Industrial Relations

Course Code: MGT 306

1st Chapter
 Reference Books:
1. Industrial Relations by Dr. Abdul Awal Khan and Dr. M. A. Taher
2. Industrial Relations by Dr. M. Ataur Rahman
3. Industrial Relations by Arun Monappa
Content
 Meaning & concept
 Defination
 Objective of IR
 Importance of IR
 Role of three actors
 Causes for poor IR
 Developing sound IR
 Code of conduct/discipline
 Objective of code of discipline
 Principle of code of discipline
 Approaches of IR
 Parties to IR
 MEANING & CONCEPT
 The term ‘Industrial Relations’ comprises of
two terms:

‘Industry’ and ‘Relations’

 “Industry” refers to “any productive activity in

which an individual (or a group of individuals)
is (are) engaged”.
 By “relations” we mean “the relationships that
exist within the industry between the employer
and his workmen.”
 The term industrial relations explains the relationship
between employees and management which stem
directly or indirectly from union-employer relationship.

 Industrial relations are the relationships between

employees and employers within the organizational
settings.

 The relationships which arise at and out of the

workplace generally include the relationships between
individual workers, the relationships between workers
and their employer, the relationships between
employers, the relationships employers and workers
have with the organizations formed to promote their
respective interests, and the relations between those
organizations, at all levels

 The term industrial relations has a broad as well as a

narrow outlook. Originally, industrial relations was
broadly defined to include the relationships and
interactions between employers and employees
 The relationships which arise at and out of the
workplace generally include the relationships
between individual workers, the relationships
between workers and their employer, the
relationships between employers, the relationships
employers and workers have with the organizations
formed to promote their respective interests, and the
relations between those organizations, at all levels.

 Industrial Relations also includes the processes

through which these relationships are expressed
(such as, collective bargaining, workers’
participation in decision-making, and grievance and
dispute settlement), and the management of conflict
between employers, workers and trade unions,
when it arises.
 DEFINITIONS
The Industrial Relations also called as labor -
management, employee employers relations.

1) “Employer-employee relationships that are

covered specifically under collective
bargaining and industrial relation laws”.

2) According to J.T. Dunlop, “Industrial relations are

the complex interrelations among managers,
workers and agencies of the government”
 “Industrial management relations encompass a set of
phenomena, both inside and outside the work place,
concerned with determining and regulating the
employment relationship”.

Michael Salmon

 “Industrial relations deals with people at work or that

industrial relations is concerned with many problems
related to employer-employee relations”

W.V Owen& H. V. Finston

Parties to IR
Employees Trade
Employers
Union

Employee Employer-Employee Employer

Employers Industrial Relations
Associations Relations Associations

Government Courts &

Tribunals
• Three main parties are directly involved in industrial relations:
Employers: Employers possess certain rights vis-à-vis labors. They have
the right to hire and fire them. Management can also affect workers’
interests by exercising their right to relocate, close or merge the factory
or to introduce technological changes.

Employees: Workers seek to improve the terms and conditions of their

employment. They exchange views with management and voice their
grievances. They also want to share decision making powers of
management. Workers generally unite to form unions against the
management and get support from these unions.

Government: The central and state government influences and

regulates industrial relations through laws, rules, agreements, awards of
court ad the like. It also includes third parties and labor and tribunal
courts.
 OBJECTIVES
Some of the other objectives of IR are as-

 To enhance the economic status of the workers.

 To regulate the production by minimizing industrial
conflicts through state control.
 To provide an opportunity to the workers to have a say in
the management and decision-making.
 To encourage and develop trade unions in order to
improve the workers collective strength.
 To improve workers strengths with a view to solve their
problems through mutual negotiations and consultation
with the management.
• To avoid industrial conflicts and its consequences
• To extend and maintain industrial democracy.
• To maintain industrial peace.
• To ensure the individual satisfaction and development.
• To ensure the sound working environment.
• To increase the goodwill of the industry.
• To eliminate or minimize the number of strikes, lockouts and
gheraos by providing reasonable wages, improved living and
working conditions, said fringe benefits.
 IMPORTANCE
 Establish a sound industrial environment
 Ensure industrial democracy
 Bringing social peace
 Improving productivity
 Benefit to workers
 Foster Industrial Peace
 Promote Industrial Democracy
 proving quality & reducing prices of prooducts
 Job Satisfaction
 Reduction of labor turnover
 Reducing absenteeism
 ROLE OF THREE ACTORS TO
IR
Role of Employee:
• To redress the bargaining advantage on win-win
basis
• To secure better terms and conditions for their
members
• To obtain improved status for the worker in his/her
work
• To increase implementation of democratic way of
decision making at various levels
Role of Employers

• Creating and sustaining employee motivation

• Ensuring commitment from employees

• Negotiating terms and conditions of employment

with TU leaders

• Sharing decision making with employees

Role of State:

