MODULE - I

DEFINING IR

• Industrial relations encompasses a set of phenomena, both inside and outside the workplace, concerned with determining and regulating employment relationship

• Relationship between management and employees or among employees and their

organization that characterize and grow out of employment.

Chapter 1

Theories and Concepts Used to Analyse Industrial Relations

Approaches Used to Define Industrial Relations (1) (1) Institutional-based definitions:

industrial relations are the sum of institutional processes that establish and administer the rules regulating workplace relations

 (2) Social Psychology-based definitions:

industrial relations are the sum of social psychological interactions between individuals

 (3) Class-based definitions:

industrial relations are the sum of institutions, interactions and processes that are a product of wider social and economic influences, in particular the class divisions of contemporary capitalism

© These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context 2E is a prescribed student textbook.

Approaches Used to Define Industrial Relations (2)

Ddefinitions that seek to include all matters contained in the first three definitions within other terms:

 (4) Human Resource Management:

contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as management of conflict arising out of the personal interactions of individuals in the workplace, are part of labour management functions ( i.e. recruitment, selection, training, development, performance management, and so on)

(5) Employment Relations (or Employee Relations):contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as the management of conflict arising out of the personal interactions of individuals in the workplace, are part of workplace relations, together with the normal functions of Human Resource Management.

OBJECTIVES OF IR

• To enhance economic status of worker• To avoid industrial conflicts and their consequences• To extend and maintain industrial democracy• To provide an opportunity to the worker to have a say in the

management decision making• To regulate production by minimizing conflicts• To provide forum to the workers to solve their problems through

mutual negotiations and consultations with management • To encourage and develop trade union in order to develop workers

collective strength

NATURE OF IR• IR arise out of employer employee relations

• IR is a web of rules: formed by the interaction of Govt, industry & labor

• IR is multi dimensional: influenced by complex set of institutional. economic & technological factors

• IR is dynamic and changing: keep pace with employee expectations, trade unions, employer associations and other economic and social institutions of society

• IR is characterized by forces of conflict and compromise. Individual differences and disagreements resolved through constructive means.

• Govt influences and shapes IR: with its laws, rules, agreements through executive and judicial machinery

• Scope of IR is very wide as it covers grievances, disciplinary measures ethics, standing orders, collective bargaining, participatory schemes and dispute settlement mechanism etc

• Interactive and consultative in nature: in resolving conflict,controversies and disputes between labor and management.

SCOPE OF IR

• Management – Union relationship• Employer – Employee relationship• Relationship amongst various groups of employees• Effect of extraneous factors like state, socio-political- economic

factors on workplace relationships

Pluralistic

Co-operation

Conflict

Authoritarian

Paternalism

Unitary

Humanresource

management

Systems

Evolution

Revolution

Marxist

Control ofthe labourprocess

Input Conversion Output

Conflict(differences)

Institutionsand

processes

Regulation(rules)

Approaches to organisations

Approaches to industrial relations

Social action

Wider approaches to industrial relations

Approaches to industrial relations

Labour market Comparative

UNITARY APPROACH

• IR is grounded in mutual cooperation, individual treatment, team work and shared goals.

• Work place conflict is seen as temporary aberration, resulting from poor management

• Employees who do not mix well with organization culture• Unions cooperate with the management• Management’s right to manage is accepted because there is no ‘we

they” feeling• Underlying assumption is that everyone benefits when the focus is

on common interest and promotion of harmony• Based on reactive strategy. Direct negotiation with employees• Participation of Govt, tribunals and unions are not sought or are

seen as being necessary for achieving harmonious employee relation

PLURALISM(CONFLICT APPROACH )

• Pluralism is belief in the existence of more than one ruling principle, giving rise to a conflict of interests.

• The pluralist approach to IR accepts conflict between management and workers as inevitable but containable through various institutional arrangements ( like collective bargaining, conciliation and arbitration etc) and is in fact considered essential for innovation and growth.

• It perceives organizations as coalitions of competing interests , where the management’s role is to mediate among the different interest groups.

• It perceives trade unions as legitimate representative of employee interests

• It also perceives stability in IR as the product of concessions and compromises between management and unions.

• Employees join unions to protect their interests and influence decision making by the management. Unions thus balance the power between management and employees. In pluralistic approach a strong unions is not only desirable but necessary

MARXIST APPROACH• Marxists like pluralists also regard conflict as inevitable but see it as a

product of capitalistic society where as pluralist believe that the conflict is inevitable in all organizations

• For Marxists IR has wider meaning. For them conflict arises not because of rift between management and workers but because of the division in the society between those who own resources and those who have only labor to offer.

• Marxist approach thus focuses on the type of society in which an organization functions.

• Industrial conflict is thus equated with political and social unrest

• Trade Unions are seen both as labor reaction to exploitation by capitalists, as-well-as a weapon to bring about a revolutionary social change. Wage related disputes as secondary

• For them all strikes are political and they regard state intervention ( via legislations and creation of Industrial Tribunals ) as supporting management’s interests, rather than ensuring a balance between the competing groups.

Systems approach

• IR - a social sub-system within the econ. & political systems

• Components– actors– contexts (influences & constraints on decisions & action

e.g. market, technology, demography, industrial structure)– ideology - beliefs affecting actor views - shared or in

conflict– rules - regulatory elements i.e. the terms & nature of the

employment relationship developed by IR processes

OTHER APPROACHES OF INDUSTRIAL RELATIONS

( DIFFERENT SCHOOLS OF THOUGHT )

PSYCHOLOGICAL APPROACH• Differences in the perceptions of labor and management wrt factors influencing their

relations i.e. wages. Benefits, services and working conditions etc• Dissatisfaction compels workers to turn aggressive and resort to strike, lockouts and

gherao etc.

