INDUSTRIAL RELATIONS

Definition and Concept of Industrial Relations:

 Broadly, the term “industrial relations” is used to denote the collective relationships between
management and the workers. The two terms, labour-management relations and employer-
employee relations are synonymously used.
 According to Dale Yoder, "Industrial relations is a relationship between management and
employees or among employees and their organizations, that characterize and grow out of
employment."
 According to R.A. Lester, "Industrial relations involve attempts to have workable solutions
between conflicting objectives and values, between incentive and economic security,
between discipline and industrial democracy, between authority and freedom and between
bargaining and co-operation."
 According to the ILO, "Industrial relations deal with either the relationships between the
state and the employers and workers organization or the relation between the occupational
organizations themselves.
 According to Prof. Dunlop, "Industrial relations may be defined as the complex of inter-
relations among workers, managers and government".
 According to Allan Flanders, "the subject of industrial relations deals with certain regulated
or institutionalized relationships in industry. Personal or in the language of sociology,
'unstructured' relationships have their importance for management and workers, but they lie
outside the scope of a system of industrial relations."
 By J. Henry Richardson “industrial relations is an art, the art of living together for purposes
of production”.
 H.A. Clegg emphasized the regulation and institutionalization of industrial relations when he
observed: “The field of industrial relations includes the study of workers and their trade
unions, management, employers’ associations, and the State institutions concerned with the
regulation of employment”.
Nature of IR
The following points emerge from a close examination of the above definitions:
1. Employer-employee interactions: Industrial relations arise out of employer-employee
interactions. These relations cannot exist without the basic building blocks, i.e., the employer
on one side and the employees on the other side.
2. Web of rules: Industrial relations are a 'web of rules' formed by the interaction of the
government, the industry and the labour. They include the relations between employer and
employees and between employers' associations, trade unions as well as the State.
3. Multidimensional: Industrial relations are fairly multi-dimensional in nature as they are
influenced, by a complex set of institutional, economic and technological factors.
4. Dynamic and changing: Industrial relations change with the times, generally keeping pace
with the expectations of employees, trade unions, employers' associations, and other
economic and social institutions in a society. Apart from the legal framework, these societal
forces generally influence the direction of industrial relations within a country.
5. Spirit of compromise and accommodation: The industrial relations system is characterised
by forces of conflict and compromise on either side. In the larger interests of society, both the
employer and the employees must put out fires amicably and get along with each other in a
spirit of compromise and accommodation. The individual differences and disagreements
must be dissolved through persuasion and even pressure. The factors responsible for
conflictful situations need to be resolved through constructive means.
6. Government's role: The government influences and shapes industrial relations with the help
of laws, rules, agreements, awards of courts and emphasis on usages, customs, traditions, as
well as the implementation of its policies and interference through executive and judicial
machinery.
7. Wide coverage: The scope of industrial relations is wide enough to cover a vast territory
comprising of grievances, disciplinary measures, ethics, standing orders, collective
bargaining, participatory schemes, dispute settlement mechanisms etc.
8. Interactive and consultative in nature: Industrial relations includes individual relations and
joint consultation between labour, management, unions, the state etc. It pinpoints the
importance of compromise and accommodation in place of conflict and controversy in
resolving disputes between labour and management.

Objectives of Industrial Relations

The primary objective of industrial relations is to maintain congenial relations between
employees and the employer. The other objectives are:
(i) To promote and develop congenial labour management relations;
(ii) To enhance the economic status of the worker by improving wages, benefits and by
helping the worker in evolving a sound budget;
(iii) To regulate the production by minimising industrial conflicts through stat control;
(iv) To socialize industries by making the government as an employer;
(v) To provide an opportunity to the workers to have a say in the management and decision-
making;
(vi) To improve workers' strength with a view to solve their problems through mutual
negotiations and consultation with the management;
(vii) To encourage and develop trade unions in order to improve the workers' strength;
(viii) To avoid industrial conflict and their consequences; and
(ix) To extend and maintain industrial democracy.

Significance of Good Industrial Relations / Outcomes of Better I.R.

Good industrial relations refer to harmonious relations between the labour union and the
management in an organisation. In other words, in such a situation, there is absence of industrial
disputes between the two parties and presence of understanding and cooperation between them.
Thus, industrial relations in an organisation must be harmonious or cordial. Such relations will
lead to the following benefits:

1. Industrial Peace:
Cordial industrial relations bring harmony and remove causes of disputes. This leads to
industrial peace which is an ideal situation for an industrial unit to concentrate on
productivity and growth.

2. Higher Productivity:
Due to cordial industrial relations, workers take interest in their jobs and work efficiently.
This leads to higher productivity and production of the enterprise where they are working.
Thus, they will contribute to the economic growth of the nation.

3. Industrial Democracy:
Sound industrial relations are based on consultation between the workers and the
management. This assists in the establishment of industrial democracy in the organisation
which motivates employees to contribute their best to the success of the organisation.

4. Collective Bargaining:
Cordinal industrial relations are extremely helpful for entering into long-term agreements as
regards various issues between labour and management. Such collective bargaining
agreements and association of employees in decision-making process will bring about
cooperation between labour and management.

