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Lecture slides of Industrial Relations.
Industrial Relations and Labour
(UNIT – I)
Course Instructor: Dr. Parikshit Joshi
Industrial Relations : Introduction
• Labour management relation, employee
employer relations, union management relations,
personal relations, human relations and so on.
• IR is the relationship between employees and
management in the day - to - day working of
• IR describe relationships between management
and employees or among employees and their
organisations that characterise or grow out of
• Dale Yodar
2© Dr. Parikshit Joshi
Three main participants in IR
• Workers and their organisation: trade union
• Employers and their organisation:
• Government: plays an increasing role in IR by protecting
the interest of employees and employers.
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Indian Constitution and IR
• Constitutional rights : adequate means of livelihood,
equal pay for equal work, similar working conditions,
living wages, etc.
• Article 14 says that the state shall not deny to any
person equality before the law
• Article 16 guarantees equality of opportunity in
matters of public employment
• Article 19 guarantees the right to freedom of speech
• Article 24 of the constitution prohibits employment
of children below 14 yrs of age in factories.
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• Article 39 deals with same pay for same work.
• Article 42 ensures good working conditions.
• Article 43 deals with living wages.
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Impact of Liberalization on IR
• 1991 New Economic reforms were introduced.
• Initial phase of liberalization led to the shock
• Many prosperous family business felt a shock
• Consumer truly became empowered
• Markets have become very competitive
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• It become difficult to attract, mould, develop
and retain human resource.
• In order to survive the companies are
reinvesting themselves by revamping their
organisational culture and structure.
• Communication barriers have been dismantled.
• Loyalty goes down
• Increase in female participation
• Equal opportunities for male and female.
7© Dr. Parikshit Joshi
The Modern IR Concept
Ownership Focus Means Result /
Govt & Big
Hire and Fire
8© Dr. Parikshit Joshi
Objectives of IR
• Develop and retain employee-employer relationship.
• To enhance the economic status of the worker by
improving wages, benefits and by helping the worker
in evolving sound budget.
• To regulate the production by minimizing industrial
conflicts through state control.
• To socialize industries by making the government as
9© Dr. Parikshit Joshi
Objectives of IR cont…….
• To provide an opportunity to the workers to have
a say in the management and decision-making.
(workers participation in decision making)
• To improve workers as strength with a view to
solve their problems through mutual negotiations
and consultation with the management.
• To avoid industrial conflict and their
• To extend and maintain industrial democracy.
10© Dr. Parikshit Joshi
Factors affecting Industrial Relations
• Institutional Factors – State policy, labour
laws, collective bargaining agreement, labour
• Economic Factors – type of business
organization sole proprietorship, partnership,
MNC, Govt Economic Policies, labour supply in
• Social Factors – Cast, colour, social values,
norms, social status
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• Technological Factors – introduction of new
and improved technology
• Psychological Factors – owners attitude,
perception of workforce, motivation, morale.
• Political Factors – political system, system of
government political philosophy, attitude of
government towards trade unions.
• Global Factors – international relations, global
conflicts, international labour agreements.
12© Dr. Parikshit Joshi
• The state has direct interest in preserving
industrial peace in the country.
• To promote healthy growth of trade unions and
set up a well organised industrial relations to
achieve industrial peace and prosperity.
• Industrialized developed and underdeveloped
economies steps have been taken by the state
to promote a healthy growth of trade union.
• The state intervention has been deemed
necessary because there are numerous labour
organizations which are relatively weak and all
employers cannot be trusted.
Role of State in IR
13© Dr. Parikshit Joshi
• Changing role of state Govt.
– Laissez Faire: During 19th century govt played a
laissez faire role in industrial relations . Under this
the workers and employees were left alone to
manage their affairs.
– Paternalism: By the end of 19th century laissez
faire was replaced by paternalism. Thinkers like
Robert, Rusin and others attract the attention of
Govt and public towards inhuman working
conditions of factories & mine workers. Govt has
also set up a royal commission on labour.
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• Tripartism: Consultancy.
• Encouragement of Voluntarism: govt given code
of discipline, code of conduct and code of
efficiency and welfare.
• Interventions: Government also plays an
interventions role, in the form of conciliation and
• Employer: Government also plays the role of
15© Dr. Parikshit Joshi
Evolution of IR in India
• Employee – employer relationship
• Employers are the people who own the
instrument and material of production and
employ the workers.
