Andhra Loyola College

(A) Department of MBA

Assignment

Submitted by
Name : MACHERLA PRASANTH

Reg No : Y23MBA068
Subject : INDUSTRIAL RELATIONS & EMPLOYEEMENT LAWS

Submitted to:
Mr Dr BHASKAR SIR
 I. Significance of Industrial Relations

Maintenance of harmonious industrial relations is on vital importance for the

survival and growth of the industrial enterprise. Good industrial relations result in
increased efficiency and hence prosperity, reduced turnover and other tangible
benefits to the organization. The significance of industrial relations can be
summarized as below:

 It establishes industrial democracy: Industrial Relations Means settling

employee’s problems through collective bargaining, mutual cooperation and
mutual agreement amongst the parties i.e., management and employees
unions. This helps in establishing industrial democracy in the organization
which motivates them to contribute their best to the growth and prosperity of
the organization.
 It contributes to economic growth and development: Good industrial
relations lead to increased efficiency and hence higher productivity and
income. This will result in economic development of the country.
 It improves morale of the work force: Good industrial relations, built-in
mutual cooperation and common agreed approach motivate one to contribute
one’s best, result in higher productivity and hence income, give more job
satisfaction and help improve the morale of the workers.
 It ensures optimum use of scare resources : Good and harmonious industrial
relations create a sense of belongingness and group-cohesiveness among
workers, and also a congenial environment resulting in less industrial unrest,
grievances and disputes. This will ensure optimum use of resources, both
human and materials, eliminating all types of wastage.
 It discourages unfair practices on the part of both management and unions :
Industrial relations involve setting up a machinery to solve problems
 confronted by management and employees through mutual agreement to
which both these parties are bound. This results in banning of the unfair
practices being used by employers or trade unions.
 It prompts enactment of sound labour legislation: Industrial relations
necessitate passing of certain labour laws to protect and promote the welfare
of labour and safeguard interests of all the parties against unfair means or
practices.
 It facilitates change: Good industrial relations help in improvement of
cooperation, team work, performance and productivity and hence in taking
full advantages of modern inventions, innovations and other scientific and
technological advances. It helps the work force to adjust themselves to
change easily and quickly

II. Factors influencing in Industrial Relations

Industrial relations refer to the relationship between employers and employees in

the workplace. Several factors can influence industrial relations. Here are some
key factors:

 Labor Laws and Regulations: The legal framework governing employment

relationships, such as labour laws, collective bargaining agreements, and
employment contracts, significantly influence industrial relations. These
laws define the rights and obligations of both employers and employees,
including issues related to wages, working hours, benefits, and dispute
resolution.
 Economic Conditions: Economic factors, such as economic growth,
inflation, unemployment rates, and industry-specific conditions, can impact
industrial
 relations. During periods of economic downturn, employers may implement
cost-cutting measures, leading to conflicts with employees over job security,
wages, and working conditions.
 Technological Changes: Technological advancements and automation can
affect industrial relations. The introduction of new technologies may lead to
job displacement, changes in work processes, and skill requirements. These
changes can create tensions between employers and employees, requiring
effective communication and adaptation strategies.
 Globalization: Globalization has increased competition and
interconnectedness among businesses worldwide. It has led to the
outsourcing of jobs, the establishment of multinational corporations, and the
expansion of supply chains. These changes can impact industrial relations by
influencing employment practices, labour standards, and the ability of workers
to organize and bargain collectively.
 Workforce Diversity: Workforce diversity, including factors such as gender,
age, ethnicity, and cultural backgrounds, can influence industrial relations.
Employers need to manage diversity effectively to ensure equal
opportunities, prevent discrimination, and promote inclusivity in the
workplace.
 Trade Unions and Employee Associations: The presence and strength of trade
unions and employee associations can significantly impact industrial
relations. These organizations represent the interests of workers, negotiate
collective agreements, and engage in collective bargaining with employers.
The relationship between employers and unions can vary depending on factors
such as union density, union strategies, and the legal framework for union
activities.
  Management Practices: The management style and practices adopted by
employers can influence industrial relations. Effective communication,
employee involvement in decision-making, fair treatment, and opportunities
for skill development can contribute to positive industrial relations.
Conversely, poor management practices, such as lack of transparency,
favouritism, and inadequate grievance handling, can lead to conflicts and
strained relationships.
 Social and Cultural Factors: Social and cultural factors, including societal
norms, values, and attitudes towards work, can impact industrial relations. For
example, cultural differences in communication styles, expectations, and
work-life balance can influence the dynamics between employers and
employees.

III. Recent trends in Industrial Relations

The emerging trends in industrial relations from labour reform to judicial trends and
managerial strategies are as under:

 Labour Reforms:

The product market and capital market reforms has increased bargaining power of
the capital vis-à-vis Labour. The labour reforms in the following:

i. Disinvesting instead of privatization.

ii. Liberalizing labour inspection.
iii. Amending trade union laws.
iv. Reducing interest rates on provident fund.
 v. Special concessions to SEZ.
vi. Different inspection authorities for SEZ.
vii. Simplify procedures of annual returns, maintenance of registers and so on.
viii. Declaring units in SEZs as ‘public utility services’ to make strikes more
difficult.
 Judicial Trends:

From the era of ‘social justice’, ‘distributive justice’ and ‘discriminative justice’,
where the judiciary was busy in giving many Land mark, judgments for protecting
the interest of workers. The trend has been reversed with the advent of
liberalization and globalization, where our industries have to compete with the
multinationals.

