Glossary – Employee Relations Management



AFL-CIO:   The American Federation of Labour and the Congress of Industrial Organizations, commonly the AFL-CIO, is a national trade union centre. It is the largest federation of unions in the United States. It was formed in 1955 with the merger of two large federations named the AFL and the CIO.

Agency Shop:   A shop that requires nonunion workers to pay a fee to the union for its services in negotiating their contract.

AITUC:   The All India Trade Union Congress is the oldest trade union federation in India. At the time of its founding in 1920, it was affiliated to the Indian National Congress. Later (1947), the Indian National Congress formed its own trade union federation. AITUC is now affiliated to the Communist Party of India. It is a central trade union.

Allocable Surplus (Payment of Bonus Act, 1965):   Allocable surplus is an amount equivalent to 60 per cent or 67 per cent of the available surplus. It is 67 per cent in case of nonbanking companies which do not have provisions for payment of dividends out of their profit in India. For all other companies, it is 60 per cent.

Approach:   The “approach” attitude to resolving conflicts means we would like to resolve the conflict (or problem) by approaching the problem and solving it.

Appropriate Government:   Many acts refer to the term appropriate government. The term denotes the jurisdiction of a particular government in relation to the various provisions of the Act. For example, the “appropriate government” for dealing with Industrial Disputes under the ID Act would be the central government in case of a mine.

Automation:   It is the use of control systems or computers used to control industrial machinery or processes replacing human operators. Automation greatly reduces the need for human sensory and mental requirements.

Available Surplus (Payment of Bonus Act, 1965):   From the gross profit calculated through Section 4, certain specified sums are to be deducted as prior charges. These prior charges are mentioned in Section 6 of the Act; for example, depreciation as permissible under the Income Tax Act, development rebate or allowance that the employer is entitled to deduct from his income under the Income Tax Act, any direct tax liability within the provisions of Section 7 or any other amount specified in Schedule 3.

Avoidance:   The “avoidance” approach is based on fear and conflict is sought to be resolved more often than not by avoiding the conflict situation.


Bharatiya Mazdoor Sangh:   The Bharatiya Mazdoor Sangh is a CTU organization. Although it claims to be an apolitical organization, there appears to be a strong influence of the RSS/BJP ideology.

Board of Conciliation:   A tripartite ad hoc body appointed by the appropriate government for promoting the settlement of disputes where the conciliation officer fails to do so within 14 days. The Conciliation Board consists of a chairman and two to four other members nominated by the parties to the dispute.

Bonus:   In common parlance, bonus is regarded as an ex gratia payment made by the employer to his workers to provide encouragement for the extra effort by them in the production process. Sometimes, it also represents a desire of the management to share its gains with the workers, who are vital to the production process and who contribute to the income and profits of the enterprise.

Business Theory of Unions:   This was proposed by Samuel Gompers. According to this, the primary objective of the union is to protect the economic interest of the workers.


Central Trade-union Organizations:   A central trade-union (CTU) organization may be defined as a federation of trade unions. Its strength is the combined membership of all registered unions is taken into account and to qualify as a CTU, the activities must be spread over at least 4 states and in 4 industries and have a combined membership of 500,000. Verification of membership is done by the central government, once in 4 years.

Chaebol:   A South Korean term for a conglomerate of many companies clustered around one parent company. The companies usually hold shares in each other and are often run by one family. They also have strong ties with the government in power.

Check-off:   This refers to the situation when the employer deducts union dues from pay and hands over the same to the union.

CITU:   The Centre for Indian Trade Unions is a CTU with political links with the Communist Party of India (Marxist).

Closed Shop:   An organization that employs only those people who are already union members directly from the union.

Closure (ID Act, 1947):   The permanent closing down of an industrial establishment.

Collective Bargaining:   A process where the collective of employees, through their representatives, bargain with the employer for having their demands met.

Committee Procedure (for fixing and revising minimum wages according to the Minimum Wages Act):   The appropriate government may appoint a committee comprising representatives of employers and employees and independent members (not exceeding 1/3 of the committee's strength). The recommendations of the committee are published in the official gazette and come into effect after expiry of three months.

Compulsory Arbitration:   When the concerned parties are required to accept arbitration without any willingness on their part. Within the context of the ID Act, 1947, compulsory arbitration amounts to adjudication.

Conciliation Officers:   Appointed permanently or for a limited period, for a specific area or for a specific industry, to whom the industrial disputes are referred to by the appropriate government.