SOCIOLOGICAL APPROACH• Sociological factors such as value system, customs and traditions etyc affect the relations

between labor and management

HUMAN RELATIONS APPROACH• Human behavior is influenced by feelings, sentiments and attitudes. As per this approach

humans are motivated by variety of social and psychological factors like economic and non-economic awards to be used.

GIRI APPROACH• Collective bargaining and joint negotiations be used to settle disputes between labor and

management. Outside interference to be avoided.

GANDHIAN APPROACH• worker's right to strike but cautioned that this right be exercised in just cause and in a

peaceful and non-violent manner for minimum wages etc like ‘satyagrah’- Non violent non- cooperation

ROLES OF WORKERS, MANAGEMENT & GOVERNMENT

PARTIES TO IR

EMPLOYEES

EMPLOYEEASSOCIATIONS

GOVERNMENT

EMPLOYERS

EMPLOYERASSOCIATION

COURTS &

TRIBUNALS

EMPLOYER-EMPLOYEERELATIONS

ROLE OF WORKERSWORKERS and their ORGANIZATIONS( Trade Unions or Associations )

• Trade unions have a protecting role of safeguarding workers interests,

• Regulating function of ensuring implementation of statutes / Acts

• Ensuring non-violation of worker’s rights

• Trade Union Act provides Status and Authority for the power vested in them

• This power is used for negotiating Wage Interests, better benefits and service conditions, concessions, more amenities and welfare schemes

• Structure of Workers’ organization or Trade unions differs from country to country

ROLE OF MANAGEMENTAn organization is represented through officials designated in the

organization structure for coordination of activities relating to:

• Administering employee benefits• Regulating terms and condition of employment• Providing welfare and social security benefits• Coordination is done through graded hierarchical and formal

communication channels of orders and directives• Style and manner in which employer organizations get work and

regulate the terms and conditions of employment affects the industrial relations of the unit.

ROLE OF GOVERNMENT

• Govt or state machinery regulates the relationship between workers’ organizations and employers’ organizations.

• It does it through :

- Statutes and legislations,

- The judiciary- labor courts industrial tribunals

- An executive machinery- that lays down rules, procedures and

gives awards and monitors them

Employment Relations

Dunlop’s model

FACTORS AFFECTING EMPLOYEE RELATIONSINTERNAL FACTORS:

• Attitudes of management to employees and unions

• Attitudes of employees to management and unions

• Attitudes of unions to unions to management and employees

• Present and likely future strength of unions

• Effective and agreed procedures for discussing and resolving grievances or handling disputes within the company

• Inter union rivalries in case of more than one union

• Effectiveness and capability of managers and supervisors in resolving grievances and handling disputes.

• Company's strategy wrt expansion, diversification, contraction , stabilization, turnaround and stagnation etc

• Quality of work life ( QWL), growth and developmental opportunities

• Degree of Autonomy and Empowerment given to employees

;

FACTORS AFFECTING EMPLOYEE RELATIONS

• EXTERNAL FACTORS:

• Militancy of unions- nationally or locally• Authority and effectiveness of the employer’s family• The extend to which bargaining is carried out at national, local or

plant level• The effectiveness of any national or local procedure agreements

that may exist• Employment situation nationally or locally• Legal framework within which IR exists

SOCIAL SECURITY( IMPACT ON EMPLOYEE RELATIONS )

• Social security is one of the key components of labor welfare• Labor welfare refers to all such services, amenities and facilities to

the employees that improve their working conditions as-well-as their standard of living

• Social security benefits provided by an organizations should protect not only their employees but also their family members including financial security and health care etc

• Social security envisages that the employee shall be protected against all types of social risks that may cause undue hardship to them in fulfilling their basic needs.

• Accidents, job losses, retirement, sickness, death while on duty- these are realities of working life and leave a person and his

dependents vulnerable• Social security is an attempt by the employer and the state io

institute measures that mitigate such social risks

MAJOR LEGISLATIONS

• India being a welfare state has taken up itself the responsibility of extending various benefits of social security and social assistance to its citizens.

• Although the constitution of india is yet to recognize social security as a fundamental right, it does require state to promote the welfare of the people by providing social, economic and political justice

• Constitution requires companies to make effective provisions for making effective provisions for securing right to work, to educate and public assistance in case of unemployment, old age, sickness and disablement. Securing just and humane conditions of work. Raise level of nutrition and standard of living, improvement of public health etc

• A social security division has been set up under the ministrybof labor and employment.

• In the context of labor , social security aims at reducing risks against

loss of earnings or earning capacity due to old age,illness or work-related injuries.

Social security to the workers is provided through 5 major Acts:

1. The Employees State Insurance act, 1948

2. Employees’ provident Fund and Miscellaneous provisions Act

3. The Worker’s Compensation Act

4. The Maternity Benefit Act

5. The payment of Gratuity Act• In addition there are large number of welfare funds also for some

specific segments• Major thrust of social security relating to labor is on:

a) Provisions relating to medical facilities, compensation benefits

and insurance coverage incase if accidents, incapacity, illness

etc..

b) Provisions relating to provident fund and gratuity

MODULE II

TRADE UNIONS

&

INDUSTRIAL DISPUTES

What is a Trade Union?

