INDUSTRIAL RELATIONS

Dr.(Mrs.)Madhuchhanda Mohanty
Dept. of PM & IR,Utkal University
Introduction
➢ Initially three recognized factor of production:
Land , Capital , Labour
➢ Skill was not so important because of
• migratory nature of labour force and
• Untrained workforce
➢ Gradually skill became important due to
technological advancement and labour was
considered as the key ingredient of production
➢ Today, Equality, Profitability and Utility of Human
resources are important.

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Introduction…..
➢ Because Human beings are active agents,
▪ Who can accumulate capital,
▪ Who can exploit natural resources
▪ Who can build social, economic, and political
organisations
▪ Who can carry forward national development
➢ Presently Industrial work has the
peculiarities such as ;
1. Industry is being considered as Social
Organisation

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Introduction…
▪ Earlier Attitude ----
Employer - to purchase labour with minimum cost
but expecting maximum output.
Employee - to sell labour at the highest cost but
doing less work
▪ Attitudinal Change ------
Employer - to accept employee as the partner of
production.
Employee - being considered as important for the
organisation generate the ‘we’ and ‘our’ feeling in the
organisation.

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Introduction…
2. Initially workers lost their independence
3.Today economic condition encourages establishment of large
scale units which involves capital and labour but not capital for
labour.
4. Due to importance of labour gradually IR concept emerged as an
important aspect.
Personnel relations (individual workers)
IR
Labour relations (collectivity of workers)

5. Developing and maintaining harmonious relation is a two way

process

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 Introduction…
Description of IR Structure Local
Union
Technology Economy Community
Federations
Employers Power
Federations Market Govt. Structure

Ideology, values, U
M obj., rules, Ideology, values, obj.,
rules, authority, NI
G authority,
culture, power, O
T culture, power,
IR Structure motivation,leadership N
motivation

workers

( Conceptual Model for Understanding IR ) 6

Introduction…
➢ By IR we mean relationship between management and
workers or between employers and employees.
➢ Although there is class of interest due to multiplicity of
relationship in the industrial process, the process goes on
smoothly and it leads towards effective operation.
➢ Two important areas of IR are;
a. Conflict( -ve)
b. Cooperation( +ve)
➢ Conflict takes place due to four reasons;
• Conflict over allocation of power
• Retention of Institutional identity
• Opposition of interest between management and unions and
• Over distribution of industrial rewards.

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Introduction…
➢ IR can be better understood if following
factors are studied.
• Wage work equation
• Role of actors / parties
• Role of Law
➢ IR has become more complex due to growing
prosperity and rising wages, increasing educational
levels of workers, greater mobility and developed
trade unionism, introduction of the concept of social
justice,industrial democracy, etc….

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 Introduction…
Trade Union Shop Steward Work Group Workers

-------------------------
Conflict over problem areas Wage-Work Equation Govt
Role of Law -------------------------

Rewards Sanctions

Employers’ Associations Employers/Owners/ Directors Managers

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Concept of IR
➢ industrial relations is the complex of inter-relations among
the labour, the management and the state that are
characterized by legal and conventional norm, methods and
techniques of regulated behaviours, organized and
unorganized conflict and cooperation in the achievement of
institutional goals.
➢ The term-' industrial relations also refers to the
cooperative and collaborative interaction between
workers, labour unions, management and the state with
a view to achieve excellence in productivity of the
employees and the enterprise.

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Concept….
Hence, industrial relations include the
whole range of relations between
workers, managers and the state which
seek to determine the conditions under
which the work is performed and the
objectives of the enterprise, employees,
the economy and the society are
achieved.
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Employers Attitudes and
Behaviour Towards Union
◼ Attitude ◼ Behaviour
• Contempt • Dictatorial
• Adversarial • Paternal
• Acceptance • Business like
• Cooperation • Participative

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Approches to IR(According to
Fahlbeck)
◼ My boat Attitude :Get off, if you don’t like it.
◼ Shared Boat Attitude : We sail together. Do not
rock the boat.
◼ Our boat attitude : It is our common enterprise.
Let us combine our efforts to better it.
◼ Your boat attitude: With a sense of ownership and
pride, the purpose is to let employees wholeheartedly
contribute to the cause of the enterprise.

