Assignment of Scir

8/6/2019 Assignment of Scir

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ASSIGNMENT

ON

INDUSTRIAL RELATIONS IN

WORLD IN FUTURE

Submitted by:

Rupika Goyal

Rishu Mangla

MBA(HR)-IV Sem



Industrial Relations

The relationship between Employer and employee or trade unions is called Industrial

Relation. Harmonious relationship is necessary for both employers and employees to

safeguard the interests of the both the parties of the production. In order to maintain good

relationship with the employees, the main functions of every organization should avoid

any dispute with them or settle it as early as possible so as to ensure industrial peace and

higher productivity. Personnel management is mainly concerned with the human relation

in industry because the main theme of personnel management is to get the work done by

the human power and it fails in its objectives if good industrial relation is maintained. In

other words good Industrial Relation means industrial peace which is necessary for better and higher productions.

Definition:-

i. Industrial Relation is that part of management which is concerned with the manpower

of the enterprise – whether machine operator, skilled worker or manager. BETHEL,

SMITH & GROUP

ii. Industrial Relation is a relation between employer and employees, employees and

employees and employees and trade unions. - Industrial disputes Act,1947

iii. While moving from jungle of the definitions, here, Industrial Relation is viewed as the

“process by which people and their organizations interact at the place of work to

establish the terms and conditions of employment.”

The Industrial Relation relations also called as labor - management, employee-employers

relations.

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What all does it Includes?

Industrial Relation encompasses all such factors that influence behavior of people at

work. A few such important factors are details below:

1. Institution: It includes government, employers, trade unions, unions

federations or associations, government bodies, labor courts, tribunals and other

organizations which have direct or indirect impact on the industrial relations systems.

2. Characters : It aims to study the role of workers unions and employers’

federations officials, shop stewards, industrial relations officers/ manager,

mediator/conciliators / arbitrator, judges of labor court, tribunal etc.

3. Methods : Focus on collective bargaining, workers’ participation in the

Industrial Relation schemes, discipline procedure, grievance re-dressal machinery,

dispute settlements machinery working of closed shops, union reorganization,

organizations of protests through methods like revisions of existing rules, regulations,

policies, procedures, hearing of labor courts, tribunals etc.

4. Contents : Includes matter pertaining to employment conditions like pay, hours

of works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals

retirements etc., laws relating to such activities, regulations governing labor welfare,

social security, industrial relations, issues concerning with workers’ participation in

management, collective bargaining, etc.

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CURRENT TRENDS

Industrial Relations currently is undergoing dramatic changes. With the changes in

markets and economy, the purview of Industrial Relations is also changing.

These changes have been enumerated in the following headings:

1. Globalization of the world

Globalization is a complex phenomenon that has had far-reaching effects. Not

surprisingly, therefore, the term “globalization” has acquired many emotive connotations

and become a hotly contested issue in current political discourse.

Globalisation has enhanced the importance of work, wages and working conditions

around the world but made these more difficult to regulate at the national level.

‘Increasing globalisation and international trade have made consideration of labour

market regulations and conditions key parameters in investment decisions’.

Renewed interest in the degree to which IR systems are converging or diverging within

industries and between countries.

2. Decentralization

• No single trend but as companies spin off smaller units, workers are at risk of losing

power and voice unless they can draw on local power resources.

• With the shift in level of coordination and bargaining from national/sectoral to

enterprise/plant level, trade unions’ bargaining power is shrinking. There is a gradual

movement from parity to disparity.

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• Industry associations are declining as individual firms take on more importance, as

new firms that choose not to join associations come into an industry, as new

technologies create new industry segments or break up old ones, such as the growth

of the information technology sector that cuts across traditional industry lines, and as

firms outsource and fragment their operations, and as small firms proliferate.

3. Deregulation

Pro-labour Pro investor Policies

World over, when the State assumed a welfare role and adopted pro-labour policies, trade

unions have grown in strength and power. When the State is neutral, trade union

movement gets stagnant. When the State adopts pro-investor policies, trade unions are

declining in power and influence, if not in number. In these circumstances, unless trade

unions forge broader and wider alliances with the society – consumers and community

and various civil society institutions, including non-governmental institutions – they find

their power base dwindling.

