16UBA802- INDUSTRIAL RELATION & LABOUR LAWS

Introduction to Industrial Relations

Industrial relations are the relationships between employees and employers within the

organizational settings. The field of industrial relations looks at the relationship between

management and workers, particularly groups of workers represented by a union. Industrial

relations are basically the interactions between employers, employees and the government, and

the institutions and associations through which such interactions are mediated.

Industrial Relations Concept

Industrial relations is a post-industrial revolution term that replaced the expression "master-

servant" used to define the relationship between a worker and an employer. Its origins are, as the

term indicates, based on the proliferation of large-scale industry from the mid-18th to the mid-

19th century. Contemporary industrial relations still refers to the employment relationship and

the business unit that manages the employment relations, personnel or human resources. It often

includes labor unions as parties to that relationship.

• Industrial Relations versus Employee Relations

• Employment Laws versus Labor Laws

• Concerted Activity

• Collective Bargaining

IMPORTANCE OF INDUSTRIAL RELATIONS

• To avoid industrial conflict or strife and develop harmonious relations, which are an

essential factor in the productivity of workers and the industrial progress of a country.

• To raise productivity to a higher level in an era of full employment by lessening the

tendency to high turnover and frequency absenteeism.

• To establish and promote the growth of an industrial democracy based on labor

partnership in the sharing of profits and of managerial decisions, so that ban individuals

personality may grow its full stature for the benefit of the industry and of the country as

well.

• Reduced Wastage – Good industrial relations are maintained on the basis of cooperation

and recognition of each other. It will help increase production. Wastages of man, material

and machines are reduced to the minimum and thus national interest is protected.

• Reduction in Industrial Dispute - Cordial Industrial relations helps in reducing industrial

disputes, disputes are reflections of the failure of basic motivation in order secure

satisfaction among employees.

• Economic growth and Development - It promotes economic growth and development,

effective industrial relations lead to increase efficiency and higher productivity, which

ultimately results in economic development.

FACTORS AFFECTING INDUSTRIAL RELATIONS

Proper industrial relations help you to run your company in an efficient manner. You

can maintain morale among your employees with the right kind of industrial relations.

Industrial relations are more of an art than a science, balancing a number of factors to

get the right relationship between capital and labor. Knowing the factors affecting

industrial relations will help you to properly calibrate this relationship

Communication

Communication acts as a key factor in industrial relations. Two-way communication between

labor and capital allows workers to stay fully informed of workplace expectations as well as

changes that affect them. Management becomes aware of problems as they arise, rather than

learning about things after they have reached the point of crisis. They can thus address issues

in a timely fashion and keep rumor, innuendo and misinformation to a minimum.

Unions

Unions can affect industrial relations in a number of complex ways. When a union comes to a

workplace, individuals no longer bargain on their own. Rather, they are represented

collectively by a third party. This can make employees feel like they have more of a voice. It

can also provide a means to collectively arbitrate labor disputes. Employees also have a means

to register discontent with parts of their job through the grievance procedure. Unions can also

complicate matters by bringing the concerns of a third party--i.e. the union--into the

negotiation process.

Wages and Benefits

Wages and benefits are perhaps the most obvious factor affecting industrial relations. While

wages and benefits don't make industrial relations run smoother all by themselves, they can

help employees to feel more appreciated. Few things are more frustrating than working for less

than what you feel you are worth. Keeping wages and benefits in line with industry standards--

or above--helps keep a lid on worker discontent.

Ideology

Every company has an ideology as part of its corporate culture. This ideology will necessarily

include a component about how management relates to labor. The attitude that a company has

towards its employees and how to deal with them--for example whether there is a greater

emphasis on rewards or punishments--necessarily has an effect on industrial relations.

INDUSTRIAL DISPUTE

An industrial dispute may be defined as a conflict or difference of opinion between management

and workers on the terms of employment. It is a disagreement between an employer and

employees representative; usually a trade union, over pay and other working conditions and can

result in industrial actions.

(ii) Secondary Strikes:

Secondary strike. Usually illegal strike action whereby workers withhold their labor because

their employer sells to or buys from a firm whose workers are on strike

A LOCKOUT: it is a work stoppage in which an employer prevents employees from working.

According to Industrial Disputes Act 1947, lock-out means the temporary closing of a place of

employment or the suspension of work or the refusal by an employer to continue to employ any

number of persons employed by him.

NATURE OF AN INDUSTRIAL DISPUTE:

1. The dispute must affect a large number of workmen who have a community of interest and the

rights of these workmen must be affected as a class.

2. The dispute must be taken up either by the industry union or by a substantial number of

workmen.

3. The grievance turns from individual complaint into a general complaint.

4. There must be some nexus between the union and the dispute.

5. According to Section 2A of the Industrial Disputes Act, 1947, a workman has a right to raise

an industrial dispute with regard to termination, discharge, dismissal, or retrenchment of his or

her service, even though no other workman or any trade union of workman or any trade union of

workmen raises it or is a party to the dispute.

