HRM (LW2312)

MODULE - 6
EMPLOYEE RELATIONS MANAGEMENT

Meaning And Definition Of Industrial Relation

The relationship between Employer and employee or trade unions is called Industrial Relation.
Harmonious relationship is necessary for both employers and employees to safeguard the
interests of the both the parties of the production. In order to maintain good relationship with the
employees, the main functions of every organization should avoid any dispute with them or settle
it as early as possible so as to ensure industrial peace and higher productivity. Personnel
management is mainly concerned with the human relation in industry because the main theme of
personnel management is to get the work done by the human power and it fails in its objectives if
good industrial relation is maintained. In other words good Industrial Relation means industrial
peace which is necessary for better and higher productions.

Definition:-

i. Industrial Relation is that part of management which is concerned with the manpower of the
enterprise – whether machine operator, skilled worker or manager.

ii. Industrial Relation is a relation between employer and employees, employees and employees
and employees and trade unions. - Industrial dispute Act 1947.

iii. While moving from jungle of the definitions, here, Industrial Relation is viewed as the
“process by which people and their organizations interact at the place of work to establish the
terms and conditions of employment.”

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

relations.

A few notable features pertaining to Industrial Relations are as under:

1. Industrial Relation do not emerge in vacuum they are born of employment relationship in an
industrial setting. Without the existence of the two parties, i.e. labor and management, this
relationship cannot exist. It is the industry, which provides the environment for industrial
relations.

2. Industrial Relation are characterized by both conflict and co-operations. This is the basis of
adverse relationship. So the focus of Industrial Relations in on the study of the attitudes,
relationships, practices and procedure developed by the contending parties to resolve or at least
minimize conflicts.

3. As the labor and management do not operate in isolations but are parts of large system, so the
study of Industrial Relation also includes vital environment issues like technology of the
workplace, country’s socio-economic and political environment, nation’s labor policy, attitude of
trade unions workers and employers.

4. Industrial Relation also involve the study of conditions conductive to the labor, managements
co-operations as well as the practices and procedures required to elicit the desired co-operation
from both the parties.

5. Industrial Relations also study the laws, rules regulations agreements, awards of courts,
customs and traditions, as well as policy framework laid down by the governments for eliciting
co-operations between labor and management. Besides this, it makes an in-depth analysis of the
interference patterns of the executive and judiciary in the regulations of labor–managements
relations.

In fact the concepts of Industrial Relations are very broad-based, drawing heavily from a variety
of discipline like social sciences, humanities, behavioral sciences, laws etc.

In fact, Industrial Relation encompasses all such factors that influence behavior of people
at work. A few such important factors are details below:

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

associations, government bodies, labor courts, tribunals and other organizations which have
direct or indirect impact on the industrial relations systems.

2. Characters : It aims to study the role of workers unions and employers’ federations officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of
labor court, tribunal etc.

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

schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery
working of closed shops, union reorganization, organizations of protests through methods like
revisions of existing rules, regulations, policies, procedures, hearing of labor courts, tribunals etc.

4. Contents : Includes matter pertaining to employment conditions like pay, hours of works,
leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc.,
laws relating to such activities, regulations governing labor welfare, social security, industrial
relations, issues concerning with workers’ participation in management, collective bargaining,
etc.

Objectives of Industrial Relation

A. To safeguard the interest of labor and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in the
process of production.

B. To avoid industrial conflict or strife and develop harmonious relations, which are an essential
factor in the productivity of workers and the industrial progress of a country.

C. To raise productivity to a higher level in an era of full employment by lessening the tendency
to high turnover and frequency absenteeism.

D. To establish and nurse the growth of an Industrial Democracy based on labor partnership in
the sharing of profits and of managerial decisions, so that ban individuals personality may grow
its full stature for the benefit of the industry and of the country as well.

E. To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.

F. To establish government control of such plants and units as are running at a loss or in which
productions has to be regulated in the public interest.

G. Improvements in the economic conditions of workers in the existing state of industrial

managements and political government.

H. Control exercised by the state over industrial undertaking with a view to regulating
production and promoting harmonious industrial relations.

I. Socializations or rationalization of industries by making the state itself a major employer

J. Vesting of a proprietary interest of the workers in the industries in which they are employed.

The main aspect of Industrial Relations are :-

i. Labor Relations, i.e. relations between union and management.

ii. Employer-employees relations, i.e. relations between management and employees.
iii. Group relations, i.e. relations between various groups of workmen.
iv. Community or Public relations, i.e. relations between industry and society.
v. Promotions and development of healthy labor-managements relations.
vi. Maintenance of industrial peace and avoidance of industrial strife
vii. Development of true industrial Democracy.

Effects of poor Industrial Relations

Poor Industrial Relation produces highly disquieting effects on the economic life of the country.
We may enumerate the ill-effects of poor Industrial Relations as under:

1. Multiplier effects: Modern industry and for that matter modern economy are interdependent.
Hence although the direct loss caused due to industrial conflict in any one plant may not be very
great, the total loss caused due to its multipliers effect on the total economy is always very great.

2. Fall in normal tempo : poor Industrial Relations adversely effect the normal tempo of work
so that work far below the optimum level. Costs build up. Absenteeism and labor turnover
increase. Plants discipline breaks down and both the quality and quality of production suffer.

3. Resistance of change : Dynamic industrial situation calls for change more or less
continuously. Methods have to be improved. Economics have to be introduced. New products
have to be designed, produced and put in the market. Each of these tasks involves a whole chain
of changes and this is resisted bitterly if these are industrial conflict.

4. frustration and social cost : every man comes to the work place not only to earn a living. He
wants to satisfy his social and egoistic needs also. When he finds difficulty in satisfying these
needs he feels frustrated. Poor Industrial Relations take a heavy toll in terms of human
frustration. They reduce cordiality and aggravate social tension.
Suggestions to Improve Industrial Relation :-

a. Both management and unions should develop constructive attitudes towards each other.

b. All basic policies and procedures relating to Industrial Relation should be clear to everybody
in the organization and to the union leader. The personnel manager must make certain that line
people will understand and agree with these policies.

c. The personnel manager should remove any distrust by convincing the union of the company’s
integrity and his own sincerity and honesty. Suspicious, rumors and doubts should all be put to
rest.

d. The personnel manager should not vie with the union to gain workers‘loyal to both the
organization. Several research studies also confirm the idea of dual allegiance. There is strong
evidence to discard the belief that one can owe allegiance to one group only.

e. Management should encourage right kind of union leadership. While it is not for the
management to interfere with union activities, or choose the union leadership, its action and
attitude will go a long way towards developing the right kind of union leadership. “Management
gets the union it deserves” is not just an empty phrase.

IMPORTANCE OF INDUSTRIAL RELATIONS:

The healthy industrial relations are key to the progress. Their significance may be
discussed as under:

1. Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from manager to
workers. The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.

2. Reduction in Industrial Disputes – Good industrial relation reduce the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate
satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts,
go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do
not spring up in an atmosphere of industrial peace. It helps promoting co-operation and
increasing production.