Confinement:   Labour resulting in the issue of a living child, or labour after 26 weeks of pregnancy resulting in the issue of a child whether alive or dead.

Conflict Approach:   An approach that assumes conflict to be inherent in organizations and, managing an organization assumes managing such conflicts. Pluralism and social action are two important sub-categories within the conflict approach.

Conflict:   When two persons (or groups) look at an issue from their own perspectives (because of a large number of reasons, ranging from inadequate communication, roles, organizational structure, personality, different emotional states, etc.) and the there is a difference in the two perspectives, then there is an existence of a “potential” conflict situation. Actual conflict may not have surfaced at this stage, but the conditions for one arising are there. The moment one person (or group) acknowledges that the difference in perception of the other person (or group) is going to negatively affect the interests of the first person (or group), a conflict surfaces.

Continuous Service:   For the purpose of eligibility for payment of gratuity under the Payment of Gratuity Act, an employee is said be in continuous service if they, for a period of time, have been in uninterrupted service, including service that may be interrupted on account of sickness, accident, leave, absence from duty without leave, etc.

Contract Labour:   A workman is deemed to be employed as “contract labour” in or in relation to the work of the establishment, if they are hired for such work by or through a contractor, with or without the knowledge of the principal employer.

Contribution:   The sum of money payable to the Corporation by the principal employer in respect of an employee and includes any amount payable by or on behalf of the employee in accordance with the provisions of the ESI Act.

Contributions Period and Benefit Period:   Workers, covered under the ESI Act, are required to contribute towards the ESI scheme on a monthly basis. Contribution period means a six-month time span from 1 April to 30 September and 1 October to 31 March. Thus, in a financial year, there are two contribution periods of six months' duration. Cash benefits under the scheme are generally linked to the contribution paid. The benefit period starts three months after the closure of a contribution period.

Craft Union:   A trade union that comprises workers who are engaged in a particular craft or skill but who are not all working for the same employer, e.g. Welder's Union, Cabin Crew Association.


Deductions from Wages (Payment of Wages Act, 1936):   The Act prohibits all kinds of deductions except those that are authorized by or under the Act (Section 7). Authorized deductions include fine, deduction for amenities and services supplied by the employer, advances paid, over-payment of wages, loan, granted for house-building or other purposes, income tax payable, in pursuance of the order of the court, provident fund contributions, cooperative societies, premium for life insurance, contribution to any fund constituted by employer or a trade union, recovery of losses, ESI contribution, etc.

Direct Action:   Pressure tactics used by unions, e.g. strikes and agitations, in order to have their demands met.

Disablement:   Under the Workmen's Compensation Act, disablement determines the extent of compensation that can be claimed by the worker injured in the course of his employment. Under the Act, there are four types of eventualities that can be compensated—death, permanent total disablement, permanent partial disablement and temporary disablement.

Disintermediation:   In the current context, it means the removal of an employee's role between the customer and the product or service. ATMs, for example, enable the customer to avail of the service without going through a bank teller.

Disputes of Interest:   These relate to claims by employees or proposals by a management about the terms and conditions of employment. These are mostly disputes that can be resolved through discussions and negotiations, give and take. However, in the event of a dispute not getting resolved through negotiation, these too may be left for resolution through arbitration/adjudication.

Disputes of Rights:   These relate to the application or interpretation of an existing agreement or contract of employment. This kind of dispute, if unresolved through negotiations, is very amenable to resolution through arbitration or adjudication.

Disputes Relating to Discipline:   These arise from acts of interference either with the exercise of right to organize or with acts termed as “unfair labour practices”.

Distributive Bargaining:   A kind of bargaining where the gain of one party is at the cost of the other party. The “share in the pie” is to be distributed between the bargaining parties.


Emotional Intelligence:   Consists of abilities such as being able to motivate one and persist in the face of frustrations; to control impulses and delay gratification; to regulate one's moods and keep distress from swamping the ability to think; to empathize and to hope.

Employee Empowerment:   A strategy and philosophy that enables employees to make decisions about their jobs. Employee empowerment helps employees own their work and take responsibility for their results.

Employee Engagement:   A combination of commitment to the organization and its values plus a willingness to help out colleagues (organizational citizenship). It goes beyond job satisfaction and is not simply motivation. Engagement is something the employee has to offer: it cannot be “required” as part of the employment contract.

