LEGAL FRAMEWORK OF INDUSTRIAL RELATIONS

LEGAL FRAMEWORK OF INDUSTRIAL RELATIONS

INTRODUCTION:

            A harmonious relationship between the management and the workers has a

vital role to play in the establishment and maintenance of industrial discipline, industrial democracy and industrial peace and it has a far reaching impact on productivity, labour efficiency and human welfare. Industrial relations denote a highly complex and dynamic process of relationships involving the workers and the management as well as their collective groups and the state. A sound system of

industrial relations and the maintenance of industrial peace is an important prerequisite for industrial development in any developing economy. A developing economy can ill-afford to have any industrial strife between the partners in the industry. Hence co-operation between the management and the workers is of paramount importance in promoting the mutual cordial relationships.

MEANING AND DEFINITION

                The concept of industrial relations is a part of the science of management

which deals with the human resources of an enterprise, and hence, is closely linked

with personnel management. Till recently, terms such as “personnel management”,

“industrial relations”, and “labour relations” were used as synonyms and as interchangeable terms. Literally, ‘industrial relations’ means the relationship that prevails between the organized  labour and the management in an industrial enterprise. Through proper attitudes of the management and that of labour, harmonious industrial relations could be developed in an organization.

According to Dale Yoder, industrial relations is collective relationship between employees’ (trade) union and the employer which arises due to employment.

The concept also means the relationship between the employees and the management in the day-to-day working of the industry. The subject of industrial relations includes three distinct areas:

i) Individual relations and joint consultations between employers and

workers at the work place,

ii) Collective relations between employers and their organizations and the

trade unions, and

iii) The part played by the State Government in regulating these relationships

According to Henry Richardson, industrial relations is “the art of living

together for the purpose of production.”

                 Ordway, Teed and Metcalfe had observed that industrial relations is the

Composite result of the attitudes and approaches of the employers and the employees towards each other with regard to planning, supervision, direction and co-ordination of the activities of an organization with a minimum level of human effort and friction Industrial relations, at present, today is largely determined by the conditions that prevailed during the period of industrial revolution and would continue to change as new economic systems evolved. These depend on the pattern of society, economic systems and political set-ups which differ from country to country. According to Dunlop, “industrial societies necessarily create industrial relations, defined as the complex of inter-relations among workers, management and the Government” Industrial relations is the product of social and economic systems. It is not the cause but the effect of the social, political and the economic forces. As such, as Harbison and Myres had pointed out that industrial relations exists in a particular context; it is not a discrete phenomenon in a society, and it is by and large determined by the results of the social, political and economic currents, rather than determining these forces. To study the industrial relations, it is necessary to study its context also. The term ‘industrial relations’ thus refers to a set of relations arising out of the employee – employer relationships in the modern industrial society. Such a relationship is however, complex and multidimensional, resting on economic, social, psychological, ethical, occupational, political and legal aspects. Lester observes that “industrial relations involve attempts to 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”. Industrial harmony is indispensable for a country’s economic progress which in its turn leads to a greater co-operation between the workers and management, better production and productivity and contributes to the overall prosperity of the country. Healthy I matter of vital concern to the community as a whole. The problem of industrial relations is essentially one of the attitudes and approaches of the parties concerned.

Industrial relations systems based on the sprit of co-operation ensures that both the

employer and the workers recognize the larger interests of the community while promoting or protecting their sectional interests. According to Singh, “Industrial relations are an integral aspect of social relations arising out of the employer – employee interactions in modern industries, which are regulated by the state in varying degrees, in conjunction with organized social forces and influenced by the existing institutions. This involves a study of the state, the legal system, and the worker’s and employer’s organizations at the institutional level, and of patterns of industrial organization (including management), capital structure (including technology), compensation of labour force, and a study of market forces – all at the economic level”

Breach had observed that personnel management mainly deals with the

executive policies and activities regarding the personnel aspects of an enterprise,

while industrial relations is mainly concerned with the employee – employer

relationships8. Steelmen had rightly observed that it is “as hard as impracticable to prescribe iron bound rules for behaviour in dealings between labour and management as it would be to prescribe them for husbands and wives”9.

COMPONENTS OF THE INDUSTRIAL RELATIONS

The “three” main parties who are actively associated with any industrial

relations system are the workers and their organizations the management and their

organizations and the state10. These three parties jointly determine the output of the system, namely, rules and regulations relating to the terms and conditions of

employment.

Workers and their Organizations’

         When large number of workers are employed in the production of goods and

services, the relationship between them generally becomes an impersonal in one into nature. Further, when they are forced to work in an alienated, monotonous and

unhygienic work environment where their activities are closely regulated and controlled by the management, their dissatisfaction makes them revolt against their

management. So workers form themselves into unions with a view to fight for their

legitimate rights. Trade unions have a very vital role to play in any industrial society to protect and promote the interests of the workers and the conditions of their employment. An effective trade union organization is imperative for regulating the labour – management relationships. It should enforce discipline among its members to gain public esteem. V.V. Giri has laid much emphasis on collective bargaining and mutual negotiations between the employers and the employees for the settlement of their disputes Trade unions could be a boon for employees if they could become strong by their collective bargaining power and avoid mutual rivalry in their bargain for better wages and better living and working conditions. In India there are at present ten central organizations of workers12. They enter into the long term collective bargaining agreements with their employers on matters affecting labour management Relations and their members who are workers, participate in the management of the Organization through works committees, joint management councils and even as Workers’ representatives in the Board of Directors. The Indian National Cement Workers’ Federation was formed in 1947 soon after the attainment of India’s political freedom. It had played a dominant role in shaping the destiny of the cement workers and their families during the last six decades.