3. High morale – Good industrial relations improve the morale of the employees. Employees
work with great zeal with the feeling in mind that the interest of employer and employees is one
and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of
industry. The employer in his turn must realize that the gains of industry are not for him along
but they should be shared equally and generously with his workers. In other words, complete
unity of thought and action is the main achievement of industrial peace. It increases the place of
workers in the society and their ego is satisfied. It naturally affects production because mighty
co-operative efforts alone can produce great results.

4. Mental Revolution – The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers, employees and Government to
work out a new relationship in consonance with a spirit of true democracy. Both should think
themselves as partners of the industry and the role of workers in such a partnership should be
recognized. On the other hand, workers must recognize employer’s authority. It will naturally
have impact on production because they recognize the interest of each other.

5. New Programmes – New programmes for workers development are introduced in an

atmosphere of peace such as training facilities, labor welfare facilities etc. It increases the
efficiency of workers resulting in higher and better production at lower costs.

6. Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastages of man, material and
machines are reduced to the minimum and thus national interest is protected.

Thus, from the above discussion, it is evident that good industrial relation is the basis of higher
production with minimum cost and higher profits. It also results in increased efficiency of
workers. New and new projects may be introduced for the welfare of the workers and to promote
the morale of the people at work.
An economy organized for planned production and distribution, aiming at the realization of
social justice and welfare of the massage can function effectively only in an atmosphere of
industrial peace. If the twin objectives of rapid national development and increased social justice
are to be achieved, there must be harmonious relationship between management and labor.

DIFFERENCE BETWEEN INDUSTRIAL RELATIONS AND HUMAN RELATIONS:

The term “Industrial Relations” is different from “Human Relations”. Industrial relations refer to
the relations between the employees and the employer in an industry. Human relations refer to a
personnel-management policy to be adopted in industrial organizations to develop a sense of
belongingness in the workers improves their efficiency and treat them as human beings and make
a partner in industry.
Industrial relations cover the matters regulated by law or by collective agreement between
employees and employers. On the other hand, problems of human relations are personal in
character and are related to the behavior of worker where morale and social elements
predominated. Human relations approach is personnel philosophy which can be applied by the
management of an undertaking. The problem of industrial relations is usually dealt with a three
levels – the level of undertaking, the industry and at the national level. To sum up the term
“Industrial Relations” is more wide and comprehensive and the term “Human Relations” is a part
of it.
Determining factors of industrial relations
Good industrial relations depend on a great variety of factors. Some of the more obvious ones are
listed below:
1. History of industrial relations – No enterprise can escape its good and bad history of
industrial relations. A good history is marked by harmonious relationship between management
and workers. A bad history by contrast is characterized by militant strikes and lockouts. Both
types of history have a tendency to perpetuate themselves. Once militancy is established as a
mode of operations there is a tendency for militancy to continue. Or once harmonious
relationship is established there is a tendency for harmony to continue.

2. Economic satisfaction of workers – Psychologists recognize that human needs have a certain
priority. Need number one is the basic survival need. Much of men conducted are dominated by
this need. Man works because he wants to survive. This is all the more for underdeveloped
countries where workers are still living under subsistence conditions. Hence economic
satisfaction of workers is another important prerequisite for good industrial relations.

3. Social and Psychological satisfaction – Identifying the social and psychological urges of
workers is a very important steps in the direction of building good industrial relations. A man
does not live by bread alone. He has several other needs besides his physical needs which should
also be given due attention by the employer. An organization is a joint venture involving a
climate of human and social relationships wherein each participant feels that he is fulfilling his
needs and contributing to the needs of others. This supportive climate requires economic rewards
as well as social and psychological rewards such as workers’ participation in management, job
enrichment, suggestion schemes, re-dressal of grievances etc.

4. Off-the-Job Conditions – An employer employs a whole person rather than certain separate
characteristics. A person’s traits are all part of one system making up a whole man. His home life
is not separable from his work life and his emotional condition is not separate from his physical
condition. Hence for good industrial relations it is not enough that the worker’s factory life alone
should be taken care of his off-the-job conditions should also be improved to make the industrial
relations better.
5. Enlightened Trade Unions – The most important condition necessary for good industrial
relations is a strong and enlightened labor movement which may help to promote the status of
labor without harming the interests of management, Unions should talk of employee contribution
and responsibility. Unions should exhort workers to produce more, persuade management to pay
more, mobilize public opinion on vital labor issues and help Government to enact progressive
labor laws.

6. Negotiating skills and attitudes of management and workers – Both management and
workers’ representation in the area of industrial relations come from a great variety of
backgrounds in terms of training, education, experience and attitudes. These varying
backgrounds play a major role in shaping the character of industrial relations. Generally
speaking, well-trained and experienced negotiators who are motivated by a desire for industrial
peace create a bargaining atmosphere conducive to the writing of a just and equitable collective
agreement. On the other hand, ignorant, inexperienced and ill-trained persons fail because they
do not recognize that collective bargaining is a difficult human activity which deals as much in
the emotions of people as in their economic interests. It requires careful preparation and top –
notch executive competence. It is not usually accomplished by some easy trick or gimmick.
Parties must have trust and confidence in each other. They must possess empathy, i.e. they
should be able to perceive a problem from the opposite angle with an open mind. They should
put themselves in the shoes of the other party and then diagnose the problem. Other factors
which help to create mutual trust are respect for the law and breadth of the vision. Both parties
should show full respect for legal and voluntary obligations and should avoid the tendency to
make a mountain of a mole hill.

7. Public policy and legislation: - when Government, regulates employee relations, it becomes a
third major force determining industrial relations the first two being the employer and the union.
Human behavior is then further complicated as all three forces interact in a single employee
relation situation. Nonetheless, government in all countries intervenes in management – union
relationship by enforcing labor laws and by insisting that the goals of whole society shall take
precedence over those of either of the parties. Government intervention helps in three different
ways 1) it helps in catching and solving problems before they become serious. Almost every one
agrees that it is better to prevent fires them to try stopping them after they start; 2) It provides a
formalized means to the workers and employers to give emotional release to their dissatisfaction;
and 3) It acts as a check and balance upon arbitrary and capricious management action.

8. Better education: - with rising skills and education workers’ expectations in respect of
rewards increase. It is a common knowledge that the industrial worker in India is generally
illiterate and is misled by outside trade union leaders who have their own axe to grind. Better
workers’ education can be a solution to this problem. This alone can provide worker with a
proper sense of responsibility, which they owe to the organization in particular, and to the
community in general.
9. Nature of industry: - In those industries where the costs constitute a major proportion of the
total cast, lowering down the labor costs become important when the product is not a necessity
and therefore, there is a little possibility to pass additional costs on to consumer. Such periods,
level of employment and wages rise in decline in employment and wages. This makes workers
unhappy and destroys good industrial relations.
INDUSTRIAL RELATIONS PROGRAMME :

Today’s professional industrial relations director, or by whatever title he is designated, no longer

views his job as personalizing management, or that of a social worker in a factory, or a union
buster, he looks upon his department as an adjunct to management supervision at all levels; he
keeps other executives informed about new discoveries, programme trends and needs. At the
same time, he provides efficient service in the operation of several centralized services.
A successful industrial relations programme reflects the personnel viewpoint, which is
influenced by three main considerations:
a) Individual thinking
b) Policy awareness and
c) Expected group reaction

Individualized thinking makes if imperative for the administrator to consider the entire situation
in which the affected individual is placed. Policy awareness underscores the idea of the
consistency of treatment and the precedent value of any decision which a management takes;
while expected group reaction balances what we know of human nature in groups against an
individual’s situation in the light of the policy that has been formulated and implemented. In all
these different circumstances, reality demands that all the three aspects of the personnel
viewpoint should be considered at once in terms of the past, the present and the future. This
viewpoint is held at all the levels of management from the top to the bottom, from the top
executives and staff to the line and supervisory personnel.

