrial relations are described below.

Employers’ Federations at the National Level

All India Organisation of Employers (AIOE)

The All India Organisation of Employers was established in December, 1932 on the initiative of FICCI with its original name All India Organisation of Industrial Employers (AIOIE). Subsequently, the word ‘Industrial’ was dropped from its name. The reason behind the formation of the AIOIE was to circumvent the objection of the ILO to the nomination of employers’ delegates to the International Labour Conference from the FICCI which was considered a federation of chambers of commerce and not an organization of industrial employers

The objectives of the AIOE, which is registered under the Trade Unions Act, 1926, include: (i) to take all necessary steps for promoting, supporting or opposing legislative and other measures affecting or likely to affect industries in general or particular industries; (ii) to nominate delegates and advisors to represent employers of India at the International Labour Conference, UN, and other conferences and committees affecting the interests of trade, commerce and industries; and (iii) to promote and support all well-considered schemes for the general uplift of labour and to take all possible steps to establish harmonious relations between capital and labour.

The federation has memberships of regional associations of chambers of commerce and employers and a number of corporate companies both in the private and public sectors.

Employers’ Federation of India (EFI)

The Employers’ Federation of India was established in 1933 on the joint initiative of Bombay and Bengal Chambers of Commerce. Initially, the federation, which was registered under the Companies Act, was concerned primarily with promoting and safeguarding the interests of the British employers, but subsequently a large number of Indian employers also came under its fold. The main objectives of the federation as laid down in its constitution are (i) to promote and protect the legitimate interests of employers engaged in industry, trade and commerce, (ii) to maintain harmonious relations between management and labour and support all well-considered schemes that would increase productivity and at the same time give labour a fair share of increased return and (iii) to collect and disseminate information affecting employers and to advise members on their employer–employee relations and other ancillary matters. Subsequently, the organization also included in its objectives extending help in matters relating to labour reforms, social policies and building of stronger relationships with social partners at the national and state levels and supporting employment generation. The activities of the federation have been similar to those of the AIOE.

Standing Conference of Public Enterprises (SCOPE)

The Standing Conference of Public Enterprises was established in 1970 as an organization registered under the Societies Registration Act. It is an apex professional organization representing the central government public enterprises and also some state government enterprises, public sector banks and a few other organizations in the public sector. It is a member of the International Organisation of Employers. The main objective of the organization is to promote excellence in organization where public investment is involved in order to enable them to be globally competitive. The organization represents the public sector employers on various national and international bodies concerned with matters relating to labour and industrial relations.

Box 10.1

EMPLOYERS’ FEDERATIONS AT THE NATIONAL LEVEL

  1. All India Organisation of Employers (AIOE) (Estd. 1932)

  2. Employers’ Federation of India (EFI) (Estd. 1933)

  3. Standing Conference of Public Enterprises (SCOPE) (Estd. 1970)

  4. Council of Indian Employers (CIE) (Estd. 1956)

  5. All India Manufacturers’ Organisation (AIMO) (Estd. 1941)

  6. Federation of Indian Chambers of Commerce and Industry (FICCI) (Estd. 1927)

Council of Indian Employers (CIE)

Founded in 1956 on the joint initiative of AIOE and EFI, the Council of Indian Employers has become the most outstanding of the employers’ federations in the country espousing the cause of employers in the field of labour and industrial relations and represents the employers on various international and national bodies concerned with labour matters. Its main constituents are AIOE, EFI and SCOPE. The more notable of the objectives and functions of the CIE are as follows:

  1. To interact with the Government of India in the formulation of long-term labour, economic and social welfare policies concerning labour and employers
  2. To contribute to creating a congenial industrial relations climate in the country and to achieve the prosperity and general growth of industry through industrial peace
  3. To foster mutual cooperation among workers’ organizations and employers
  4. To deliberate on general problems confronting Indian employers
  5. To furnish and exchange information relating to industrial relations with employers of other countries
  6. To represent employers on various national and international bodies

Thus, the important activities concerning broader industrial relations and labour issues, which were earlier taken up by AIOE, EFI and SCOPE separately, were assigned to the CIE with a view to ensuring uniformity in the stand of the employers over these matters. However, the three constituents continue to retain substantial autonomy in their organizational and other affairs. As a matter of fact, the decisions of the CIE are the outcome of joint deliberations of the three constituents under an agreed arrangement. The CIE is also affiliated to the International Organisation of Employers. The CIE is not a registered body, but has been recognized by the Government of India and many international and national bodies as an apex employers’ organization in regard to labour and social policy matters.

