Industrial Relations: An Overview

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Industrial relations is a dynamic socio- economic process. It is a designation of a whole field of relationships that exist because of the necessary collaboration of men and women in the employment processes of industry. It has two facets: cooperation and conflict.

The relationship between labor and management is based on mutual adjustment of interests and goals. It depends upon the economic, social and psychological satisfaction of the parties. Higher the satisfaction, healthier the relationship.

The industrial revolution resulted in investment of huge amounts of capital in technology to achieve the benefits of large scale production. Company form of organization led to separation of ownership and management of industry. The workers faced many economic, social and psychological problems as a result of the introduction of machines and they started organizing themselves, in the form of trade unions. 

Definition & Meaning Of Industrial 

Industrial Relations refers to all types of relations between employers and workers, be they at national, regional or company level. It is a field of study that examines all dealings with social and economic issues, such as wage setting, working time and working conditions.

Bethal and Associates asserted that “Industrial relations is that part of management which is concerned with the manpower of the enterprise.”

According to Tead and Metcalfe, “Industrial relation is the composite result of the attitudes and approaches of employers and employees towards each other with regard to planning, supervision, direction and coordination of the activities of an organization with a minimum of human efforts and frictions with an animating spirit of cooperation and with proper regard for the genuine well-being of all members of the organization.”

Prof. Dunlop adds a new dimension of inter-relations- “Industrial societies necessarily create industrial relations defined as the complex of inter-relations among workers, managers and government.” 

Objectives Of Industrial Relations 

It is difficult to precisely lay down the objectives of industrial relations. However, various authors on the subject attempted to highlight the main objectives of industrial relations. Some of them are as follows:

  1. To improve the economic conditions of workers.
  2. For state control on industries for regulating production and promoting harmonious industrial relations.
  3. For socialization or rationalization of industries by making the state itself a major employer.
  4. For vesting of the proprietary interest of the workers in the industries in which they are employed.
  5. To develop management relations with trade unions or groups of workers which covers rights and practices, regulated by law or legal machinery.
  6. One of the most important objects of industrial relations is to maintain industrial peace and harmony and, thereby, increase productivity. It depends on the quality of union management relations at workplaces.
  7. To check industrial conflicts and minimize the occurrence of strikes, lockouts and gheraos.
  8. To minimize labor turnover and absenteeism by providing job satisfaction to the workers and increasing their morale.
  9. To establish and develop industrial democracy based on workers partnership in management of industry.
  10. To facilitate government control over industries in regulating production and industrial relations.

Significance Of Good Industrial Relations 

Good industrial relations refer to harmonious relations between the labor union and the management in an organization. Such relations will lead to the following benefits:

  1. Industrial Peace: Cordial industrial relations bring harmony and remove the cause of disputes. This leads to industrial peace which is an ideal situation for an industrial unit to concentrate on productivity and growth.
  2. Higher Productivity: Due to cordial relations, workers take interest in their jobs and work efficiently. This leads to higher productivity and production of the enterprise where they are working.
  3. Industrial Democracy: Sound industrial relations are based on consultation between the workers and the management. This assists in the establishment of industrial democracy in the organization which motivates employees to contribute their best to the success of the organization.
  4. Collective Bargaining: Cordial industrial relations are extremely helpful for entering into long term agreements as regards various issues between labor and management. Such collective bargaining agreements and association of employees in the decision making process will bring about cooperation between labor and management.
  5. Fair Benefits to Workers: The worker should get sufficient economic and non-economic benefits to lead a happy life. It is possible when the relations between workers and management are cordial and the productivity is high. The employers can afford higher benefits to the workers.
  6. Higher Morale: Good industrial relations imply the existence of an atmosphere of mutual cooperation, confidence and respect within the enterprise. In such an atmosphere there are common goals, which motivate all members of the organization to contribute their best. 
  7. Facilitation of Change: Sound industrial relations, by creating a climate of cooperation and confidence, make the process of change easy. Hence full advantages of the latest invention, innovation and other technological advancements can be obtained.

Industrial Relations & Human Relations

Industrial relations are basically a problem of human relations, and are influenced by all the complex circumstances that affect the latter. While the apparent causes of good or bad labor management relations may not be difficult to classify, the real cause have their roots in historical, political, socio-economic factors and depend upon attitudes of workers and employers. 

Many times, work-stoppages which can be apparently ascribed to some simple demand, namely, economic or personnel, are found, on a deeper examination, to have complex roots in the social and cultural attitudes of the

worker involved. At times, though strikes take place because of certain economic demands, harmonious relations are not necessarily restored even after the monetary benefits demanded are granted to workers. 

On the contrary, it is also possible that even without the apparent demand being satisfied or conceded, good relations are restored once the deeper cause, be it political, social or economics is properly tackled. A change in the leadership in the workers’ union or a change in the management may radically alter the basic relationship between the management and the workers.

As such, a particular state of industrial relations cannot be viewed in isolation from the political, social and economic characteristics obtaining therein nor the remedies to correct certain situations developed without giving due consideration to such factors

Barriers In Development Of Industrial Relations  

  1. Low Wages: Discontent amongst industrial workers revolves around the question of wages. Low wages figure prominently both in industrial and agricultural sectors.
  2. Ignorance And Illiteracy: Another malady of Indian workers is illiteracy. The workers do not fully realize the social and economic implications of the modern industrial system and evils arising therefrom and, therefore, are less likely to insist on reforms. Lack of education among industrial workers has also given rise to the evolution of outside leadership.
  3. Heterogeneity: Another characteristic of Indian labor is its heterogeneity. India is a vast country where customs and traditions differ considerably from one part to another. There are distinctions based on caste, creed and religion and provincial jealousy. The effect of this is that workers do not unite for better conditions and for reform.
  4. Absenteeism: Absenteeism has been a cause of great concern in most of the organizations in India. There is no hard and fast rule to deal with this problem. However, it is certain that it requires a great deal of expertise to effectively bring down the cases of absenteeism.
  5. Child labour: Another major problem of industrial relations is that of child labor. It is a common and serious problem for the country. It ultimately affects the personality and creativity of children. The evil of employment of children in agricultural and industrial sectors in India is a product of economic, social and, among others, inadequate legislative measures.

Changing Dimensions Of Industrial Relations In India

Globalization, liberalization and privatization have brought new market imperatives. The traditional industrialization system is under unprecedented pressure because it is unable to meet this situation. Some of the key features are given below:

  1. The institution of trade union is becoming weaker. Employers, despite the provisions of unfair labor practice under the Industrial Disputes Act, 1947, are discouraging the formation of unions and promoting nonunionism. 
  2. The institution of collective bargaining is being decentralized and replaced by unit bargaining, individual bargaining, commercial bargaining and collaborative bargaining.
  3. Disinvestment/privatization and VRS are almost accepted facts of industrial relations.
  4. Changing pattern of compensation/rewards management—fixed/assured time rate wages are replaced by variable/performance-based wages.
  5. Social security and employment guarantee schemes are being provided for unorganized/agricultural workers.
  6. Pro-labour attitude of the government is being diluted. This is evident from the shift in government’s attitude of non-interference and liberally granting permission to lay-off, retrench or close the undertaking.
  7. The establishment of ‘special economic zones’ is another area which shows the attitude of the government towards emerging business scenario.
  8. The attitude of the judiciary is also changing. The recent judgments of the Supreme Court on contract labor, discipline and disciplinary action, absenteeism and strikes show that it looks at the problem from the viewpoint of economic reforms and global competition.

Reference Links

  1. Industrial Relations and Labour Laws, 6th Edition