SCOPE OF INDUSTRIAL RELATIONS WORK:

The staff employed in the industrial relations department should know the limitations within
which it has to function. The industrial relations director generally has several assistants who
help him to perform his functions effectively, and he usually reports directly to the president or
chairman of the board of directors of an organization.

The functions of the industrial relations staff are -

1. Administration, including overall organization, supervision and co-ordination of industrial

relations policies and programmes.
2. Liaison with outside groups and personnel departments as well as with various cadres of the
management staff.
3. The drafting of regulations, rules, laws or orders and their construction and interpretation.
4. Position classification, including overall direction of job analysis, salary and wage
administration, wage survey and pay schedules.
5. Recruitment and employment of workers and other staff.
6. Employment testing, including intelligence tests, mechanical aptitude tests and achievement
tests.
7. Placement, including induction and assignment.
8. Training of apprentices, production workers, foremen and executives.
9. Employee counseling on all types of personnel problems-educational, vocational, health or
behavior problems.
10. Medical and health services.
11. Safety services, including first aid training.
12. Group activities, including group health insurance, housing, cafeterial programmes and social
clubs.
13. Suggestion plans and their uses in labor, management and production committees.
14. Employee relations, specially collective bargaining with representatives and settling
grievances.
15. Public relations.
16. Research in occupational trends and employee attitudes, and analysis of labor turnover.
17. Employee records for all purposes.
18. Control of operation surveys, fiscal research and analysis.
19. Benefit, retirement and pension programmes.

FUNCTIONAL REQUIREMENTS OF A SUCCESSFUL INDUSTRIAL RELATIONS

PROGRAMME

The basic requirements on which a successful industrial relations programme is based are :-

a) Top Management Support: - Since industrial relations is a functional staff service, it must
necessarily derive its authority from the line organization. This is ensured by providing that the
industrial relations director should report to a top line authority to the president, chairman or vice
president of an organization.
b) Sound Personnel Policies: - These constitute the business philosophy of an organization and
guide it in arriving at its human relations decisions. The purpose of such policies is to decide,
before any emergency arises, what shall be done about the large number of problems which crop
up every day during the working of an organization. Policies can be successful only when they
are followed at all the level of an enterprise, from top to bottom.

c) Adequate Practices should be developed by professionals: - In the field to assist in the

implementation of the policies of an organization. A system of procedures is essential if intention
is to be properly translated into action. The procedures and practices of an industrial relations
department are the “tool of management” which enables a supervisor to keep ahead of his job
that of the time-keeper, rate adjuster, grievance reporter and merit rater.

d) Detailed Supervisory Training :- To ensure the organizational policies and practices are
properly implemented and carried into effect by the industrial relations staff, job supervisors
should be trained thoroughly, so that they may convey to the employees the significance of those
policies and practices. They should, moreover, be trained in leadership and in communications.

e) Follow-up of Results: - A constant review of an industrial relations programme is essential,

so that existing practices may be properly evaluated and a check may be exercised on certain
undesirable tendencies, should they manifest themselves. A follow up of turnover, absenteeism,
departmental morale, employee grievances and suggestion; wage administration, etc. should be
supplemented by continuous research to ensure that the policies that have been pursued are best
fitted to company needs and employee satisfaction. Hints of problem areas may be found in exit
interviews, in trade union demands and in management meetings, as well as in formal social
sciences research.

TRADE UNION IN INDIA

A trade union is an organization of workers who have banded together to achieve certain
common goals which is basically "maintaining or improving the conditions of their
employment".
A trade union is a voluntary organization of workers pertaining to a particular trade, industry or
a company and formed to promote and protect their interests and welfare by collective action.
Trade unions originated in Europe from where it spread to many countries. The Industrial
Revolution gave a bargaining power almost completely to the employers causing many workers
to be mistreated or underpaid. This led to formation of groups to fight against such inhuman
treatment. The Left parties and organizations gave impetus by backing these groups. The right to
join a trade union is mentioned in article 23, subsection 4 of the Universal Declaration of Human
Rights.

In India, The Trade Union Act was passed in the year 1926 which came into force on 1st June
1927.This Act was passed with the object of protecting the trade unions registered under this
Act.
BASIC FUNCTIONS OF A TRADE UNION

Trade unions serve two principle purposes -a bridge between the management and the workers;
inculcating a sense of responsibility and discipline in the workers.

They aim to:

1 - Secure fair wages for workers and improve their opportunities for training and promotion.
2- Safeguard security of tenure and improve their conditions of service.
3- Improve working and living conditions of workers
4- Provide them cultural, educational and recreational facilities.
5- Facilitate technological advancement by broadening the understanding of the workers
6- Help them in improving levels of production, productivity, discipline and high standard of
living.
7- Promote individual and collective welfare and thus corelate the worker's interests with that of
their industry.

TRADE UNIONS IN INDIA

In India, the first organized trade union was formed in 1918 and sice then they have spread in
almost all industrial centers of the country. As of now there are 11 Central Trade unions
recognized by the Union Ministry of Labor.

The legislation regulating these trade unions is the Indian Trade Unions Act, 1926 which has
seen several amendments, the latest being in 2001. Some salient features of this Act are given
below:
- Funds of a registered Trade Union will not be spent on any other activity except those
mentioned in the Act. No member should be forced to contribute and no member should be
discriminated against on the basis of his contribution.
- No member of the Trade Union shall be liable for punishment under Indian Penal Code in
respect of any agreement made between the members for furthering the objective of the Trade
Union unless the agreement is an agreement to commit an offence
- The leader or office bearer of the Trade Union has to be above 18 years of age, not been
convicted and imprisoned by a court in India for 5 years before taking up the post
- Retired and retrenched employees will not be considered as outsiders for the purpose of holding
an office.
- Unions are authorized to set up separate political funds to further civic and political interests of
its members.

The Act is administered by the Ministry of Labor through its Industrial Relations Division.It
works in close coordination with the Chief Labor Commissioner (Central) via the Central
Industrial Relations Machinery.

In India, trade union movements are generally divided on political lines. Most of the unions are
affiliated to the major political parties namely, BJP, INC and Left parties. The World Labor
Report summarizes the trade union situation in India by saying :"Indian unions are very
fragmented. In many work places, several trade unions compete for the loyalty of the same
body of workers and their rivalry is usually bitter and sometimes violent. It is difficult to say
how many of the unions operate on a national level since many are not affiliated to any All
India federation. The early splits in Indian trade unionism tended to be on ideological grounds
each linked to a particular political party. Much of the recent fragmentation, however, has
centered on personalities and occasionally on caste or regional considerations."