Employee Involvement:   Creating an environment in which people have an impact on decisions and actions that affect their jobs. Employee involvement is not the goal nor is it a tool, as practised in many organizations. Rather, employee involvement is a management and leadership philosophy about how people are most enabled to contribute to continuous improvement and the ongoing success of their work organization.

Employee Participation:   Employee participation is part of a process of empowerment in the workplace whereby employees are involved in decision-making processes, rather than simply acting on orders.

Employee Relations:   This lays emphasis on the individual employee rather than the workforce as a whole. Its purpose today is to build partnerships between the employer and the employee.

Employees Deposit Linked Insurance (EDLI) Scheme:   EDLI provides life-insurance benefits to employees who are members of the Provident Fund Scheme.

Employees' Pension Scheme and Fund:   Provides for members to avail of pension on superannuation or retirement and on disablement.

Employees' Provident Fund and Miscellaneous Provisions Act, 1952:   The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 was enacted to provide a kind of social security to industrial workers. It purports to be a social measure, inducing employees to save a portion from their present earning for future.

Employees' Provident Fund Scheme:   A scheme under the provisions of the EPF & MP Act, 1952. Under this scheme, an account of each contributing member is maintained by the provident fund organization. Interest is calculated on the basis of the rate declared every year by the central government in consultation with the Board of Trustees. The fund with accruing interest becomes payable at the time of superannuation or death.

Employees' State Insurance Act, 1948:   The Employees' State Insurance Act, 1948, is a piece of social-welfare legislation enacted primarily with the object of providing certain benefits to employees in case of sickness, maternity and employment injury and also to make provision for certain others matters.

Employers' Organizations:   Voluntary bureaucratic institutions that place reliance on specialization (industry or sector) to fulfil organization objectives.

Employment Injury:   A personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his/her employment, being an insurable employment, whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India.

Equity Concept:   Based on an ethical stance that all employees should be treated equally, and that the same fundamental terms and conditions of employment are to apply to all.

ESI Corporation:   The social-security programme under the ESI Act is administered by a corporate body called the Employees' State Insurance Corporation. It comprises members representing interest groups that include employee, employers, the central and state government, besides representatives of parliament and the medical profession.


Factory:   As defined in the Factories Act, 1948, a “factory” means any premises (i) wherein 10 or more workers are working, or were working on any day of the preceding 12 months, and in any part of which manufacturing process is being carried on with the aid of power or (ii) wherein 20 or more workers are working, or were working on any day of the preceding twelve months, and in any part of which manufacturing process is being carried out without the aid of power but does not include a mine subject to the operation of The Mines Act, 1952, or mobile unit of armed forces, a railway running shed or a hotel, restaurant or eating place.

Fair Wage:   A level of wage somewhere between minimum and living wages.

Flexibility Concept:   According to the concept of the “flexible workforce”, where everyone concerned is trained to be available for any work that the organization may require of them.


Globalization:   It refers to economic integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.

Gratuity:   A lump sum payment made by the employer as a mark of recognition of the service rendered by the employee when he retires or leaves service.

Grievance Disputes:   Arising from day-to-day workers' grievance or complaints.


Hazardous Process:   Defined in Section 2(cb) of the Factories Act, 1948, it implies such processes that may be carried out in an industry specified in Schedule 1 of the Act and the process may cause one of the following two (or both):

  1. Cause material impairment to the health of the persons engaged in or connected with it
  2. Result in pollution of the general environment

HMS:   The Hind Mazdoor Sabha is a CTU organization with no apparent political affiliation. It was initially formed with socialist leanings.

Human Capital:   Human resource deployed in productive work.


ILO Conventions:   An instrument through which the ILO sets the International Labour Standards. These are matters pertaining to conditions of conditions of labour and employment and are adopted in the International Labour Conference. Once adopted and ratified by the member countries, conventions take the form of international treaty and becomes enforceable.

ILO Recommendations:   Also adopted by the International Labour Conference, recommendations too are instruments for setting International Labour Standards. However, as the name suggests, these are only recommendatory in nature.

Industrial Action:   Industrial action is a term that has not been defined in any of the industrial laws but it means action that may follow if disputes of conflicts cannot be resolved through negotiations. “Strikes” and “lockouts” are forms of industrial action.

Industrial Democracy:   This approach compares democracy in the government (wherein the “state” is prevented from inflicting injury to individual citizens by means of elected representatives and people's power) to an industrial setting where, through unions, the workers protect themselves from the power and influence of the owners, as the individual workers are no match for the owners in these aspects.

