IR in India – Pre Independence

• In the pre-independence days the workers were hired and fired as the principle of demand and supply governed industrial relations. The employer was in a commanding position and the conditions of employment and wages were very poor which led to revolutionary movements. There were hardly any laws to protect the interests of the workers except the Employers and Workmen (Disputes) Act, 1860, which was used to settle wage disputes.

• After the 1st world war, IR assumed a new dimension in the sense that the workers resorted to violence and employers to lockouts. There were numerous strikes and disturbances during 1928-29. As a result the government enacted the Trade Disputes Act, 1929, to enhance the early settlement of industrial disputes. However the Central or the State governments did not make adequate use of this law leading to acute industrial unrest.

• In 1938, the Bombay government enacted the Bombay Industrial Relations (BIR) Act. For the first time a permanent machinery, called the Industrial Court, was established for settling disputes. This Act was amended a number of times.

• After the 2nd World War, India faced many problems like the rising cost of living, scarcity of essential commodities, high population growth and massive unemployment leading to turbulent industrial relations.

IR in India – Post Independence

• Industrial relations in India during the post-independence era underwent a significant change. One of the most significant development in the field of Industrial Relations was the enactment of the Industrial Disputes Act, 1947, which not only provides for the establishment of permanent machinery for the settlement of Industrial Disputes but also makes these awards binding and legally enforceable.

• The Constitution of India provided for Freedom of Association to all citizens subject to the interests of public order. This gave the workers right to association, organisation and collective bargaining and a fillip to the trade unions to rise, seek affiliation with Central bodies and to function more effectively.

• An important development was the setting of the Indian Labour Conference (ILC), a tripartite body to look into IR problems in India. Its main objective was to establish cooperation between the government, the employers and the trade unions

• In 1966, the National Commission of Labour (NCL) was appointed by the government to look into labour matters and make recommendations. According to NCL, industrial relations affect not merely the interests of the two participants- labor and management, but also the economic and social goals to which the State addresses itself.

• During this period there was a marked change in the attitude of the government towards labour and their problems and many labour laws were enacted between 1947-1956 to protect the interests of the industrial workers covering issues like seniority, wage rates, paid holidays, disciplinary matters, social security etc. The Government enacted The Indian Factories Act, 1948, Employees State Insurance Act, 1948 and Minimum Wages Act, 1948 - all measures for the welfare of the workers and industry.

During the late 1970s and early 1980s industrial relations was characterized by violence due to various reasons like rising price levels @ 15%-20% annually, ineffective machinery for speedy resolution of industrial disputes, and other problems like controls on production, licensing procedures, high rate of taxation, restrictions on imports etc. which inhibited industrial growth leading to incapacity to meet the legitimate demands of the working class.To meet the situation of industrial strife, the government, on 26th July, 1981, issued an ordinance to ban strikes. A new law Essential Service Maintenance Act (ESMA) was promulgated. This Act provided the government with wide ranging powers to intervene in industrial relations. It empowered the government to ban strikes, lay-offs and lockouts in ‘essential services’ and also punish any person who participates or instigates a strike deemed illegal under ESMA.

Industrial Relations - Five Year Plans

The Five Year Plans focused on:– Improving the conditions of labour and welfare of workers– Prevention and settlement of industrial disputes and

maintenance of industrial peace and harmony to avoid disruption of industrial activity which could adversely affect the realization of plan goals

– Controlling industrial growth to prevent concentration of economic power in the hands of a few and reducing income disparities among individuals and regions

– Worker’s education– Worker’s participation in management

The scenario of the Indian industrial relations has been fast changing. With the incoming of a liberal leader at the Centre and the reforms following after that have played a key role in giving a new definition to the scenario. The tradition started by the Japanese concerns and some of the Indian pioneers is being carried forward by the industry.

The late 80s and early 90s saw an unprecedented movement in the positive direction. The overall strikes and subsequent man-days lost are on decline. The progressive outlook is on an increase.

The major events that occurred are:

1. Liberalisation and Globalisation

2. Entry of MNCs

3. Paradigm Shift

IR in India – At present

• Prior to 1991, the industrial relations system in India sought to control conflicts and disputes through excessive labor legislations. These labor laws were protective in nature and covered a wide range of aspects of workplace industrial relations like laws on health and safety of labors, layoffs and retrenchment policies, industrial disputes and the like. The basic purpose of these laws was to protect labors.

• However, these protectionist policies created an atmosphere that led to increased inefficiency in firms, over employment and inability to introduce efficacy. With the coming of globalization, the 40 year old policy of protectionism proved inadequate for Indian industry to remain competitive as the lack of flexibility posed a serious threat to manufacturers because they had to compete in the international market.