4. Changes in labour market

Labour Market Flexibility

Even within the organized sector, an increasing number of jobs are approximating the

character of these in the unorganized sector as a result of the increasing labour market

flexibility in the wake of globalization. A comprehensive survey of about 1300 firms

scattered over 10 States and nine important manufacturing industry groups, shows that

between 1991 and 1998, employment increased at the rate 2.84 per cent per annum

(Deshpande et al, 2004). Non-manual employment increased at 5 per cent per annum

whereas manual employment increased at 2.29 per cent. This increase is in total

employment was brought by increasing the share of non-permanent employees and

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increase in manual employment by increasing the share of women workers. Smaller firms

grew faster than bigger firms. Firms, which increased sales, increased manual

employment as did those which employed contract workers. Employers who increased

fixed capital per worker reduced manual employment. Employers increased employment

but only of one or other category of non-regular flexible workers. It was found that as a

whole over the 7 years of liberalization (between 1991 and 1998) dualism in the labour

market did increase. The share of permanent manual workers declined from close to 68

per cent in 1991 to 64 per cent in 1998. Not only did the share of non-permanent increase

but the share of casual in non-permanent increased even faster. It is the big firms that

resorted to the greater use of non-permanent workers. Holding all other factors constant,

firms employing 50-99 workers and those employing 500 or more workers, increased the

share of non-permanent workers significantly between 1991 and 1998. Also, firms

employing 500 workers or more increased the share of temporary workers. Casual

employment did not show an association with size of employment. Women workers

were mostly employed in large firms. Firms employing 1000 workers or more accounted

for more than 75 per cent of all women workers. Firms, which employ a higher share of

non-permanent, also employ a higher share of women. Firms employing 50-99 workers

and 500 and over report an increase in the share of female workers. From the above, one

should not hasten to conclude that there is no rigidity in the Indian labour market.Irrespective of its impact on employment, a degree of excessive or unwarranted

protection to labour may lead to inflexibility in labour adjustment required for

restructuring of enterprises in the interest of competitive efficiency. In the wake of

liberalization, this problem has been brought center stage and there has been frequent

demand by the industry and foreign investors to have some kind of ‘exit’ policy – the

right of hiring and firing. In this respect the provisions of the I.D. Act which lay down

conditions and procedures for retrenchment of workers have been widely criticized. It is

contended that the provisions are so restrictive that reduction in workforce or closures are

extremely difficult even if the employer is agreeable to pay the compensation as required

under the law. This is because under the law prior permission of the government is

required to retrench workers or effect closures in the case of enterprises employing more

than 100 workers and such permissions in the past were generally not granted by the

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Central and the State Governments. Of late, the scenario has changed in the wake of

globalisation. The Labour Ministry of the Central Government and the Labour

Departments of the State Governments are regularly conducting the hearing of

applications for lay-off, retrenchment and closure by inviting representatives of the

workers and employers. After following the principles of natural justice, orders are

issued on the basis of merits of each case taking due note of the long-term viability and

competitiveness of the enterprise. This has resulted in granting permission in most of the

cases where applications have been made to the appropriate government. Accordingly,

the existence of Chapter VB in the I.D. Act cannot be blamed for all the ills faced by

industrialists. In spite of these obstacles, many enterprises were able to adjust their

workforce by rationalization and technological changes, but the process has been tardy.

Several routes have been found out – illegal closures by not paying electricity bills, etc.

All these have only added to the problem of labour – they are neither paid their wages

nor their due compensation. This has also resulted into significant industrial sickness as

well as the prevalence of redundancies leading to their loss of competitiveness. Although,

unions have generally resisted any legislative or executive move to make closure and

retrenchment easier, in recent years unions at the enterprise level have generally been

found to be accepting the inevitability of adjustments in the workforce in the face of

globalization and industrial restructuring.

5. Changes in trade unions

Declining trade union density

In the traditional strongholds of trade union membership – government and public sector

– the workforce is declining due to non-filling of vacancies and the introduction of

voluntary/early separation schemes. New employment opportunities are shrinking in

these sectors. In the private sector, particularly the service and the soft ware sectors, the

new, young and female workers are generally less eager to join the unions. Trade unions

are still to conceive and implement meaningful strategies to make unionism relevant and

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appealing to these new and diverse workgroups. It is mainly in the informal economy,

thanks to the initiatives that the government is willing to consider in the realm of social

security benefits, that there is a prospect of rise in trade union membership Here too,

trade unions are finding an adversary in someone who is otherwise considered an ally:

the non-governmental organizations operating under the guise of or as virtual trade

unions. The sickness, closure and non-viability of industries have forced the trade unions

to re-orient their role to ensure survival of the industry. The workers appear to be willing

to overlook their grievances as they are more concerned with retention of employment.

