Evolution of Industrial Relations

Industrial Relations in India Prior to British Raj

India was predominantly a pastoral and agrarian economy during ancient and medieval times.

Trade and business were few and far between.

Manual services formed the third rung of organizational occupation.

A large number of occupations were carried on by small manufacturers in their cottages, mostly on hereditary basis.

Slavery was common. The Employer-Employee relations were

those of master and slave and, later on, of those of master and servant.

Ancient scriptures and laws of our country laid emphasis on the promotion and maintenance of peaceful relations between capital and labour.

From very early times, craftsmen and workers felt the necessity of being united.

The commercial character of the East India Company did not change the conditions of workers.

After the abolition of the monopoly of the East India company in 1883, the British Industrialists and merchants were able to develop some industries (Cotton, Jute, Railways, Plantation, Coal-mines etc.) and trade in India.

Industrial Relations during Colonial period

Industrial relations is a by-product of Industrial Revolution and it owes its origin from excessive exploitation of workers by the owners of industries.

The relationship was that of two unequal's-the powerful employers and powerless workers.

Many events happened which accelerated the pace of industrial relations during the period:-

The success of Russian Revolution in 1917 Establishment of ILO (1919) and the influence

of its conventions and recommendations.

Establishment of AITUC in 1920 Emergence of Left wing on the Indian political

horizon in 1924 The Indian Trade Union Act of 1926 The Trade Dispute Act, 1929 Formation of Royal Commission on labour, 1929-31, which made a comprehensive study of Indian Labour problem regarding health, safety and welfare of workers and made recommendations of far-reaching consequences

 

Industrial Relations in post- independence era

Following forces were operating at the time of Independence.

Industrial relations were inherited from the legacies of colonial masters with colonial mindset, colonial habits and colonial culture.

Coincidentally, the freedom struggle coincided with the struggle by the working class for better industrial relations.

In course of these struggles, the top leaders made promises and pledges to workers. Therefore, after Independence, leaders had to fulfil those "promises" and the "pledges" made to the workers during freedom struggle.

Most leaders were influenced by Socialist philosophies and after independence they were to be put in practice. Industrial relations were deeply influenced by all the above forces.

These philosophies got reflected in the Constitution - (1) The Preamble of the Constitution (2) The Fundamental Rights (3) The Directive Principles of State Policies.

Industrial Relations in Post-Globalization period from 1991 till date

The requirements and imperatives of global competitiveness are of international standards in quantity, quality, cost-effectiveness and customers' concerns.

This, in turn, requires introduction of state-of-art of technology, followed by innovation, creativity and strategic alignment of divergent resources to create performing climate.

Such a performing climate requires a dynamic and synergetic employee relationship.

The traditional IR was made to "fight the fire" or "douse the fire".

It was reactive, negative, passive, ad hoc and legalistic.

The tradition of industrial relations is under tremendous pressure, because it was made to cater to the requirements of a controlled, protected and regulated market and was unable to address the new imperatives of a competitive, global market.

Traditional institutions of IR were losing their importance and relevance. Trade unions were marginalized and kept outside the mainstream of business.

 In the Post-Industrial Society, technological revolution has created a situation where space, distance and time have lost their relevance.

National boundaries have completely withered away. The world has really become a global village.

The business skyline is completely changing by continuous mergers and acquisitions across the globe.

Global competitiveness is the only rule of the global business game where only the fittest can survive

In this situation, it was not possible for India to remain isolated and insulated from the global charges. Hence, India embarked on a New Economic Policy (1991).

Some of the features of this Policy were as under:-

Core sectors have been opened for Private Sectors.

Multinationals are allowed to invest in India in non-strategic sectors - Inflow of FDIs.

Banking and Insurance Sectors are opened to investment by foreign FIIs.

Restrictions and regulations on Industrial licensing and inspections were relaxed.

India, being member of W.T.O.- declared as its policy to follow their guidelines.

Quantitative restrictions on imports/exports are reduced.

Core conventions (forced labor, child labor, etc.) of ILO started influencing our trade and business. Disinvestments of PSUs (both Central and State) have become a reality.

Changing Dimensions of Industrial Relations in IndiaEmerging business scenario has brought in new market imperatives.

The traditional IR system is under unprecedented pressure because it is not geared to meet this.

A market determined profile of Industrial Relations is required to meet the challenges of the market.

Therefore, traditional IR is giving way to emerging employee relations.

Some of the features of this phenomenon are given below:-

The institution of trade union is getting weak.

Employers are going for unitarism and non-unionism.

In IT & ITES, there are hardly any TUs.

The institution of collective bargaining is being decentralized and being replaced by unit bargaining, individual bargaining and commercial bargaining / collaborative bargaining.

Disinvestment / Privatization and VRS are almost accepted facts of Industrial Relations.

Changing Pattern of Compensation /Rewards Management - Fixed/Assured Time Rate Wages are replaced by variable/performance- based wages.

Court sent clear messages to the unions that they mean business.

There is a proposal for Labour Law simplification/codification

There is a trend to make employer-friendly conciliation

There has been ease in labour inspection There has been use of Section 10 (3) of

IDA, declaring strikes illegal Strict enforcement of Unfair Labour

Practices Use of Police for diluting labor struggle Re-engineering and Rationalization of

work - Job mobility, Redeployment, Job Rotation, Shedding surplus manpower

Competencies management and skill formation - multi-skilling and career development

Employee involvement, participation and communication

Trade Union participation Enterprise-based unions Responsive Trade Unionism and Diluting

political ideology