• Definition: An organization of workers or employees formed mainly to

_ Negotiate with the employers on various

employment related issues– Improve the terms and conditions at their workplace– Enhance their status in society

• In most countries, there are laws governing the formation, membership and administration of trade unions.

ORIGIN & GROWTH OF TRADE UNION MOVEMENT

• Industrialization brought about new economic and social order in societies. TU emerged as a result of industrialization in new social order

• First workers’ union in India under the leadership of Mr Lokhande was developed in 1890

• Beginning of labor movement in the modern sense started after the outbreak of World War I

• Economic. Political and social conditions influenced the growth of trade union movement in India.

• Establishment of ILO helped the formation of TUs in the country

• In 1920 AITUC( All India Trade Union Congress) was formed- the 1st All India trade union

• World War II brought splits in AITUC. Efforts of Indian National Congress resulted in the formation of INTUC( Indian National Trade Union Congress)

• Socialists separated from AITUC formed HMS( Hind Mazdoor Sabha) in 1948

• Some other unions were also formed. They were BMS ( Bhartiya Majdoor Sangh) in1955, HMP( Hind Majdoor Panchayat) in 1965, CITU( Centre of Indian Trade Union ) in 1970

PRINCIPLE OF TRADE UNION

1. UNITY: Unity is strength

2. EQUALITY: Workers must not be discriminated wrt caste, creed, sex etc.

Each worker should get equal pay for equal work

3. SECURITY: Security of their employment and their families must be safeguarded

Objectives of a Trade Union

1. Collective bargaining – Represent members to negotiate with

employers, for better wages and conditions of employment

2. Safeguard jobs– Protect jobs of members

3. Cooperate with employers– For the benefits of members, resolve

disputes in a mutually acceptable manner

Objectives of a Trade Union

4. Political activities - Support pro-union political parties

5. Social activities - Support members with recreation

facilities and benefits for unemployment, illness, retirement, death

Types of Unions

1. Craft union– Same craft or occupation

2. General union– For unskilled workers

3. Staff union– Non-manual workers

Types of Unions

4. Industry union– Same industry, regardless of skills,

occupation or job

5. House union (company or enterprise union)– All members are from the same

company regardless of occupation or job

Why Workers Join Unions

1. Higher wages and better working conditions– Collective bargaining with employer

2. Job security– More secured with collective agreement

3. Social need – Meet co-workers from other departments or

companies

Why Workers Join Unions

4. Upgrading of skills – Attend training courses organized by

union

5. Peer pressure – Colleagues are members

6. Self-fulfillment – Serve other members

OBJECTIVES/IMPORTANCE OF TRADE UNIONS• Wages & salaries Policy matter but differences in implementation, so comes the role of trade union

• Working conditions safeguarding workers health: Lighting & ventilation, sanitation, rest rooms, safety

equipments ( hazards free atmosphere , drinking water, refreshments, working hours, leave & rest, holidays with pay, job satisfaction, social security benefits and other welfare measures

• Discipline Protect workers from victimization by management- transfers, suspensions, dismissals etc

• Personal policies Fighting against improper implementation of personnel policies wrt

recruitment, selection, promotion, transfer, training etc..• Welfare Solving difficulties of workers through collective bargaining wrt sanitation, hospitals,

quarters, schools, colleges and other basic amenities

• Employer- employee relations Bureaucratic attitude and unilateral thinking of mgmt may lead to conflicts

Trade unions go for constant negotiations for industrial democracy and peace.• Negotiating machinery Based on ‘give and take principle’, negotiations continue till parties reach an agreement. Protect interests of workers through collective bargainINg

• Safeguarding organizational health Methods evolved for grievance redressal, techniques adopted to reduce absenteeism and labor turnover. upgrading skills- attend training courses organized by unions

ACTIVITIES OF TRADE UNIONECONOMIC: Improved economic status, shorter working day, improvement in

living and working conditions, better health & safety standards, upgrading welfare facilities, reducing inequalities- both internally & externally

POLITICAL: Seeking / obtaining political power through political affiliations, lobbying activities to influence the cause of labor and legislations, participating & representing workers on bipartite forums,

developing revolutionary ideologies among workers, protesting against Govt. decisions

SOCIAL: Initiating & developing workers’ education system, organizing welfare & recreational facilities, providing monitory and other help during period of strike and economic distress, running cooperative welfare schemes and societies, hosing needs/ community development, organizing cultural functions & social welfare programmes

NATIONAL / INTERNATIONAL LEVEL: Representing workers at the national level on advisory committees, associating with national federations for unity & solidarity, Raising funds in case of national / International calamities or tragedies

FEATURES OF AN EFFECTIVE TRADE UNION

• Internally democratic• Have a strong leadership• Exhibit a responsibility towards their worker

members• Committed to promote industrial peace and

harmony• Inclined towards collective bargaining that is

collaborative and not competitrive• Possess financial security• Adaptable to change

Industrial Dispute and individual dispute

• Industrial dispute means any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with employment or non-employment or the terms of employment .The dispute has to be between plurality of workman and employer

• Individual workman cannot raise an industrial dispute

Individual dispute deemed as industrial dispute

• 1965 amendment to I.D ACT and insertion of 2A.• Where any employer discharges, dismisses,

retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer…….shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.

• This definition is not applicable to disputes short of termination

FORMS OF UNREST/DISPUTES

STRIKES: A strike is spontaneous and concerted refusal of work and withdrawal of labor from production temporarily. It is a collective stoppage of work for pressurizing their employers to accept certain demands.

