Unit -I

Introduction of IR

Evolution of IR in India1. Industrial Relations in India Prior to British Raj

India was predominantly a pastoral and agrarian economy during ancient andmedieval times.

A large number of occupations were carried on by small manufacturers in theircottages.

The employer- employee relations were those of master and slave and, later on,of those of master and servant.

Ancient laws of our country laid emphasis on the promotion and maintenance ofpeaceful relations between capital and labour.

From very early times, craftsmen and workers felt the necessity of being united.

The description of unions of workmen in different occupations is found at manyplaces in the Vedic literature and Shastras.

During the days of Vikramaditya, there were well organized guilds known as kula.

These guilds worked according to their own by-laws for the management of theunions.

From the earliest Buddhist literature, it appears that Shreni aimed at makingcommercial progress.

Almost every craft, profession or occupation had its own union which was calledShreni.

Every Shreni included about a 1000 members.

The Shreni elected its chief who was called Pramukh.

These guild often have considerable political power and influence.

The Indian works of arts and crafts were badly damaged during the invasions offoreign invaders, which lasted for about 700 years.

These artisans gradually lost their traditional skills.

Their condition degenerated to such an extent there was hardy any differencebetween an artisan and a slave.

The situation improved after the restoration of law and order under the Mughals.

It has observed that different kinds of work such as embroidery, goldsmith’s work,varnishing, tailoring, leather work, making of pots, polishing of metals with gold orsilver, weaving of silken clothes were carried on in big apartments known as theKarkhanas.

Under Emperor Akbar, the government factories worked at Agra, Lahore, Fatehpur,and Ahmedabad, where employees could develop their respective arts.

All contemporary travellers and historians agree that the industry of manufactureof wool and its cloth was in a very highly developed condition in Kashmir.

The articles produced by these craftsmen were mostly consumed by the Mughalemperors and the members of the household and nobles.

The commercial character of the East India Company did not change theconditions of workers.

After the abolition of the monopoly of the East India company in 1883, the BritishIndustrialists and merchants were able to develop some industries and trade inIndia.

2. Industrial relations during colonial period

Industrial relations in by- product of Industrial Revolution and it owes itsorigin from excessive exploitation of workers by the owners of industries.

The relationship was that of two unequal- the powerful employers andpowerless workers.

It was a master servant relationship which continued for a long.

In early stage, the Government adopted the policy of Laissez- faire andlater on, enforced penalty on workers for breaches of contract.

Some attempts were made to form trade unions, which were resisted andcrushed by the employers.

The First World War is the first milestone enroute to industrial relations inIndia.

In certain social, economic and political conditions, which raised newhopes among workers in industries.

It was for the first time, that workers realized their importance that unlessthey produce goods required for wars, the wars cannot be foughtsuccessfully.

After war, prices of consumer goods also become dearer.

This lead to intense labour unrest because worker’s earnings did not keeppace with the rising prices and their aspirations.

Many other events happened which accelerated the pace of industrialrelations during the period-

1. Establishment of ILO(1919) and the influence of its conventions andrecommendations.

2. Formation of the Labour Party Govt. in U.K in 1924.

3. The Indian Trade Union Act of 1926.

4. The Trade Dispute Act, 1929.

5. Formation of Royal Commission on labour, 1929-31, which made acomprehensive study of Indian Labour problem regarding health, safetyand welfare of workers and made recommendations of far- reachingconsequences.

The second World War gave a new a spurt in the industrial relations field.

The exigency of the war made it essential for the Govt. to maintainuninterrupted flow of goods and services for successful conduct of militaryoperations.

Therefore Govt. of India embarked upon a two- fold action for maintainingindustrial relations-

1. Form a Trade Dispute Act,1929 for helping the union Government inenacting the I.D. Act,1947, which laid down a comprehensive disputesettlement machinery to be applicable to all states.