5. Fair Benefits to Workers:

 The workers should get sufficient economic and non-economic benefits to lead a happy life.
It is possible when the relations between workers and management are cordial and the
productivity is high. The employers can afford higher benefits to the workers.

6. Higher Morale:
Good industrial relations imply the existence of an atmosphere of mutual co-operation,
confidence, and respect within the enterprise. In such an atmosphere, there are common
goals, which motivate all members of the organisation to contribute their best.

7. Facilitation of Change:
Sound industrial relations, by creating a climate of co-operation and confidence, make the
process of change easy. Hence, full advantage of latest inventions, innovations and other
technological advancements can be obtained. The workforce easily adjusts itself to required
changes for betterment.

Factors Affecting Industrial Relations

1. Industrial Factors:
These include items like state policy, labour laws, voluntary codes, collective bargaining
agreements, labour unions, employers organisations / federation etc.

2. Economic Factors:
These include economic organisations (socialist, communist, capitalist) type of ownership,
individual, company – whether domestic or MNC, Government, co-operative, ownership,
nature and composition of work force, the source of labour supply, labour market relative
status, disparity of wages between groups, level of unemployment, economic cycle, the
global economic changes and the impact of World Trade Organisation (WTO).

3. Social Factors:
Social Factors like social group (like caste system or joint family system) creed, social
values, norms, social status etc. influence industrial relations in the early stages of
industrialisation. They give rise to relationships as master and servant, have and have-nots,
high caste and low caste, etc. but with the acceleration of industrialisation, these factors
gradually lose their entity but one cannot overlook their importance.

4. Technological Factors:
These include methods, type of technology used, rate of technological change, R & D
activities, ability to cope up with emerging trends, etc. These factors considerably influence
 the patterns of industrial relations as they are known to have direct influence on employment
status, wage level, and collective bargaining process in an organisation.

5. Psychological Factors:
Such factors include items pertaining to industrial relations like owners’ attitude, perception
of workforce, their attitude towards work, their motivation, morale, interest, alienation,
dissatisfaction, occupational stress and boredom resulting from man-machine interface.

6. Political Factors:
Political institutions, system of government, political philosophy, attitudes of government,
ruling elite and opposition leaders towards labour problems affect the state of industrial
relations. For instance, in the various communist countries, prior to the adoption of new
political system, the industrial relations environment was very much controlled by the
Government.

Theories of Industrial Relations

I. Unitary Approach:
The employer and employee work as a harmonious unit and they work for a common goal.
Hence, there is no possibility of conflicts arising between them and they work as a team to
attain the common goal. According to Edwards (2003), ‘Any conflict that may occur is then
seen as the result of misunderstanding or mischief.’ Thus, conflict is perceived as disruptive.
The concept of loyalty is privileged in the Unitarist Approach because of its paternalist roots.
Since there exist direct relations between the employer and the employee, trade unions are
considered as unnecessary. The orientation and application of rules may be managerial but
employees are expected to be loyal and sincere to the organization.

II. Pluralist Approach:

 The pluralist approach was developed in the United States of America by John R
Commons. He considered society as complex due to the presence of multiple interest
groups with their own goals. Hence, conflict is inevitable in the system and there are
possibilities of compromise based on the interaction between different stakeholders.
Collective bargaining was used as a mechanism to sort out the conflict between the
employer and employees. The presence of trade union in an organization can serve as an
interest group to protect the interest of employees. According to Edwards (2003),
‘pluralism was particularly salient in the approach of management: instead of unitary
denial that there was any rational basis for conflict, managers should recognize the
inevitability of dispute and seek means to regulate them.’ Employees understood the
 basis of conflict and were ready to negotiate with the trade union in the overall interest of
the organization.

 The Pluralistic Theory is based on the premise that the enterprise contains people with a
variety of interests, aims and aspirations; therefore, it is a coalition of different interests.
Arthur Ross argued that we should view an organisation as a “plural society containing
many related but separate interests and objectives which must be maintained in some
kind of equilibrium”.

III. Classical Approach (Marxist Model)/ Radical Approach:

Karl Marx considered industrial conflict as a part of the broader social conflict between
classes and used it to explain the fundamental historical process of change and development
in human society. He was concerned with certain macro economic processes and deep-
rooted inequalities in society as a whole, and not with specific industries or firms. Marx
divided the society into two classes (i) capitalists, who own the means of production, and (ii)
proletariat, who own nothing but their own labour power. These classes are antagonistic
groups. Antagonism and conflict are of the very essence of Marx’s conception of class. The
reasons for this fundamental antagonism lie in the capitalist mode of production.

