Suspension of a Conductor
Galaxy Road Transport Corporation was established in 1950s to provide smooth public commuting facility in a big metro. The Corporation introduced an incentive scheme in 1996. Thereby, a bus crew would get the incentive bonus if the income of the bus during a particular day in a particular route crossed the standard amount of collection. The standard amount for all the routes were fixed by the administration on the basis of average income in the preceding year in the respective routes, which were designated by numbers. The crew would get one percent of the excess amount over and above standard amount. The collections of the Corporation increased phenomenally after the introduction of new incentive scheme. The bus crew began to take extra care in clearing all the passengers awaiting bus for their journey. Prior to this, the bus crew never allowed the passengers over and above the seating capacity. The management was well aware of overloading but never raised the issue with the bus crew.
The other day, a bus was plying on Route No. 439. There was heavy traffic. Against the seating capacity of 54 passengers, double the number had boarded the bus. In a huff, the bus conducted urged the passengers to buy tickets who already possessed one. It was becoming quite tough for him to know whether a passenger has already bought the ticket. Many a time, the passengers snubbed him. However, there were a number of passengers who purchased the ticket twice, thinking probably they did not have the ticket in the first place. Having struggled a lot for selling the tickets, after a point he presumed that all the passengers must have got the ticket.
Soon the Checking Staff stopped the bus. They found that five old passengers in all had not purchased the ticket. They immediately issued tickets and collected penalty from them. All of them said that they could not buy tickets because of the rush and they had intended to get the tickets once the crowd thinned. The Checking Staff suspended the Bus Conductor.
The Bus Conductor informed the Trade Union about his suspension over phone. The Trade Union leaders met the Depot Manager and explained the matter to him. They urged the Depot Manager to revoke the suspension as the bus conductor was acting in good faith. However, the Depot Manager refused to revoke the suspension and the Trade Union called for a wild cat strike. The Traffic was affected badly and the commuters suffered a lot due to the sudden strike.
The Strike continued for almost a week. Soon, the trade unions of other bus depot started coming in their support. Everyday the corporation was loosing lakhs of rupees in collection. Ultimately, the General Manager of the Corporation instructed the Depot Manager to take immediate steps and resolve the issue. Then the Depot Manager called the Trade Union to discuss the matter again. Suspension order was withdrawn and bus crew returned to report on duty.
Case Questions:
1. How do you view the disciplinary procedure followed in this case in punishing the conductor?
2. If you were the checking staff, how would you handle the case?
3. If you were the depot manager, how would you handle the case?
Thursday, November 22, 2007
MIR Case # 1
Standard Textile and Printing Works
The Standard Textile Printing Works conduct business in high quality printing of superior textiles. It has a good reputation in the market. The company employs about 500 workers who work in three shifts a day. There is no union in the plant. The CEO of the Works is designated as General Manager who is assisted by three Shift Managers, six Supervisors and twelve Assistant Supervisors.
For the past few months, the General Manager had been receiving frequent complaints from Shift Managers that a large number of pieces of customer’s cloth were missing from the plant and they could not account for the losses. The General Manager took a serious view of the losses because it meant not only payment of damages to the customers but also the reputation of the company in the market. He therefore, ordered a close search of workers at the time of their exit. As a result of these searches, a couple of workers were caught with pieces of cloth hidden inside their dresses. They were charge-sheeted for theft and subsequently dismissed after the domestic enquiry.
The other day, during lunch interval, Vinayak, a worker in the folding department saw an Assistant Supervisor taking a piece of cloth and then putting the same in his briefcase. Vinayak immediately reported the matter to the Shift Manager who came to the department and found the said piece in the briefcase of the Assistant Supervisor. Without any discussion, he asked the Assistant Supervisor to see him in his office. A week passed and the concerned Assistant Supervisor continued to work as usual.
During all this while, the Assistant Supervisor threatened Vinayak that the latter’s days in the company were numbered. Vinayak was obviously upset at the turn of event. He approached the Shift Manager to enquire about the case and what action was taken against the Assistant Supervisor. The Shift Manager politely replied, ‘I am thankful to you for whatever you did, it is none of your business to know what action we are taking against him. Remember that, after all, he is your officer.’ Vinayak felt irritated, but left the office of the Shift Manager without uttering a word.