2. The need for tripartite labour machinery on the pattern of ILO wasrecommended by the Royal Commission on Labour as early as in 1931.But the first step in this direction was taken only in the year 1942, whenthe first tripartite labour conference was held at New Delhi under theChairmanship of Dr. B.R. Ambedkar.

The objectives, set before the two tripartite bodies at the time of theirinception in 1942, were-

1. Promotion of uniformity in labour legislation.

2. Laying down of a procedure for the settlement of industrial disputes.

Tripartite deliberations helped to reach on

statutory minimum wage fixation(1944)

constitution of tripartite industrial committees (1944)

Introduction of health insurance scheme (1945)

Provident funds scheme (1950)

Thus, it led to the passing of three important central labour laws like-

The Minimum Wages Act, 1948

The Employee’s State Insurance Act, 1948

The Employee’s Provident Funds Act, 1952.

IR in Post- Independence Era

This was the time when we launched our five year plans. Each of thesuccessive five year plans emphasized for the well- being of the workingclass, co-operation between worker and employer, harmonious industrialrelations, worker’s right and worker’s participation, Welfare State etc.

The results of independence saw the mushroom growth of trade unions.

This was the period when Industrial Policy Resolution, 1956, facilitated thegrowth of the public undertakings both at the centre and state level.Through these PSUs, Govt. wanted to preset a role-model of industrialrelations as ‘ Model- Employers”.

Emergency of 1975 had its share of impact on industrial relations. Mrs. IndraGandhi, the PM, wanted to salvage her image as a democrat. Thereforeshe amended the constitution to provide for workers participation andadded in the Industrial Dispute Act, 1947.

IR in Post-Globalization Period from 1991 to till date

The requirements a of global competitiveness are of internationalstandards in quantity, quality, cost- effectiveness and customers.

This in turn, requires introduction of state of art technology,followed by innovation, creativity and strategic alignment ofdivergent resources to create performing climate.

Such a performing climate requires a dynamic and synergeticrelationship.

The tradition of IR is under tremendous pressure, because it wasmade to cater to the requirements of a controlled, protected andregulated market and was unable to address the new imperatives ofa competitive, global market.

A tug of war is going on between “forces of change” and “ forces ofinertia”.

The market requires a flexible, and aggressive employee relationsapproach, while traditional industrial relation wants to remainadhered to status quo without any change.

Traditional institutions of IR are losing their importance and relevance.Trade unions are marginalized and kept outside the mainstream ofbusiness.

Strike is losing its cutting edge.

Collective bargaining is being replaced by collaborative and productivityand individual bargaining.

Emerging Business Scenario In the post industrial society ,technological revolution has created a

situation where space, distance and time have lost their relevance. The world has really become a global village. This has facilitated the movement of business across the boarder. The business skyline is completely changing by continuous mergers

and acquisition across the globe. Global competitiveness is the only rule of the global business game

where only the fittest can survive. In this situation it was not possible for India to remain isolated and

insulated from the global changes. Hence India frame New Economic Policy, 1991. The profile and requirement of emerging industries are entirely

different from the requirement of sunset industries. New players like Consumer Forms, NGOs, and electronic media are

replacing trade union in many areas.

Flexibilities has become of vital importance, which may beenterprise flexibility like outsourcing or labour flexibility like size ofwork force, composition of work force, functional flexibility, flexitimings, pay flexibility and place flexibility.

Changing patterns of managerial practices like life long employmentvs short term employment, part time, contract worker andinternational workers are regular features.

Changes nature of work like unmanned work station, officelesswork (sales executive), establishment open 24 hours 365 days.

Use of electronic gadgets in the office like telephones mobile phonecomputers and internet have made them smart and self reliant.

Fresher from international bodies like ILO, WTO, Internationallabour standard are exerting pressure on IR.

These business scenarios require a different brand of employeesrelations.

Changing Dimensions of Industrial Relations in India

Emerging business scenario has brought in new market imperatives.

Therefore traditional IR is giving way to emerging employee relations some of the features of this are as under-

1. The institutions of trade union is getting weak. In IT there are hardly any TUs.

2. The institution of collective bargaining is being decentralized and being replaced by unit bargaining and individual bragaining.

