Emerging Socio Economic and Techno
Economic Profile
& Role of State in Managing IR
Evolution of IR in India
Industrial Relations in India Prior to British Raj
India was predominantly a pastoral and agrarian economy during
ancient and medieval times.
A large number of occupations were carried on by small manufacturers
in their cottages.
The employer- employee relations were those of master and slave and,
later on, of those of master and servant.
Ancient laws of our country laid emphasis on the promotion and
maintenance of peaceful relations between capital and labour.
From very early times, craftsmen and workers felt the necessity of being
united.
It has observed that different kinds of work such as
embroidery, goldsmith’s work, varnishing, tailoring,
leather work, making of pots, polishing of metals with
gold or silver, weaving of silken clothes were carried on
in big apartments known as the Karkhanas.
Under Emperor Akbar, the government factories
worked at Agra, Lahore, Fatehpur, and Ahmedabad,
where employees could develop their respective arts.
All contemporary travellers and historians agree that
the industry of manufacture of wool and its cloth was
in a very highly developed condition in Kashmir.
The articles produced by these craftsmen were mostly
consumed by the Mughal emperors and the members
of the household and nobles.
The commercial character of the East India Company
did not change the conditions of workers.
After the abolition of the monopoly of the East India
company in 1883, the British Industrialists and
merchants were able to develop some industries and
trade in India.
Industrial relations during colonial period
Industrial relations in by- product of Industrial Revolution and it
owes its origin from excessive exploitation of workers by the owners
of industries.
The relationship was that of two unequal- the powerful employers
and powerless workers.
It was a master servant relationship which continued for a long. In
early stage, the Government adopted the policy of Laissez- faire and
later on, enforced penalty on workers for breaches of contract.
Some attempts were made to form trade unions, which were
resisted and crushed by the employers.
The First World War is the first milestone enroute to industrial
relations in India.
In certain social, economic and political conditions,
which raised new hopes among workers in industries.
It was for the first time, that workers realized their
importance that unless they produce goods required
for wars, the wars cannot be fought successfully.
After war, prices of consumer goods also become
dearer.
This lead to intense labour unrest because worker’s
earnings did not keep pace with the rising prices and
their aspirations.
Many other events happened which accelerated the
pace of industrial relations during the period
Establishment of ILO(1919) and the influence of its
conventions and recommendations.
Formation of the Labour Party Govt. in U.K in 1924.
The Indian Trade Union Act of 1926.
The Trade Dispute Act, 1929.
Formation of Royal Commission on labour, 1929-31,
which made a comprehensive study of Indian Labour
problem regarding health,
safety and welfare of workers and made
recommendations of far- reaching consequences.
The second World War gave a new a spurt in the
industrial relations field.
The exigency of the war made it essential for the Govt.
to maintain uninterrupted flow of goods and services
for successful conduct of military operations.
Therefore Govt. of India embarked upon a two- fold
action for maintaining industrial relations
Form a Trade Dispute Act,1929 for helping the union
Government in enacting the I.D. Act,1947, which laid
down a comprehensive dispute settlement machinery to
be applicable to all states.
The need for tripartite labour machinery on the pattern
of ILO was recommended by the Royal Commission on
Labour as early as in 1931. But the first step in this
direction was taken only in the year 1942, when the first
tripartite labour conference was held at New Delhi
under the Chairmanship of Dr. B.R. Ambedkar.
The objectives, set before the two tripartite bodies at the time of their inception in
1942, were
1. Promotion of uniformity in labour legislation.
2. Laying down of a procedure for the settlement of industrial disputes
Tripartite deliberations helped to reach on
statutory minimum wage fixation(1944)
constitution of tripartite industrial committees (1944)
Introduction of health insurance scheme (1945)
Provident funds scheme (1950)
Thus, it led to the passing of three important central labour laws like-
The Minimum Wages Act, 1948.
The Employee’s State Insurance Act, 1948.
The Employee’s Provident Funds Act, 1952.
IR in Post- Independence Era
This was the time when we launched our five year plans. Each of the
successive five year plans emphasized for the well- being of the
working class, co-operation between worker and employer,
harmonious industrial relations, worker’s right and worker’s
participation, Welfare State etc.
The results of independence saw the mushroom growth of trade
unions.
This was the period when Industrial Policy Resolution, 1956, facilitated
the growth of the public undertakings both at the centre and state level
Through these PSUs, Govt. wanted to preset a role-
model of industrial relations as ‘ Model- Employers”.
Emergency of 1975 had its share of impact on
industrial relations. Mrs. Indra Gandhi, the PM,
wanted to salvage her image as a democrat. Therefore
she amended the constitution to provide for workers
participation and added in the Industrial Dispute Act,
1947.
IR in Post-Globalization Period from 1991 to till date
The requirements a of global competitiveness are of international
standards in quantity, quality, cost- effectiveness and customers.
This in turn, requires introduction of state of art technology,
followed by innovation, creativity and strategic alignment of
divergent resources to create performing climate.
Such a performing climate requires a dynamic and synergetic
relationship.
The tradition of IR is under tremendous pressure, because it was
made to cater to the requirements of a controlled, protected and
regulated market and was unable to address the new imperatives
of a competitive, global market.
A tug of war is going on between “forces of change” and “
forces of inertia”.
The market requires a flexible, and aggressive employee
relations approach, while traditional industrial relation
wants to remain adhered to status quo without any change.