IV. Human Relations or Neo-Classical Approach:

 This approach has its origin in the Hawthorne experiments conducted by Elton Mayo,
Roethilsberger, Whitehead, Whyte and Homans, etc. According to this theory, conflict is
an aberration and not the natural state of human society. This aberration occurs when
tendency of the industrial society is to treat worker as an isolated individual, and deprive him
of all control over his environment. This loss of mooring and control is a major source of
conflict.
 The core of human relations theory consists in the importance attributed to the small informal
social groups as a source of human satisfaction. This satisfaction results from better human
relations through the encouragement in creating informal social groups and better
communication by providing not only downward communication but upward communication
also. They key to sound industrial relations lies in achieving better human relations in the
organisation. The major criticism of this theory is that it treats the factory as if it were a self
contained and isolated social system. The sources of conflict lie as much outside the factory
as within it, and the argument that all these strains can be handled by the management
through better human relations within the factory is not convincing.
V. Social Action Approach:
 The Social Action Model has its origins in Weberian Sociology. Under this model, the
actors’ own definitions of the situations in which they are engaged and these are taken as an
initial basis for the explanation of their social behaviour and relationships.

 This model points out the reciprocal nature of the relationship between social structure and
behaviour. Social structure limits social action. Thus, a worker’s ability to take strike action
or an entrepreneur’s ability to invest may be limited by his personal and by more general
economic conditions, and this will help to determine the environment for similar decisions in
future.

 One of the most important features of the social action models is the attitude it adopts
towards social theory. The social action approach suggests that general explanations of
social action are not possible simply because of the nature of the subject of social sciences –
men do not react to the stimuli in the same way as matter in the natural sciences.

VI. Systems Approach (developed by John Dunlop):

The systems approach views the industrial relations system as a sub-system of the society or
the total social system. The society is seen as providing certain external influences and
constraints but not as completely dominating industrial relations. An industrial relations
system at any particular time is regarded as comprising of certain actors, certain context and
ideology which bind the industrial relations system together through a body of rules created
to govern the actors at the place of work and work community.

VII. Gandhian Trusteeship Approach:

Gandhiji’s views on industrial relations are based on his fundamental principles of truth and
non-violence and non-possession. Out of these principles evolved the concept of trusteeship
on which his philosophy of industrial relations rests. This philosophy presumes the peaceful
co-existence of capital and labour, which calls for the resolution of conflict by non-violent,
non-cooperation (i.e., Satyagraha), which actually amounts to peaceful strikes in ordinary
parlance. Gandhiji accepted the workers’ right to strike, but cautioned that this right is to be
exercised in a just cause, and in a peaceful and non-violent manner; and it should be resorted
to only after employers fail to respond to their moral appeals.

Industrial Relations System

 An industrial relations system is an integrate system of relationships between employers and
employees and employers which are managed by the means of conflict and co-operation. It
 can also be understood as the laws dealing with the arrangements that are made between
workers and employers and these laws are developed by governments.
 A sound industrial relations system is one in which relationships between management and
employees (and their representatives) on the one hand, and between them and the State on the
other, are more harmonious and cooperative than conflictual and creates an environment
conducive to economic efficiency and the motivation, productivity and development of the
employee and generates employee loyalty and mutual trust.

CHAPTER– 8
TRADE UNION

A trade union is an organization of employees formed on a continuous basis for the

purpose of securing diverse range of benefits. It is a continuous association of wage earners for
the purpose of maintaining and improving the conditions of their working lives.
Trade union can also be known as an organization whose membership consists of workers and
union leaders, united to protect and promote their common interests.
According to Flippo, “A labour union or trade union is an organisation of workers
formed to promote, protect, and improve, through collective action, the social, economic, and
political interests of its members”.

Structure of Trade Union:

It refers to the basis on which unions are organised (i.e., whether they are organised on
craft or industrial or general union basis) and to the pattern whereby the plant unions are linked
to regional level or national level federations or unions.

Trade Unions based on Trade:

a. Craft Union:
It is an organisation of wage earners engaged in a single occupation. It may cover all
workers engaged in a particular craft irrespective of the industries in which they are employed.
Thus, electricians though working in different industries may form a union of electricians. There
may be separate unions for fitters, turners, carpenters, etc. The International Wood Carvers’
Association and the Indian Pilots’ Guild may be cited as examples of craft unions.

b. Industrial Union:
It is organised on the basis of an industry rather than a craft. If the workforce of a cotton
textile factory decides to form a union consisting of workers of different crafts, the union will be
called an industrial union.

c. General Union:
It is one whose membership covers workers employed in different industries and crafts.
General unions are not popular in India.

d. Closed Shop / Union Shop:

In such situations the union makes employment conditional on union membership, one
variation being that employment is routed through the union, where it acts as a labour supplier
and, the other that once, employed, an employee is required to join the union.

Check off System

The check off system is a practice where the management collects an employee’s union
dues, as a wage deduction and gives a lump sum amount to the union. This is a facility that
ensures totality of collection of union dues, with no excuse for employees to desist from paying
for one reason-or the other, as it could happen in a voluntary system. Such a facility is provided
only to a recognised union.

e. White Collar Unions:

 In India unionization among white-collar workers began as early as 1897 and in 1897, the
National Union of Railway men of India and Burma were formed. However, unionization
among the workers did not have any significant growth before the Second World War.
Since, 1947, the growth of unionization among white-collar workers has been due to
inflation, the realization of effectiveness of collective bargaining, etc.