TYPES OF STRIKES:

SYMPATHETIC STRIKE: To show sympathy with workers in other industriesGENERAL STRIKE: Strike by all or most of the unions in an industry or a regionUNOFFICIAL STRIKE: Strike undertaken without the consent of the unionsSECTIONAL STRIKE: Refusal of a section of a given class of workers to perfor their normal

dutiesBUMPER STRIKES: to paralyze the industry firm by firm SIT DOWN /TOOL DOWN/PEN DOWN: Strike when unions plan strike and workers cease to

perform but do not leave the place of work: SLOW DOWN STRIKE: Go-slow tactic, workers do not stop working but dot perform at their

normal paceLIGHTNING STRIKE: Workers may go on strike without notice or at very short notice with an

element of surpriseHUNGER STRIKE: To gain sympathy from public and get noticed by employer workers may

decide to forego food for a specified period. Such non-violent protests generally bring moral pressure on employers

FORMS OF UNREST/DISPUTESLOCK-OUTS:• It is the counterpart of strike.• It is the weapon available with employer to close down the factory till the workers agree to

resume work on the conditions laid down by employer.• If it is impossible to meet the demands of workers, employers may decide o go for lock-out• An employer may also pull down the shutters so as to bring psychological pressure on the

workers to agree to his conditions or face the closure of unit

GHERAO:• Gherao means to surround• Group of workers initiate collective action aimed at preventing members of he

management from leaving the office. This can happen outside the premises too• Persons who atre under gherao are not allowed to move for a long time, sometime even

without food or water• National commission on labor has refused to accept it as a form of industrial protest

PICKETING and BOYCOTT• While picketing workers carry/display signs ,banners and placards( In connection with

dispute), prevent others from entering the place of work and persuade others to join the strike

• Boycott aims at disrupting the normal functioning of an enterprise, Through forceful

and negative behavioral acts, strikers prevent others not to cooperate with employer

MANAGEMENT ACTION TO COUNTER STRIKES

EMPLOYER’S ASSOCIATION:• Employers may form their unions to collectively oppose the working class

and put pressure on trade unions

LOCKOUT:• It is the counterpart of strike.

• An employer may close down the place of employment temporarily. It is very powerful weapon available with employer to pressurize workers till they agree to resume work on the conditions laid down by employer.

• If it is impossible to meet the demands of workers, employers may decide o go for lock-out

• An employer may also pull down the shutters so as to bring psychological pressure on the workers to agree to his conditions or face the closure of unit

TERMINATION:• Employer may resort to suspension or disciplinary action leading to

termination of workers on strike. The list of employees so suspended or dismissed may be circulated to the other employer so as to restrict their chances of getting employment with other employers.

CHANGING ROLE / PUBLIC PERCEPTION

TRADE UNIONS• Change in the attitude of unions towards management, Industry,

Govt. and economy• Unions becoming increasingly matured, responsive and realistic Gone are the days of frequent strikes, bandhs, gheraoes and

violence• Unions are reconciled to economic reforms. The accent is on

opposing the adverse impact of reforms and not the reforms• Discussion among trade union circles is now on issues like

productivity, TQM, Technology, competition, MNCs, exports etc..• Unions aware of the Right Sizing and feel the need for suplus labor

fat to be shed• Days when unions were affiliated with political parties are gone by.

Today thrust is on de- politicization of unions• Experience of politically free unions is pleasant, reinforcing the

belief that farther the unions are from politics, more advantageous it is for them

• Workers association in our country is highly fragmented and the consequence is multiplicity of unions, which weakens the bargaining strength of employees.

• One of the defects of trade union movement in India has been the phenomenon of outside leadership. The fault of outside leadership lies with trade Union Act, 1926 itself. The act permitted outside participation to the extent of 50% of the strength of office bearers in a union.

• Trade Unions are at cross roads. Their membership is declining, Their political support is waning, public sympathy is receding, their relevance itself is at stake

• Managements on the other hand are on the offensive. They are able to force unions to accept terms and conditions. Workers,officers and managers are mercilessly terminated in the name of restructuring, downsizing etc

• Professionalisation of trade unions movement is another trend witnessed, they are trying to upgrade their leadership quality. Topics lie IT, strategic planning, diversity, networking and productivity etc now form inputs in training programmes organized for union leaders

TRADE UNIONISM IN INDIA TODAY

• Unionization according to industry/region/state• 70,000 registered trade unions , many not regisered• 9 central unions, all affiliated to political parties• 2 % of the union force unionized • PSUs: Industrial level collective bargaining in coal/steel,

enterprize level elsewhere• Private sector: Plant level collective bargaining• Union density according to the size of of industry• Craft unions in Govt transport sector• Unionization in India under recession• Twin battle against Inter Union Competition and

assertive management

MAJOR PROBLEMS FACED BY TRADE UNIONS IN INDIA

• Outside or political leadership

• Multiplicity of trade unions

• Small size of unions

• Low membership

• Uneven growth

• Poor financial position

• Low level of knowledge of labor legislation

• Fear of victimization

TRADE UNION ACT (1926)

• It legalizes the formation of trade unions by allowing employees the right to form and organize unions and also strengthen bargaining power of workers

• Act aims to provide law for the registration of trade unions and get it registered under the act

• Permits any seven persons to form a union

OBJECTIVES

• Lay down conditions governing the registration of trade unions

• Defines obligations of trade unions

• Prescribe rights and liabilities of a registered trade union

STATUS OF A REGISTERED UNION

• It becomes a body corporate

• It gets a common seal

• It can buy and hold movable and immovable property

• It can enter into contracts with others

• It can sue and be sued in its name

TRADE UNION ACT (1926)