Hence, they are not reporting grievances to unions. The reduction in employment has led

to reduction in union membership making unions vulnerable. Issues such as survival of

industry, maintaining competitive edge and productivity dominate collective bargaining.

There appears to be a growing realization of the futility of a confrontationist attitude in

the unions. The threat of privatization and withdrawal of budgetary support looming

large over the Ordnance Factories Board, with its nearly 40 factories manufacturing

mainly defence equipment and ammunition, adopted strategies such as diversification of

production for civilian market, marketing these products in domestic and international

markets, stopping all recruitments, cutting over-time payment bills and going for I.S.O.

certification. The federations/unions operating in Ordnance Factories have not opposed

these strategies. More and more stress is given on R&D.

Collective bargaining

With the shift in level of coordination and bargaining from national/ sectoral to

enterprise/plant level, trade unions’ bargaining power is shrinking. Also, there is a

gradual movement from parity to disparity. Since 1992 to date, over 100 of the 240

central public sector corporations did not have wage revision because the government

announced that companies have to mobilize resources to pay for workers wages and thatthe government would no longer subsidize wage increases. Also, Instead of pressing for

higher wages and improved benefits, trade unions are pressing for maintenance of

existing benefits and protection and claims over non-payment of agreed wages and

benefits.

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6. Employer militancy

Worker militancy replaced by Employer

Militancy?

Economic reforms introduced in India in 1991 signify India’s quest for global economic

integration. If during the decade 1981-90, India lost 402.1 million man-days due to

industrial conflict, in the subsequent decade, 1991-2000, the number has come down to a

half: 210 million. This does not mean that the industrial relations situation has actually or

substantially improved.

Workers are reluctant to go on strike because of fear of job insecurity, concern about the

futility of strikes and recognition of the imperative need to consider the survival of

enterprise as a prerequisite for job and income security. Further, trade unions are hesitant

in giving a call for a strike because it may lead to loss of jobs or closure of the unit. What

is even more striking is that over 60 per cent of the man-days lost in the post-reform

period was due to lockouts and less than 40 per cent due to strikes. It must be added that

quite a few lockouts may have been preceded by strikes. One measure of trade unions

becoming more defensive than being on a more offensive and collision course with

employers is seen from the shift in their actions from strikes to litigation. Also, instead of

pressing for higher wages and improved benefits, trade unions are pressing for

maintenance of existing benefits and protection and claims over non-payment of agreed

wages and benefits.

7. Settlement Machinery

Other methods of dispute resolution

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The conciliators both at the central and at the State level have started appreciating the

impact of globalization on industrial relations and labour market institutions in the new

perspective and are very sympathetic to the needs of the employer who has to face

competition around the globe for their products. Accordingly, they have to make changes

in the product design which entail changes in the working conditions. The workers have

to retrain and improve their skills. Even, multi-skilling has become a necessity. Workers

who cannot adapt themselves to these new demands have to be given the option of going

home through voluntary retirement schemes. Accordingly, the conciliation machinery is

not compelling the employers to retain the existing work force under all circumstances.

Interest disputes resolution through arbitration and wage boards are moving into the

museum of history. The presiding officers in the arena of industrial adjudication have

become more sympathetic to the needs of the managements in the globalized world. The

appropriate Governments are generally permitting lay off, retrenchments and closures

even though, they were adamantly, declining the same in the 70s and 80s. Even the apex

court has become very strict about indiscipline and lethargy of the workers in the

industry. Instances have been quoted earlier in this study. As regards the changes in the

industrial relations machinery, it is felt that inspection of establishments cannot be done

away with. However, the process of inspection can be used to create awareness and to

educate the employers and workers with regard to benefits of timely and genuinecompliance. The role of inspector can also be modified so that he acts as a facilitator

helping employers in complying with the provisions of the laws. Selective and

purposeful inspections have to replace routine statistics oriented inspections. Similarly,

the conciliation officers need to be well aware of the new challenges posed by

globalization before the employers and employees and equip themselves with necessary

knowledge, attitude and skills to handle industrial disputes whose nature and dimensions

will be very different from industrial disputes hitherto handled.