The trade unions are facing a unique situation. With most labor intensive work being outsourced
to contractors the unions are facing a loss of bargaining power and a loss in membership. Yet,
calls for strikes do end up crippling general life throughout the country and specifically in states
where Left parties hold a sway. Opinions about trade unions are divided. On one hand, some are
of the opinion that strikes are the only way to grab the attention of the government regarding its
"unjust" policies. Yet, there are many who disapprove of the extreme loss and hardship caused
by strikes to the general public and the economic situation.

A trade union enjoys the following advantages after registration:

(i) A trade union after registration becomes a body corporate

(ii) It gets perpetual succession and common seal

(iii) It can acquire and hold both movable and immovable property

(iv) It can enter into a contract

(v) It can sue and be sued in its registered name

The Registrar can cancel the registration in the following cases:

(i) On the application of the Trade Union (ii) where the certificate of registration has been
obtained by fraud or mistake (iii) where the trade union has ceased to exist (iv) Where any rule
of the union is inconsistent with the provisions of the Act (v) where trade union violates any
provision of the Act (vi) where the union has rescinded any rule providing for any of the
compulsory matters (vii) where the primary objects of the union are no longer statutory.

The Act contains detailed provisions relating to rights and liabilities of registered trade unions.
The rights and privileges of a registered trade union include (a) it is a body corporate (b) it can
keep separate fund for political purposes (c) it enjoys immunity from criminal conspiracies (d) it
enjoys immunity from civil suits (e) an agreement between the members of a registered trade
union not to accept employment is valid (not void being agreement in restraint of trade) (f) it has
a right to amalgamate to form a larger union or federation of unions (g) members of the union
have a right to inspect books (h) any person who has attained the age of 15 years can become the
member of the union.

MERITS / ADVANTAGES
- increase in wages for its members as the union has a collective bargaining power.
- Counterbalance a situation where one company is the sole employer in an industry or region.
- Protection of workers from over-exploitation and in upholding legislation related to safety at
work.
- Trade unions led by good leaders can actually increase the productivity of the company. Trade
unions have been known to forego salaries collectively when their company was in financial
trouble.
- Unionized workplaces have policies where similar positions have similar pay structures.
- The union contract specifies when raises occur and what amount of time with the company
qualifies the worker for a promotion. These details are otherwise subjective and often lead to
employee dissatisfaction.
- Policies become consistent as they are a result of dialogue between employers and employees.
This results in satisfied employees. Employers also deal with a content workforce and less time
and resources in training to effect changes.
-Trade unions often have a membership fee. This leads to a sense of belonging. At a long and
medium term, this reduces the rate of attrition of employees. Employers save the cost of new
employees.
- Businesses have to undergo changes if they have to be at the forefront. If the employer is
successful in winning over the union leaders, it makes the change easier as everyone is on the
same page.

DEMERITS / DIADVANTAGES

Trade unions have been accused of benefiting insider workers, those having secure jobs, at the
cost of outsider workers, consumers and the share-holders. In the case of public education
(outside India), unions have often been accused in forcing out young and competent teachers to
give way to older and incompetent teachers. In the United States and many advanced economies,
the outsourcing of labor to Asia, Latin America and Africa has been driven partially due to the
increasing costs of unionism making it more efficient to perform labor intensive work
there. Milton Friedman, economist, sought to show that unionization tends to increase wages
for the members at the expense of fewer jobs. He also sought to show a corresponding marked
decline in the wages of the non-unionized industries.

Some other demerits are given below:

- Constant threats of a strike can lead to increase in wages in the short term. But, in the long
term, this will lead to unemployment as the company will find it nonviable at some point of time.

- Trade unions consist of organized and formal workforce. They ignore the unorganized and
informal section of the workforce.

- From the point of view of an employee, when he is part of a union, he loses his voice. He
cannot bargain with the employer on his own accord. He has to accept all the decisions of the
union irrespective of his opinion.
- Labor laws limit the freedom to fire striking employees. A strike causes immense loss of
money through loss in production. Besides, customer goodwill is also at stake when it comes to
product deliveries.

- Unions negotiate promotions based on seniority rather than merit. That also means that if the
company has to lay off workers, it has to start with the most recent and not the oldest.

- If the management is not on amicable terms with the union, it can lead to a "us versus them"
mentality with the union coming up with frivolous complaints and resisting even reasonable
management decisions of laying off workers.

- Terminations, demotions, out of turn promotions are liable to be challenged in a court of law by
disgruntled employee(s) when backed by unions.

- Trade unions have been heavily criticized for becoming havens for organised crime. A case in
point is how the American trade unions have been infiltrated by the Mafia.

- In Brazil, in spite of the government investing heavily in the education sector, tangible changes
were hard to notice because teacher unions blocked all attempts to reform the sector. This has led
to what is called ni trabajan ni estudian (neither work nor study) drop-outs who will likely end
up in the drug business leading to instability in Brazil. Thus, unions can at times threaten the
stability of a nation.

So, the issue of relations between management and trade unions is a very delicate one. It is in the
interest of both the management and the trade unions to maintain a fine balance.

Weaknesses of Trade Union Movement in India:

The instability of the trade union movement in India can be traced to a number of causes
given below:

(1) Multiplicity of unions:

Unlike the developed countries of the world (like U.K. and U.S.A) the number of unions is
relatively large in India. A number of unions exist in one industrial unit. The rival unions
sometimes do more harm to the workers than good.

(2) Absence of union structure:

The structure of the trade union may be a craft union, industrial union or the general union. A
craft union is a union of workers representing particular skills such as electricians. When all the
workers of an industry become members of the union, it is known as industrial union. A general
union on the other hand covers various types of workers working in the different industries. In
India, there is an absence of craft union. National commission on labour has recommended the
formation of industrial unions and industrial federations.
(3) Limited membership:

The membership of the trade unions in India is very less. A trade union cannot become strong
unless it can enroll large number of workers as its members.

(4) Scarcity of finances:

The main problem faced by trade unions in India is the paucity of financial resources.
Fragmentation necessarily keeps the finances of the union very low. The membership fees paid
by the members are very nominal. For this reason it is not possible for the union to take up
welfare activities for its members.

(5) Small size:

On account of the limited membership, the size of the unions in India is very small. About 70 to
80% of the unions have less than 500 members.

(6) Lack of unity:

The major weakness of the trade union movement in India is the lack of unity among the various
unions existing in India at present. The labour leaders have their own political affiliations. They
use labour force for achieving their political gains rather than concentrating on the welfare of the
workers.

(7) Lack of trained workers:

The workers in India are uneducated and untrained. The politicians, who are least concerned with
the welfare of the workers, become their leaders. Backwardness of the workers and their fear of
victimization keep them away from union activities.