Management

         The Management is the key factor in the system of industrial relations around

which the whole process of maintaining good relationships revolves. They decide on the terms and conditions of employment and it is they who frame the various social security schemes as also the various labour welfare policies. The philosophy that they adopt to get their work done through workers determines the quality of the relations that exist between the management and the workers. The consultative and participatary style of management views workers as their friends and even considers them as partners in their joint Endeavour of improving the efficiency and productivity of the enterprises. However, the role of management in the new globalised economy has become a challenging one. The managements are expected to reinvent themselves again and again in terms of managing their resources and work practices.13 The proactive and co-operative industrial relationships can deliver good results. In other words the management has to move from confrontation to collaboration and strive to have a disciplined and conscious workforce for enhancing productivity

The Government

      Maintaining industrial peace and harmony is of vital importance for achieving

sustained economic growth and for maintaining a continued productive employment for the workers15. So the role of the Government in the industrial relations system of a country is very important. The state intervention in labour relations had its beginning when British rulers wanted to protect their commercial interests in India during the period of the Second World War. The legacy got from the British Government was given a statutory setting in the form of conciliation and adjudication in the Industrial Disputes Act of 1947. The Act had provided for elaborate provisions on conciliation, court of enquiry, industrial tribunals, national tribunals, labour courts and for voluntary arbitrations. However, V.V.Giri, former President of India and former Union Minister for Labour was of the view that only collective bargaining could hammer out disputes instead of the labour courts and the industrial tribunals.

The emerging new economic scenario had given rise to a number of labour problems. It is alleged that it had given rise to many new problems such as the lay

offs, the discharge of employees, voluntary retirements, under employment situations and the like. The regulatory role of the Government had now become more crucial and more demanding than it was before, and it is likely to complicate the matters with the passage of time. In order to re-structure the industrial relations system in India the labour laws have to be amended in such a way as to promote higher productivity and curb the indiscipline among the workers. The concept of industrial relations could not be confined to the limits of a single discipline as it is basically an inter-disciplinary concept. It includes inputs from sociology, psychology, law, history, politics, economics, accounting and certain elements of management studies. The conflicts in industrial relations will have to be approached on a multi-disciplinary basis for any objective analysis of the problems involved. A few approaches to the problems of industrial relations have been discussed here.

The Systems Approach

John Dunlop had developed the systems approach to the problem of industrial

relations. It focuses its attention on the participants in the process, on environmental forces and on the output. There are three participants who interact with a set of ideas and beliefs commonly held by them. The environment is the ground on which participants interact, namely, technological characteristics of the work place, the market and the other economic constraints. The output is the result of the interaction of the parties to the system, which gets manifested in the form of a network of rules ,the country’s labour policy and the labour management agreements.

The Oxford Approach

          This approach has had a great deal of influence on the thinking on industrial

relations in the United Kingdom, Flanders, the exponent of this approach, considersevery enterprise as a social system of production and distribution, which has a structured pattern of relationships of its own. The institution of job regulation is categorized as both internal and external. The former type of job regulations is by adopting internal procedures and joint consultations and through communication and grievance procedures. Flanders considered trade union as an external institution of job regulation, which was controlled by market forces. He was of the opinion that collective bargaining was central to the industrial relations system.

The Industrial Sociology Approach

         G. Margerison, an industrial sociologist, was of the view that the core of the

problem of industrial relations was the nature and development of the conflict itself.The conflict is itself the concept, which forms the basis for the study of industrial relations. Industry is a community consisting of various individuals and groups withdifferent socio-economic backgrounds, emotions, attitudes and values, likes and dislikes. These differences together with job factors like job content, work task and technology, wages and working and living conditions create conflicts. Besides these, conflicts arise also due to social factors, such as the culture in the society, the value systems, institutions, customers, structural changes, status symbols, acceptance or resistance to changes and the like. Thus industry is inseperable from the society with in which it has to function.

The Marxist Approach

The Marxist approach was primarily based on the historical development of the power relationship between capital and labour. It was characterized by the struggle between the two classes of people to consolidate and strengthen their respective positions to exert a greater influence by the one on the other.

The Pluralist Approach

The social environment is an important factor in understanding industrial conflicts. The isolated masses of workers are more strike prone as compared to the dispersed groups. When employees get themselves more integrated into the inner society, strikes are likely to be less frequent; though conflicts are inherent features in the very structure of the industrial system.

The Human Relations Approach

Human resource is the only factor in the value – creation process and it has an

immeasurable growth potential. This is being viewed as the most critical factor in the entire industrial organizational set up. The human beings are not machines. They have their own emotions, perceptions, attitudes and personalities. These characteristics make them a group consisting of complex individuals. Their complexity gets further accentuated when they interact with others collectively. When employers treat them as inanimate lifeless objects and encroach upon their

expectations, conflicts and tensions arise. Another important cause for all types of industrial conflicts is the dissatisfaction among the individuals. Hence for maintaining good human relations in general and for promoting good industrial relations in particular, a study of the human needs, namely, physiological needs, safety needs, and the social and egoistic needs become things of paramount importance.

The Gandhian Approach

Mahatma Gandhiji could be considered as one of the greatest labour leaders of modern India. His approach was entirely based on respecting labourers as human beings. His philosophy presupposes the peaceful co-existence of capital and labour and his concept of trusteeship namely, that the employers were not the sole owners but were merely trustees of the society in managing the industries, which was a significant contribution in the sphere of Indian industrial relations.