REGISTRATION:A trade union formed with at least 7 members may apply for registration with following

documents• A copy of the rules of trade union• Name, occupation and addresses of members• Name of trade union and address of its office• Office Bearers of the trade unions• In case already in operation- submit statement of accounts/assets and liability statement

OBLIGATIONS: It should have a name, clearly laid down objective, membership list readily available,

purpose for which funds shall be utilized, members to be the actually working persons , Honorary/temporary office bearers, conditions for benefits/fines, conditions under which rules shall be amended, manner in which office bearers shall be appointed, safe custody of funds and manner in which trade union shall be dissolved

RIGHTS AND LIABILITIES• Section 15 of the Act provides for certain obligations and liabilities of registered unions• It also stipulates the purpose for which funds can be utilized

THE AMALGAMATION OF TRADE UNIONS:• Any two or more registered unions may get amalgamated together as one trade union

INDUSTRIAL DISPUTE ACT (1947)Ever expanding complex multi product/project companies with diverse and

conflicting interests of workmen and employers, growing labor consciousness, resulting in strikes and lockouts, lead to the outcome of

Industrial dispute Act, 1947

Main provisions of the Act are:• Settlement machinery -Provides suitable machinery for investigation, just, equitable and peaceful settlement of

industrial disputes and aims to provide justice both to employers and workmen - Collective bargaining, Negotiation• Aims at promoting security, amity and good relations between employer and

employee or between employers and workmen or among workmen• Prevent illegal strikes and lockouts and explains the contingencies when these

can be lawfully resorted to or when these can be declared illegal or unlawful.• Provide conditions and relief to workmen in the matters of lay-offs,

retrenchment, dismissals and victimization Last in first out in a retrenchment case or specific reasons in case of others• Provides conditions under which an industrial unit can be closed down 60 days notice to be given of intention to close down any undertaking Compensation to workmen in case of closing down• Get the workmen the right of collective bargaining and promote conciliation• Lists down unfair labor practices on the part of both parties introduced in 1984

MACHINARY FOR SETTLEMENT OF INDUSTRIAL DISPUTES

KEY PROVISIONS OF ID ACT:• PREVENTION OF INDUSTRIAL DISPUTES:Strong trade unions, works committees, joint management councils, standing orders, proper grievance

procedures, code of disciplines, negotiation, collective bargaining etc.. Help in prevention of industrial disputes.

NEGOTIATION: Each party adjusts its demands to seek a mutually acceptable agreement

steps in negotiation involve (1) PREPARATION: each party must know what it wants. (2) PRESENTATION Each party presents its case (3) EXCHANGE & COMPROMISE: Parties look for

possible adjustment or compromise (4) REACHING AN AGREEMENT: Parties sign a written statement on what has been agreed

COLLECTIVE BARGAINING: It is a technique by which disputes as to conditions of employment are resolved amicably, by agreement rather than coercion

• SETTLEMENT OF INDUSTRIAL DISPUTES:MEDIATION: Impartial 3rd party, Makes recommendations , final decision by parties

CONCILIATION : It is facilitated negotiation. The practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution. Conciliator does not impose a solution but works with the parties, meets parties separately or together, to enable them to come to an agreement.

ARBITRATION (Voluntary Arbitration ): The process in which the disputing parties show willingness to go an arbitrator ( A third party ) and submit to his decision voluntarily,

ADJUDICATION ( Compulsory Arbitration ): It is the process of settling disputes through the intervention of a third party appointed by the Government ie through :Labor Courts, Industrial Tribunals and National Tribunals

INDUSTRIALDISPUTES

Compulsory Adjudication LC, IT, NT

Award Sec. 18(3) of ID Act

Publication of award

Judicial review - Art. 226 orArt. 136

Voluntary Arbitration – 10-A

Award – 18(2) & 18(3)

Judicial review - Art. 226 orArt. 136

Conciliation (if successfulSettlement)

Sec. 18(3) of The I D act

Collective Bargaining –If successful – settlement

Sec. 18(1) of ID Act

Reference by theAppropriate Government

Sec. 10(1)

S. 2-A, 33-A

A CASE STUDY( GROUP ASSIGNMENT & PRESENTATIONS )

BALBIR – THE UNION MAN

MODULE - III

COLLECTIVE BARGAINING

COLLECTIVE BARGAINING

• A procedure by which the terms and conditions of employment of workers are governed by agreements between their bargaining agents and employers

• It is the process by which representatives of management and workers negotiate over wages, hours and other terms and conditions of employment, so as to arrive at an amicable agreement.

• Employer and employees may begin the process with divergent views but ultimately try to reach a compromise, making some sacrifices

• Both the parties reconcile their differences voluntarily without the intervention of third party.

NATURE OF COLLECTIVE BARGAINING

• COLLECTIVE: All workers collectively bargain for common interests. WORKERS & MGMT jointly arrive at amicable solution

• STRENGTH: Start with equal bargaining strength of both parties across the table

• FLEXIBLE: No party can afford to be inflexible and rigid. Both parties start with divergent views but end finally at the middle point

• VOLUNTARY: Both parties voluntarily come to the negotiating table for a meaningful dialogue and also reach agreement by voluntary process

• CONTINUOUS PROCESS: An agreement is only the beginning of CB. A continuous process that includes implementation of agreement and further negotiation also.