All India Manufacturers’ Organisation (AIMO)

The AIMO, which consists mainly of medium and small enterprises, was established in 1941 on the initiative of M. Vishesvarayya. The organization was founded with the motto ‘prosperity through industry’. The organization looks after both the trade and labour interests of its members.

Federation of Indian Chambers of Commerce and Industry (FICCI)

The Federation of Indian Chambers of Commerce and Industry was founded in 1927 by G. D. Birla and Purushottam Takkar on the advice of Mahatma Gandhi. Till the establishment of the AIOIE in 1932, its industrial relations function was confined mainly to nominating employers’ delegates to the International Labour Conference and taking up labour matters with the government occasionally. In view of the ILO’s objection to the FICCI being considered by the Government of India as the most representative employers’ organization authorized to nominate their delegates, the FICCI announced the establishment of the AIOIE for the purpose. Presently, the FICCI has membership of about 1,500 corporates and 500 Chambers of Commerce and business houses. The organization is now concerned with economic, financial and business interests of its members and takes up industrial relations and labour matters only occasionally.

Employers’ Federations at the Industry Level

Employers in the country have also formed industrial federations in a few industries such as jute, cotton textiles, engineering, sugar, cement, paper and chemicals. Most of these federations are affiliated to one or more of the employers’ federations at the national level. The main impetus to the formation of industrial federations of employers came from the appointment of Central Wage Boards during the second and third plans period, establishment of Industrial Committees for specific industries and success of industry-wide negotiations in some industries and regions. Most of these industrial federations have their regional and state branches. During more recent years, the industrial federations of employers have entered into collective agreements with trade unions at the industry level. However, there have been problems in negotiations on account of the existence of more than one employers’ federation in a particular industry. In some industries such as iron and steel, coal mining, and plantations, the problem has partially been solved by the formation of joint committees which has tended to ensure a uniform stand by the employers. In this regard, the first National Commission on Labour (1969) observed, ‘Wherever … there is more than one organization of employers dealing with an industry, we suggest that these should be amalgamated into a single organization and the first step in this direction would be the constitution of Joint Committees to deal with the problems of the industry as a whole or to negotiate on behalf of the industry at that level’.12 The views of the second five year plan in this regard are similar. The plan recommended that ‘in the interests of industry-wise bargaining in an area, provision should be made for the certification of employers’ associations as representatives of industry in an area. Any agreement entered into by such associations would then be binding on all members of the associations, as well as on non-members’.13

Regional and State Level Employers’ Federations

A number of employers’ federations have also been formed at the regional and state levels. Examples of such federations are United Planters’ Association of South India, Federation of Gujarat Mills and Industries, North India Commerce and Industries Association, Federation of Andhra Pradesh Small Scale Industries Association and Bihar Industries Association. Like the national and industry level federations, the regional and state level federations also send their representatives on the tripartite and bipartite committees at their respective levels. These federations exert pressure on the government to refrain from taking measures detrimental to the interests of their members. Some of these federations have a strong tradition of entering into collective agreements with their trade unions counterparts. They also extend help to their constituents in the event of industrial disputes, negotiations with trade unions and governmental authorities. Examples of such federations are given in Box 10.2.