 Some of the important trade unions of white-collar employees are the All India Bank
Employees Union, the All India Defence Employees Federation, the National Federation of P
& T workers, the Confederation of Central Government Employees and the Indian
Federation of Working Journalists.

f. Blue-Collar and White-Collar Workers:

 A distinction is made on the basis of the level and status of the employee for membership
of the union. All shop floor workers (part of the production system who operate
 machines and related systems) are termed blue-collar workers and all clerical or office
staff, who do not work on the shop floor are termed white – collar workers.
 White – Collar workers or non-manual workers form a distinct social group characterized
by divergent socio-economic backgrounds, levels of education, manner of speech, social
customs and ideology. They are paid on monthly basis, enjoy longer holidays and
different privileges as compared to the blue-collar workers.

Classification based on Representation

i. Qualified Union:
Unions having at least 5 percentage of membership of total employees.

ii. Primary Union:

Having membership of at least 15 percentages of the employees in an undertaking.

iii. Representative Union:

Having a membership of not less than 25 percentages of the total employees as members in
an undertaking.

Pattern of Structure
Another aspect of the structure of unions in India relates to their pattern of relationship
between national level, regional level, local level and plant level unions.

1. Local Level Federations:

This is the second level in the structure from below the local trade union federation holds
together the plant level unions at the local level in a particular craft and industry. The local level
federations might be affiliated to either some regional level or national level federation discussed
below or they may be independent.

2. Regional Level Federations:

These are the organisations of all the constituent unions in a particular state or region.
The importance of such federations cannot be exaggerated. In a vast country like India,
conditions vary from region to region. The style of living, language, customs, traditions,
working conditions, etc. are different. Therefore, it is better that workers are organised at
regional or state level. These regional federations may have members of two kinds: (a) the plant
level unions affiliating themselves to these directly, and (b) the local federations. In the second
case, plant level unions become the members of regional federation indirectly through the local
federations. It may be noted that the regional federations may be independent or they may get
affiliated to some national federation.
 3. National Federation:
These are national level bodies to which plant level unions, local unions or regional level
unions may get affiliated. These are the apex bodies at the top of the structure. They act as
coordinating bodies. The national federations may have their own regional or state level
coordinating bodies to which the plant level unions may get affiliated.

National Level Federation

Historically, four major federations have been in existence and have established a
national network of federated unions. They are the All India Trade Union Congress (AITUC),
Indian National Trade Union Congress (INTUC), United Trade Union Congress (UTUC), and
Hind Mazdoor Sabha (HMS). The UTUC merged with the Centre of Indian Trade Unions
(CITU). At present, Ministry of Labour has recognised eleven central trade unions. The twelve
central trade unions and their political affiliations are presented in the table. There are many
unions at state levels as well; some of them are associated with regional parties.

Central Trade Unions in India

S.No. Central Trade Union Political Policy Year

1. All India Trade Union Congress Communist Party of India 1921
2. Indian National Trade Union Congress Indian National Congress 1947
3. Hind Mazdoor Sabha Socialist 1948
4. Centre of Indian Trade Unions Communist Party of Indian (Marxist) 1971
Communist Party of India (Marxist – Leninist)
5. All Indian Central Council of Trade Unions 1989
Liberation
6. All India United Trade Union Centre Socialist Unity Centre of India (Communist) 1958
7. Bharatiya Mazdoor Sangh Rashtriya Swayamsevak Sangh 1955
8. New Trade Union Initiative Independent from political parties 2001
9. Self Employed Women’s Association of India - 1972
10. Labour Progressive Federation Dravida Munnetra Kazhagam -
11. United Trade Union Congress Revolutionary Socialist Party 1949
12. Trade Union Co-ordination Committee All India Forward Bloc -

Criticism of Trade Unions

Trade unions have been subjected to severe criticism, particularly by the employers
because of the following reasons:

1. Increased Potential for Strikes:

Trade union leaders serve the threat of strike to the management quite frequently to get
their demands accepted. When a trade union fails to get its demand accepted by the management
through collective bargaining and negotiations, it may adopt militant methods including a strike
blockage or work stoppage.

2. Narrow Perspective:
Lack of education makes the workers narrow-minded, and prevents them from taking
long-term views. Thus, anything which does not result in an immediate reward becomes
unattractive to them. This attitude is responsible for many strikes and lockouts in industrial
concerns.

3. Resistance to Change:
Trade unions do not welcome rationalisation and improved methods of production for the
fear that some of the workers will be put out of work. They often show resistance to introduction
to changes in work methods, procedures and working conditions.

4. Fear of Increased Costs:

All efforts of a trade union to gain concessions from management in the form of higher
pay, better working conditions, better retirement benefits, etc. for its members imply higher costs
to management. Obviously higher costs, if not accompanied by increases in employees’
productivity, are not desirable for the organisation as it will not be able to face competition in the
market in the long-run.

5. Social Costs:
When labour unions strike on flimsy grounds, incalculable losses occur to producers,
community and the nation. Strikes are harmful to the workers also as they have to suffer loss of
wages and other benefits.

6. Lack of Employee Commitment:

In a unionized firm, the employees’ loyalty is often shifted from the organisation to the
union. This can result in reduced employee commitment, lower morale, resistance to change,
and sublimation of the organisation’s goals to those of the trade union.