The process of globalisation has forced trade unions to be defensive and maintain a low

profile. Therefore, there is a need for the industrial relations machinery to be more

proactive and vigilant so that undercurrents of discontentment and grievances are

detected in time as unions may not report the grievance in changed environment.

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8. Role of regulatory bodies

Static Labour Policy but changed mindset of

the judiciary, legislature and the executive.

A remarkable feature of industrial relations in the wake of globalization is the gradualwithdrawal of the State in their traditional role of actively supporting the organized

labour. Though, Labour law reforms will be explained later in greater detail are not

taking place both the labour administration and adjudication machinery have been more

willing than before to entertain the concerns of industry. Some State governments –

notably Rajasthan, Andhra Pradesh, Maharashtra, Gujarat and Uttar Pradesh, for

instance, - have taken the initiative to make small changes in labour laws and a major

effort to drastically simplify the returns to be submitted by employers and ease the

pressure of labour inspections.

Also, Transnational Bodies like WTO, ILO and World Bank are growing in their

significance. Because of their increasing importance, employer bodies have also come

up, to ease lobbying and interactions with these bodies.

9. Technology and Knowledge

Management

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This is a century of knowledge management and technology. To my mind, better

understanding, negotiation in good faith, productivity related wage increase, fixed team

appointments, proactive approach of workers and unions, better work envoirnment and

work culture would be new dimensions of good IR in 21 st Century.

Before we further move forward, one has to remember that the coming time will mainly

centre around customer, cost, competition and care for MAN, Therefore, we may

anticipate what sort of spectrum may emerge in future for Indian industries in the

changing environment. We should remember that protected economy is the song of past

days and free economy with divergent forces has started making its feel at this stage. And

as consequence of it, certain things are likely to happen and let us glance at them.

Unemployment which is acute today will further be aggravated leading to a large

unskilled population who can not be employed in industries which may need more and

more qualified, skilled and technical hands. Automation, mechanization, robotization

etc., will greatly reduce demand for unskilled while creating short supply of trained and

experienced hands. MNCs and big business houses and corporate bodies will compete

acquiring the cream of the country while a large number will be flying out of the country

for better career opportunities abroad. Downsizing the industries and gradual reduction in

industrial employment even seen in the recent past can lead to grave unemployment problem and labour unrest adversely affecting industrial growth and economy of the

country. But worker profile will be different who will require all care and attention to

work in competitive and challenging environment.

10. Environmental factors

Various other Environmental factors are changing leading towards a changed IndustrialRelations Approach. These are:

• Free Economy with divergent forces

• World Political Events

• Global Trends- Recession/ Boom

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• Focus on Customer, Cost, Competition

• CSR, Ethics and Corporate Governance

FUTURE OF INDUSTRIAL RELATIONS

The Internationalisation Of Industrial Relations

• Globalisation has provided an opportunity to reassert the relevance of IR in relation

to the international division of labour and the impact of these changes on the nature

of work and organisations.

• Limitations on the ability of nation states to control flows of capital across their

borders has had implications for the regulation of work and employment, particularly

in multinational enterprises.

•

The growing significance of international organisations such as the ILO, WTO,World Bank etc in relation to the conditions under which work is performed.

• Renewed interest in the degree to which IR systems are converging or diverging

within industries and between countries.

Knowledge Management And Human

Capital

We are fastly travelling in 21st Century - A century of knowledge menagement and

technology. Today industrial relations theory can be better reflected as the networked,

knowledge based, economy. This is the overriding challenge all industrial relations actors

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and institutions face. Knowledge, information, and human capital could serve as both the

key sources of economic growth and competitive advantage and the new sources of

power that will allow workers and their families to prosper in the 21st century economy.

Both management and workers will use the tool of IT to strengthen their bargaining

power.

Also worker profile will be different who will require all care and attention to work in

competitive and challenging environment.