With the advent of liberalization in1992, the industrial relations policy began to change. Now, the policy was tilted towards employers. Employers opted for workforce reduction, introduced policies of voluntary retirement schemes and flexibility in workplace also increased.

Globalization brought major changes in industrial relations policy in India. The changes can be summarized as follows:

•Collective bargaining has become more decentralized in most of the sectors.•The number of local and enterprise level unions has increased and there is a significant reduction in the influence of the unions.•Another trend is that the employers have started to push for internal unions i.e. no outside affiliation.•Some industries are cutting employment to a significant extent to cope with the domestic and foreign competition e.g. pharmaceuticals. On the other hand, in other industries where the demand for employment is increasing are experiencing employment growths. •In the expansionary economy there is a clear shortage of managers and skilled labor.•HR policies and forms of work are emerging that include, especially in multi-national companies, multi-skills, variable compensation, job rotation etc. These new policies are difficult to implement in place of old practices as the institutional set up still needs to be changed.•HRM is seen as a key component of business strategy. •Training and skill development is also receiving attention in a number of industries, specially banking and information technology.

Some major changes in the economy that have influenced the dynamics of the labour-management relations

Before Liberalization • State sponsored & state mediated

development• Protected domestic market• Budgetary and directed institutional

resource allocation• Subsidies and administered price

regime• Welfare state active in labour market• Systematic de-casualisation of jobs• Largely government-funded social

security and welfare programmes for a few

• Stable government structure and policy regime

• Stable, though obsolete, labour- intensive technologies

• Dominant status of manufacturing

After Liberalization• Market led and private enterprise

dominated• Competitive market• Competitive capital market-led resource

allocation• Rational pricing, including user charges• Labour neutral and investment- friendly

state policies• Fast re-casualisation and

contractualization of jobs• Crisis of sustainability of social security

welfare and pressure for security measures for all.

• Crisis of governance and fear of political & economic instability

• Micro-electronics led new generation capital and skill intensive technologies.

• Threat of deindustrialization and rapid growth of the service sector.

Future of Industrial relations in India

• There are many labour laws in the country, covering all aspects of labour, to protect industrial workers. The problem is not lack of labour laws but that of lapse of implementation owing to lack of fuller understanding on the part of management. Moreover in the absence of an all India code, labour laws have a tendency to overlap and become repetitive.

• A common labour code will help in reducing the gap that are occurring as a result of the variations that occur in central and State legislations as far as labour matters are concerned.

• Various Worker-Participation schemes in management has not made much progress.

Several attempts have been made by the government,through its five year plans, to implement the variouslabour laws. The National Commission on Labour (NCL) has also made recommendations for the better implementation of labour laws.

Moreover the whole system, inclusive of management,workers and legislations, need to take into account the effect of their actions on the consumers and society in general, owing to the growing inter-linkages between the Industry and its environment. The environment is fast Changing and the pressures from various groups involvedare starting to get more vocal and intense. The strategy chosen for attainment of goals will not only depend on the objectives, values, structures and environment but also on the personnel and industrial relation functions.

Industrial relations in India• Industrial Relations: Organized sector and their impact on unorganized sector- There was a rapid

transformation from the agrarian system to an industrial one. But of the total population only 37% are in the workforce of which only about 25.5 % are in the organized sector. But the patterns of Industrial Relations has a definite impact on labour-management relations in the unorganized sector. The trends and patterns established in the organized sectors spills over as there is always pressure on unorganized organizations to match its employment, working conditions, benefits etc with that of organized sector.

• Unions are important force in the Indian political scenario- Unions are sometimes a fall out of the political system and is used for electioneering purpose. Also unions sponsored by ruling parties has an influence on the legislative process through their intense lobbying. Strong national level unions are consulted by government in formulating various socio-economic policies which in turn influences the system of industrial relations.

• Varying patterns of Industrial Relations in India – The IR patterns vary not only in unorganized and organized sector but also within the latter. Due to non unionization in the unorganized sectors the grievances are at times redressed by threats of dismissal or other violent forms, thus the problem of Industrial Relations is not allowed to surface.

• Changing dynamics of Industrial Relations in India – Initially with the adoption of socialistic pattern of society and subsequent acceptance of Industrial policy, the public sector was entrusted with the responsibility of accelerating economic development and growth in the country. There were many constraint in the growth and development of the private sector. The industrial relations scenario was poor in the private sectors and the employees had to suffer in the hands of the employers. The employees of public sector got a better deal. With the liberalization of the Indian Economy, the labour-management relations are now improving in the private sectors and getting strained in the public sector.

