20 Definition of Industrial Relations

Learning Objectives

After completing this session, you will be able to:

  • define and describe concept of industrial relations.

The Labour Dictionary defines ‘industrial relations’ as ‘the relation between employers and employees in industry’. According to Dale Yoder, ‘industrial relations’ describe ‘relationships between management and employees or among employees and their organizations, that characterize or grow out of employment’.

 In order that the term ‘industrial relations’ could cover every sector of the labour force in all parts of the world, the International Institute of Labour Studies has defined it as ‘social relations in production’. According to John T. Dunlop, ‘Industrial societies necessarily create industrial relations, defined as the complex of interrelations among managers, workers and agencies of government’. Today, this term stands for such a wide variety of practices and institutions and has been used in such divergent contexts, that to define just an essence of it, is an extremely complicated task. However, a few elements of this term are clear. These are as follows: (i) Originally, the term stood for employer–employee relations in industry. (ii) Later on, when the workers organized themselves into trade unions and the latter started dealing with employers, trade union activities also came to be included under this term. (iii) Still later, when the relations between employers and employees came to be vested with public importance and ceased to be private, the state had to be involved in such relations. Therefore, the activities of the state designed to modify, regulate and control relations between employers and employees also became a part of industrial relations. (iv) The term ‘industry’ is no longer confined to a small segment of economic activity, but has come to include all gainful employments, including service under the state. The relationship between the state and its employees has also come to acquire many of the characteristics and features of employer–employee relationship in the industry. Therefore, employer–employees relationship under public services has also come to be covered by the term. Considering all the elements mentioned above, the term ‘industrial relations’ can be taken to stand for employee(s)/ union(s)—employer(s)/management—government relationships in employment. As the term indicates, industrial relations spring from the contacts between employers, employees and their trade unions. Such relations and contacts prevail at various levels and in various forms such as the relations between a single employer and a single union of employees, between a single employer and more than one union or between many employers organized on one side, and many unions grouped under , on the other. The modern industrial organization is based upon two large aggregates: (i) accumulation and aggregation of large capital, and (ii) aggregation of large number of workers organized under trade unions. The availability and supply of a large quantity of capital and a large number of workers divorced from any ownership of means of is sine quo non of the establishment and growth of modern industries. The centre of industrial relations is coming together of these two big aggregates. Used narrowly, the term ‘industrial relations’ covers industrial employments only, but in a wider sense, it covers public employments also. Industrial Relations Industrial relations stand for employee(s)/union(s)— employer(s)/management—government relationships in employment.

Collective Bargaining – Types – Process – Pre-requisites – Issues Involved –

Collective bargaining is a process in which the terms and conditions of employment are determined jointly by the employer and workers. Like bargaining in the commodity market, where the sellers try to sell commodities at higher possible prices, and the buyers want to purchase them at lower possible prices, in collective bargaining the sellers of labour services, that is, workers, bargain for obtaining better and improved terms and conditions of employment, and the buyers of these services try to purchase them at as low price as possible. In this process, the final terms are determined.  The term ‘collective’ in collective bargaining generally represents the workers’ side, that bargains either in combination or through their trade unions. There may be only one employer or a group or organization of employers on the other side. Bargaining between individual workman and the employer is individual bargaining and not collective bargaining. In practice, it is the representatives of workers and the employer or the agents who actually participate in the bargaining. Collective bargaining emanates from employment relationship. The employer–employee relationship is a precondition for collective bargaining. Where there is no such relationship as in the case of self-employed persons or members confined to a trade union or an employers’ organization, the question of collective bargaining does not arise.

The main object of collective bargaining is the determination of terms and conditions of employment through negotiations and process of give-and-take. If negotiations succeed, the parties arrive at an agreement, which is called ‘collective agreement’. In the event of the failure of negotiations, the parties generally take recourse to coercive measures such as strikes and lock-outs.  The agreement arrived at during the course of bargaining may relate to a number of subjects of the terms of employment and working conditions or to only a single issue. As the terms of employment and working conditions have widened during the course of time, so has the subject matter of collective bargaining.  Collective bargaining is confined not only to employers and workers, but the state has also come to play a notable role in regulating various aspects of collective bargaining. Some of these aspects are—selection of the bargaining agent, determining the enforceability of collective agreements, obligating the employer and trade unions to bargain collectively, and imposing restrictions on industrial actions in the event of failure of negotiations and so on. The nature of collective bargaining is changeable and dynamic. With the changes taking place in technology, economic order, political environment, structure of trade union organizations, ownership of industrial enterprises, role of the government and so forth, the various ingredients of collective bargaining also change. The pattern of collective bargaining in different countries is not the same, nor is collective bargaining at the same stage of development everywhere.  The main steps usually involved in collective bargaining include: (i) presentation in a collective manner to the employer their demands by the employees, (ii) discussions and negotiations on the basis of mutual give-and-take for fulfilling the demands, (iii) signing of a formal agreement or arriving at an informal understanding, when negotiations result in mutual satisfaction and (iv) in the event of the failure of negotiations, a likely resort to strike or lock-out to force the opposite party to come to terms.