Industrial Dispute:   Has been defined under the Industrial Disputes Act, 1947. Stated simply, it is a dispute between the employer and (a group of) employees on matters relating to employment or conditions of employment. The ID Act also includes disputes between employees and employees, or employers and employers, which are also considered industrial disputes.

Industrial Disputes Act, 1947:   One of the most important pieces of legislations, it concerns itself, in the main, in providing for prevention and settlement of industrial disputes between employers and employees, employees and employees and employers and employers.

Industrial Relations:   Looks at the relationship between the management and the workers, particularly groups of workers represented by a union. Its purpose is to maintain industrial peace.

Industrial Tribunals:   The tribunals appointed by the appropriate government for adjudication in matters listed in Schedule 3 prescribed under the ID Act, which affect the working of a company or an industry.

Industry Union:   In this form of organization, workers in the same industry are organized into the same union, irrespective of their skills.

Insurable Employment:   An employment in a factory or establishment to which the ESI Act applies.

Insured Person:   A person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any benefit under the ESIC Scheme.

Integrative Bargaining:   It is a kind of joint problem solving where both parties try to arrive at a solution that is mutually satisfying. The effort is to find novel solution, maybe increase the size of the pie itself.

International Labour Conference:   The policy-making and legislative body of the ILO. It is here that the conventions and recommendations are finally adopted. In the ILC, each member state is represented by the government's, the employers' and the employees' delegates in the ratio of 2:1:1.

International Labour Office:   The permanent secretariat of the International Labour Organization. It is headed by a Director General, who also functions as the Secretary General of the International Labour Conference.

International Labour Organization:   An international tripartite body founded in 1919 in the aftermath of World War I (as a part of Treaty of Versailles, to end WW I). The main aim of ILO was to promote the conditions of labour throughout the world.

INTUC:   Indian Trade Union Congress is the trade-union wing of the Indian National Congress. It is a CTU.


Job Evaluation:   A scientific method to determine the “relative” worth of a job in comparison to other jobs within an organization. Job evaluation helps establish internal equity within the organization, also enabling inter-organization comparisons.


Labour Administration:   Involves the formulation of labour policy and the enforcement of labour laws for the promotion of labour welfare.

Labour Courts:   Constituted by the appropriate government for adjudication on industrial disputes relating to any matter specified in Schedule 2 of the ID Act.

Labour Legislation:   Under the Constitution, the legislative powers in different fields of government activity are shared by the central and state governments, in accordance with the lists that form a part of the Constitution—the Union list, the Concurrent List and the State List. The parliament has exclusive powers to make laws on matters enumerated in the Union List. The state legislatures have powers to legislate for the state or any part thereof on any matter enumerated in the State List. Both the parliament and the state legislatures have powers to make laws with respect to matters enumerated in the Concurrent List. To avoid a possible conflict, certain safeguards are provided for subjects on which both centre and state can legislate. Labour is a subject that is included in the Concurrent List.

Labour Policy:   Includes the treatment of labour under constitutional, legislative and administrative Acts, rules and practices, and various precepts laid down in the successive Five Year Plans.

Lay-off (ID Act, 1947):   The failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other connected reason, to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Living Wage:   Enables the employee to provide for himself/herself and his/her family, education to children, protection against ill health, essential social needs, insurance against misfortunes, including old age, in addition to the basic sustenance needs. The upper limit should take the capacity to pay into consideration.


Managerial Trade Unionism:   A trend whereby the managers in an establishment have organised themselves along the lines of trade unions for the purpose of bargaining with the management. This trend started mainly in the large PSUs and a few large private sector establishments.

Manufacturing Process:   It has a precise meaning under the Factories Act, 1948 where it has been defined under section 2(k) as any process for:

  • Making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking-up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; or
  • Pumping oil, water sewage or any other substance; or
  • Generating, transforming or transmitting power; or
  • Composing types of printing letter press, lithography, photogravure or other similar process or book-binding; or
  • Constructing, reconstructing, repairing or refitting, finishing or breaking-up of ships or vessels; or
  • Preserving or restoring any article in the cold storage.

Maternity Benefit Act, 1961:   The Maternity Benefit Act of 1961 was, passed to provide uniform maternity benefit for women workers in certain industries not covered by the Employees' State Insurance Act, 1948.