HANDLING INDUSTRIAL DISPUTES / SETTLING INDUSTRIAL DISPUTES

A dispute, therefore, needs to be settled as early as possible. Various methods are available for

resolving disputes. More important of them are:

1: Collective bargaining

2: Code of discipline

3: Grievance procedure

4: Arbitration

5: Conciliation

6: Adjudication

7: Consultative machinery

Collective Bargaining

Collective bargaining is probably the most effective method of resolving industrial disputes. It

occurs when representatives of a labour union meet management representatives to determine

employees’ wages and benefits, to create or revise work rules, and to resolve disputes or

violations of the labour contract.

The bargaining is collective in the sense that the chosen representative of the employees (i.e. the

union) acts as a bargaining agent for all the employees in carrying out negotiations and dealings

with the management. The process may also be considered collective in the case of the

corporation in which the paid professional managers represent the interests of the stockholders

and the board of directors in bargaining with the union leaders. On the employer side, it is also

collective in those common situations in which the companies have joined together in an

employer association for purposes of bargaining with a union.

Code Discipline

The code of discipline defines duties and responsibilities of employers and workers. The

objectives of the code are:

1. To ensure that employers and employees recognize each others rights and obligations

2. To promote constructive co-operation between the parties concerned at all levels;

3. To secure settlement of disputes and grievances by negotiation, conciliation and voluntary

arbitration

4. To eliminate all forms of coercion, intimidation, and violence in industrial relations;

5. To avoid work stoppages;

6. To facilitate the free growth of trade unions; and

7. To maintain discipline in industry

Grievance Procedure

Grievance procedure is another method of resolving disputes. All labour agreements contain

some form of grievance procedure. And if the procedure is followed strictly, any dispute can

easily be resolved.

In the meanwhile, a grievance may be understood as an employee’s dissatisfaction or feeling of

personal injustice relating to his or her employment relationship.

A grievance is generally well-defined in a collective-bargaining agreement. It is usually

restricted to violations of the terms and conditions of employment.

Arbitration

Arbitration is a procedure in which a neutral third party studies the bargaining situation, listens to

both the parties and gathers information, an then makes recommendations that are binding on the

parties. Arbitration is effective as a means of resolving disputes because it is:

I. Established by the parties themselves and the decision is acceptable to them, and

2. Relatively expeditious when compared to courts or tribunals. Delays are cut down and

settlements are speed up.

Conciliation

Conciliation is a process by which representatives of workers and employers are brought

together before a third party with a view to persuade them to arrive at an agreement by mutual

discussion between them. The third party may be one individual or a group of people. The

alternative name for third party is mediators.

It may be stated that the conciliator has no power to force a settlement, but can work with the

parties separately to determine their respective positions, explains a position more fully to the

opposition, points out bases for agreement that may not have been apparent previously, helps in

the search for solutions, and generally facilitates the reach of an agreement.

In effect, mediators act as communications catalyst, and their effectiveness depends on their

impartiality and on their capacity to win the trust of both parties

Adjudication

Adjudication means a mandatory settlement of an industrial dispute by a labour court or a

tribunal. Generally, the government refers a dispute or adjudication depending on the failure of

conciliation proceedings. Section 10 of the Industrial Disputes Act, 1947, provides for reference

of a dispute to labour court or tribunal. The Act also lays down rules regarding the composition

and powers of labour courts and tribunals.

Disputes are generally referred to adjudication on the recommendation of the conciliation officer

who had dealt with them earlier. However, the government has discretionary powers to accept or

reject recommendations of the conciliation officer. It is obvious that once a dispute is referred for

adjudication, the verdict of a labour court or tribunal is binding on both the parties.

The system of adjudication is the most significant instrument of resolving disputes. But, it has

been criticized because of the delay involved in resolving conflicts. Continued dependence on

adjudication deprives the trade unions of their right to recognize and consolidate their strength.

Consultative Machinery

Towards the end it is essential to refer to the consultative machinery set by the government

to resolve conflicts. The main function of consultative machinery is to bring the parties together

for mutual settlement of differences in a spirit of co-operation and goodwill. A consultative

machinery operates at the plant, industry, state and the national levels. At the plant level, there

are works committees and joint management councils. Being essentially bipartite in character,

works committees are constituted as per the provisions of the Industrial Disputes Act, 1947.

EMPLOYEE GRIEVANCES

Grievance means any type of dissatisfaction or discontentment’s arising out of factors related to

an employee’s job which he thinks are unfair. A grievance arises when an employee feels that

something has happened or is happening to him which he thinks is unfair, unjust or inequitable.