Box 10.2

EXAMPLES OF EMPLOYERS’ FEDERATIONS AT THE REGIONAL AND STATE LEVELS

  1. United Planters’ Association of South India

  2. Federation of Gujarat Mills and Industries

  3. North India Commerce and Industries Association

  4. Employers’ Federation of Southern India

  5. Federation of Andhra Pradesh Small Scale Industries Association

  6. West Coast Employers’ Federation

Salient Features of the Role of Employers’ Federations in Industrial Relations

The principal roles of employers’ federations in the country in the fields of industrial relations and labour as evident from the foregoing discussions may be summarized as follows:

  1. They have been sending their representatives at tripartite and other bodies with a view to placing employers’ stand on various issues concerning labour, economy, industry, industrial relations and other related matters. These representatives try to arrive at unanimity along with representatives of workers and government on matters of common interests. There are several examples to show that these representatives have played important roles in providing solution to a number of burning issues at the Indian Labour Conference, Standing Labour Committee, Industrial Committees and other forums.
  2. A few employers’ federations at the industry and regional levels have also entered into collective agreements with trade unions. During more recent years, industry-wise negotiations have become a common feature in certain industries such as banking, iron and steel, plantations, air-transport and coal mining.
  3. The employers’ federations have also been extending help to their members in dealing with difficult situations such as industrial disputes, strikes and other similar problems. They also approach the government and other organizations for ensuring an effective solution of the problems facing their constituents.
  4. Employers’ federations at higher levels have contributed much towards adoption of a coordinated approach towards the problems concerning the economy, industry, labour and industrial relations. This has led to the establishment of uniformity of labour standards in industrial units located in different parts of the country. In its absence, the views of different employers on the same issue would have been varied and even opposed leading to wide heterogeneity in industrial relations situations in different industrial establishments. Since the adoption of the economic and industrial policy of 1991, the employers’ federations at almost all levels have been insisting on labour laws reforms and greater freedom in adjustment of workforce.

    The employers’ federations and their constituents have been doing a commendable work by organizing seminars, workshops, training programmes and conferences with a view to equipping industrial relations professionals with more knowledge and greater skill in handling industrial relations problems. Some of the national level federations have been publishing useful journals and bulletins dealing with labour and industrial relations problems. The role of employers’ federations in the field of industrial relations can be greatly improved if they could give adequate attention to the following:

  5. While major employers’ federations have contributed much towards reaching unanimity on a number of labour issues at tripartite and bipartite forums, they have not given adequate attention to the development of collective bargaining at higher levels. Development of collective bargaining at higher levels can reduce many industrial relations problems at the level of enterprise.
  6. Infringement of labour laws and regulations, settlements and awards by particular employers has not been an unusual feature in Indian industries. The employers’ federations can play a useful role by persuading their members to ensure their proper observance and implementation. They should also guide their members to refrain from engaging in unfair labour practices.
  7. After the adoption of the economic and industrial policy of 1991, retrenchments, lay-offs, VRS and ‘golden hand-shake’ have common feature in a large number of industries in the country. The employers’ federations, which are committed to their social responsibility of expanding employment and growth of industry and economy, should join hands with the government in the adoption of concrete measures towards rehabilitation of displaced workers.
  8. The employers’ federations can play a useful role in establishing effective and workable institutions of workers’ participation in management in consultation with trade unions.
  9. The employers’ federations should arrange regular training and development programmes, seminars and workshops for their members relating to recent trends and developments in industrial relations, skills in negotiations, working of joint bodies, maintenance of discipline, redressal of grievances and similar other matters.

With the entry of multinationals in Indian industries, emergence of highly competitive domestic and foreign markets, need for cost control and ever increasing complexity of labour, social and political problems in the country, the challenges before the employers’ federations have considerably enlarged. What is primarily needed is the enhancement of their adaptability to changing situations.