ORGANISATIONS

ILO was established on April19, 1919 by Versailles Peace Conference as an autonomous body associated with the League of Nations. It deals with international labour problems.

It is a tripartite body consisting of representations ofi) employers (who share responsibility for the welfare of the workers), ii)labour ( for whose benefit it is created)andiii) government (which finance it).

In the ration 1:1:2. The principal organs of the ILO are

i) The International Labour Conferenceii) The Governing Bodyiii) The International Labour Office.

ILO has been attempting to promote world wide respect for freedom and dignity of the working man and to create conditions in which that freedom and dignity can be more fully and effectively enjoyed.

India became member of ILO in 1919, as an original signatory to the treaty of peace.

ILO – The international Labour Organisation

National Level Federations• The Indian Trade Union Movement had initially witnessed the presence

of four major federations. They are1. All India Trade Union Congress (AITUC) – established in 1921, the

Communist thinking had greater influence in the formation and the working of the AITUC and it espoused a more radical approach, To protest the Communist supremacy , the moderates withdrew from AITUC and formed another Federation.

2. Indian National Trade Union Congress (INTUC) - This union was organised in 1947 with active support and encouragement from Congress leaders. It wanted to bring about a peaceful and non-violent solution to industrial disputes.

3. Hind Mazdoor Sabha (HMS) (UTUC) - This national federation came into being in 1948. This federation espouses the socialist philosophy and has linkages with socialist parties.

4. Centre of Indian Trade Unions (CITU) - is a National level Trade Union in India politically attached to the Communist Party of India (Marxist). This is a national federation which was established in 1971 as a result of the split in the AITUC. CITU is today one of biggest assembly of workers of India.

At present there are twelve Central Trade Union Organizations in India:

1. All India Trade Union Congress (AITUC) 2. Bharatiya Mazdoor Sangh (BMS)3. Centre of Indian Trade Unions (CITU) 4. Hind Mazdoor Kisan Panchayat (HMKP)5. Hind Mazdoor Sabha (HMS) 6. Indian Federation of Free Trade Unions (IFFTU)7. Indian National Trade Union Congress (INTUC) 8. National Front of Indian Trade Unions (NFITU)9. National Labor Organization (NLO)10. Trade Unions Co-ordination Centre (TUCC)11. United Trade Union Congress (UTUC) and12. United Trade Union Congress - Lenin Sarani (UTUC - LS)

Federations of Trade Unions

• Some of the registered federations of unions in various industries and occupations.

1. All-India Bank Employees Association2. National federation of Indian Railwaymen3. All-Indian Post and Dock Workers Federation 4. National Federation of Post and Telegraph

Workers5. All-India Mine Workers’ Federation6. Indian Federation of Working Journalists

Employers’ Association (Eos) • Eos are formal groups of employers set up to defend,

represent or advise employers and strengthen their position with respect to labour matters and defend the economic interests of employers.– The Associated Chamber of Commerce and Industry of India

(ASSOCHAM) : formed in 1920 under the Indian Companies Act, 1913.

– Federation of Indian Chambers of Commerce and Industry (FICCI): One of the apex organisations to which a large number of chambers of commerce and industrial associations are affiliated. It was established in 1927 and acts as a coordinating agency for the commercial and industrial interests of the various associations.

– All India Organisation of Employers (AIOE) : set up in 1932 and registered under the Indian Trade Unions Act with the objective to promote and protect the interests of the industry and represent the employers of India at the ILO.

Employers’ Association (Eos) contd• Employer’s Federation of India (EFI): Set up in 1933 under the Indian

Companies Act and subsequently in 1963 registered under the Indian Trade Unions Act, 1926. The objective of EFI is to facilitate the selection of employer’s delegates for the meetings and conferences of the ILO.

• Council of Indian Employers (CIE) : It was formed in 1956 to bring the AIOE and EFI under one umbrella. The main objective of CIE is to represent the interests of large scale industries in India. It is the representative of Indian employers.

• Standing Conference of Public Enterprises (SCOPE): An organisation of public sector undertakings it was set up in 1970 under the Societies Act. It assists the public sector to improve its total performance and advises the government on matter relating to the public sector.

• All India Manufacturers’ Organisation (AIMO): It was set up in 1941 to represent both the trade and labour interests in the medium and small sectors.

LABOUR LEGISLATION IN INDIA

This is an important area which has a great impact on the industrial relation system and has been instrumental in shaping the course of industrial relations in India.