(8) Political dominance:

It is very unfortunate for the workers that all trade unions in India are being controlled by
political parties. In order to achieve their political ends, they exaggerate workers’ demands and
try to disturb the industrial peace of the country.

(8) Hostile attitude of employers:

The employers have their own unions to oppose the working class. According to M. M. Joshi
“They first try to scoff at it, then try to put it down; lastly if the movement persists to exist, they
recognise it”.In order to intimidate the workers, employers use many foul means which go to the
extent of harassing the leaders by black-listing them or threatening them through hired goondas.

(9) Miscellaneous:

Certain other reasons which also make the union movement weak are (a) recruitment of workers
through the middlemen who do not allow these persons to become members of the union (b)
workers in India come from different castes and linguistic groups it affects their unity (c) unions
least care for the welfare activities of their members. The weak position of the Trade Unions in
the country stands in the way of the healthy growth of the device of collective bargaining for the
achievement of workers’ aims. It is one of the principal reasons that adjudication rather than
negotiation has to be applied for the settlement of industrial disputes.

It is incumbent on the part of all concerned with the welfare of the workers to make the trade
unions strong and effective for the purposes for which they are formed. A strong union is good
for the workers, the management, as well as for the community.

Grievance:
A grievance as a complaint of one or more workers with respect to wages and allowances,
conditions of work and interpretation of service, condition covering such areas as overtime,
leave, transfer, promotion, seniority, job assignment and termination of service.
(International Labour Organization(ILO)).
Definitions:
1. A grievance is a formal dispute between an employee & management on the conditions
of employment.
2. Grievances are complaints that have been formally registered in accordance with the
grievance procedure.
3. A grievance is any dissatisfaction or feeling of injustice in connection with one’s
employment situation that is brought to the attention of the management.
4. Any discontent or dissatisfaction whether expressed or not and whether valid or not
arising out of anything connected with the company / organisation that an employee
thinks / believes or even “feels” is unfair or unjust.
What is grievance?
• Dissatisfaction
• Complaint
• Accusation
• Criticism
• Objection
• Grumble
• Injustice
Features of Grievances
 Discontent or Dissatisfaction.
  Dissatisfaction must arise out of employment & not due to personal reasons.
 The discontentment can arise out of real or imaginary reasons.
 The discontent may be voiced or unvoiced but it must expression in some form.
 Broadly speaking a grievance is noticeable & traceable to real or perceived non-
fulfillment of one’s expectations.
Grievance vs Discipline
GRIEVANCE
• Provides the employer with a process for resolving a complaint they are unable to resolve
through regular communications with their superior/manager.
DISCIPLINE
• Gives employer a process for handling an employee who is not meeting the expected
standards of performance or behavior
Purpose of the Grievance Procedure:
• Allow employees and management to resolve problems
• Allow employees to voice concerns workplace and environment
• Keep lines of communication open
Causes of Grievance:
Type of Grievances Common causes

Wages:

1. Demand for individual wage He is not getting what he is worth. Gets

adjustment less than other people work
requiring the same skill.

2. Complaints about job His job is worth more than it pays. Should be
classification reclassified, deserves to be upgraded.

3. Complaints about The method of figuring his pay is so complicated

incentive system that he doesn’t know what his rate really is.

4. Miscellaneous Mistakes are made in calculating pay.

Supervision:
 1. Complaints against discipline Supervisor doesn’t like him, picks on him. He is
active in
the union. His mistakes were due inadequate
instructions

2.Objection to a particular He is playing favorites. Trying to undermine

supervisor. union.He ignores complaint.

3. Objection to general method Too many rules & regulations. Or not clear
of complaint

Seniority discharge:
1. Loss of seniority He has been unfairly deprived of seniority.

2.Calculation of seniority Not received the seniority due to him.

3. Interpretation of seniority Clause in agreement has been unfairly

interpreted (Clauses often vague)

4. Disciplinary discharge Penalized unfairly. Company wanted to get rid of

him anyway – for the union activity.

5. Promotions Company would not promote – union activity

doesn’t have a chance to advance himself.

General working conditions:

1. Safety & health Toilet facilities are inadequate. Dampness, noise

fumes and other unpleasant & unsafe
conditions.

2. Miscellaneous He has to lose too much waiting for the material.

Overtime is unnecessary lunch room facilities are
inadequate.

Collective bargaining:

1. Violations of Contract Company putting obstacles in the way grievance

settlement.

2. Interpretation of Contract Supervisors are not given any authority for

concessions

3. Settlement of Grievances Company fails to discipline supervisors where

disciplinary action is necessary.
Dissatisfaction with individual
workers:

1. Complaints concerning discipline Disregard of plant rules. Disregard of supervisor's

orders / safety regulations / absenteeism / general
irresponsibility.

2.Complainants concerning work Slow down / poor work.

Miscellaneous:

1. Questionable methods of Misrepresents management’s attitude towards

soliciting union members. new employees.

2.Union rules conflicting with Interferes with management’s freedom by terms of

agreement passing restrictive rules in conflict with
the agreement.

Reasons for Grievances :

Economic
 Wage fixation, wage computation, overtime, bonus
 Employees feel they are getting less than what they ought to get

Working Environment
 Poor working conditions, defective equipment and machinery, tools, materials.
.
Supervision
 Disposition of the boss towards the employee perceived notions of favoritism,
nepotism, bias etc.

Work Group

 Strained relations or incompatibility with peers. Feeling of neglect, obstruction

and victimisation.

Work Organisation

 Rigid and unfair rules, too much less work responsibility, lack of recognition.

Effects of Grievance :
 a. Loss of interest in work and consequent lack of moral and commitment
b. Poor quality of production
c. Low productivity
d. Increase in wastage and costs
e. Increase in employee turnover
f. Increase in the incidence of accidents
g. Indiscipline
h. Unrest, etc.
Grievance Procedure :

Dispute settlement machinery:

 Different methods for settlement of industrial disputes provided in the Industrial Dispute
Act 1947.
 Conciliation
 Arbitration
 Adjudication
Conciliation
 The Government (Central or the State) appoints conciliation officers who are usually
officials of the State Labour Department or the officials of the Ministry of Labour
Government of India.
 Appointed for a particular geographical area, usually a revenue district.
 In certain cases the conciliation officer is appointed for a particular industry in a
particular area.
 If any industrial dispute arises between an employer and his workmen the either can
approach the Conciliation Officer for the area in which the industry is situated and
request him to hold conciliation talks in the dispute and settle the issue.
 The talks initiated by the conciliation officer are called conciliation talks.
 The conciliation talks may end in the settlement of the disputes in which case a
settlement is drafted and signed by the employer, the workmen(trade union) and the
conciliation officer.
 There may be cases when the conciliation officer may not be able to settle the dispute for
several reasons.
 In such circumstances, the conciliation officer sends a report to the Government.
 This report is called the conciliation failure report.
 The Government may refers the issue in dispute to the Labour Court/Industrial Tribunal.
Adjudication
 The Labour Court/Industrial Tribunal gets the jurisdiction to decide an industrial only if
the Government makes a reference of that dispute to it.
 The proceedings before the Labour Court/Industrial Tribunal are called adjudication
proceedings.
 The Labour Court/Industrial Tribunal after following the procedure prescribed under law
finally gives its decision.
 This decision is sent to the Government and becomes operational thirty days after the
date of its publication by the Government.
However, any one of the can challenge the decision by means of a writ petition before the
High Court.
Arbitration
 The parties agree that the issue in dispute between them should be settled by referring the
issues for arbitration.
 The parties to the dispute can select the person who should arbitrate the issue i.e., the
arbitrator.
How to Prevent a Grievance:
• Identify potential causes
• Correct problems promptly
• Encourage corrective suggestions
• Establish and reaffirm policies and work rules
• Communicate and give advance notice of changes
• Keep employees informed of their progress
• Be objective
• Learn to listen
• Be consistent
Benefits of Early Settlement:
At any point during the grievance process, the parties
can agree to an early settlement.The benefits include:
• Quick resolution
• Employee frustration avoided
• Supervisor/Superior credibility
• Company credibility
• Respect of employees gained
• Prolonged conflict avoided
• “Local” control maintained
Grievance Redressal Procedure:
• Grievance must be settled
- promptly
- to the point of origin
- on merit only
- as many facts as possible
- attitude of mutual confidence & respect
Grievance Redressal Procedure must :
1. Be simple, fair & easy to understand
2. Encourage employees to put forth their
 grievances
3. Function promptly
4. Gain employee confidence
5. Promote healthy relations between
employees and the company
Conducting the Grievance Meeting:
Discuss the matter rationally:
– Review the grievance with the grievant and the representative.
– Do not bargain with the grievant or the steward.
– Be certain that you have all of the information you need before responding.
– Do not respond to a demand for an “instant” answer. A possible exception is a
matter of health and/or safety.
Preparing the Grievance Response
– Adhere to the timeline for your response.
– Provide an answer that is concise and complete. Brevity is important. If you need
help in providing an answer, obtain assistance from Employee / Industrial
Relations officer/manager.
– Obtain acknowledgement of receipt of your answer from the grievant/steward,
including time and date.
Preparing for Grievance Meeting with Employee / Industrial Relations
Employee / Industrial Relations will facilitate the process at this step. The
process includes:

• Schedule ‘prep’ meeting with the department and /or management before the date of
grievance meeting.
• Serve as hearing officer.
• Determine who should be involved in the meeting, including identifying any witnesses.
• Determine what information must be captured on record.
• Discuss the format of the grievance meeting.
• Provide written response.
SUPERANNUATION AND RETIREMENT
Superannuation
A type of retirement plan set up by a company for the benefit of its employees. These types of
plans use funds deposited by the company (defined benefit plan) or by the employee (defined
contribution plan), with the funds growing in value until the employee retires. also
called pension plan.

Superannuation is retirement from the service on attainment of specific age. The competent
authority(central or state govt.) decides on the age limit for different posts. Currently this is 58
years for many states. Superannuation is retirement on attaining specific age.

Retirement

Retirement can take place at any age. Any employee can choose to retire anytime in his career.
People working in defense retire very young and earn pension also. VRS/CRS are retirement
schemes. So, retirement can be compulsory but superannuation is always automatic and
predictable. Retirement is also an act of relieving from service but not necessarily be due to
attaining a prefixed age and shall include Voluntary Retirement or even Compulsory Retirement.
Though superannuation is also retirement, the latter need not be superannuation.
Lay off, retrenchment and closure
Lay off - means failure, refusal or inability of employer on account of shortage of coal, power or
raw materials or accumulation of stock or break down of machinery or natural calamity; to give
employment to a workman on muster roll. - - ‘Lay off’ means not giving employment within two
hours after reporting to work. Lay off can be for half day also. In such case, worker can be asked
to come in second half of the shift. [section 2(kkk)].
Retrenchment – ‘Retrenchment’ means termination by the employer of service of a workman
for any reason, other than as a punishment inflicted by a disciplinary action. However,
‘retrenchment’ does not include voluntary retirement or retirement on reaching age of
superannuation or termination on account of non-renewal of contract or termination on account
of continued ill-health of a workman. [section 2(oo)].‘Retrenchment’ means discharge of surplus
labour or staff by employer. It is not by way of punishment. The retrenchment should be on basis
of ‘last in first out’ basis in respect of each category, i.e. junior-most employee in the category
(where there is excess) should be retrenched first. [section 25G]. If employer wants to re-employ
a persons, first preference should be given to retrenched workmen. [section 25H]. Closure –
Closure- means permanent closing down of a place of employment or part thereof. [section
2(cc)]. - - Thus, closure can be of part of establishment also. - - 60 days notice should be given
for closure to Government, if number of persons employed is 50 or more. 60 days notice is not
necessary if number of persons employed is less than 50. [section 25FFA]. Compensation has to
be given as if the workman is retrenched.
Strike and lock-out –
‘Strike’ means a cessation of work by a body of persons employed in any industry, acting in
combination, or a concerted refusal, or a refusal under a common understanding, of any number
of persons who are or have been so employed to continue to work or to accept employment.
[section 2(q)].
Prohibition of strike and lock out in public utility service .In case of public utility, employees
have to give at least 14 days notice for strike. The notice is valid only if strike commences within
6 weeks. Otherwise, fresh notice is required. Similarly, an employer cannot declare lock out
without giving 14 days notice.
Lock-out – means temporary closing or 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. [section
2(l)]. Workers go on strike, while ‘lock-out’ is to be declared by employer.
Illegal strike or lock-out – Strike or lock out in violation of sections 22 or 23 and when it is
continuing in violation of order issued by Government u/s 10(3) (when matter is referred to
Conciliation Board or Tribunal) is illegal. [section 24]. Fine upto Rs 50 per day to workman and
Rs 1,000 to employer can be imposed. In addition, he can be imprisoned upto one month.
[section 26].

Redundancy
The expiry of a fixed-term contract may be considered to be a redundancy if the work for which
the individual was employed has diminished, or ceases to exist. This would cover projects,
which have run their course, or research funded work that has come to an end due to an absence
of funding. Termination of employees for business reasons, such as poor economic conditions.
Redundancies are typically preceded by consultations, which are collaborative efforts between
employers, employees and other stakeholders into ways the business can save the role from
redundancy through new opportunities or restructuring. Common euphemisms for redundancy
include ‘downsizing,’ ‘delayering,’ ‘excess reduction,’ and ‘strategic restructuring.’

Re-deployment
Redeployment is the process of moving people within the organization and from units where
there are excess employees to the departments where there is shortage. The process of
redeployment involves the identification of surplus and shortage areas, notifying and educating
employees about the importance of being redeployed in high need areas, identifying the skills
and competencies required in these areas and assessing the employees who can be successfully
redeployed. Sometimes retraining or retooling may be required before redeployment. The
process also includes the development of systems which can assess and put the right people at
right jobs. The managers are also given incentives to allow their human talent to leave so that it
can be redeployed in areas where higher returns are expected from this talent. An assessment
process is also developed to see how the employees are doing in their new assignments. If
carried out in a proper way, redeployment can help the organization as well as its employees.
 The offer of suitable alternative work should have similar status, should be within the
capabilities of the employee, should not cause unreasonable in convenience to the employee and
should provide similar earning to the employee.
Workers’ Participation in Management

Workers’ participation in management is an essential ingredient of Industrial democracy. The

concept of workers’ participation in management is based on Human Relations approach to
Management which brought about a new set of values to labour and management.