In an organization, a grievance may arise due to several factors such as:

1. Violation of management’s responsibility such as poor working conditions

2. Violation of company’s rules and regulations

3. Violation of labor laws

4. Violation of natural rules of justice such as unfair treatment in promotion, etc.

Various sources of grievance may be categorized under three heads: (i) management policies, (ii)

working conditions, and (iii) personal factors

1. Grievance resulting from management policies include:

• Wage rates

• Leave policy

• Overtime

• Lack of career planning

• Role conflicts

• Lack of regard for collective agreement

• Disparity between skill of worker and job responsibility

2. Grievance resulting from working conditions include:

• Poor safety and bad physical conditions

• Unavailability of tools and proper machinery

• Negative approach to discipline

• Unrealistic targets

3. Grievance resulting from inter-personal factors include

• Poor relationships with team members

• Autocratic leadership style of superiors

• Poor relations with seniors

• Conflicts with peers and colleagues

It is necessary to distinguish a complaint from grievance. A complaint is an indication of

employee dissatisfaction that has not been submitted in written. On the other hand, a grievance is

a complaint that has been put in writing and made formal.

THE GRIEVANCE PROCEDURES DIFFER FROM ORGANIZATION TO

ORGANIZATION.

1. Open door policy

2. Step-ladder policy

STEPS IN GRIEVANCE HANDLING

Open door policy:

Under this policy, the aggrieved employee is free to meet the top executives of the organization

and get his grievances redressed. Such a policy works well only in small organizations.

However, in bigger organizations, top management executives are usually busy with other

concerned matters of the company. Moreover, it is believed that open door

policy is suitable for executives; operational employees may feel shy to go to top management.

Step ladder policy:

Under this policy, the aggrieved employee has to follow a step by step procedure for getting his

grievance redressed. In this procedure, whenever an employee is confronted with a grievance, he

presents his problem to his immediate supervisor. If the employee is not satisfied with superior’s

decision, then he discusses his grievance with the departmental head. The departmental head

discusses the problem with joint grievance committees to find a solution. However, if the

committee also fails to redress the grievance, then it may be referred to chief executive. If the

chief executive also fails to redress the grievance, then such a grievance is referred to voluntary

arbitration where the award of arbitrator is binding on both the parties.

INDUSTRIAL DISPUTE

An Industrial dispute may be defined as a conflict or difference of opinion between management

and workers on the terms of employment. It is a disagreement between an employer and

employees representative; usually a trade union, over pay and other working conditions and can

result in industrial actions.

CAUSES FOR INDUSTRIAL DISPUTES

REMEDIES FOR POOR INDUSTRIAL RELATIONS

Some of the major measures for improving employer-employee relations are as follows:

1. Sound Human Resource Policies 2. Constructive Attitudes 3. Collective Bargaining 4.

Participative Management 5. Responsible Unions 6. Employee Welfare 7. Grievance Procedure.

1. Sound Human Resource Policies:

Policies and procedures concerning the compensation, transfer, promotion, etc. of employees

should be fair and transparent. All policies and rules relating to employer-employee relations

should be clear to everybody in the enterprise and to the union leaders

Top management must support them and set an example for other managers. Practices and

procedures should be developed to put human resource policies into practice. Sound policies and

rules are of little help unless they are executed objectively and equitably.

2. Constructive Attitudes:

Both management and trade unions should adopt positive attitudes towards each other.

Management must recognise union as the spokesmen of workers grievances and as custodians of

their interests. The employer should accept workers as equal partners in a joint endeavor. Unions

and workers, on their part, must recognise and accept the rights of employers.

3. Collective Bargaining:

Employers’ organisations as well as trade unions should be able and willing to deal with mutual

problems freely and responsibly. Both should accept collective bargaining as the cornerstone of

good employer-employee relations.

A genuine desire on the part of employers to bargain with employees on the basis of equality is

necessary. Government agencies should assist the two sides in public interest. Problem centred

negotiations rather than a legalistic approach is desired. Widespread union management

consultations and information sharing are helpful.

4. Participative Management:

Employers should associate workers and unions in the formulation and implementation of human

resource policies and practices. Management should convince workers of the integrity and

sincerity of the company.

Management should not interfere in the internal affairs of the unions. Instead of trying to win

workers’ loyalty away from unions, management should encourage right type of union

leadership. A strong union is an asset to the employer.

5. Responsible Unions:

Unions should adopt a responsible rather than political approach to employer-employee relations.

Unions should accept private ownership and operations of industry. They must recognise that the

welfare of workers depends on the successful operation of industry. A strong, democratic and

responsible union alone can ensure that workers honour the agreement with their employer.

6. Employee Welfare:

Employers should recognise the need for the welfare of workers. They must ensure reasonable

wages, satisfactory working conditions, opportunities for training and development, and other

necessary facilities for labour. A genuine concern for the welfare and betterment of working

class is necessary.

7. Grievance Procedure:

A well-established and properly administered system for the timely and satisfactory redressal of

employees’ grievances can be very helpful in improving employer-employee relations. It

provides an outlet for tensions and frustrations of workers. Similarly, a suggestions scheme will

help to satisfy the creative urge of workers. A code of discipline if properly adhered to by both

the parties will help to avoid unilateral and violent actions on either side.