Salient Features of Industrial Relations in India

Some of the more notable features of industrial relations in the country emerging from the preceding discussions and a perusal of other relevant chapters may be summarized as follows:

  1. The main parties to industrial relations—the workers and their organizations, and employers or their representatives are free to enter into mutual agreements for laying down the terms and conditions of employment of workers or resolving their differences. The agreements arrived at in the course of conciliation proceedings known as ‘settlements’ are binding on all the workers of the concerned undertaking, whereas agreements arrived at otherwise than in the course of conciliation proceedings are binding only on the parties to the agreements. Other types of collective agreements not covered under the term ‘settlements’ do not have a binding character(see Chapter 21).
  2. Most of the collective agreements in the country are contracted at the level of establishment or undertaking. This is done for ensuring their legal enforceability. Only in a few states like Maharashtra and Gujarat, collective agreements reached at region–industry level have a legally binding character under state laws.
  3. The government has provided a network of conciliation and adjudication machineries under law for the settlement of industrial disputes. The parties are generally free to utilize the services of the conciliation authorities, but considerable discretion vests in the government to refer industrial disputes to adjudication authorities whose awards have a legally binding character.
  4. Considerable restrictions have been imposed under law on the workers going on strike and employers declaring lock-out. These restrictions are more rigid in public utility and essential services.
  5. The government has also provided under law machineries such as works-committee and grievance redressal committee to prevent industrial disputes from arising.
  6. Quite a number of schemes of workers’ participation in management sponsored by the government have been experimented within the country from time-to-time, but most of these have ended in failures. Only in a few establishments, where such schemes have been adopted on the basis of collective agreements, these have been functioning to the satisfaction of the parties.
  7. The government has set up tripartite bodies at various levels to enable the parties to arrive at unanimous decisions on broader labour and industrial relations issues. A particular mention may be made of the Indian Labour Conference and Standing Labour Committee which have contributed much towards the adoption of unanimous decisions on many burning issues concerning labour, many of which have been given effect to by the government.
  8. Quite a few labour laws in the country such as The Employees’ State Insurance Act, 1948, Minimum Wages Act, 1948, and Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, have provided for the association of representatives of workers and employers in their enforcement.
  9. Some other features of industrial relations in the country include multiplicity of both workers’ and employers’ organizations at various levels, frequent political interference even in day-to-day industrial relations matters and entry of unscrupulous elements in union leadership.
SUMMARY
  1. There are two dominant aspects of industrial relations: (i) cooperation and (ii) conflict. The element of cooperation between capital and labour is an inseparable element of industrial relations. No industrial enterprise can think of functioning in absence of this element. As many interests of employers and workers are opposed, conflict between the two is also inevitable. Many institutional arrangements have been made to reconcile the conflicting situations.
  2. A few scholars have developed their own approaches to the study of industrial relations. These include the economic, sociological, psychological and political approaches. All these approaches are interrelated and do not have validity in isolation.
  3. Of the various models of industrial relations, the system approach developed by John T. Dunlop and International Institute of Labour Studies (IILS) are more prominent and widely quoted. The system approach of Dunlop asserts that industrial relations involve making of rules governing terms and conditions of employment in which the actors, environmental factors and ideology play their respective roles. The actors comprise the management and hierarchy of managers, workers and hierarchy of their organizations, and specialized governmental and mutually agreed non-governmental agencies. The environmental contexts include the state of technology, market context, and locus and distribution of power in larger society. Ideology in the context of industrial relations system represents a set of ideas and beliefs held by the actors in the system together as an entity. The IILS Model has identified four elements in industrial relations. They are: environment, parties, processes and rules. Environment denotes the conditions under which industries or industrial establishments operate. The parties comprise state, workers’ organizations and employers or managerial hierarchies. Processes involve negotiations, collaboration and resolution of conflict. The rules in industrial relations are concerned with the terms and conditions of employment. These rules are of two types: (i) procedural rules and (ii) substantive rules. The procedural rules comprise the procedures involved in the process of collective bargaining or settlement of disputes. The substantive rules are related to the subject-matters of terms and conditions of employment.
  4. The development of industrial relations in the country has passed through certain distinct stages. Prior to the First World War, the relationship between employers and workers was mainly in the nature of master and servants. During this period, the British government intervened in the field of industrial relations, primarily with a view to protecting the interests of the British employers. The main features of industrial relations during the period from the end of the First World War to the Independence of the country were: (i) strengthening of the trade union movement and active involvement of eminent nationalist and other leaders in the movement; (ii) enactment of trade unions, industrial disputes and standing orders laws; (iii) establishment of permanent tripartite bodies at various levels enabling the parties to participate in the deliberations concerning broader labour and industrial relations issues and arrive at unanimity; (iv) appointment of commissions and committees at intervals for deliberating on specific areas of labour issues; and (v) enactment of a series of protective and social security laws. The main features of industrial relations in the country during the post-Independence period have been: (i) formation and strengthening of both workers’ and employers’ organizations at various levels; (ii) general freedom of the parties to resolve their disputes by negotiations and availability of the services of conciliation officers for helping the parties to arrive at an amicable settlement; (iii) provision of a network of adjudication authorities for deciding industrial disputes with binding awards in the event of the failure of the parties to resolve their disputes themselves and vesting in the government extensive powers to refer disputes to these authorities; (iv) imposition of legal restrictions on strikes and lock-outs, especially in public utility and essential services; (v) provision of machineries under law to prevent industrial disputes from arising; (vi) experimentation with specific schemes of workers’ participation in management at intervals most of which have been failures; and (vii) enlargement of tripartite deliberations at various levels for ensuring active participation of the parties in deciding matters of common interests in an unanimous manner and giving them an opportunity to participate in the enforcement of labour laws.
QUESTIONS FOR REVIEW
  1. Explain the dominant aspects of industrial relations in modern industry. Can industrial relations be conceived in the absence of any of these?
  2. Briefly describe any two approaches to industrial relations.
  3. Describe Dunlop’s model of industrial relations along with the limitations of its applicability in the Indian context.
  4. Explain IILS’ model of industrial relations.
  5. Give a brief account of the development of industrial relations in India.
  6. Present the salient features of industrial relations in India.
  7. Explain the objectives and functions of employers’ federations operating at the national level.
KEY TERMS