Traditionally the concept of Workers’ Participation in Management (WPM) refers to

participation of non-managerial employees in the decision-making process of the organization.
Workers’ participation is also known as ‘labour participation’ or ‘employee participation’ in
management. In Germany it is known as co-determination while in Yugoslavia it is known as
self-management. The International Labour Organization has been encouraging member nations
to promote the scheme of Workers’ Participation in Management.
Workers’ participation in management implies mental and emotional involvement of workers in
the management of Enterprise. It is considered as a mechanism where workers have a say in the
decision-making.

Workers’ Participation in Management in India

Workers’ participation in Management in India was given importance only after Independence.
Industrial Disputes Act, 1947 was the first step in this direction, which recommended for the
setting up of works committees. The joint management councils were established in 1950 which
increased the labour participation in management. Since July 1975 the two-tier participation
called shop councils at shop level and Joint councils were introduced. Workers’ participation in
Management Bill, 1990 was introduced in Parliament which provided scope for upliftment of
workers.

Definition: According to Keith Davis, Participation refers to the mental and emotional
involvement of a person in a group situation which encourages him to contribute to group goals
and share the responsibility of achievement.

According to Walpole, Participation in Management gives the worker a sense of importance,

pride and accomplishment; it gives him the freedom of opportunity for self-expression; a feeling
of belongingness with the place of work and a sense of workmanship and creativity.

The concept of workers’ participation in management encompasses the following:

 It provides scope for employees in decision-making of the organization.
 The participation may be at the shop level, departmental level or at the top level.
 The participation includes the willingness to share the responsibility of the organization by the
workers.

Features of WPM:
1. Participation means mental and emotional involvement rather than mere physical presence.
2. Workers participate in management not as individuals but collectively as a group through their
representatives.
3. Workers’ participation in management may be formal or informal. In both the cases it is a
system of communication and consultation whereby employees express their opinions and
contribute to managerial decisions.

4. There can be 5 levels of Management Participation or WPM:

a. Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matter of general economic importance.
b. Consultative importance: Here workers are consulted on the matters of employee welfare
such as work, safety and health. However, final decision always rests with the top-level
management, as employees’ views are only advisory in nature.
c. Associative participation: It is an extension of consultative participation as management here
is under the moral obligation to accept and implement the unanimous decisions of the
employees. Under this method the managers and workers jointly take decisions.
d. Administrative participation: It ensures greater share of workers’ participation in discharge
of managerial functions. Here, decisions already taken by the management come to employees,
preferably with alternatives for administration and employees have to select the best from those
for implementation.
e. Decisive participation: Highest level of participation where decisions are jointly taken on the
matters relating to production, welfare etc.

Objectives of WPM:

1. To establish Industrial Democracy.

2. To build the most dynamic Human Resources.
3. To satisfy the workers’ social and esteem needs.
4. To strengthen labour-management co-operation and thus maintain Industrial peace and
harmony.
5. To promote increased productivity for the advantage of the organization, workers and the
society at large.
6. Its psychological objective is to secure full recognition of the workers.

Strategies / Methods / Schemes / Forms of WPM:

1. Suggestion schemes: Participation of workers can take place through suggestion scheme.
Under this method workers are invited and encouraged to offer suggestions for improving the
working of the enterprise. A suggestion box is installed and any worker can write his
suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the
suggestion committee or suggestion screening committee. The committee is constituted by equal
representation from the management and the workers. The committee screens various
suggestions received from the workers. Good suggestions are accepted for implementation and
suitable awards are given to the concerned workers. Suggestion schemes encourage workers’
interest in the functioning of an enterprise.
2. Works committee: Under the Industrial Disputes Act, 1947, every establishment employing
100 or more workers is required to constitute a works committee. Such a committee consists of
equal number of representatives from the employer and the employees. The main purpose of this
committee is to provide measures for securing and preserving amity and good relations between
the employer and the employees.
Functions: Works committee deals with matters of day-to-day functioning at the shop floor
level. Works committees are concerned with:
 Conditions of work such as ventilation, lighting and sanitation.
 Amenities such as drinking water, canteens, dining rooms, medical and health services.
 Educational and recreational activities.
 Safety measures, accident prevention mechanisms etc.
Works committees function actively in some organizations like Tata Steel, HLL, etc but the
progress of Works Committees in many organizations has not been very satisfactory due to the
following reasons:
 Lack of competence and interest on the part of workers’ representatives.
 Employees consider it below their dignity and status to sit alongside blue-collar workers.
 Lack of feedback on performance of Works Committee.
 Undue delay and problems in implementation due to advisory nature of recommendations.

3. Joint Management Councils: Under this system Joint Management Councils are constituted
at the plant level. These councils were setup as early as 1958. These councils consist of equal
number of representatives of the employers and employees, not exceeding 12 at the plant level.
The plant should employ at least500 workers. The council discusses various matters relating to
the working of the industry. This council is entrusted with the responsibility of administering
welfare measures, supervision of safety and health schemes, scheduling of working hours,
rewards for suggestions etc.
Wages, bonus, personal problems of the workers are outside the scope of Joint management
councils. The council is to take up issues related to accident prevention, management of
canteens, water, meals, revision of work rules, absenteeism, indiscipline etc. the performance of
Joint Management Councils have not been satisfactory due to the following reasons:
 Workers’ representatives feel dissatisfied as the council’s functions are concerned with only the
welfare activities.
 Trade unions fear that these councils will weaken their strength as workers come under the direct
influence of these councils.

4. Work directors: Under this method, one or two representatives of workers are nominated or
elected to the Board of Directors. This is the full-fledged and highest form of workers’
participation in management. The basic idea behind this method is that the representation of
workers at the top-level would usher Industrial Democracy, congenial employee-employer
relations and safeguard the workers’ interests. The Government of India introduced this scheme
in several public sector enterprises such as Hindustan Antibiotics, Hindustan Organic Chemicals
Ltd etc. However the scheme of appointment of such a director from among the employees failed
miserably and the scheme was subsequently dropped.
5. Co-partnership: Co-partnership involves employees’ participation in the share capital of a
company in which they are employed. By virtue of their being shareholders, they have the right
to participate in the management of the company. Shares of the company can be acquired by
workers making cash payment or by way of stock options scheme. The basic objective of stock
options is not to pass on control in the hands of employees but providing better financial
incentives for industrial productivity. But in developed countries, WPM through co-partnership
is limited.

6. Joint Councils: The joint councils are constituted for the whole unit, in every Industrial Unit
employing 500 or more workers, there should be a Joint Council for the whole unit. Only such
persons who are actually engaged in the unit shall be the members of Joint Council. A joint
council shall meet at least once in a quarter. The chief executive of the unit shall be the
chairperson of the joint council. The vice-chairman of the joint council will be nominated by the
worker members of the council. The decisions of the Joint Council shall be based on the
consensus and not on the basis of voting.
In 1977 the above scheme was extended to the PSUs like commercial and service sector
organizations employing 100 or more persons. The organizations include hotels, hospitals,
railway and road transport, post and telegraph offices, state electricity boards.