Traditional institutions of IR are losing their importance
and relevance. Trade unions are marginalized and kept
outside the mainstream of business. Strike is losing its
cutting edge.
Collective bargaining is being replaced by collaborative and
productivity and individual bargaining.
Emerging Business Scenario
In the post industrial society ,technological revolution has
created a situation where space, distance and time have lost
their relevance.
The world has really become a global village. This has
facilitated the movement of business across the boarder.
The business skyline is completely changing by continuous
mergers and acquisition across the globe.
Global competitiveness is the only rule of the global
business game where only the fittest can survive.
In this situation it was not possible for India to remain
isolated and insulated from the global changes.
Changing Dimensions of Industrial Relations in India
Emerging business scenario has brought in new market
imperatives.
Therefore traditional IR is giving way to emerging employee
relations some of the features of this are as under
The institutions of trade union is getting weak. In IT there are
hardly any TUs.
The institution of collective bargaining is being decentralized
and being replaced by unit bargaining and individual bragaining.
Changing pattern of compensation management, fixed time rate
wages are replaced by performance based wages.
The recent judgment of supreme court and Tamil Nadu government case on
strike 2003 send clear messages to the unions that mean business
1. There is a proposal for labour Law simplification.
2. There is a trend to make employer friendly conciliation.
3. There has been ease in labour inspection.
4. There has been use of IDA, declaring strikes illegal.
5. Strict enforcement of unfair labour practices.
6. Use of policies for diluting labour struggle.
7. Skills management and formation.
8. Employee involvement, participation and communication.
9. Trade union participation.
10. Diluting political ideology.
Role of state in managing IR
Government intervention in IR is as old as the industry itself.
Howe ever, till the 19th century, governments everywhere
followed the laissez faire policy- they left IR to the managers and
workers who were required to solve the problems themselves.
Towards the end of the 19th century, the attitude of the
governments changed, and intervention became a reality.
The state, as of today, regulates the relationship between the
management and the labour and seeks to protect the interest of
both the groups.
The government has set up wage boards, labour courts, tribunals and
enacted laws to lay down norms and to enforce their compliance.
The state endeavor to correct, through effective industrial relations, an
imbalanced, disordered and maladjusted social and economic order
with a view to reshaping the complex socio- economic relationship
following technological and economic progress. It also controls and
disciplines the parties concerned and adjust their conflicting interest.
In this process, it protects some and restrains others, depending upon
the situation.
Role of employer in IR
In general the employers play an important role like
Creating and maintaining employee motivation.
Obtaining commitment from the workforce.
Establishing mutually beneficial channels of communication
throughout the organization.
Achieving high level of efficiency.
Negotiating terms and conditions of employment with
employee representatives.
Sharing decision making with employees.
Engaging in a power structure with trade unions.
Role of Employer’s Associations
Employer’s associations operate at local, industry and all India
levels. The major objectives of employer’s associations include:-
1. Representing employers in collective bargaining.
2. Developing machinery for the avoidance of disputes.
3. Providing information on employee relations and to give advice.
4. Representing members on national issues.
Unions have a crucial role to play in IR. Unions have broad objectives which are:-
To redress the bargaining advantage of the individual worker by substituting joint
action for individual action.
To secure improved terms and conditions of employment for their members and the
maximum degree of security to enjoy these terms and conditions.
To obtain improved status for the worker in his or her work.
To increase the extent to which unions can exercise democratic control over
decisions that affect their interest by power sharing at the national, corporate and
plant levels.
The union power is exerted primarily at two levels- at the industry level, to establish
joint regulation on basic wages and hours with an employer’s association or its
equivalent and at the plant level.
Role of Trade Union in IR
Unions have a crucial role to play in IR. Unions have broad objectives which are:-
To redress the bargaining advantage of the individual worker by substituting joint
action for individual action.
To secure improved terms and conditions of employment for their members and the
maximum degree of security to enjoy these terms and conditions.
To obtain improved status for the worker in his or her work.
To increase the extent to which unions can exercise democratic control over decisions
that affect their interest by power sharing at the national, corporate and plant levels.
The union power is exerted primarily at two levels- at the industry level, to establish
joint regulation on basic wages and hours with an employer’s association or its
equivalent and at the plant level.
Three actors of IR
The major participants or actors of industrial relation are workers and
their organizations, management and the government etc.
Workers and their organizations:- The workers play an important role in
industrial relations. The workers have working age, educational
background, family background, psychological factors, culture, skills
attitude towards other work etc.
Worker’s organizations prominently known as trade unions play their
role more prominently in trade unions. The main purpose of trade unions
is to protect the worker’s economic interest through collective bargaining
and by bringing pressure on management through economic and political
tactics. Trade union factors include leadership, finances, activities etc.
Employers and their organizations
Employer is a crucial factor in industrial relations. Employers
employ worker, pays the wages and various allowances,
regulates the working relations through various rules,
regulations and by enforcing labour laws.
He expects the worker to follow the rules, regulations and laws
and also expects them to contribute their resources to the
maximum. Employer from their organizations to equate their
bargaining power with that of trade unions. Employer’s
organizations protect the interest of the employer forcing the
trade unions and government.
Government
government exerts its influence on industrial
relations through its labour policy, industrial relations
policy, implementing labour laws, the process of
conciliation and adjudication by playing the role of a
mediator etc. it tries to regulate the activities and
behavior of both employees organizations and
employers' organizations.
THANKYOU