Internal Leadership

External leadership has largely been replaced in many developed and developing

countries with the advent of liberalised and enlightened outlook on the part of employers

and a sense of commitment and concern in the employees. This will brighten the

prospects of nurturing internal leadership among the employees. The frequent

confrontations resulting in agitations, stoppages of work and closures of Industrial

establishments will become a nightmare for all those who are concerned with

productivity improvements and organisational excellence.

Employee Synergy

The present dimensions of different cadres of employees as workers and managers will

gradually disminish. The growing awareness of roles and responsibilities and the

increasing levels of education will convert the less informed workers into knowledge

workers who in turn will comfortably compete with their more privileged superiors-the

Managers. The distinction thus will disappear, so traditional approach of maintaining IR

will not work. HR Manager has to be fully prepared, competent, transparent and logical

while dealing with workforce.

To my mind, better understanding, negotiation in good faith, productivity related wage

increase, fixed team appointments, proactive approach of workers and unions, better

work envoirnment and work culture would be new dimensions of good IR in 21 st

Century.

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Growth Of Non-Standard Workers

There is growth of various types of non-standard work arrangements and also changes in

the demographics of the labor force. Adapting industrial relations institutions to

accommodate the different types of non-standard work is a challenge facing unions and

labor policy regimes in all countries around the world. Making them a priority will open

up attractive alternatives for unions to reach women and to make gender equality at work

and at home a central issue on the agenda of unions in the future.

Some of the implications of the increased role of women in the workforce and the

growing role of part time work can be seen by comparing the responses of Japanese

(Rengo) and German (DGB) union federations. In both countries, the traditional view of

unions has been to focus on and promote full time, standard work and to see the growth

of part time work as a threat that might erode their work standards and job opportunities.

However, as more women move into the paid labor force and take up part time jobs, this

union position becomes untenable. In each country around the world, unions are trying to

come to grips with this phenomenon. Doing so first requires a strategic shift in policy

from one of opposing part time work to one of recognizing that flexibility in working

hours can provide opportunities for men and women if, as the German unions put it,

“worker sovereignty” or choice can be protected and the standards of part time work can

be regulated appropriately through a combination of legislation and collective

representation.

In both Japan and Germany these structural changes start with moving consideration of

these issues from the backwaters of “women’s departments” in union federations to

mainstream priorities. In Germany this movement was aided by the emphasis given these

issues in the European Community’s working time legislation.

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Towards a New Model of Unionisation

Traditional union organizing and service models are not working and not likely to work.

Unions are declining around the world The model sees unions as decoupling

membership from collective bargaining by offering individual memberships that continue

as workers move across employers and throughout their careers—a life long membership

concept. Unions would provide a range of services and benefits including job mobility

assistance and discounted prices for a variety of insurance, leisure activities, and other

services. Unions would rely heavily on the use of information and communications

technologies to interact with and serve their members. Collective bargaining would

continue to play an important role but not be the sole reason for joining a union or for

maintaining membership or a requirement for union organizing.

The key is to eliminate the free rider problem associated with collective bargaining—one

can get the benefits of unionization without joining the union and to make the benefits

and services provided substantial.

One of the research indicated that young activists generally share the same commitment

to social justice, fairness, and solidarity as their elder counterparts. Young activists may

be more accepting of partnerships with their employer but they clearly do not lack acommitment to traditional union values. They join unions more for internal reasons of

values, family background an ideology, less for defensive reasons or because of some

external event. Thus, the basis for building a new labor movement may still exist among

young workers and social activists. The key is to provide them with the opportunity to act

on their values.

Social Capital Unionism

In this type, the workers interact and build relationships with each other, share

information on and off the job, and build relationships in civil society to further enhance

the power of the union through its network relationships.

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Alternative Structures for Voice and

Representation

The recognition that unions are in decline has turned attention to the role of alternative

forms of representation, including works councils and other forms of voice, participation,

and representation. By comparing the effects of union membership and nonunion works

councils, it was found that unions outperform non union works councils on distributive

issues while nonunion works councils do a better job on cooperative or integrative

issues. Non- union forms of representation are not complete substitutes for unionism.

Clearly, the labor organizations of the future cannot ignore workers’ needs for the

independence and sources of power to assert their interests effectively where theyconflict with employer interests. The challenge lies in being effective on both sets of

issues.