Maternity Benefit:   Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit, which is the amount payable to her at the rate of the average daily wage for the period of her actual absence.

Maximum Bonus (Payment of Bonus Act, 1965):   Where the allocable surplus in an accounting year exceeds the minimum amount to be paid as bonus, the employer is bound to pay an amount in proportion to the salary or wage earned by the employee subject to a maximum of 20 per cent of such salary or wage.

Minimum (Payment of Bonus Act, 1965):   A minimum of 8.33 per cent of the annual salary or wages or INR 100, whichever is higher, is to be paid as bonus.

Minimum Wage:   The Minimum Wages Act lays down the mechanism for determination of minimum wages for all kinds of employment. The concept of minimum wage in India was outlined in a recommendation of a tripartite committee on fair wages set up in 1948. As per the Act, the government notifies the minimum wages in different kinds of employment.

Mode of Payment (Payment of Wages Act, 1936):   Wages must be paid in current coin or currency notes or in both and not in kind. It is, however, permissible for an employer to pay wages by cheque or by crediting them in the bank account if so authorized in writing by an employed person.

Mutual Insurance:   In exchange for the fees that the members pay to the union, the union renders certain services, which are more functional in nature.


National Tribunals:   Meant for those disputes that involve the questions of national importance or issues that are likely to affect the industrial establishments of more than one state.

Negotiation:   A way to resolve issues without resorting to actions that hurt or destroy relationships.

Neo-Unitary Approach:   A variant of the Unitary Approach, Neo-Unitary Approach, appears to have emerged in some organizations since the 1980s. It builds on existing unitary concepts but is more sophisticated in the ways it is articulated and applied within enterprises. Its main aim seems to be to integrate employees, as individuals, into the companies in which they work

Notification Procedure (for fixing and revising minimum wages according to the Minimum Wages Act):   In this procedure, the government notifies the proposed revision in the official gazette. A minimum of two months' period is provided for persons likely to be affected by the proposal to react and send their representations. The government should also consult the Advisory Board.


Occupational Disease:   An occupational disease while in service, is a disease that inflicts workers in that particular occupation in which s/he was employed, resulting from exposure to a hazardous working atmosphere, particular to that employment. If a worker contracts such a disease, then the employer is liable to pay compensation, provided that the worker was employed by him for a continuous period of six months.

Occupier:   As defined in the Factories Act, it means a person who has the ultimate control of the factory.

Open Shop:   An organization that does not discriminate based on union membership in employing or keeping workers. Where a union is active, the open shop allows workers to be employed who do not contribute to a union or the collective bargaining process.

Organized Labour:   In the context of industrial relations, organized labour would comprise employees under enterprise/industry/organizations to which most of the labour laws apply.

Overtime:   No adult worker shall be required or allowed to work in a factory for more than nine hours in any day or for more than forty-eight hours in a week. Work in excess of that shall be treated as overtime. Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.


Participation Rate:   The proportion of people in the labour force out of total cohort population.

Pay Day (Payment of Wages Act, 1936):   Wages must be paid on a working day and not on a holiday. When there are less than 1,000 persons employed, the wages shall be paid before the expiry of the seventh day of the following month. When there are more than 1,000 workers, the wages are to be paid before the expiry of the 10th day of the following month.

Permanent Partial Disablement:   Disablement that reduces the capacity to work in any employment similar to that the worker was performing at the time of the accident.

Permanent Total Disablement:   Disablement that incapacitates a worker from all kinds of work.

Philadelphia Declaration:   The objectives of the ILO were further refined by way of a conference held in the year 1944 at Philadelphia. The outcome of the Philadelphia conference was later incorporated in the Constitution of the ILO as the Philadelphia Declaration.

Picketing:   The action taken by unionists to prevent willing employees from attending work after a strike has been called. This activity is usually carried out at the gate or entrance but may also be done at any other location near or far from the factory or a section of it.

Pluralism:   The existence of more than one ruling principle. The pluralist approach to IR accepts conflict as inevitable but containable through various institutional arrangements.

Post-capitalist Society:   An open society in which political, economic and social power is increasingly dispersed and in which the regulation of industrial and political conflict are of necessity dissociated.

Preferential Union Shop:   Wherein additional recognition by agreement is accorded by the management to give first chance to union members in recruitment.

Premises and Precincts:   It is a term used in the definition of “factory” under the Factories Act, 1948. Though not spelt out clearly in the Act itself, through various interpretations under judicial rulings, premises corresponds to building whereas precincts correspond to a delineated area.