• DYNAMIC: Mental make up of parties keep changing

• POWER RELATIONSHIP: Workers want to gain maximum from management and management wants to extract max. from workers. For consensus both have to retreat from such positions

• REPRESENTATION: Chief participants do not act for themselves, They represent either employer or workers

• BIPARTITE PROCESS: No third party intervention

• COMPLEX PROCESS: involves many things like procedures, techniques, preparation, timing, selection of negotiators, tedious negotiations, agreement and enforcement.

ADVANTAGES OF COLLECTIVE BARGAINING

• Settlements of disputes & conflicts related to wages and working conditions is done in an amicable manner.

• Interests of workers are protected through collective action.

• Differences between workers and management are resolved through voluntary negotiations and consensus.

• Third party intervention is avoided in matters relating to employment relationship.

COLLECTIVE BARGAINING- PROCESS1 PREPARING FOR NEGOTIATION- Careful advance preparations necessary for both parties- Study of financial position and attitude of mgmt in past negotiations as-well-as attitudes and desires of

employees- Presenting an orderly and factual case for an effective bargaining

2 IDENTIFYING BARGAINING ISSUES- Wage related issues- Supplementary economic Benefits- Institutional issues- Administrative issues 3 NEGOTIATION- Logical step ( Refer next slide )

4 REACHING AN AGREEMENT

5 RATIFYING THE AGREEMENT- After initial agreement the two sides usually return to their respective constituencies to

determine whether what they have informally agreed upon is acceptable- At this crucial ratification stage union negotiating team explains and puts the agreement

to vote With majority vote it becomes a contract 6 ADMINISTRATION OF AGREEMENT- Signing the agreement is not the end of CB, rather it is beginning, Agreement must be

implemented according to the letter and spirit of the provisions of the agreement. Faulty implementation or violation leads to disputes

7 RENEWAL / REVISION OF AGREEMENT: Done in some specific circumstances

NEGOTIATION OF AGREEMENT

• Negotiating phase begins with each side presenting its initial demands

• Negotiation goes on for days until the final agreement is reached• It is a battle of wits, playing on words and threats for strikes &

lockouts• It is a big relief to everybody when the agreement is finally signed by

mgmt representatives and the union.• Success of negotiation depends on skills and abilities of negotiators• At times negotiation may break down without any amicable solution.

Then the dispute is resolved through : a) Third party intervention such as arbitration and adjudication b) Union tactics like strikes and boycotts c) mgmt strategies such as lockouts, splitting the unions, bribing union leaders and using political influence

NEGOTIATION OF AGREEMENT• THE Dos OF NEGOTIATIONS1. Do seek more or offer less than you plan to receive or give

2. Do negotiate in private, not through media

3. Do let both sides win otherwise the other side may retaliate.

4. Do start with easy issues

5. Negotiations are seldom over when the agreement is concluded

6. Resolve deadlocks by stressing past progress or counter proposals

• THE Don’ts OF NEGOTIATIONS1. Do not make your best offer first

2 . Do not seek unwanted changes, you may get them

3. Do not say “No” or “ Yes” absolutely

4. Do not violate a confidence

5. Do not settle too quickly

6. Do not let the top management actually participate in face-to-face negotiations

They are often not totally informed

CURRENT COLLECTIVE BARGAINING TRENDS

• In most industrialized economies, company unions and centralized bargaining is giving way to decentralized bargaining. carried out at plant level

• Local factors have become more important

• Process is centered around handful of employers’ associations and trade unions

REASONS FOR FAILURE OF CBIN INDIA

Collective bargaining could not make much headway in India when compared to the other industrialized nations. Reasons for the same are;

• Employer’s Reluctance

• Weak Unions: Only 10 % of total workforce in India is unionized, A figure much lower than developed countries. Poor financial strength and multiple unions with many political affiliations are the other factors

• Inadequate interventions

- Employers in India face certain practical problems as well. In case of multiple unions, bargaining with each union may prove to be a tough battle

- Collective bargaining has not grown in view of the encouragement given to wage boards, pay commissions, statutory fixation of conditions of work and social security measures

ASSIGNMENT

Q1: How does concept of Industrial Relation different from

Human Resource Management. Explain role of

different participants in Industrial Relation System.

Q2: What are functions of various Trade Unions .

Discuss the changing role of Trade unions and

resultant impact on industrial Relation climate.

Q3: Discuss various measures of preventing dispute and

Dispute Resolution Machinery in detail..

MODULE IV

GRIEVANCE MANAGEMENT

DEFINITION

• Any discontent or dissatisfaction, whether expressed or not, whether valid or not, arising out of anything connected with the company that an employee feels to be unfair, unjust or inequitable

• Every employee has certain expectations which he thinks must be fulfilled When an organization fails to do this or is unfair to him, he develops a grievance

FEATURES/NATURE OF GRIEVANCE

• Refers to any form of discontentment or dissatisfaction

• Dissatisfaction must arise out of employment and not due to personal or family problem

• Discontent may arise out of real or imaginary things, when an employee feels that an injustice has been done to him. Reason for such a feeling may be valid or invalid

• Discontent may be voiced or unvoiced

• Arises out of non fulfillment of one’s expectations from the organization

TYPES OF GRIEVANCES• FACTUAL: A factual grievance arises when legitimate needs of

employees remain unfulfilled, e.g. wage hike has been agreed but not implemented citing various reasons

• IMAGINARY: When an employee’s dissatisfaction is not because of any valid reason but because of a wrong perception, wrong attitude or wrong information he has. Management is not at fault but it has to clear the ‘fog’ immediately

• DISGUISED: An employee may have dissatisfaction for reasons that are unknown to himself. He/she may be under pressure from family, friends, relatives or neighbor etc or a new recruit may get better facilities on joining

CAUSES OF GRIEVANCE• ECONOMIC: Wage fixation, overtime, bonus, wage revision.