Worker’s participation in Management

      The manager, workers and industrial relations experts interpret the term “workers’ participation   management” in different ways. Some managers interpret it as information sharing while others    consider it as joint consultation prior to decision making. However this is not all about it! The   workers generally think of it as joint decision-making. That means workers treat participation as equivalent to co-decision in the spheres of management of the enterprise.

The following are the forms of participation:

Form # 1. Works Committee:

Enterprises with a workforce of 100 or more workers constitute a works committee with equal number of representatives from employees and the management. This committee has to evolve ways and means for maintaining cordial and harmonious relations between employees and the management.

Form # 2. Joint Management Council (JMC):

JMCs were introduced in 1958. These councils are formed at plant level with equal number of employee and employer representatives. These are mainly consultative and advisory ones. The scope of JMCs encompasses to matters like working conditions, indiscipline, absenteeism, accident prevention, preparation of holiday schemes etc. It is generally alleged that both works committee and JMC are similar in scope and function. Hence multiplicity of bipartite consultative bodies did not serve the purpose.

Form # 3. Board of Representation:

Under this scheme, one or two representatives of workers are nominated or elected to the Board of Directors. The basic idea is to safeguard worker’s interest, and usher in industrial harmony and good relations between workers and management. This is the highest form of participation. Government of India introduced this schemes in public sector enterprises like Hindustan Antibiotics Ltd, BHEL, NTC, National Coal Mines Development Corporation, Hindustan Organic Chemicals, etc.

Public Sector Banks have introduced the scheme from 1970 onwards. The representative unions have to give a panel containing names out of which one will be selected by the Government. The success of the worker director depends in his role in the board and his prior consultation communication with the other workers. He should articulate the worker’s concern very effectively and cogently with facts and figures and enlighten the management of the implications of various proposals at the board.

Form # 4. Participation through Ownership:

Workers by becoming shareholders take part in management. Management sell shares at reduced price to its committed and loyal workforce. Such workers are allowed to pay the price in installments or allowed financial accommodation to buy the shares. But participation is distinct from management. But its effect on participation is observed to be limited. In some cases, sick companies are allowed to be taken over by workers. For example, Kamani Tubes, New Central Jute mills, etc., are some of the companies taken over by worker’s cooperatives.

Form # 5. Participation through Complete Control:

It is called self-management. Yugoslavia is the country practicing this model. This gives a complete control to the workers to directly manage all aspects of industries through their representatives. This method ensures complete identification of workers with their organization. The scope for industrial conflict becomes lesser under the self-management method. But the success of the method depends on the intensity of interest shown by workers in the management.

Form # 6. Collective Bargaining:

This mechanism gives the management and the employees to lay down rules relating to working conditions and contract of employment. This type of participation is in practice.

Form # 7. and:

Job enlargement means addition of task elements horizontally. Job enrichment means adding motivators to the existing job. Both are mechanisms to relieve the job holders of the monotony of work. They serve as participative mechanisms as they offer freedom and scope to use their wisdom.

Form # 8. Suggestion Scheme:

Suggestions are invited from workers on the various aspects of work. Management reviews the suggestions made and put the constructive suggestions into action. Some companies share financial benefits accruing through good suggestions with the workers who contribute the suggestion. This mechanism kindles the creative or innovative urge in the workers. This is a win-win mechanism. The rewards awarded should be commensurate with the benefits derived from the suggestion.

Form # 9. Quality Circle (QC):

A Quality Circle (QC) consists of 7 to 10 people drawn from the same work area, who meet regularly to define, analyse and solve quality and related problems in their area. Membership is voluntary and meetings are held once a week for an hour. During the meetings, members are trained in problem-solving. This concept originated from Japan. In India, the experience of quality circle is a mixed one.

Form # 10. Empowered Team and Autonomous Teams:

Empowerment means transferring authority and responsibility to employees. When power is transferred to employees, they experience a sense of ownership and control over their job. At the same time, it engenders in them a sense of accountability.

  1. Empowered team sets its own target.
  2. Decides the method of work.


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