Preventive Machinery:   Has not been defined anywhere in any Act. However, it comprises: (i) provisions in law that reduce the scope of conflict (health, safety, wages, etc.); (ii) institutions that provide for periodic and structured consultations (Indian Labour Conference, Standing Labour Committee, Industrial Committees, Works Committee, etc.); (iii) pre-emptive procedures and systems (grievance, standing orders, etc.); and (iv) voluntary codes (Code of Discipline).

Principal Employer:   The manager or occupier of a factory or head of the department of a government/local authority who employ contract labour.

Psychological Contract:   Represents the mutual beliefs, perceptions, and informal obligations between an employer and an employee. It sets the dynamics for the relationship and defines the detailed practicality of the work to be done. It is distinguishable from the formal written contract of employment, which, for the most part, only identifies mutual duties and responsibilities in a generalized form.


Radical Approach:   Mainly Marxist, wherein industrial conflict is an inevitable but small part of class struggle between labour and capital or the proletariat and the bourgeoisie. Industrial conflict and organized labour are but a means for larger transformation.

Radicalism:   Views commercial and industrial harmony as impossible until the labour controls the means of production, and benefit from the generation of wealth.

Ratification:   Once adopted at the International Labour Conference, the member states need it to be submitted to their competent authority for ratification (the parliament in our case). Ratification makes it a legally binding document and thereafter the member states have to create suitable legal provisions to enforce the convention.

Rationalization (of manpower):   Strictly, it means bringing the manpower requirements of a firm to optimum levels. In practice, however, it largely means measures to reduce redundant manpower through redeployment, voluntary separation schemes, outsourcing, etc.

Recognition Disputes:   Disputes over the right of a trade union to represent a particular class or category of workers for purposes of collective bargaining.

Recognition (of a trade union):   A trade union may be recognised (by the management) as representing the body of employees in the whole establishment provided it has a majority of employees supporting it. There is no central legislation for the recognition of trade unions though a few state governments, either through legislation or rules framed for recognition, have provision for recognition of a union based on membership verification.

Reformist Unions:   Aim at the preservation of the capitalist economic structure through the maintenance of employer–employee relationship. They do not seek to change the existing social, economic or political structure of the State or the business strategy of the industrial unit.

Registration (of a trade union):   Under the Trade Unions Act, 1926, there is provision of registration of Trade Unions with the Registrar of Trade Unions. Any seven or more members of a Trade Union may apply for registration of the Trade Union under this Act by subscribing their names to the rules of the Trade Union and by complying with the provisions of this Act with respect to registration.

Registration under Contract Labour (R&A) Act:   Every establishment that intends to employ contract labour, is required to get registration as a Principal Employer from the appropriate government.

Regulatory Union:   A union whose main aim is to protect workers' rights. They function on the ideology of economic and social justice, and regulate any decision or policy that violates the “rights” of workers.

Retirement:   Termination of the service of an employee other than on superannuation.

Retrenchment (ID Act, 1947):   The termination by an employer of the service of a workman for any reason whatsoever, other than as a punishment inflicted by way of disciplinary action. It does not include—voluntary retirement of the workman; or retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned.

Revolutionary Theory:   This theory proposes that the means of production must belong to the workers. Trade unions are instruments for a revolution in which the capitalists must be destroyed and the workers (proletariat) must take over the industry and, in turn, the government. Trade unions were a means towards the achievement of a classless society. With this approach, trade unions were regarded as a component in the larger political process for the establishment of a classless society.

Revolutionary Unions:   Aim at destroying the present structure and replacing it with a new order that is regarded as preferable to the working class. They could be anarchist or political in nature.


Salary:   Fixed, regular (usually monthly) payment to an employee.

Set-off:   Where, for any accounting year, there is no available surplus, or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under Section 10 of Payment of Bonus Act, and there is no amount or sufficient amount carried forward and set-on under Sub-section (1), which could be utilized for the purpose of payment of the minimum bonus, then such minimum amount or the deficiency, as the case may be, shall be carried forward for being set-off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year.

Set-on:   Where, for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under Section 11 of the Payment of Bonus Act, the excess shall, subject to a limit of 20 per cent of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set-on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus.

Settlement Machinery:   Once an industrial dispute arises, the ID Act (1947) has provisions for three-tier machinery—conciliation, arbitration and adjudication—for the settlement of the dispute.