 Trade unions nexus

The bargaining power of trade unions has been weakened earlier. IRS was mainly
concerned with trade unions, management and the government. But now the
consumers and community are also a part of dynamic Industrial Relations System
(IRS). When the rights of consumers and community are affected, the rights of
workers and trade unions and even managers/employers get a back seat. This is
evidenced by ban on bandh and restriction on protests and dharnas. Now-a-days,
trade unions can see their future by aligning themselves with the interests of the
wider society. Unions have to make alliances with the society, consumers and
community, otherwise they will find themselves dwindling.

 Collective bargaining

In IRS, collective bargaining constitutes one of the most important mechanisms of

rule-making acceptable to both the employers as well as the workers.
  Labour management conflict

The globalization has brought significant changes in the labour market and the
industrial relations system. Both the actors (management and workers) have
exerted respective pressures on the government to introduce concrete actions
favouring their interests. The government has responded to protect the dominant
political interests while announcing labour reforms.

 Managerial strategies

The economic reforms have toned down industrial conflicts, due to shift in the
relative bargaining power in favour of capital. The employers devised various
managerial strategies to achieve labour flexibility, weaken labour power, more
control over production process, reduction in regular workers via VRS, transfers,
multi-tasking, freeze in employment, increased use of contract labour,
subcontracting etc., on both public as well as private enterprises.

 Government strategy

In the positive direction, to boost the industrial harmony and economic activity, the
government has adopted two strategies namely disinvestment and deregulation,
which are expected to be mutually beneficial for the workers as well as the
management

IV. Importance of collective bargaining

 Collective bargaining through unions gives workers a united voice to
negotiate for improved wages and benefits they could not achieve as
individuals. Unions have won higher pay, better health plans, retirement funds
and other compensation that help improve workers’ living standards, financial
security and overall well-being.
 Collective agreements establish work rules, policies and grievance procedures
that provide stability, predictability and fairness in the workplace.
Predictable processes benefit both employers through reduced conflict and
workers through due process and proper representation. Clear guidelines
promote a productive work environment.
 Research shows unions boost organizational productivity through
mechanisms like lower turnover, improved training, more worker autonomy
and greater job security. Higher productivity grows firms and the economy,
benefiting employers, workers and society. Unionized workers are generally
more satisfied and engaged, further increasing productivity.
 By securing higher wages and better benefits, unions help distribute economic
gains from productivity increases more fairly between workers and
corporations. This addresses issues of inequality in society by narrowing the
compensation gap. Fair compensation promotes greater social justice.
 Collective bargaining serves as a check on corporate power by requiring
employers to negotiate with workers. This balance of interests promotes a
more equitable and sustainable economy where the needs of all stakeholders,
not just shareholders, are considered. Workers get a voice in decisions that
impact their jobs.
 Collective bargaining ensures workers’ needs are heard alongside employers’
goals. This benefits workers through fair treatment and compensation and
society through higher living standards, productivity and a fairer distribution
of wealth. Though imperfect, collective bargaining remains important to
balance the interests of labour and capital.
 Unions push for safer working conditions through collective bargaining.
Union contracts typically include provisions for workplace health and
safety. This benefits all workers, even non-union members.
 Collective bargaining helps protect worker rights. Union contracts define
rights like just cause for termination, seniority rights, severance pay and
grievance procedures. These protect against unfair treatment and
exploitation.
 Unions promote workforce diversity through collective bargaining. Contract
language can address issues like equal pay, accommodations, hiring and
promotion practices. This ensures workplaces are inclusive for all workers.
 Union contracts support work-life balance. Benefits like paid leave, flex
time and family-friendly policies negotiated through collective bargaining
help workers manage job and family responsibilities. This enhances worker
productivity and well-being.
 Collective bargaining promotes staff’s voice. Through unions, workers gain
a formal channel to provide input into workplace decisions that impact them.
This grant benefits both workers and employers.
 Unions negotiate for more employer transparency. Contracts can require the
disclosure of information to hold employers accountable. Transparency
builds trust between labour and management.
  Collective action through unions fosters democracy in the workplace. Workers
gain a collective voice and participation in decisions that affect their jobs
and livelihoods. This democratic process strengthens the economy and
society.

V. Characteristics of collective bargaining

 Collective Process: Another feature is it is a collective process. Delegates

participate on behalf of the employer and trade union represent the
employees Both of the party sit together and reach at an acceptable
conclusion.
 Continuous Process: The collective bargaining process is continuous one, it
goes on for 365 days of the year. It does not end with an agreement and does
not start with negotiations. The process includes application of contract and
administration also. The bargaining goes on day to day under the rules
established by labour agreements. It provides machinery for continuing
relationship between trade unions and management.
 Flexible and Mobile: The process is very flexible and there is no specific
rule for reaching at the conclusion. There is more scope for compromise.
Give and take policy also works before reaching at the conclusion.
 Bipartite Process: The process involves two parties. There is no intervention
of third party. Both the party’s employer and employees collectively take
some decision. It is a two-way process. D In most of the countries, the
process leads to conflict between the parties because of which the process
adopts a principle to gain to the other part. A rigid, hard or inflexible position
does not make for a settlement.
 Dynamic: Collective bargaining is a dynamic process because the way by
which conclusion is reached keeps on changing every time. It is scientific
and factual process.
 Industrial Democracy: The collective bargaining is based on principal of
industrial democracy. The trade union represents the workers in negotiations
with the employer or employers. It is a joint effort of helping the workers in
matters which affect labour.