New Actors and the Emerging Dynamics

Changes in the environmental contexts in which work takes place and employment

relationships are formed are placing great pressures on employers, unions, and

government to adapt and update their practices and policies. These changes pose several

additional questions: Can the actors regain control over their destiny and over the destiny

or performance of their industrial relations systems in light of changes in these external

contexts? Are new actors and/or new structures emerging that require reconceptualizing

our theories of industrial relations?

So, we must expand the definition of the key “actors” in industrial relations systems to

include institutional forms that are emerging at two levels. At the community level NGOs

in developing countries and other civil society groups (women and family advocates,

ethnic groups, religious groups, labor market intermediaries such as temporary help and

placement agencies, etc.) are playing more active roles in labor markets and industrial

relations. At the international level, efforts to build institutions that are able to engage the

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key international agencies that set policies and allocate financial resources are just

beginning to emerge out of the conflicts over globalization that erupted in recent years.

Both of these need greater analysis and incorporation into our models of industrial

relations in the 21st century.

Also, Consumers and community have begun to assert themselves and take a significant

role and due to this the rights of workers/unions and managers/employers are taking a

back seat.

Also, the court rulings are borne by the realization that wider public good matters most in

preference to the narrow self interest of a minority.

Also, Social forces such as environmental groups, students, living wage advocates, and

NGOs are also growing and reasserting their role as a dynamic force for advancing

workers’ interests and labor standards.

Future role of trade unions in India:

Organizing the unorganized

The future role of the trade union movement is linked with a broader concern for

ensuring the social cohesion of working people in a large and diverse country. In this

final section, we examine union strategies in the private corporate sector, in public sector

enterprises, and in the informal sector. It is imperative for the trade union movement to

concentrate on organizing the unorganized, so as to create secure incomes and safe

working conditions for those with irregular and precarious jobs.

The private corporate sector

On average, private enterprises employ around 30 per cent of all formal sector workers in

India; in manufacturing and trade, this proportion is around 70 per cent, whereas in

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transport, electricity and construction the figure is less than 5 per cent. In successful

private companies enterprise-based trade unions (that may or may not be politically

affiliated) will have to accept that their pay is partly (if not largely) determined by

productivity. Rather than blind resistance to this kind of pay structure, a cooperative

strategy may pay greater dividends in terms of gain sharing at enterprise level. Unions

will have to u se their “collective voice” effectively in collective bargaining when

incentive structures are proposed and negotiated. While the independent unions will find

this strategy quite natural, those which are affiliated to the centralized federations may

find it difficult. In either case, the extent to which a union is willing to take a risk will

partly determine the composition of pay (performance-based “risk” pay and “steady”

pay).

While the majority of contracts in this sector are (and probably always will be)

negotiated at enterprise- or plant-level, unions in some organizations, possibly in the

multinationals, could concentrate on attaining firm-wide agreements in the face of

considerable management opposition. Firm-wide agreements will strengthen union power

at the corporate-level, and to achieve this, unions may have to trade off some plant-level

gains. An example of this situation is being played out at Bata India. Management

recognizes the enterprise unions in its various plants a cross the country, but the loosely

united All India Bata Employees Federation is not recognized. It appears thatmanagement is willing to talk to the federation if it agrees to restructuring plans at the

plant in Faridabad. If the federation agrees to these plans in exchange for management

recognition, this would clearly reduce union influence at the plant. In the older industries

in the private sector, where industry-wide bargaining is the dominant structure and where

inter-fir m differentiation has grown considerably since liberalization, unions and

employers are finding it difficult to reach industry-level agreements. Unions will

continue to face obstacles to industry-wide solidarity in this sector.

What have been the effects of economic liberalization on the connections between unions

and political parties, and what has this meant for the private corporate sector? To the

extent that most of the centralized trade unions continue to oppose the basic implications

of economic liberalization, there has been a surprising reconciliation of unions affiliated

to opposing political parties on a range of issues at both regional and national level.

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There has been a gap between the preoccupations of political parties and the macro-

objectives of trade unions since the reforms. This has created a dilemma for most of the

unions in this sector: while the loosening of ties with the parent body inevitably leads to

greater autonomy in decentralized decision-making, it also means a lessening of

centralized lobbying power. Market forces will increasingly dominate union strategies in

this sector.