Shop Stewards:   Members who occupy an official position in the union hierarchy and who are also employees of an organization.

Shops and Establishments Act, 1953:   These are laws pertaining to conditions of employment of employees in the unorganized sectors mainly. These are “state” government legislations and vary from state to state.

Sickness:   A condition that requires medical treatment and attendance and necessitates abstention from work on medical grounds.

Sit-in Strike:   Not only work stoppage but also refusal by strikers to vacate the premises.

Social Action Theory:   Emphasizes the individual responses of the social actors, such as managers, employees and union representatives to given situations, focusing on understanding particular actions in industrial relations situations rather than on just observing explicit industrial relations behaviour. This contrasts with systems theory, which regards behaviour in industrial relations as reflecting the impersonal processes external to the system's social actors over which they have little or no control.

Social Security:   Social security, in the context of employment relations aims at access to health care and income security, in cases of old age, loss of employment, sickness, disability, work injury, maternity or loss of a main income earner.

Socio-psychological Theory:   Proposes that members join a Union primarily for meeting their socio-psychological needs like security, esteem, companionship, etc.

Soft Skills:   Skills by which the individual interacts with, interprets, structures, coordinates or otherwise informs the social and physical environments within which physical, societal and/or personal product may be generated.

Sole Bargaining Agent:   A provision making it binding for a recognized union alone to bargain on behalf of all the employees.

Spread-over:   The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest, they shall not spread over more than ten and a half hours in any day.

Strike:   Refers to a collective refusal to work by the workers with a view to bring pressure on the management to accede to a demand; this is the meaning in its simplest form, although an elaborate definition has been given in the Industrial Disputes Act, 1947

Subsistence Worker/Employment:   Subsistence workers are those who hold a self-employment job, and in this capacity, produce goods or services that are predominantly consumed by their own household, and constitute an important basis for its livelihood.

Superannuation:   In relation to an employee, it means the attainment by the employee of such age as is fixed in the contract or conditions of service at the attainment of which the employee shall vacate the employment.

Systems Model:   An industrial relations system, at any one time in its development, is regarded as comprising certain actors, certain contexts, an ideology that binds industrial relations systems together and a body of rules created to govern the actors at the workplace and work community.


Temporary Disablement:   This may be total or partial disablement, of temporary nature, which reduces the earning capacity of the worker in any similar employment for the period of disablement.

Terminal Wage (Payment of Wages Act, 1936):   When the employment of any person is terminated, the wages earned by him must be paid before the expiry of the second working day from the day of termination.

Thatcherism:   Margaret Thatcher's political and economic philosophy of reduced state intervention, free markets, and entrepreneurialism.

The Contract Labour (Regulation and Abolition) Act, 1970:   Seeks to regulate the employment of contract labour in certain establishments and to provide for its abolition under certain circumstances.

The Factories Act, 1948:   Is an Act that consolidates all laws regulating labour in factories with the aim of protecting workers employed in factories against industrial and occupational hazards.

The Governing Body:   Is the executive body of the International Labour Office (please note that International Labour Office is one of the sub-systems of the International Labour Organization). The Governing Body oversees the functioning of the Labour Organization. The Governing Body: a) decides the agenda of the International Labour Conference; b) helps finalize the draft of Works Programme and Budget of the ILO for submission to the ILC; and c) Elects the Director-General (of the International Labour Office).

The Minimum Wages Act, 1948:   The Minimum Wages Act aims at establishing a mechanism for fixing minimum wage rates in various kinds of employments.

The Payment of Bonus Act, 1965:   The object of the Payment of Bonus Act aims to impose statutory liability upon the employer to bonus to the employees and goes on to define the principles of payment of bonus.

The Payment of Gratuity Act, 1972:   It is a beneficent piece of social-security legislation that aims at providing a scheme for providing gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railways, shops and other establishments. The gratuity was to be paid in the event of superannuation, retirement, resignation, death or total disablement due to accident or disease.

The Payment of Wages Act, 1936:   The Payment of Wages Act, 1936 was enacted to regulate the payment of wages to workers employed in industries and to ensure a speedy and effective remedy against illegal deductions and/or unjustified delay caused in the payment of wages to them. The Payment of Wages Act, 1936 is a central legislation, which applies to the persons employed in factories, industries and other establishments.

The Standing Orders Act, 1946:   An act that purports to statutorily lay down the conditions of employment of industrial employees. It also provides for the process for laying down and certifying these conditions of work known as “Standing Orders”.