7. Artificial Scarcity of Labour:

It is alleged that the labour unions may create artificial scarcity of labour by demanding
that only union members should be employed. In such a situation, an employer may prefer not to
fill the vacancies because of fear or trouble by the union. As a result, employment gets
restricted.

Outcomes of Joining Trade Union

The important forces that make the employees join a union are as follows:
1. Greater Bargaining Power
The individual employee possesses very little bargaining power as compared to that of
his employer. If he is not satisfied with the wage and other conditions of employment, he can
leave the job. It is not practicable to continually resign from one job after another when he is
dissatisfied. This imposes a great financial and emotional burden upon the worker. The better
course for him is to join a union that can take concerted action against the employer. The threat
or actuality of a strike by a union is a powerful tool that often causes the employer to accept the
demands of the workers for better conditions of employment.

2. Minimize Discrimination
The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in
nature. The personal relationships existing between the supervisor and each of his subordinates
may influence the management. Thus, there are chances of favoritisms and discriminations. A
trade union can compel the management to formulate personnel policies that press for equality of
treatment to the workers. All the labor decisions of the management are under close scrutiny of
the labor union. This has the effect of minimizing favoritism and discrimination.

3. Sense of Security
The employees may join the unions because of their belief that it is an effective way to
secure adequate protection from various types of hazards and income insecurity such as accident,
injury, illness, unemployment, etc. The trade union secure retirement benefits of the workers and
compel the management to invest in welfare services for the benefit of the workers.

4. Sense of Participation
The employees can participate in management of matters affecting their interests only if
they join trade unions. They can influence the decisions that are taken as a result of collective
bargaining between the union and the management.

5. Sense of Belongingness
Many employees join a union because their co-workers are the members of the union. At
times, an employee joins a union under group pressure; if he does not, he often has a very
difficult time at work. On the other hand, those who are members of a union feel that they gain
respect in the eyes of their fellow workers. They can also discuss their problem with' the trade
union leaders.

6. Platform for self expression

The desire for self-expression is a fundamental human drive for most people. All of us
wish to share our feelings, ideas and opinions with others. Similarly the workers also want the
management to listen to them. A trade union provides such a forum where the feelings, ideas and
opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and
complaints of the workers to the management. The collective voice of the workers is heard by
the management and give due consideration while taking policy decisions by the management.

7. Betterment of relationships
Another reason for employees joining unions is that employees feel that unions can fulfill
the important need for adequate machinery for proper maintenance of employer-employee
relations. Unions help in betterment of industrial relations among management and workers by
solving the problems peacefully.

Trade Union Activities

The foregoing analysis of the generic trade union methods can be better understood if
they are further analysed in terms of the specific activities in which they result.
Trade Unionism
These activities may be summarised as follows:
Economic Activities
Under this head come all those activities which result in the exercise of the economic
pressure on the employer, for example, engaging in collective bargaining, demonstration, strike,
boycott, picketing and so on.

Political Activities
(a) Carrying on political education of the workers;
(b) Obtaining political power and influence through developing political parties of their own,
and extending help to candidates of other political parties who are sympathetic to the cause
of labour;
(c) Carrying on lobbying activities for influencing the course of labour and other legislation;
(d) Participating in, and representing the workers on, advisory institutions and bodies;
(e) Developing militancy and revolutionary urge amongst workers; and
(f) Protesting against governmental decisions and measures detrimental to the interests of
workers.

Social Activities
(a) Initiating and developing workers education scheme;
(b) Organising welfare and recreational activities such as mutual insurance, providing monetary
and other help during periods of strikes and economic distress;
(c) Running cooperatives;
(d) Providing housing facilities;
(e) Participating in community development and community protection activities;
(f) Engaging in cultural activities; and
(g) Cooperating with governmental agencies in social welfare programme.
(h)

INDUSTRIAL DISPUTES

The term Industrial Dispute is defined by Section 2(k) of the Industrial Disputes Act,
1947 as, “any disputes or differences between employers and employers, or between employers
and workmen, or between workmen and workmen, which is connected with the employment or
non-employment or the terms of employment or with the conditions of labour, of any person”.
This definition is very wide and covers all possible contingencies that may result in work
stoppages / strikes. Ina strict judicial sense it would not exclude strikes in support of workers in
another industry; or, for that matter, in some other country.
Industrial dispute is disagreement and difference between two disputants, namely, labour
and management. This disagreement or difference could be on any matter concerning them
individually or collectively but must be connected with employment or non-employment or with
the conditions of labour. The definition of industrial dispute as per Section 2 (k) of the Industrial
Disputes Act, 1947 given in the para above could be divided into four parts.
i. Factum of dispute
ii. Parties to dispute
iii. Subject matter to dispute
iv. Industry.

i. Factum of Dispute:
Denotes the fact of existence of dispute. That the dispute or difference or disagreement must
be something fairly definite and of real substance, not a mere personal quarrel and should not
be existing only in the minds of the parties. Further, the term connotes a real and substantial
difference having some element of persistency, and likely to endanger the industrial peace of
the community, if not resolved.

ii. Parties to Dispute

This identify the following parties:
a. employers and employers
b. employers and workmen
c. workmen and workmen
iii. Subject matter to Dispute:
The subject-matter of an industrial dispute must be specific, i.e., which affects the
relationship of employers and workers. The terms of employment and conditions of labour
are included under the term industrial dispute.

iv. Industry:
The adjective ‘industrial’ relates the disputes to an industry as defined in Section 2(j) of
Industrial Disputes Act.