The objectives of the labour legislation are to • Protect workers from exploitation• Strengthen industrial relations• Provide machinery for settling industrial disputes and welfare of workers Labour legislation in India has a history of over 125 years. The laws regulate not

only the conditions of work of industrial establishments, but also industrial relations, payment of wages, registration of trade unions, provide social security measures for workers, define legal rights and obligations of employees and employers and provides guidelines for their relationships.

In India all laws emanate from the Constitution. Under the Constitution, labour is

a concurrent i.e. both the Central and State governments can enact labour legislation, with the clause that the State legislation cannot enact the law which is repugnant to the Central law.

Standards and norms legislations

Welfare and amenities legislations

Disputes processing and rights of parties legislation

1. Factories Act2. Shops and

Establishment Act3. Mines Act4. Plantation Labour

Act5. Indian Merchants

Shipping Act6. Minimum Wages

Act7. Payment of Wages

Act8. Indian Trade

Unions Act

1. Maternity Benefits Act2. Employees State Insurance Act3.Workmen’s Compensation Act4.Employees Provident Act5.Gratuity Act

Collective Matters: Central Acts1. Industrial Disputes Act2. Sales Promotion Employees Act3. Payment of Bonus ActState Acts1. Bombay Industrial relations Act2. Maharashtra Act for prevention of unfair labour practices and compulsory recognition of Trade UnionsIndividual Matters: Central ActsIndustrial Employees Standing orders Act and Model Standing Orders governing contract of employment

Profile of Labour Legislation in India

1.The Standards and norms legislations are concerned with the health and safety of the worker at his workplace, ensures payment for work done etc

2. The Welfare and amenities legislations looks into the social security measures meant to protect workers against risks of undue hardships and privation, provisionof medical care, accidental compensation, compensation during illness, retirement benefits etc

3. The Disputes processing and rights of parties Legislation provides for settlement of disputes by negotiations, conciliation, mediation, voluntary arbitration and compulsory arbitration.

First Five Year Plan (1951 - 1956) - emphasised on the importance of setting up a tripartite body, providing for the conciliation machinery for healthy industrial relations.Second Five Year Plan (1956-1961) – Stressed on Code of Discipline, on internal settlement between the employers and the workers and their organisations, necessity of building a strong trade union movement, setting up of Standing Joint Consultative Machinery at all levels, towards promotion of industrial relations in the country.Third Five Year Plan (1961-1966) - The development of Code of Discipline and extension of the Joint management committee to new industries and units.Fourth Five Year Plan (1969-1974) - protective legislative measures - Payment of Bonus Act, 1965, Shops and Commercial Establishments Act and Labour Welfare Funds Acts in States and extension of activities of Employees’ State Insurance Corporation, promotion of collective bargaining, raising of productivity through labour-management cooperation and growth of a healthy trade union movement.Fifth Five Year Plan (1974-1979) - improvements in various aspects like Increasing level of worker participation in certain spheres of decision making; Setting up of shop councils and similar bodies; Improvement in communication systems; Introducing of productivity-linked incentive scheme bearing good results.Sixth Five Year Plan (1980-1985) - also referred to as the Janata Government Plan, has reiterated the importance of tripartite consultations, growth of trade unions on healthy lines, empowers the Government to punish any person who participates or instigates a strike which is deemed illegal under ESMA.

Seventh Five-Year (1985-1989) - The primary aim of the five year plan was to upgrade the industrial sector and enable India to establish itself as one of the developed countries of the world. The objective of this plan was to generate more scope of employment for the people of India, to produce more in terms of food which would lead to an overall increase in productivity.8th five year plan – (1992 - 1997) The basic objective of this plan was to modernize industrial sector, focus on technical development. During this period India received a coveted opportunity to become a member of the World Trade Organization.9th Five Year Plan (1997-2002) - The main objective of this Plan was - Industrialization at a rapid pace, · Reduction in poverty level, complete employment for all countrymen, price stabilization, promotion of social events like benefits for special social groups, female empowerment, etc.The 10th Five Year Plan (2002-07) - The main objective of this Plan is to make provision for useful and lucrative employments, decrease in gender discriminations in the spheres of wage rate and literacy, setting up of a state-of-the-art infrastructure, introduction of reforms and capacity building in Indian industrial sector11th five year plan: ( 2007 to 2012) - Owing to India's five year plans, great advancement has been made with regard to India's national income. Since 1951 ( 1st five year plan was presented) India has come a long way. India has taken giant strides and today it is considered as one of the emerging powers. India is currently following the 11th five year plan. The tenure of the 11th five year plan is from 2007 to 2012.