On the same day, when the watchman was about to search Vinayak while he was leaving the plant, Vinayak shouted at the watchman saying, ‘I will not allow myself to be searched unless the officers are also searched. They are the real thieves’. The watchman detained Vinayak at the gate and reported the matter to the General Manager, who called Vinayak to his office. On being questioned by the General Manager, Vinayak told him all about the pieces of cloth in the Assistant Supervisor’s briefcase and subsequent events and repeated what he had said to the watchman. The General Manager thereupon asked him angrily, ‘Do you mean to say that we are thieves?’ Vinayak curtly replied, ‘You may take it that way, if you so desire.’ The General Manager recorded the incident along with Vinayak’s reply to his question and took his signature on it.
Next day, Vinayak was served with a suspension order for his ‘Act of Insubordination and Indecent Behaviour’. Thereafter the General Manager referred the case to the Personnel Manager.
Case Questions:
What are the main issues in the case?
How far is the action of the General Manager justified?
As Personnel Manager, how would you handle the case? Give valid reasons in support of your action.
The Standard Textile Printing Works conduct business in high quality printing of superior textiles. It has a good reputation in the market. The company employs about 500 workers who work in three shifts a day. There is no union in the plant. The CEO of the Works is designated as General Manager who is assisted by three Shift Managers, six Supervisors and twelve Assistant Supervisors.
For the past few months, the General Manager had been receiving frequent complaints from Shift Managers that a large number of pieces of customer’s cloth were missing from the plant and they could not account for the losses. The General Manager took a serious view of the losses because it meant not only payment of damages to the customers but also the reputation of the company in the market. He therefore, ordered a close search of workers at the time of their exit. As a result of these searches, a couple of workers were caught with pieces of cloth hidden inside their dresses. They were charge-sheeted for theft and subsequently dismissed after the domestic enquiry.
The other day, during lunch interval, Vinayak, a worker in the folding department saw an Assistant Supervisor taking a piece of cloth and then putting the same in his briefcase. Vinayak immediately reported the matter to the Shift Manager who came to the department and found the said piece in the briefcase of the Assistant Supervisor. Without any discussion, he asked the Assistant Supervisor to see him in his office. A week passed and the concerned Assistant Supervisor continued to work as usual.
During all this while, the Assistant Supervisor threatened Vinayak that the latter’s days in the company were numbered. Vinayak was obviously upset at the turn of event. He approached the Shift Manager to enquire about the case and what action was taken against the Assistant Supervisor. The Shift Manager politely replied, ‘I am thankful to you for whatever you did, it is none of your business to know what action we are taking against him. Remember that, after all, he is your officer.’ Vinayak felt irritated, but left the office of the Shift Manager without uttering a word.
On the same day, when the watchman was about to search Vinayak while he was leaving the plant, Vinayak shouted at the watchman saying, ‘I will not allow myself to be searched unless the officers are also searched. They are the real thieves’. The watchman detained Vinayak at the gate and reported the matter to the General Manager, who called Vinayak to his office. On being questioned by the General Manager, Vinayak told him all about the pieces of cloth in the Assistant Supervisor’s briefcase and subsequent events and repeated what he had said to the watchman. The General Manager thereupon asked him angrily, ‘Do you mean to say that we are thieves?’ Vinayak curtly replied, ‘You may take it that way, if you so desire.’ The General Manager recorded the incident along with Vinayak’s reply to his question and took his signature on it.
Next day, Vinayak was served with a suspension order for his ‘Act of Insubordination and Indecent Behaviour’. Thereafter the General Manager referred the case to the Personnel Manager.
Case Questions:
What are the main issues in the case?
How far is the action of the General Manager justified?
As Personnel Manager, how would you handle the case? Give valid reasons in support of your action.