Trade Union Congress:   A federation of trade unions in the United Kingdom, representing the majority of trade unions.

Trade Unions:   Are associations of workers united as a single, representative entity for the purpose of improving the workers' economic status and working conditions through collective bargaining with employers.

Tripartism:   Consultations involving the three actors of industrial relations, namely, the employer, the employee and the State with a view to having a consensual approach on issues affecting the three parties.

Tripartite Bodies:   All bodies that have representation from employees, employers and the government.

Trusteeship:   An approach to industrial relations credited mainly to Mahatma Gandhi. A business enterprise has the inherent responsibility to its consumers, workers, shareholders and the community. The responsibilities are mutual. A business enterprise is meant for good for all and not just for profits. The enterprise, in effect, must act as trustee to the interests of all. According to Gandhi, conflicts are inevitable in an industrializing society, but labour and capital must learn to peacefully coexist for mutual benefit and for the community at large.


Union Security:   Comprises the tools and methods that trade unions use to keep “free riders” from enjoying the benefits of collective bargaining by the unions. It usually takes the form of an agreement between the union and the employer about the extent to which Union may force membership or to collect dues and fees from the members.

Union Shop:   Employs non-union workers as well, but sets a time limit within which new employees must join a union.

Unitarism:   Assumes that the objectives of all involved are the same or compatible, and concerned only with the well-being of the organization and its products, services, clients and customers.

Unitary Approach:   An approach to IR that advocates every work organization is an integrated and harmonious whole, existing for a common purpose. That the labour and management are working towards a common objective.

Unorganized Labour:   In the context of Industrial Relations, unorganized labour would comprise labour to which most of the labour laws do not apply and also who lack any kind of formal representative body.


Voluntary Arbitration:   A choice made by the contending parties for arbitration, before referring it for adjudication.


Wage Board:   A tripartite body, which has representation of employers and labour besides independent members. It was envisaged as machinery for wage fixation in specified industries, and also as a means for implementing many wage-related policies and principles laid down by the various committees and commissions.

Wage Period (Payment of Wages Act, 1936):   The period to be fixed for paying wages to an employed person must not exceed one month. That means an employer can choose to pay wages to a person employed by him for a period of every week or every fortnight, but not for a period of every two months or every three months.

Wage Structure:   Signifies the relationship of wage rates for the entire job within the company, industry or labour market areas.

Wage:   Regular payment to an employee for his or her work. Wage is basically the price that an organization is willing to pay for having a particular job carried out as also the price at which an employee is willing to sell his/her labour.

Wages:   Usually means compensation in exchange of labour. The compensation though mostly financial, need not necessarily be so. Different labour legislations have defined “wages” differently. Under the Payment of Wages Act, 1936, the term wages means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed, which would, if the terms of employment express or implied were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment.

Weekly Holiday:   No adult worker shall be required or allowed to work in a factory on the first day of the week (Sunday) unless given a full day's holiday on one of the three days immediately before or after the said day. This section also specifies that this substitution should not result in any worker working for more than ten days consecutively without a holiday for a whole day.

Wildcat Strike or Walk-Out: Usually by a small section of workers who may defy even their own union leaders, and could be in response to a small shop-floor issue or an argument between a manager and a single employee.

Worker:   Defined under the Factories Act, 1948, worker means a person employed, directly or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the union.

Workers Participation in Management:   An approach to involve the participation of workers in the management of the industrial unit through making effective use of workers' committees, joint consultation and other methods. This may improve communication between managers and workers, which may, in the long run, increase productivity and lead to greater effectiveness.

Workers' Organizations:   Institutions or/and associations of employees formed and maintained for the specific purpose of negotiating concessions and benefits from the employers.

Work-in Strike:   The workers do not stop work but continue the production in defiance of management, who may have stopped production or declared a closure. It is thus the opposite of a usual strike—not a withdrawal of work but a continuation of work to defy management.

Workmen's Compensation Act, 1923:   The Workmen's Compensation Act is the first piece of legislation towards social security. It deals with compensation for workers who are injured or contract occupational disease in the course of duty.

Workmen's Compensation:   Provides cover for medical care and compensation for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue his or her employer for negligence at workplace.

Work-to-Rule and Go-Slow:   Under these methods, unions may not officially stop work but work only at a slower pace or specifically refuse to do certain tasks, which have the effect of reducing the total output, or disrupting the work process.