3. Changing pattern of compensation management, fixed time rate wages are replaced by performance based wages.

The recent judgment of supreme court and Tamil Nadugovernment case on strike 2003 send clear messages to theunions that mean business-

1. There is a proposal for labour Law simplification.

2. There is a trend to make employer friendly conciliation.

3. There has been ease in labour inspection.

4. There has been use of IDA, declaring strikes illegal.

5. Strict enforcement of unfair labour practices.

6. Use of policies for diluting labour struggle.

7. Skills management and formation.

8. Employee involvement, participation and communication.

9. Trade union participation.

10. Diluting political ideology.

All the activity have become regular features of emerging E.R.sthis trend is going to be accelerated in future.

Role of Trade Union in IRUnions have a crucial role to play in IR. Unions have broad

objectives which are:-

1. To redress the bargaining advantage of the individual workerby substituting joint action for individual action.

2. To secure improved terms and conditions of employment fortheir members and the maximum degree of security to enjoythese terms and conditions.

3. To obtain improved status for the worker in his or her work.

4. To increase the extent to which unions can exercisedemocratic control over decisions that affect their interest bypower sharing at the national, corporate and plant levels.

The union power is exerted primarily at two levels- at theindustry level, to establish joint regulation on basic wagesand hours with an employer’s association or its equivalentand at the plant level.

Role of employer in IRIn general the employers play an important role like-

1. Creating and maintaining employee motivation.

2. Obtaining commitment from the workforce.

3. Establishing mutually beneficial channels of communicationthroughout the organization.

4. Achieving high level of efficiency.

5. Negotiating terms and conditions of employment withemployee representatives.

6. Sharing decision making with employees.

7. Engaging in a power structure with trade unions.

Role of Employer’s AssociationsEmployer’s associations operate at local, industry and all India

levels. The major objectives of employer’s associationsinclude:-

1. Representing employers in collective bargaining.

2. Developing machinery for the avoidance of disputes.

3. Providing information on employee relations and to giveadvice.

4. Representing members on national issues.

the specific objectives of CII( Confederation of Indian Industries)are:-

1. Identifying and strengthening industry role in the economicdevelopment of the country.

2. Acting as a catalyst in bringing about growth anddevelopment of the Indian industry.

3. Reinforcing industry’s commitment to society.

4. Working towards globalization of Indian industry and itsintegration into world economy.

5. Providing up-to-date information and data to industry andgovernment.

6. Creating awareness and support industry efforts on quality,environment and consumer protection.

7. Identifying and addressing special needs of the small- scalesector.

8. Promoting co- operation with counterpart organization.

Role of state in IRGovernment intervention in IR is as old as the industry itself.

Howe ever, till the 19th century, governments everywherefollowed the laissez faire policy- they left IR to the managersand workers who were required to solve the problemsthemselves.

Towards the end of the 19th century, the attitude of thegovernments changed, and intervention became a reality.

The state, as of today, regulates the relationship between themanagement and the labour and seeks to protect the interestof both the groups.

The government has set up wage boards, labour courts, tribunalsand enacted laws to lay down norms and to enforce theircompliance.

Role of State in IRThe state endeavor to correct, through effective

industrial relations, an imbalanced, disordered andmaladjusted social and economic order with a viewto reshaping the complex socio- economicrelationship following technological and economicprogress. It also controls and disciplines the partiesconcerned and adjust their conflicting interest.

In this process, it protects some and restrains others,depending upon the situation.

Three actors of IRThe major participants or actors of industrial relation are

workers and their organizations, management and thegovernment etc.

1. Workers and their organizations:- The workers play animportant role in industrial relations. The workers haveworking age, educational background, family background,psychological factors, culture, skills attitude towards otherwork etc.

Worker’s organizations prominently known as trade unions playtheir role more prominently in trade unions. The mainpurpose of trade unions is to protect the worker’s economicinterest through collective bargaining and by bringingpressure on management through economic and politicaltactics. Trade union factors include leadership, finances,activities etc.