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Approaches to IR
◼ The scenario of IR is perceived differently by
different people.
◼ For some, IR is related to class conflict,

◼ Other perceive it in terms of mutual cooperation and

◼ Still others understand it in terms of competing

interests of various groups.
▪ HR managers are expected to understand these
varying approaches because they provide the
theoretical understanding for much of the role of
HRM.
◼ The three popular approaches to IR are unitary
approach, pluralistic approach and Marxist/Radical
approach.
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UNITARY APPROACH
◼ IR is grounded in mutual cooperation, individual
treatment, teamwork and shared goals.
◼ Workplace conflict is seen as a temporary aberration,
resulting from poor management, and from
employees who do not mix well with the
organizations culture.
◼ Managers and the managements rights to manage is
accepted because there is no "we-they" feeling.
◼ The underline assumption is that everyone benefits
when the focus is on common interest and promotion
of harmony.
◼ Conflict in the form of strikes is not regarded as
necessary but destructive.
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UNITARY APPROACH….
◼ Advocates of the unitary approach emphasize on a
reactive IR strategy.
◼ They seek direct negotiations with employees.
◼ Participation of government, tribunals, and unions
are not sought or are seen as being necessary for
achieving harmonious employee relations.
◼ It is criticized as a tool for seducing employees away
from unionism and socialism.
◼ It is also criticized as manipulative and exploitative

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PLURALISTIC APPROACH
◼ The pluralistic approach totally departs from the
unitary approach.
◼ The pluralistic approach perceives:

1. Organisations as coalition of competing interest,

where the managements role is to mediate amongst
the different interest groups.
2. Trade unions are accepted as legitimate
representatives of employee interests.
3. Stability in IR is the product of concessions and
compromises between management and unions.

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PLURALISTIC
APPROACH…
◼ Legitimacy of the management authority is not automatically
accepted.
◼ Conflict between the management and workers is understood as
inevitable and in fact, is viewed as conducive for innovation and
growth.
◼ Employees join unions to protect their interest and influence
decision making by the management.
◼ Unions thus balance the power between the management and
employees.
◼ In the pluralistic approach, therefore, a strong union is not only
desirable but necessary.
◼ Similarly, society's interests are protected by state intervention
through legislation and industrial tribunals which provide orderly
process for regulation and resolutions of conflict.

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PLURALISTIC
APPROACH…
◼ The theories on pluralism were evolved in the
mid-sixties and early seventies when England
witnessed a resurgence of industrial conflicts.
◼ However, the recent theories of pluralism
emanate from British scholars, and in
particular from Flanders and Fox.
◼ According to pluralists, industrial conflict
is inevitable and it needs to contain within the
social mechanism of collective bargaining,
conciliation and arbitration.

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MARXIST/ RADICAL
APPROACH
◼ Marxist, like the pluralistic, regard conflict between employers
and employees as inevitable.
▪ However, pluralists believe that the conflict is inevitable in all
organisations. Marxists see it as a product of the capitalist
society.
◼ Adversarial relations in the workplace are simply one aspect of
class conflict.
▪ The Marxist approach focuses on the type of society in which
an organization functions.
▪ Conflict arises not just because of competing interest within the
organization, but because of the division within society between
those who own or manage the means of production and those
who have only their labour to offer.
▪ Industrial conflict is thus seen as being synonymous with
political and social unrest

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MARXIST/ RADICAL
APPROACH…
◼ Trade unions are seen both as labour reaction to
exploitation by capital, as well as a weapon to bring
about a revolutionary social change.
◼ Trade unions focus on improving the position of
workers within the capitalist system and not to
overthrow.
◼ For the Marxist, all strikes are political.
◼ Besides, Marxists regards state intervention via
legislation and the creation of industrial tribunals as
supporting managements’ interest rather than
insuring a balance between the competing groups.

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MARXIST APPROACH
◼ This view is in contrast to the belief of the pluralists
who argue that state intervention is necessary to
protect the overall interest of society.
◼ To Marxists, the pluralists approach is supportive of
capitalism, the unitary approach anathema.
◼ Consequently, enterprise bargaining, employee
participation, cooperative work culture, and the like
which help ushers in cordial IR are not acceptable to
Marxists.
◼ Such initiatives are regarded as nothing more than
sophisticated management techniques designed to
reinforce management control and the continuation
of the capitalist system.
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System Approach
◼ Prof. J.J Dunlop originated the system concept to IR
in 1958 to understand the integrative nature of the
parts of the IR.
◼ According to him IR should not be considered as the
relationship between the workers and management
operating within a spectrum of industrial peace or
conflict but rather it should be concerned with the
larger subject of an IRS where not only the workers
and management are concerned but also the society
as a whole is concerned the linkage it established
within the economic and social system prevailing in
it.
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System Approach…..
◼ The IR framework is designed to be applicable to
three broad area of IR experience namely,
• IR within an enterprise
• IR within a country
• IR as a totality in the course of economic development.
▪ The IRS could be divided into four interrelated
elements comprised of certain actors, certain
contexts, an ideology which binds the industrial
relations system together and a body of rules created
to govern the actors in the workplace

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 System Approach…..
◼ ACTORS in IR System:
• The workers (non-managerial) and their representatives.
• The hierarchy of management and their representatives.
• The specialized govt. agencies concerned with IR.
▪ CONTEXT of a System:
• Technological – form of management, type of supervision, condition
of workplace, employment pattern, size and characteristics of labour
force
• Market – Competitive position, labour cost, labour productivity, and
financial capacity of org.
• Power – Industrial policy, rules and regulations, status of workers,
political systems

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System Approach…..
◼ Establishment of Rules:
• Rules regarding compensation in all forms.
• Rules regarding duties and performances of workers including
rules of discipline for failure to achieve standards.
• Rules regarding the rights and duties of workers along with
methods of settlement of disputes
▪ Ideology:
It is the set of ideas and beliefs commonly held by the actors
that helps to blend and to integrate the system together.