• Relationship between employee-employer was
informal, personal and intimate since the
business and industrial establishments were
• The growth of the giant sized joint stock
companies and business corporations, which
employed thousands of workers changed the
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• In India occupations were carried on by small
manufacturers in their cottages, mostly on
• Slavery was common.
• Master-slave relations later on converted to
• The Indian craft and arts were badly damaged
during the invasions of foreign invaders, which
lasted about 700 years
• After invasion of East India Company in 1883, the
British Industrialist developed some industries
(cotton, jute, railways plantation, coal mines, etc.)
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• Industrial relations is a by product of industrial
revolution , it originates from excessive
exploitation of workers by the owners of
• Trade unions were resisted and crushed by
• The first world war is the first milestone
enroute to industrial relations in India.
• After war prices of consumer good goes up
and workers were unable to afford it.
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• Other events which accelerated the pace of
– Success of Russian Revolution in 1917
– Formulation of ILO
– AITUC was established in 1920
– In 1924 labour party Government formed in U.K.
– The Indian Trade Union Act 1926
– Royal commission on Labour (1929-31) was
19© Dr. Parikshit Joshi
• By the end of 19th century and start of 20th
century govt. started paying attention towards
inhuman working conditions of mine & factory
• British Government set up a Royal Commission
on labour (1929-1931) to conduct a study on the
working conditions of Indian Labour.
• As a result of the same conciliation and
adjudication were formulated.
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• After Independence Industrial Dispute Act, 1947
• Which laid down a comprehensive dispute
settlement machinery to be applicable to all
states and passed three important Central Labour
– The Minimum Wages Act 1948,
– The Employees State Insurance Act 1948
– The Employees Provident Funds Act 1952
• Five year plans of India
• In 1969 first National Commission on Labour was
formed and many banks, sick textile mills, sick
steel plants were nationalized.
• New Economic Policies in 1991
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• "Trade Union" means any combination, whether
temporary or permanent, formed primarily for the
purpose of regulating the relations between
workmen and employers or between workmen and
workmen, or between employers and employers, or
for imposing restrictive conditions on the conduct of
any trade or business
• Trade unions are formed to protect and promote the
interests of their members. Their primary function is
to protect the interests of workers against
discrimination and unfair labor practices.
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• Voice in decisions affecting workers
• Member services
(a) Education and training
(b) Legal assistance
(c) Financial discounts
(d) Welfare benefits
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Functions of Trade unions
(i) Militant functions
a) To achieve higher wages and better working
b) To raise the status of workers as a part of
c) To protect labors against victimization and
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(ii) Fraternal functions
• To take up welfare measures for improving the
morale of workers
• To generate self confidence among workers
• To encourage sincerity and discipline among workers
• To provide opportunities for promotion and growth
• To protect women workers against discrimination
25© Dr. Parikshit Joshi
Importance Of Trade Unions
• Trade unions help in accelerated pace of economic
development in many ways as follows:
– by helping in the recruitment and selection of
– by inculcating discipline among the workforce
– by enabling settlement of industrial disputes in a
– by helping social adjustments. Workers have to adjust
themselves to the new working conditions, the new
rules and policies. Workers coming from different
backgrounds may become disorganized, unsatisfied
and frustrated. Unions help them in such adjustment.
26© Dr. Parikshit Joshi
Social responsibilities of trade unions include:
• promoting and maintaining national
integration by reducing the number of
• incorporating a sense of corporate social
responsibility in workers
• achieving industrial peace
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Trade Unionism In India
Indian trade union movement can be divided
into three phases.
* The first phase (1850 to1900)
* The second phase (1900 to 1946)
* The third phase (in 1947).
28© Dr. Parikshit Joshi
Trade Union Act 25 March 1926
• The trade Unions Act, 1926 provides for registration
of trade unions with a view to render lawful
organisation of labour to enable collective
bargaining. It also confers on a registered trade union
certain protection and privileges.
29© Dr. Parikshit Joshi
At present there are twelve Central Trade
Union Organizations in India:
• All India Trade Union Congress (AITUC)
• Bharatiya Mazdoor Sangh (BMS)
• Centre of Indian Trade Unions (CITU)
• Hind Mazdoor Kisan Panchayat (HMKP)
• Hind Mazdoor Sabha (HMS)
• Indian Federation of Free Trade Unions (IFFTU)
• Indian National Trade Union Congress (INTUC)
• National Front of Indian Trade Unions (NFITU)
• National Labor Organization (NLO)
• Trade Unions Co-ordination Centre (TUCC)
• United Trade Union Congress (UTUC) and
• United Trade Union Congress - Lenin Sarani (UTUC - LS)
30© Dr. Parikshit Joshi
• Employers' Organizations are institutions set
up to organize and advance the collective
interests of employers.