 

Industrial relations

Actors in industrial relations

Procedural rules

Substantive rules

Case Study 1

What parties are involved in industrial relations?

In an engineering factory established in 1945 near Delhi, the employer and the only recognized trade union ‘A’ functioning since the inception of the factory have been working hard to ensure a high level of productivity and profitability of the enterprise and also a satisfactory level of standard of living for the workers. They have been entering into collective agreements on matters of mutual interests including the terms and conditions of employment of workers. In 1950, two more trade unions ‘B’ and ‘C’ led by outsiders also came to be formed in the factory. These two new unions started placing exorbitant demands before the management and organized demonstrations and strikes by a section of workers at intervals leading to impairment of the smooth functioning of the enterprise. The management then approached the Labour Department with a request to intervene. The Labour Department declared the strikes organized by the two new unions illegal and convened a meeting of the parties with a view to providing solution to the disturbed industrial relations in the enterprise. Unions ‘B’ and ‘C’ did not participate in the meeting. The government then referred the issue before a tribunal which recognized the status of union ‘A’ as the sole bargaining agent and debarred unions ‘B’ and ‘C’ from any activity in the enterprise.

Questions

What elements of industrial relations exist in the enterprise?

Which are the parties involved in the industrial relations of the enterprise?

How have the rules governing the terms and conditions of employment of workers been formed in the enterprise?

How will you identify the role of the government in the industrial relations of the enterprise?

Case Study 2

Approaches in industrial relations

In a large-scale industrial undertaking near Jaipur, the terms and conditions of employment of workers are governed by a combination of labour laws and regulations, collective agreements and settlements, standing orders and industrial awards. While contracting collective agreements, the parties have taken into account the technology used in production, conditions of product and labour markets, profitability of the enterprise and standards of living of workers. Most of the agreements reflected the relative strength of the parties at the time of the agreements. There have been differences of approaches of the unions while presenting their demands before the management. While one union also took into account the financial conditions of the enterprise, another insisted on increased wages even when the undertaking was running in loss. Besides, there were considerable differences in the extent of membership of the unions and their hold on the workers.

Questions

Who are the actors in industrial relations scene of the enterprise?

What environmental factors are involved in the establishment of rules in the enterprise?

Do you find any differences in the ideology held by the unions?