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System Approach…..
◼ Criticisms:
• Ignores the influential role of the owner of business.
• Emphasis on roles rather than people and ignores behavioural
variables
• The belief on having a common ideology is criticized which
implies IR system to be naturally stable and orderly.
• The existence of contradictory processes and forces, treating IR
system to be unstable and importance on sources of conflict
and cooperation should be considered.

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Concept and values in
Industrial Relations
◼ Perhaps the most important issues and
debate in IR apart from that concerning the
conflictual/concessional relationships of the
participants centre around such concepts as
fairness/equity, power/ authority,
individualism and collectivism.
◼ The main problem with any value laden
concept is trying to understand what is meant
by the term and its limitations.
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Fairness and Equity
◼ It is explicitly most frequently associated with
consideration of payment structures levels
and more recently with the introduction of
legislation in relation to dismissal.
◼ Equity is often confused with term equality.
◼ Equality is only one value or belief set that
may be used to judge the existence extent of
fairness.
◼ Inequality exist both in society and
organization.

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Fairness and Equity…..
◼ Unequal distribution of wealth, income and
ownership; variation in benefits such as job
security, nature of work, status, education ,
health etc.; differential access to power,
authority and control.
◼ The existence of inequality at macro level of
society which render the concept of fairness
at micro level of the individual or organization
almost meaningless.
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Fairness / Equity…..
◼ Fairness is perhaps most usefully seen as a relative and
variable concept with which to examine the conduct of human
relationships. In this respect it may be used in three ways.
• It may imply that, in an exchange there should be reasonable
reciprocity or balance between the parties concerned.
• In a wider context, fairness may imply that a particular
exchange is consistent with other exchanges undertaken
elsewhere.
• Fairness may, particularly in respect of non-monetary
exchanges, imply equality of treatment and consideration in the
conduct of different relationships and within the same
relationship over time.

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Power and Authority
◼ In practice the two concepts are inextricably
linked, authority is achieved through power
and vice versa.
◼ Power implies force
◼ It is the ability of an individual or group to
control his (their) physical and social
environment and as part of the process the
ability to influence the decisions, which are or
are not taken by others.
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Power and Authority…..
◼ Power has different meaning and it is useful to
differentiate between;
• Power meaning the ability to control or impose.
• Power meaning the ability to influence and thereby secure
some modification in another party’s decision or action. This
may be subdivided between;
a) The ability to force a change
b) The ability to generate an implicit influence
▪ French and Raven identified five major interrelated sources of
power.
Reward, Coercion, Legitimatized, Referent, Expertise

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Power and Authority…..
◼ Power can only exist and be exerted if there is a reciprocal
perception of power.
• Perceived power equality between the parties provides for an easy
agreement and high value outcome.
• Perceived low power inequality provides for a difficult agreement and
low value outcome.
• Perceived high power inequality provides for an easy agreement and
high but biased value outcome.
▪ Authority is the legitimate use of power
▪ It is the right inherent in a position to utilize intersection in such
a way that organizational objectives are set and achieved.
▪ It is the right to expect and command obedience.

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Power and Authority…..
◼ It is a natural privilege or right accorded to
management in capitalism to direct production and to
command the labour force.
◼ Power being legitimized through authority has a no.
of important implications for IR;
• It induces a perception that the use of power is unacceptable
while the exercise of authority is acceptable
• The process of socialization which induces an acceptance of
orders from those appointed to govern has produced the so
called conflict between the individual role as an employee and a
TU member.
• The rights of entitlements of subordinates are closely bound up
with the exercise of power and authority or more particularly
its control.
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Power and Authority…..
◼ Power is easy to feel and happy to
exercise.
◼ It is a force that can not be seen but its
impact can be felt.
◼ It is the ability to get things done the
way one wants them to be done.

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Individualism and Collectivism
◼ People should be seen as individual human beings each with his
her own aspirations, attitudes and attributes and each in their
sphere of work, able to make a unique and significant
contribution to the successful operation of the organization.
◼ The fundamental basis of a democratic society is the freedom of
the individual; the freedom to choose and make decisions in
respect of the conduct of the individual ‘s life.
◼ At the society level, it is generally accepted that the individual
has freedom of action only where that action does not harm
others or interfere with the right of freedom of others.