Employees may feel that they are paid less as compared to others

• WORK ENVIRONMENT: Poor physical conditions of work place, tight production norms, defective tools or equipment poor quality of materials, unfair rules, lack of recognition etc

• SUPERVISION: Relates to the attitudes of superior towards employees such as bias, favoritism, nepotism, caste/regional feelings

• WORK GROUP: An employee is unable to adjust with his colleagues, suffers from feeling of neglect, victimization and humiliation

• MISCELLANEOUS: Issues relating to violation in respect of promotions, safety, transfers, disciplinary rules, fines, granting leaves and msdical or other facilities etc..

EFFECTS OF GRIEVANCE Grievances if not identified and redressed, may adversely affect

employees and organization• ON PRODUCTION

Low quality of production, low production and productivity,

Increased rejections, rework and wastages, increased cost of production

• ON THE EMPLOYEE

Increase in absenteeism and turnover, Reduction in the level of commitment, sincerity and punctuality, increase in accident rate,

Reduction in employee morale.• ON THE MANAGERS: Strained superior-subordinate relations,

Increase in degree of supervision, contrl and followup, Increased indiscipline cases, Increase in unrest and reduction in industrial peace

NEED FOR GRIEVANCE REDRESSAL

• Grievance redressal procedure is a formal communication between an employee And management designed for the settlement of grievance

• Grievances affect not only the employees but also the organization as a whole

• In view of these adverse effects, management has to identify and redress the grievances in a prompt manner

• If individual grievances of left ignored and unattended, there is a danger that these grievances may result in collective disputes, affecting employee morale adversely

• Hence it is essential to have a proper grievance redressal procedure for smooth functioning of organization.

GUIDELINES FOR HANDLING GRIEVANCE

• Treat each case as important and get the grievance in writing• Talk to the employee directly. Encourage him to speak truth. Give

him a patient hearing• Discuss in. identify violations, if any a private place. Ensure

confidentiality, if necessary• Handle each case within a time frame• Examine company provisions in each case• Get all relevant facts about the grievance• Control your emotions, remarks and behavior• Maintain proper records and follow up the action taken ineach case• Be proactive

STEPS IN GRIEVANCE REDRESSAL PROCEDUREADOPTED IN INDIAN INDUSTRY

Aggrieved

Employee

Departmental

Representative

Head of

department

Grievance

committee

Chief executive

Voluntary Arbitration

SETTLEMENT OF GRIEVANCE

GRIEVANCE REDRESSAL PROCESS• IDENTIFY GRIEVANCES: Has to be identified or acknowledged as early as

possible

• DEFINE CORRECTLY: Management has to understand the problem correctly after it is identified / acknowledged

• COLLECT DATA : complete information should be collected from all parties relating to grievance. and classified as facts, data, opinions etc

• ANALYSE & SOLVE: Analyzing data and developing alternate solutions to the problem. and selecting best solution

• PROMPT REDRESSAL : of grievance by quickly implementing the solution

• FOLLOW UP: Implementation of solution must be followed up at every stage in order to ensure effective and speedy implementation

MODULE V

EMPLOYEE DISCIPLINE

&

WORKERS PARTICIPATION

DISCIPLINE – IT’S IMPORTANCE

• Organizational discipline is concerned with standards of attitude, behavior and performance.

• Direction and management of organizational discipline is devised and defined by senior managers, operated by those with departmental, divisional and functional responsibilities and accepted by those who work in and for the organization.

• Traditionally discipline imposes check or restraint on the freedom of a person. Discipline is referred to the act of imposing penalties for wrong behavior

• Fear of punishment puts employees back on rails.

DISCIPLINE- THREE INTERPRETATIONS

NEGATIVE DISCIPLINE:• It is an act of imposing penalties for wrong behavior. Fear of

punishment puts the employee back on rails. • Negative disciplinary action involves techniques such as fines,

reprimand, transfer, demotion layoff etc• Negative discipline doesn’t eliminate undesirable behaviors, rather it

merely suppresses for a while• Management has to be very cautious in adopting negative discipline

POSITIVE DISCIPLINE

• Employees comply with rules not out of fear but out of inherent desire to cooperate and achieve goals.

• No conflict between individual and organizational goals• Creation of conducive climate of orderliness where employees

willingly practice self control and respect organizational rules

SELF DISCIPLINE AND CONTRL• A training that corrects, moulds attitudes behavior and conduct

DISCIPLINING EMPLOYEES• PROGRESSIVE DISCIPLINE

- It refers to a process by which an employee with disciplinary problems progresses through series of disciplinary stages until the problem is corrected

- Primary advantage : It informs employees that there is a problem and provides them opportunity to improve

- Some companies bypass the stage if they feel that there is a gross misconduct

POSITIVE DISCIPLINE

- In positive disciplinary action, the process is not punitive, rather it focuses on constructive feedback and encourages employees to improve their behaviors or performance at work.

- It use employee counseling a problem solving approach instead of

punishment

HANDLING INDISCILINE• Misconduct or indiscipline is violation of established rules

& procedures.