• Labor policies

• Labor laws

• Industrial tribunals

• Wage boards

• Industrial relations policy

 CAUSES FOR POOR IR
The main reasons are as follows:
 Lack of proper human relation attitude: Industrial relation may be poor
because sometimes management does not show the proper human attitude toward
the employees. They do not consider the needs of employees. Actually management
consider the employees as a machine of production rather than human being.
 Autocratic attitude: Autocratic attitude of management is also responsible for
poor industrial relation. Management always takes all kinds of decisions solely and
makes employees bound to obey it.
 Faulty supervision: Unskilled supervisors are not able to understand the attitude
and behavior of employees as well as they are not capable to protect the emergency
situations. So it is clear that faulty supervisions lead to poor industrial relation.
 Anomalies in wages policy : Employees are much more sensitive to wages. But
anomalies in wages policy are observed in most of the industries. That’s why it leads
to shaky industrial relations.
 Job security: Every worker want a security about their job. It is a basic need of the
workers and If it is not ensured then industrial relation will be poor.
 Poor working condition: Unsound and unhealthy working condition decreases the
morale of workers. If it is not sound and healthy then the workers raise their voice against
the management.
 Nepotism and biasness: Industrial relation may be poor when the management treats
the workers being biased or due to nepotism.
 Injustice in promotion & Training: Promotion & training policy should be introduced
in every industry. If any discrimination is noticed then industrial relation may be poor.
 Communication barriers: Mutual misunderstanding may be created due to
communication barriers and ultimately it leads to poor industrial relation.
 Political nature of unions: Each and every trade union have an political patronization
that’s why unions are influenced by the external political parties.
 Inter union rivalries: Inter union rivalries also lead to poor industrial relation.
 Features of Industrial Relations in
Developed & Developing Countries
• Exploitation of workers
• Democracy within the society
• Educational qualification of workers
• Family size
• Level of employment
• Class-consciousness of industrial workers
• Productivity & profitability
• Wage level
• Strength of trade unions
• Opportunism among trade union leaders
• Industrial commitment
• State intervention
• Level of industrialization
 Challenges of IR
 Globalization
 Import liberalization
 Privatization
 Information technology
 Downsizing
 Reengineering
 Workforce diversity
 Total quality management
 Free flow of man power
 Managerial obsolescence
 Economic condition & social pressure
 Adoption of international rules & regulations
 IR in Bangladesh
 Poor condition of democracy

 Due to political intervention industrial peace & productivity were affected a

number of times

 The level of industrialization is very poor

 Industrial workers are not at all class conscious

 Physical fitness is not good enough

 Govt cannot ensure satisfactory wage level

 Multiplicity of trade unions is one of the main weaknesses of labor politics

in our country

 Politicization of labor unions by outside political leaders

Approaches to IR

1. Unitary approach

2. Pluralistic Approach

3. Marxist Approach

4. Social action approach

5. System approach

6. HRD approach
 Approaches to IR
Approaches to organisations

Unitary Pluralistic Marxist

Authoritarian Co-operation Evolution

Paternalism Conflict Revolution

Approaches to industrial relations

Input Conversion Output

Institutions
Conflict Regulation
and
(differences) (rules)
processes

Human Systems Social action Control of

resource the labour
management process
Wider approaches to industrial relations

Labour market Comparative

1. Unitary Approach
•Organization is an integrated group of people with a single authority.

•IR is grounded in mutual co-operation, individual treatment, team

work and shared goals.

•Union co-operate with the mgt. & the mgt.’s right to manage is
accepted because there is no ‘ we they feeling’

•Assumption: Common interest & promotion of harmony No strikes are

there.

•Conflict is perceived as an irrational activity

•Trade unions are regarded as intruders into the organization from

outside competing with management for the loyalty of employees

•They seek direct negotiations with employees.

2. Pluralistic Approach
• It perceives:
• Org. as a coalitions of competing interest.
• TU as legitimate representatives of employee
interests.
• Stability in IR as the product of concessions
and compromises between mgt. & unions.

• Conflict between Mgt. and workers is understood as

inevitable.
• Conflict is viewed as conducive for innovation and
growth.
• Strong union is necessary.
3. Marxist Approach
 In capitalist society there is always class conflict which arise in
the society also affects industrial relations
 Employer always exploit workers who only sell their labor power.

 Marxists see conflict as a product of the capitalist society.

 Conflict arises due to the division in the society between those

who own resources and those who have only labor to offer.
 For Marxist all strikes are political.
 He regard state intervention via legislation & the creation of
Industrial tribunals as supporting mgt’s interest rather than
ensuring a balance between the competing groups.
4.Social action approach:
 The pioneer of this approach is C.J. Magerision and Max Weber.
This approach emphasizes upon understanding of interpersonal
relationship in the work.

 Social action approach discusses the behavior of individual and group

within the organization.

The assumptions of this approach are-

 People are human beings
 People are members of informal small groups
 People have own personality level.

 This approach assumes that the existing environmental relations in the

workplace are affected by industrial behavior of management and
workers. Individual behavior, desire and social works are affected by
some social and physiological factors that are shown in the following
diagram-
 expectations

norms , values &

attitude
people goals

interaction with
others
 System approach:
 John T. Dunlop is the pioneer of this approach. System approach considers the
industrial relations as an system that performs an institutional procedure to
make rules to govern behavior of the people at work. Dunlop suggested that
industrial relations system is a process created by four interrelated elements
comprised of –

 Certain actors(workers, management & government)

 Environmental contexts(the technology, market or budgetary constraints and
distribution of power)
 Ideology(a set of common beliefs which acts as an integrating forces)

 According to this approach, industrial relations system is a composition of actors,

environmental contexts and rules, where ideology gives the bindings to shape
the behavior of the actors. Here conflict is the result of interaction among the
actors, contexts and ideology. This conflict is processed through some
mechanism to form some rules that will control the future behavior of the
actors.
 HRD approach:
 Human resource development involves-
 The greatest involvement of an employee in various aspects of his work.
 Way to adjust the individual to his job and environment
 The greatest concern for enhancing the capabilities of the individual.

 HRD approach recognizes employees as the greatest assets in an

organization and believes that they can be developed to an unlimited
extent with proper incentives, atmosphere and treatment. It is possible
to integrate human needs with organizational requirements. If the
manager has a caring, helpful attitude towards employees and creates a
healthy work environment then employees are willing to give their best
to the organization. So the employers in their own self interest, they
must create a motivating climate so that employees commit themselves
to assigned task whole-heartedly.
IR Vs. HRD