FORMS OF DISPUTES
1. Strike: When workers collectively cease to work in an industry, it is known as strike. “it
means a cessation of work by a body of persons employed in an industry acting in
combination; or a concerted refusal of any number of persons who are or have been so
employed to continue to work or to accept employment; or a refusal under a common
understanding of any number of such persons to continue to work or to accept employment.

For trade unions, strike is the most powerful weapon for forcing the management to
accept their demands. Various types of strikes are discussed below:
i. Economic Strike: Most of the strikes of workers are for more facilities and increase in
wage levels. In economic strike, the labourers demand increase in wages, travelling
allowance, house rent allowance, dearness allowance and other facilities such as increase
in privilege leave and casual leave.

ii. Sympathetic Strike: When workers of one unit or industry go on strike in sympathy with
workers of another unit or industry who are already on strike, it is called a sympathetic
strike.
iii. General Strike: It means a strike by members of all or most of the union in a region or
an industry. It may be a strike of all the workers in a particular region of industry to force
demands common to all the workers. It may also be an extension of the sympathetic
strike to express generalized protest by the workers.
iv. Stay-in Strike: In this case, workers do not absent themselves from their place of work
when they are on strike. They keep control over production facilities but do not work.
Such a strike is also known as ‘pen down’ or ‘tool down’ strike.
 v. Slow Down Strike: Employees remain on their jobs under this type of strike. They do
not stop work, but restrict the rate of output in an organized manner. The adopt go-slow
tactics to put pressure on the employers.

2. Boycott:
The workers may decide to boycott the company by not using its products. Such an appeal
may also be made to the public in general. In the former case, the boycott is known as
primary and in the latter secondary. It is a coercive method whereby the management is
forced to accept their demands since the boycott affects the marketability of its products.

3. Picketing:
 When workers are dissuaded from work by stationing certain men at the factory gates,
such a step is known as picketing. If picketing does not involve any violence, it is
perfectly legal.
 Picketing is an act of posting pickets and implies marching or patrolling of the workmen
in front of the premises of the employer carrying and displaying signs, banners, and
placards (in connection with the dispute) for the purpose of preventing others from
entering the place.

4. Gherao: It means in Hindi to surround. Workers may gherao the members of management
by blocking their exits and forcing them to stay inside their cabins just like prisoners. The
main object of gherao is to inflict physical and mental torture to the person being gheraoed
and hence this weapon disturbs the industrial peace to a great extent.

Weapons of Management
1. Employers’ Association: The employers may form their unions which may collectively
oppose the working class and put pressure on the trade unions.

2. Lock-outs: An employer may close down the place of employment temporarily. Such a step
is technically known as lock-out. It is reverse of a strike and is a very powerful weapon in
the hands of an employer to coerce or pressurizes the workers to return to the place of work.
According to the Industrial Disputes Act, 1947, “lock-out means the closing of a place of
employment or the suspension of work, or the refusal by an employer to continue to employ
any number of persons employed by him.

3. Termination of Service: The employers may terminate the services of those workers who
are on strike by blacklisting them. Their lists may be circulated to other employers so as to
restrict their chances of getting employment with those employers.
Causes of Industrial Disputes
The disputes between the management and the workers may arise on account of the following
factors:
1. Economic Causes: These causes may be classified as:
a. Demand for increase in wages on account of increase in all-India Consumer Price Index
for Industrial Workers. The demand for increase in wages may be raised for all
categories of factory workers.
b. Demand for higher gratuity and other retirement benefits.
c. Demand for higher bonus.
d. Demand for certain allowances such as house rent allowance, medical allowance, night
shift allowance, conveyance allowance.
e. Demand for paid holidays.
f. Reduction of working hours.
g. Better working conditions, etc.

2. Political Causes: Trade unions in India are controlled by various political parties. In many
cases, their leadership vests in the hands of persons who are more interested in achieving
their political interests rather than the interests of labourers.
3. Personnel Causes: Sometimes, industrial dispute arise because of personnel problems like
dismissal, retrenchment, layoff, transfer, promotion, etc.
4. Indiscipline: Industrial disputes also take place because of indiscipline and violence on the
part of the workforce. Lock-outs are resorted to by the managements to curb indiscipline and
violence.
Indicators of Poor Industrial Relations
(i) Absenteeism: It is unauthorized absence from work. Stated differently, it amounts to
absenteeism when an employee is scheduled to work bur fails to report for duty.
(ii) Employee Turnover: It is that situation in which the employee himself resigns and
leaves the job permanently.

(iii) Strikes: A strike is a collective stoppage of work by a group of workers.