2. Employers annd their organizations:- Employer is a crucialfactor in industrial relations. Employers employ worker, paysthe wages and various allowances, regulates the workingrelations through various rules, regulations and by enforcinglabour laws.

He expects the worker to follow the rules, regulations and lawsand also expects them to contribute their resources to themaximum. Employer from their organizations to equate theirbargaining power with that of trade unions. Employer’sorganizations protect the interest of the employer forcing thetrade unions and government.

3. Government :- government exerts its influence on industrialrelations through its labour policy, industrial relations policy,implementing labour laws, the process of conciliation andadjudication by playing the role of a mediator etc. it tries toregulate the activities and behavior of both employeesorganizations and employers' organizations.

International Labour Organization(ILO)ILO is the symbol of social justice, universal peace and human

dignity. India’s policies and programs, which it pursues in thefulfillment of it’s obligations towards it’s people, are alsobased on similar concept, namely, social justice, universalpeace and human dignity.

ILO was established on April 19, 1919.

It was born as a result of the peace conference at the end ofWorld War I.

India became the member of ILO in 1919.

It became specialized agency of United Nations in 1946.

ILO is new social institution trying to make the word consciousthat world peace may be affected by unjust conditions of itsworking populations.

It deals with International Labour Problems.

The unique feature of ILO is that it is a tripartite bodyconsisting of representation of employers, labour andgovernment.

There are three constituents namely the governments, whichfinances it, the workers, for whose benefit it is created andthe employers who share responsibility for the welfare of theworkers.

Objectives of ILO Full employment and the raising of standards of living.

The employment of workers in the occupation in which they canhave satisfaction of giving the fullest measures of their skill andmake their contribution to the common well being.

The provision, as a means to the attachment of this end underadequate guarantees for all concerned, of facilities for training andtransfer of labour including migration for employment andsettlement.

Policies in regard to wages and earning bonus and other conditionsof workers like minimum wages to all and need of protection.

The effective recognition for the right of collective bargaining, thecooperation of management and labour in continuousimprovement of productive efficiency and the collaboration ofworkers and employers in social and economic measures.

Provision for child welfare and maternity protection.

The provision of adequate nutrition, housing and facilities for recreation and culture.

The assurance of educational and vocational opportunity.

Structure of the ILO

The structure of ILO consists three principle bodies-

1. The International Labour Conference

2. The Governing Body

3. The International Labour Office

The International Labour Conference:- it is the prime body ofthe ILO. It comprises 4 representing members governments,employers ad workers in the ratio of 2:1:1. ILC holds itssession once in a year. One of the primary powers of theconference is to appoint committees to deal with differentmatters during each session.

Functions of International Labour Conference

To formulate International Labour standards.

To fix amount of contribution by the member states.

To decide the estimated expenditure.

To consider the report of the Director General giving labourproblems ad assist their solution.

To appoint committees to deal with different matters doingeach session.

To select once in 3 years members of the Governing body.

To elect President.

To confirm the power, functions ad procedure of RegionalConference.

The Governing Body:-It is political and legislative body of ILO. Out of 56 members in it,

28 represent the governments, 14 employers and 14 workers.The tenure of office of this body is 3 years. It meets severaltimes a year to take decisions on the programs of the ILO.

Functions:-

To co-ordinate work of the organization.

To prepare agenda for each session and subject to thedecision of the ILC.

To appoint the Director General of the office.

To follow up the implementation of the conventions andrecommendations adopted by the ILC.

To fix the date, duration and agenda of the regionalconference.

International Labour OfficeThis is the third important body of the ILO. The Director General

of the ILO is the chief executive ad he is appointed by theGoverning Body. His tenure is for 10 years ad his term may beextended by the governing body.

Functions:-

To prepare documents o the times of agency for theconference.

To brig out publications dealing with industrial labourproblems of international interest.

To collect and distribute information of international labourand social problems.