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Individualism and
Collectivism…..
◼ A collective basis to the employment relationship exists because
it meets certain needs of both management and employees.
◼ Management own arrangement of its operations induces the
development of a collective basis to the employment
relationship.
◼ Individual by combining with others, not only establishes the
means to protect his interests and improve his terms and
conditions of employment but also increases his power vis a vis
management and is able to secure a more favourable outcome
than he would as an individual.
◼ The power and ability of the employees collectivity to further
the individual interests rest largely on its internal
fraternalism/solidarity.

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Individualism and
Collectivism…..
◼ The emphasis of collectivism in the determination of
the employment relationship is closely associated
with the notion of voluntarism i.e., the freedom of
parties to organize themselves, to determine the
nature and content of their relationship and to
regulate it without governmental or legal
intervention.
◼ Individual subordination to collective interests
appears to clash with society’s notion of ‘freedom of
the individual’.

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Integrity and Trust
◼ Integrity must be defined in terms of the individual acting in
accordance with his or her personal values and beliefs (ethics)
rather than in terms of the individual acting according to some
universally accepted code of conduct.
◼ The essential quality of integrity (honesty) is that the
individual’s words and actions should be seen by others, to
coincide and express a consistent set of values.
◼ It is argued that the only ‘matter of principle’ in IR is the
maintenance of personal integrity.
◼ Trust may be established only between people rather than
organizational collectivities called ‘management’ , ‘union’.
◼ Inter- organizational trust stems from interpersonal trust

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Role of State in IR
◼ The necessity of state intervention in India
could be out of the following reasons.
• Distrust between employer and union
• Inability of IR institutions in protecting public interest

• Federal nature of the constitution

• Concept of welfare state in Directive Principles

▪ Role of State in IR in India can be classified as;

Employer Legislature Administrator Regulator Facilitator

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Role of State in IR……
◼ Employer
• Direct Employment
• Mixed Economy
• 50% employee are under state control
• ID Act,1947 and IE Act, 1946 provide job security
• PSU for generating employment (HRP)
• Surplus dealt with VRS

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Role of State in IR……
◼ Legislator
• Constitution (federal)
• Concurrent list
• Article 39 – EPEW, economic compulsion and mismatch in job
• Article 41 – Right to work, education; public assistance in case
of unemployment, disablement, sickness
• Article 42 – just and human condition of work
• Article 43 – living wage
• Article 43A – participation

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Role of State in IR……
◼ Administrator
A. Central Machinery
• Ministry of Labour and Employment – Labour Secretary
• (chief advisor)
• It looks after;
• Labour policy and legislation
• Conciliation of labour laws
• Consists of main secretariat, five attached offices & autonomous
bodies
• Secretariat – coordinate activities of tripartite bodies, state govt

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Role of State in IR……
• Attached Offices –
1.DG of Employment & Training
2.Office of Central Chief Labour Commissioner(IRM,1945),Delhi
3. DG of Factory Advice Services & Labour Institute, Mumbai
4.DG of Mines & Safety (Dhanbad)
5.Labour Bureau (Shimla),collection, compilation & publication of
lab.statistics
• Autonomus Organisation –
1.DG , ESI Corporation
2.EPF org.
3.Central Board of Workers Education

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Role of State in IR……
4. Office of the Contoller,Emigrant Labour
5. Dock Labour Boards
6.National Safety Council
B. State Machinery
• Labour Commissioner
• Chief Inspector of factories – IFA,1947
• Chief Inspector of Boilers – IBA,1923
• Labour Statistics in Labour Gazette

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Role of State in IR……
Labour commissioner

Joint L. Commissioner

Deputy L. Commissioner( Division)

Assistant L. Commissioner (Zones)

District Labour Officer (District)

Assistant Labour Officer (subdivision)

Regional Labour Inspector

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Role of State in IR……
◼ Regulator
• Tripartite bodies
• Participative Mgt. (JMC,PC,SC…..)
• Committee on Convention -1954(ILO)
• Steering Committee on Wages -1956(wage fixation)
• Central Implementation and Evaluation Machinery –
1957 (imp. Of award, agreement, C.O.D)
• Central Board of Workers education
• National Productivity Council – Productivity
movement

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Role of State in IR……
◼ Facilitator
• Liberalization, Deregulation & Privatization
• Economic restructuring, Structural transformation, International
competition, Redundant jobs, Changes in mgt. strategy
• Labour Policy – Decentralization, Attracting investment,
Increase productivity &Tackling Ind.sickness
• Union’s realisation of futility of strikes
• Stable & Peaceful IR – Because of competition
• Facilitating education & training, SS, pension…..
• Efficiency & Productivity of both capital and labour

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