(iv) Lockouts: Closing down of an undertaking or the suspension of work or the refusal of an
employer to continue to employ any number of persons employed by him is known as
lockout.
(v) Grievances: Grievance means any discontent or dissatisfaction, whether expressed or
not, whether valid or not, arising out of anything connected with the company which
employee thinks, believes or even feels to be unfair.
(vi) Indiscipline: It is code of misconduct. Indiscipline is violation of rules and norms of
behaviour (both formal and informal).
(vii) Industrial Conflicts: Organised protest against prevailing industrial conditions raised by
a group or a class of workers.
(viii) Industrial Disputes: Any dispute or difference between employees and employees, or
between employees and employers or between employers and employers, which is
connected with the employment or non-employment or the terms of employment or with
the conditions of work of any person.
(ix) Improper working conditions.

(x) Resistance to change.

Industrial Dispute Settlement Machinery

Some of the major industrial dispute settlement machinery are as described:-
1. Conciliation
2. Board Of conciliation
3. Court of Inquiry
4. Voluntary Arbitration
5. Adjudication.
This machinery has been provided under the Industrial Disputes Act, 1947. It, in fact, provides a
legalistic way of setting the disputes. As said above, the goal of preventive machinery is to create
an environment where the disputes do not arise at all.

1. Conciliation
Conciliation is a form of mediation. Mediation is the act of making active effort to bring two
conflicting parties to compromise. Mediation, however, differs from conciliation in that whereas
conciliator plays only a passive and indirect role, and the scope of his functions is provided
under the law, the mediator takes active part and the scope of his activities are not subject to any
statutory provisions.

Conciliation is the practice by which the services of a neutral 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 of agreed solution. The Industrial Disputes Act, 1947 provides for
conciliation, and can be utilised either by appointing conciliation officers (permanently or for a
limited period) or by constituting a board of conciliation.

This conciliation machinery can take a note of a dispute or apprehend dispute either on With a
view to expediting conciliation proceeding, time-limits have been prescribed-14 days in the case
of conciliation officers and two months in the case of a board of conciliation, settlement arrived
at in the course of conciliation is binding for such period as may be agreed upon between the
parties or for a period of 6 months and with continue to be binding until revoked by either party.
The Act prohibits strike and lockout during the pendency of conciliation proceedings before a
Board and for seven days after the conclusion of such proceedings.

Conciliation Officer: The law provides for the appointment of Conciliation Officer by the
Government to conciliate between the parties to the industrial dispute. The Conciliation Officer
is given the powers of a civil court, whereby he is authorised to call the witness the parties on
oath. It should be remembered, however, whereas civil court cannot go beyond interpreting the
laws, the conciliation officer can go behind the facts and make judgment which will be binding
upon the parties.

On receiving information about a dispute, the conciliation officer should give formal intimation
in writing to the parties concerned of his intention to commence conciliation proceedings from a
specified date. He should then start doing all such things as he thinks fit for the purpose of
persuading the parties to come to fair and amicable settlement of the dispute.

Conciliation is an art where the skill, tact, imagination and even personal influence of the
conciliation officer affect his success. The Industrial Disputes Act, therefore, does not prescribe
any procedure to the followed by him. The conciliation officer is required to submit his report to
the appropriate government along with the copy of the settlement arrived at in relation to the
dispute or in case conciliation has failed, he has to send a detailed report giving out the reasons
for failure of conciliation. The report in either case must be submitted within 14 days of the
commencement of conciliation proceedings or earlier.

But the time for submission of the report may be extended by an agreement in writing of all the
parties to the dispute subject to the approval of the conciliation officer. If an agreement is
reached (called the memorandum of settlement), it remains binding for such period as is agreed
upon by the parties, and if no such period is agreed upon, for a period of six months from the
date on which the memorandum of settlement is signed by the parties to the dispute, and
continues to be binding on the parties after the expiry of the period aforesaid, until the expiry of
two months from the date on which a notice in writing of an intention to terminate the settlement
is given by one of the party or parties to the settlement.

Board of Conciliation
In case Conciliation Officer fails to resolve the differences between the parties, the government
has the discretion to appoint a Board of Conciliation.

The machinery of the Board is set in motion when a dispute is referred to it. In other words, the
Board does not hold the conciliation proceedings of its own accord. On the dispute being referred
to the Board, it is the duty of the Board to do all things as it thinks fit for the purpose of inducing
the parties to come to a fair and amicable settlement. The Board must submit its report to the
government within two months of the date on which the dispute was referred to it. This period
can be further extended by the government by two months.

Court of Inquiry
In case of the failure of the conciliation proceedings to settle a dispute, the government can
appoint a Court of Inquiry to enquire into any matter connected with or relevant to industrial
dispute. The court is expected to submit its report within six months. The court of enquiry may
consist of one or more persons to be decided by the appropriate government. The court of
enquiry is required to submit its report within a period of six months from the commencement of
enquiry.