Public sector enterprises

On average, the public sector employs around 70 per cent of all formal sector workers in

India; in transport, mining, construction, electricity and services this proportion is high

(>80 per cent), but it is considerably lower in agriculture (40 per cent), manufacturing

(<40 per cent), and trade (<35 per cent) (Datta Chaudhuri, 1996). In non-viable public

sector enterprises that are ready for closure, most of which are in the East, the situation

continues to be very grim. Workers have not been paid for several months and the

endless talk of revival now sounds hollow. The closure of these firms seems to be the

only solution and unions can do no more than see that lay-offs are implemented fairly

and as generously as possible. In several state-owned enterprises and organizations

unions have accepted that privatization is the only way of saving the unit, and that

informed negotiation is required. As a result of increased competition from both domestic

and international producers, the output of public enterprises and services has improved

substantially. Nowhere is this more true than in the state-run airlines. But unions in the

public sector, especially those in services such as medicine, education, the police and

municipal workers, can substantially increase their credibility by agreeing to enforceable

accountability procedures. This would mean internal monitoring, which the unions are

reluctant to accept.Although the government has indicated a preference for decentralization, the centralized

bargaining structures have not yet been dismantled. Unions could campaign for a

restructured central system that allows for greater local autonomy and minimizes

bureaucratic inflexibilities. For the public sector to deliver long-run productivity

improvements in the post-liberalization period,

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unions will have to partly align their objectives with those of the end-user the average

voter/consumer who has become an important voice in the labour relations system.

The informal sector

In terms of union density, India fares rather badly compared to other large developing

countries. According to the ILO World Labour Report 1997-98, union membership as a

percentage of nonagricultural labour dropped from 6.6 per cent in 1985 to 5.5 per cent in

1995 (the corresponding figure in 1995 for Argentina was 23.4 per cent, Brazil 32.1 per

cent and Mexico 31 per cent). Union membership as a percentage of formal sector

workers in India declined from 26.5 per cent to 22.8 per cent between 1985 and 1995 (the

corresponding figures in 1995 were Argentina 65.6 per cent, Brazil 66 per cent, Mexico

72.9 per cent). If the figures are derived only from registered unions that submit returns,

it is possible that they may somewhat underestimate union density in India. According to

the above source, less than 2 per cent of workers in the formal and informal sectors in

India are covered by collective bargaining agreements. Clearly, a large proportion of

workers (certainly those in the formal sector) fall within the ambit of labour legislation,

even though they are not covered by a collective agreement. Nevertheless, it is apparent

that considerable organization of workers remains to be undertaken in the Indian

economy. If one were to assume that the formal sector corresponds with the unionized

sector (in reality, the unionized sector is a subset of the formal sector ), then the

following figures give an idea of the extent to which unions in future can organize

workers in the various sectors. In total, less than 10 per cent of all workers a re in the

formal sector. The proportion of workers in this sector by industry groups is: mining and

quarrying (56.9 per cent), manufacturing (19 per cent), construction (17.5 per cent), trade

(2.1 per cent), transport (38.7 per cent), and services (38.7 per cent). Clearly, there isenormous potential for organizing workers in construction, manufacturing and trade. In

addition, detailed surveys in several industries have found that the existing unions do not

sufficiently represent the interests of casual and temporary workers. Finally, according to

National Sample Survey Organization data, there is a “high incidence of women’s

involvement in unorganized sector activities, ranging anywhere between 20 to 25 per

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cent of total employment in urban areas and anywhere between 30 to 40 per cent of total

employment in rural area s figures which far outweigh women’s recorded involvement in

productive activities from Census sources” In sharp contrast to the formal sector, “the

unorganized sector has little by way of protective legislation or union representation”

Conclusions

• IR needs to retain its long-established focus on bargaining and other forms of

interaction between the established social partners and the state but it should also

embrace new actors and issues central to the world of work.

• IR should combine micro-level perspectives on workplace issues, individuals and

groups at work with broader macro-level issues concerning the economy, society andinstitutions.

• IR should strengthen its long-held concerns with the balance between efficiency and

equity but seek to emphasize the need for integration between these often competing

interests.

• Finally, IR needs to take an international and comparative perspective without

diminishing the importance of the regional and local dimensions of work and

employment relations.

Documents

Assignment of Scir