7. Shop councils: Government of India on the 30th of October 1975 announced a new scheme in
WPM. In every Industrial establishment employing 500 or more workmen, the employer shall
constitute a shop council. Shop council represents each department or a shop in a unit. Each shop
council consists of an equal number of representatives from both employer and employees. The
employers’ representatives will be nominated by the management and must consist of persons
within the establishment. The workers’ representatives will be from among the workers of the
department or shop concerned. The total number of employees may not exceed 12.

Functions of Shop Councils:

1. Assist management in achieving monthly production targets.
2. Improve production and efficiency, including elimination of wastage of man power.
3. Study absenteeism in the shop or department and recommend steps to reduce it.
4. Suggest health, safety and welfare measures to be adopted for smooth functioning
of staff.
5. Look after physical conditions of working such as lighting, ventilation, noise and
dust.
6. Ensure proper flow of adequate two way communication between management and
workers.

Reasons for failure of Workers participation Movement in India:

1. Employers resist the participation of workers in decision-making. This is because they feel
that workers are not competent enough to take decisions.
2. Workers’ representatives who participate in management have to perform the dual roles of
workers’ spokesman and a co-manager. Very few representatives are competent enough to
assume the two incompatible roles.
3. Generally Trade Unions’ leaders who represent workers are also active members of various
political parties. While participating in management they tend to give priority to political
interests rather than the
workers’ cause.
4. Schemes of workers’ participation have been initiated and sponsored by the Government.
However, there has been a lack of interest and initiative on the part of both the trade unions and
employers.
5. In India, labour laws regulate virtually all terms and conditions of employment at the
workplace. Workers do not feel the urge to participate in management, having an innate feeling
that they are born
to serve and not to rule.
6. The focus has always been on participation at the higher levels, lower levels have never been
allowed to participate much in the decision-making in the organizations.
7. The unwillingness of the employer to share powers with the workers’ representatives, the
disinterest of the workers and the perfunctory attitude of the government towards participation
in management act as stumbling blocks in the way of promotion of participative management.

Measures for making Participation effective:

1. Employer should adopt a progressive outlook. They should consider the industry as a
jointendeavour in which workers have an equal say. Workers should be provided and enlightened
about the benefits of their participation in the management.
2. Employers and workers should agree on the objectives of the industry. They should recognize
and respect the rights of each other.
3. Workers and their representatives should be provided education and training in the philosophy
and process of participative management. Workers should be made aware of the benefits of
participative management.
4. There should be effective communication between workers and management and effective
consultation of workers by the management in decisions that have an impact on them.
5. Participation should be a continuous process. To begin with, participation should start at the
operating level of management.
6. A mutual co-operation and commitment to participation must be developed by both management
and labour.
Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a
manager; never the twain shall meet” should be replaced by “managers and workers are partners
in the progress of business”.

Collective Bargaining:

Collective bargaining is specifically an industrial relations mechanism or tool, and is an aspect of

negotiation, applicable to employment relationship. As a process, the two are in essence the
same, and the principle applicable to negotiations is relevant to collective bargaining as well. In
collective bargaining the union always has a collective interest since the negotiations are for the
benefit of several employees. Where collective bargaining is not for one employer but for
several, collective interests become a feature for both parties to the bargaining process. In
collective bargaining certain essential conditions need to be satisfied, such as the existence of
freedom of association and a labor law system. Further, since the beneficiaries of collective
bargaining are in daily contact with each other, negotiations take place in the background of a
continuing relationship which ultimately motivates the parties to resolve the specific issues.
Collective bargaining is a process of negotiations between employers and the representatives of a
unit of employees aimed at reaching agreements that regulate working conditions. Collective
agreement usually set out wage scales, working hours, training, health and safety, overtime,
grievances, mechanisms and rights to participate in workplace or company affairs. Ultimately the
term “bargaining” implies that the process is one of haggling, which is more appropriate to one-
time relationships such as a onetime purchaser or a claimant to damages. While collective
bargaining may take the form of haggling, ideally it should involve adjusting the respective
positions of the parties in a way that is satisfactory to all.

Concept/Definition of Collective Bargaining:

According to ILO, (convention no: 87) “Collective Bargaining is a fundamental right. The right
to Collective Bargaining forms an integral part of the ILO declaration on fundamental Principles
(1998).”

OECD (Organization for Economic Co-operation and Development), WTO (World Trade
Organization) and the United Nations advocates Collective Bargaining in similar tones.
Collective Bargaining is a part of “Core Labor Standards, Social clause and Global Compact
respectively” This means future that Collective Bargaining should be considered as a
Fundamental Right.

Today collective bargaining has assumed a complex nature, conducted in the most formal
environment, associating the services of a large number of experts, legal practitioners,
consultants and specialized personnel. Today it is regarded as a social process, because it occurs
in a social setting. In majority of the cases collective bargaining process deals with issues like:
a. Rate of wages, pay.
b. Hours of employment, working conditions
c. Employment policies
d. Productivity settlement

Objectives:

There are some basic objectives of collective bargaining on that basis whole process generally
work, these are:
1. Settle the conflicts related to working conditions and wages.
2. To protect the interest of the workers through collective action.
3. To resolve the difference between the workers and management through voluntary
negotiations and to arrive at a consensus.
4. To avoid third party intervention in matters relating to employment.
5. Practically speaking any issues that has any relevance to management and workers becomes
the subject matter of bargaining.

Advantages of Collective Bargaining

To understand the collective bargaining it is necessary to know about the various advantages of
collective bargaining, these are:
1. Collective bargaining has the advantage of settlement through dialogue and consensus rather
than through conflict and confrontation. Agreement resulting from collective bargaining usually
represents the choice or compromise of the parties themselves.
2. Collective bargaining agreements often institutionalize settlement through dialogue. For
instance, acollective agreement may provide for methods by which disputes between the parties
will be settled. In that event parties know beforehand that if they are in disagreement there is an
agreed method by which such disagreement may be resolved.
3. Collective bargaining is a form of participation because it involves a sharing of rule making
power between rule making power between employers and unions in the areas which in earlier
times were regarded as management prerogative e.g. transfer, promotion, redundancy.
4. Collective bargaining agreements sometimes renounce or limit the settlement of disputes
through trade union action.
5. Collective bargaining is an essential feature in the concept of social partnership towards which
labor relations should strive. Social partnership in this context may be described as a partnership
between organized employer institutions and organized labor institutions designed to maintain
non- confrontational process in the settlement of disputes which may arise between employers
and employees.
6. Collective bargaining has a valuable by- products relevant to the relationship between the two
parties.
7. In societies where there is a multiplicity of unions and shifting union loyalties, collective
bargaining a consequent agreements tend to stabilize union membership.
8. Collective bargaining is the most important and effective in improving industrial relations.