This report is subsequently published by the government within 30 days of its receipt. Unlike
during the period of conciliation, workers‟ right to strike, employers right to lockout, and
employers right to dismiss workmen, etc. remain unaffected during the proceedings in a court to
enquiry. A court of enquiry is different from a Board of Conciliation. The former aims at
inquiring into and revealing the causes of an industrial dispute. On the other hand, the latter's
basic objective is to promote the settlement of an industrial dispute. Thus, a court of enquiry is
primarily fact-finding machinery.

2.Voluntary Arbitration
On failure of conciliation proceedings, the conciliation officer many persuade the parties to refer
the dispute to a voluntary arbitrator. Voluntary arbitration refers to getting the disputes settled
through an independent person chosen by the parties involved mutually and voluntarily. In other
words, arbitration offers an opportunity for a solution of the dispute through an arbitrator jointly
appointed by the parties to the dispute.

The process of arbitration saves time and money of both the parties which is usually wasted in
case of adjudication. Voluntary arbitration became popular as a method a settling differences
between workers and management with the advocacy of Mahatma Gandhi, who had applied it
very successfully in the Textile industry of Ahmedabad. However, voluntary arbitration was lent
legal identity only in 1956 when Industrial Disputes Act, 1947 was amended to include a
provision relating to it.
The provision for voluntary arbitration was made because of the lengthy legal proceedings and
formalities and resulting delays involved in adjudication. It may, however, be noted that
arbitrator is not vested with any judicial powers. He derives his powers to settle the dispute from
the agreement that parties have made between themselves regarding the reference of dispute to
the arbitrator. The arbitrator should submit his award to the government.

The government will then publish it within 30 days of such submission. The award would
become enforceable on the expiry of 30 days of its publication. Voluntary arbitration is one of
the democratic ways for setting industrial disputes. It is the best method for resolving industrial
conflicts and is a close supplement to collective bargaining. It not only provides a voluntary
method of settling industrial disputes, but is also a quicker way of settling them. It is based on
the notion of self-government in industrial relations.

Furthermore, it helps to curtail the protracted proceedings attendant on adjudication, connotes a

healthy attitude and a developed outlook; assists in strengthening the trade union movement and
contributes for building up sound and cordial industrial relations.

3.Adjudication:
The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication by
labour court or tribunals when conciliation machinery fails to bring about a settlement.
Adjudication consists of settling disputes through intervention by the third party appointed by the
government.

The law provides the adjudication to be conducted by the Labour Court, Industrial Tribunal of
National Tribunal. A dispute can be referred to adjudication if hot the employer and the
recognised union agree to do so. A dispute can also be referred to adjudication by the
Government even if there is no consent of the parties in which case it is called compulsory
adjudication. As mentioned above, the dispute can be referred to three types of tribunals
depending on the nature and facts of dispute in questions.

These include:
(a) Labour courts,
(b) Industrial tribunals,
(c) National tribunals.

The procedure, powers, and provisions regarding commencement of award and period of
operation of award of these three bodies are similar. The first two bodies can be set up either by
State or Central Government but the national tribunal can be constituted by the Central
Government only, when it thinks that the adjudication of a dispute is of national importance.
These three bodies are into hierarchical in nature.

It is the Government's prerogative to refer a dispute to any of these bodies depending on the
nature of dispute.

(a) Labour Court:

A labour court consists of one person only, who is normally a sitting or an ex-judge of a High
Court. It may be constituted by the appropriate Government for adjudication of disputes which
are mentioned in the second schedule of the Act.

The issues referred to a labour court may include:

(i) The propriety or legality of an order passed by an employer under the Standing Orders.
(ii) The application and interpretation of Standing Orders.

(iii) Discharge and dismissal of workmen and grant of relief to them

(iv) Withdrawal of any statutory concession or privilege.
(v) Illegality or otherwise of any strike or lockout.
(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals with
the jurisdiction of Industrial Tribunals).

(b) Industrial Tribunal:

Like a labour court, an industrial tribunal is also a one-man body. The matters which fall within
the jurisdiction of industrial tribunals are as mentioned in the second schedule or the third
schedule of the Act. Obviously, industrial tribunals have wider jurisdiction than the labour
courts. Moreover an industrial tribunal, in addition to the presiding officer, can have two
assessors to advise him in the proceedings; the appropriate Government is empowered to appoint
the assessors.

The Industrial Tribunal may be referred the following issues:

1. Wages including the period and mode of payment.
2. Compensatory and other allowances.
3. Hours of work and rest intervals.
4. Leave with wages and holidays.
5. Bonus, profit sharing, provident fund and gratuity.
6. Shift working otherwise than in accordance with the standing orders.
7. Rule of discipline.
8. Rationalisation.
9. Retrenchment.
10. Any other matter that may be prescribed.

(c) National Tribunal:

The Central Government may constitute a national tribunal for adjudication of disputes as
mentioned in the second and third schedules of the Act or any other matter not mentioned therein
provided in its opinion the industrial dispute involves questions of national importance or the
industrial dispute is of such a nature that undertakings established in more than one state
are likely to be affected by such a dispute.

The Central Government may appoint two assessors to assist the national tribunal. The award of
the tribunal is to be submitted to the Central Government which has the power to modify or
reject it if it considers it necessary in public interest.