• They are crucial for shaping an environment
conducive to competitive and sustainable
enterprises that can contribute to economic
and social development, and by providing
services that improve and guide individual
performance of enterprises.
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• Employers’ organizations are a critical component
of any social dialogue process, which can help to
ensure that national social and economic
objectives are properly and effectively formulated
and enjoy wide support among the business
community which they represent.
• As one of the three constituents of the ILO,
employers' organizations have a special
relationship with the Organization. The ILO's
Bureau for Employers' Organizations - a
specialized unit within the ILO Secretariat - is
responsible for the nurturing and development of
32© Dr. Parikshit Joshi
• Its task is to maintain close and direct
relations with employers' organizations in
member States, to make the ILO's resources
available to them and to keep the ILO
constantly aware of their views, concerns and
33© Dr. Parikshit Joshi
Problems of Trade Union
• Multiplicity of Trade Unions and Inter-union
• Small Size of Unions
• Financial Weakness
• Leadership Issues
• Politics involved in Trade Unions
• Problems of Recognition of Trade Unions.
34© Dr. Parikshit Joshi
International Labour Organisation(ILO)
• Established in April 11, 1919 by the Versailles
Peace Conference as an autonomous body
associated with the League of Nations.
• Its first assembly took place in Washington on
• There were 45 members of the ILO in 1919.
• India has been a member of the ILO since its
35© Dr. Parikshit Joshi
Objectives of ILO
• Full employment and the raising of standards
• Workers must be given that employment in
which they can have the satisfaction of giving
the fullest measure of their skill and make
their contribution to the common well being.
• Facilities for training and the transfer of labour
including migration for employment and
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• Policies in regards to wages and earnings bonus
and minimum wages.
• Right of collective bargaining.
• Social security measures and medical care
• Adequate protection by the life and health of
workers in all occupations.
• Provision for child welfare and maternity
• Provision of adequate nutrition, housing and
facilities for recreation and culture
• The assurance of educational and vocational
37© Dr. Parikshit Joshi
• Since 1945 ILO has expanded its working in
three major directions:
1) The establishment of Tripartite International
Committees to deal with problems of some of
the major industries
2) The holding of regional conferences and
meetings of experts to study special regional
problems particularly those of underdeveloped
3) The development of operational activities
38© Dr. Parikshit Joshi
• Today the ILO comprises 183 Member States.
• In addition to the States which were Members of
the International Labour Organization on 1
November 1945, any original member of the
United Nations and any State admitted to
membership of the United Nations by a decision
of the General Assembly may become a Member
of the ILO.
• Communicating to the Director-General its
formal acceptance of the obligations of the
Constitution of the Organization.
39© Dr. Parikshit Joshi
• ILO is a tripartite organisation consisting of
representatives of the governments,
employers and workers of member countries
in the ratio of 2:1:1.
• Three main organs of ILO:
i. The International Labour Conference
ii. The Governing Body
iii. The International Labour Office
40© Dr. Parikshit Joshi
International Labour Conference
• The ILC sessions held once a year and is the
policy making organ of ILO
• Each member country is represented by four
member delegates – two representing the
Government, one representing the employers
and on one representing the workers.
• Principal function is to formulate international
social standards in the form of International
Labour Conventions and Recommendations.
41© Dr. Parikshit Joshi
The Governing Body
• Governing body is the chief executive body of
the organisation and meets several times a
year to formulate policy for effective
programming of work and setting of agenda
for the annual conference.
• Membership of 40.
• 20 Government representatives, 10 employers
representatives and 10 representatives of
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The International Labour Office
• The International Labour office functions as
the secretariat of the ILO.
• Its main functions are preparation of the
documents on varied items of the agents of
the meeting of the conference collection and
distribution of information on all subjects.
43© Dr. Parikshit Joshi
Major Activities of ILO
• Creation of International standards of Labour
• Employment Creation
• Collection and Distribution of Information and
• Research & Studies
• Improvement of Working conditions and
44© Dr. Parikshit Joshi
© Dr. Parikshit Joshi 45
Dr. Parikshit Joshi
Department of Management Science
Sri Ram Murti Smarak College of Engg. & Technology
Bareilly (U.P.), India