• Common disciplinary problems:

- Attendance related problems

- Dishonesty related problems: thefts, falsifying

records, damaging assets etc

- Performance related problems: failure to complete\

assigned work, Producing sub standard product

- Off the job behavior problems: insubordination,

smoking, fighting, gambling, carelessness, sleeping

while at work, abusive language, sexual harassment,

accepting bribes, gifts

CAUSES OF INDISCIPLINE

• Absence of effective leadership: Lack of vision, direction, guidance and instructions

• Unfair management practices: discrimination, ineffective grievance handling, low QWL, low wages etc

• Communication barriers: Poor upward communication

• Non uniform disciplinary action• Divide and rule policy• Inadequate attention to personal problems• Victimization

DISCIPLINARY ACTIONS There is no specific or rigid procedure for taking disciplinary action. Disciplinary actions

usually followed in Indian industry are:

• ISSUING A LETTER OF CHARGE: Charges of indiscipline or misconduct are framed and clearly state in the charge sheet and the

employee is asked to give explanation within a time frame.

• CONSIDERATION OF EXPLANATION No disciplinary action if the explanation is found satisfactory

• SHOW CAUSE NOTICE A show cause notice given If sufficient prima facie evidence of misconduct found. This gives

employee another chance to counter the charges made against him.

• HOLDING A FULL-FLEDGED ENQUIRY enquiry is initiated by first serving him a notice of enquiry indicating clearly the name of

enquiry officer, time, date and place of enquiry Principle of natural justice is followed by giving employee an opportunity of being heard

• MAKING A FINAL ORDER OF PUNISHMENT Disciplinary action to be taken if misconduct is proved. While deciding nature of disciplinary

action employee’s previous record, precedents and effect of disciplinary action on other employees have to be considered

• FOLLOW UP: A proper follow up action for finding consequences of implementation of disciplinary action.

WORKER’S PARTICIPATION World participation means sharing the decision making power with

lower ranks of organization in an appropriate manner.

• Participation has unique motivational power and great psychological value• Since workers are involved in the decision from the beginning, they tend to

view the decisions their own.• The feeling of being treated as equals increases their confidence in

management and accept plan of rationalization, expansion etc without raising serious objections

• Since they are treated with respect now, they begin to view job and the organization as their own and show full commitment

• Workers have lot of ideas which may be useful• Workers participation may foster more cooperative attitude amongst

workers and management.• WPM is not something from outside It has a native flavor and has been

accepted by corporate houses in India even before independence

WORKER’S PARTICIPATION

OBJECTIVES: concept of workers participation is unique and broad

It may serve the following purpose.• An instrument for increasing efficiency of enterprise and establishing

harmonious industrial relations.• A means for achieving industrial peace and harmony• An approach for developing self management and developing

industrial democracy• An act that elevates the status of worker in society• Improves QWL ( Quality of work life ) • Enhanced mutual cooperation and work leads to increase in

efficiency and productivity• Aims at securing cooperation and commitment from workers.

WORKER’S PARTICIPATION• INFORMATIVE PARTICIPATION

Refers to sharing of information. Workers have the right to scrutinize the information

• CONSULATIVE PARTICIPATION

Involves higher degree of sharing of views, where they get chance to express their views on various issues

• ASSOCIATIVE PARTICIPATION

Not purely advisory. Management is under obligation to accept and implement the unanimous decisions of the council

• ADMINISTRATIVE PARTICIPATION

Still greater degree of sharing responsibility and authority of managerial work allowing workers a little more autonomy in exercising administrative and supervisory powers wrt welfare, safety, benefits, rewards etc

• DECISIVE PARTICIPATION

Highest form of participation where decisions are taken jointly on matters relating to production, safety, welfare etc..

FORUMS FOR EMPLOYEE PARTICIPATION

• JOINT MANAGEMENT COUNCIL ( JMC )- 1958:- At board level

• PLANT COUNCIL – 1975: At enterprise level

• SHOP COUNCIL – 1977: At shop/departmental level

1990 BILL

- Meaningful 3 Tier participation to workers in management at 3 levels: Shop Floor level, Enterprise level and Board Level

- Detailed criteria regarding nomination of representatives from workers

- Secret ballot for choosing representatives of workers

- Rules for monitoring the programme

EVALUATION : Various schemes have failed to live up to the expectations of employers and employees

REASONS FOR FAILURES: Employer’s reluctance, workers’ apathy, illiteracy, lack of knowledge, inter-union and intra-union rivalary, lack of support from Govt. etc…

HOW TO MAKE

WPM EFFECTIVE IN INDIATo make WPM effective certain conditions should be specified

1. MANAGERIAL ATTITUDE: There is an urgent need for training & education to workers to make participation culture a success and bring them to certain level before negotiation

2. UNION COOPERATION: Mutual trust and confidence is important

to make WPM more effective

3 MEANINGFUL PARTICIPATION: Participation should cover a wide range of important issues where workers ca openly represent their case and seek quick solutions on the spot. Participative forums should not be merely consultative and advisory bodies dealing with insignificant and routine issues relating to labor welfare only.

4 WORKERS’ ATTITUDE: Workers must have complete faith in the efficiency of the system. Workers must give a positive contribution

thinking from both worker and organizational point of view. To encourage participative culture among workers, seminars, workshops and conferences must be held to educate them the usefulness of participation

ALTERNATIVE APPROACHES TO PARTICIPATION

• QUALITY CIRCLES• QWL• SUGGESTION SCHEMES• PRODUCTIVITY IMPRROVEMENT PROJECTS• QUALITY IMPROVEMENT PLANS• TQM ACTION PLANS• CROSS FUNCTIONA TEAMS• THEME BASED OPEN FORUMS• BIPARTITE COMMITTEES• SPECIAL IMPROVEMENT PLANS• EMPOWERMENT