MIR Handout # 3.1
Discipline at the workplace
Meaning and Concept
The word discipline is derived from the Latin word ‘Disciple’ which means ‘to teach’.
In the context of industries, discipline means:
v Willingness to carry out instructions and orders of the superior;
v Compliance with accepted orders;
v Proper appreciation of the hierarchical –Superior-subordinate relations;
v Adherence to established norms and regulations;
v Observance of rules and regulations consistently;
v Decent behaviour at the workplace.
Some definitions of Discipline
Discipline is the orderly conduct of affairs by the members of an organization, who adhere harmoniously in forwarding the end, which the group has in mind, and willingly recognize that –Ordway Tead
Discipline does not mean a strict and technical observance or rigid rules and regulations, it means working, cooperating and behaving in a normal and orderly way -Bremblet
Discipline is a training that corrects, moulds, strengthens or perfects individual behaviour –Websters’ Dictionary
Importance of Discipline
Industrial discipline helps in the following :
v Observance of rules and regulations of the workplace
v Attainment of organizational goals
v Attainment of higher productivity
v Effective use of manpower
v Promotion of mutual trust between employees and employers
v Promotion of fellow-feeling among the workers
Approaches to Indiscipline
Indiscipline is a transgression of some established and definite rules where no discretion is left to the employees. In simple terms, it is violation of rules.
Indiscipline is an act or conduct, which is prejudicial to the interests of the employers or is likely to impair the reputation of the employer or create unrest and can be performed even outside the premises of the establishment and beyond duty hours.
Negative approach to Indiscipline
It ensures that the subordinates adhere strictly to rules and punishment is awarded in the vent of indiscipline.
Here employees adhere to rules out of fear of punishment
Judicial Approach to Indiscipline
Various kinds of misconducts and commensurate punishments are listed in the Standing Orders.
Management simply checks what is the prescribed punishment for a particular misconduct and administers the same
Positive approach to Indiscipline
It ensures self-discipline among the employees.
Employees are expected to comply with rules not out of fear of punishment but because they desire to cooperate in achieving the organizational goals.
Here willingness to comply is important.
This is possible when the employees are enabled to internalize socio-ethical milieu of the company.
Before punishing the employee, the cause of indiscipline is ascertained.
An analysis is made to find out whether the act of indiscipline is due to failure of his training or motivation system individual’s own failure to meet the requirements and accordingly corrective measures are taken.
Mc Gregor’s Hot Stove Approach
Mc Gregor believes that the best form of discipline is similar to a burn from a hot stove.
Manager should behave like a Hot Stove while enforcing discipline at the shop floor.
Characteristics of a Hot Stove
It is foreseeable:
Just as the flames or red coils provide warning that you will be burnt by touching the hot stove, your employees should know in advance that poor conduct or performance will result in specific, pre-determined consequences.
It is swift:
When you touch a Hot Stove, you feel the burning sensation immediately.
Similarly, the manager should punish the employee immediately for his misconduct.
It is relatively intense with the first offence:
While the severity of the infraction should certainly be taken into account, the incident should never be overlooked as a freak occurrence that probably will not happen again.
The Hot Stove does not have any sympathy for the first time offenders and neither should the manager have.
By letting it go, you are giving your approval for it to happen again and loosing your moral authority to punish anyone for the same offence in future.
It is impersonal:
A Hot Stove does not punish out of anger.
It does not hold grievance and strike harder at those who have touched it before.
The manager should avoid personal grudges against the employees while administering punishments.
It is objective:
It emphasizes behaviour, not the persons.
People who touch Hot Stove are burnt because of their action and not because of who they are.
Hence the manager should also be objective in administering punishment and should not spare his favourites or any other influential worker.
It is consistent:
A Hot Stove burns each and every person who touches it every time.
It does not spare anyone:
Each person under your command should be treated equally. If an incident occurs, others who view the situation should be able to expect a similar punishment for the same infraction.
It provides alternatives:
Do not touch the Hot Stove and you will not be burnt.
The manager should reward the compliant behaviour and punish the employees for any infraction.
Disciplinary Procedures/Domestic Enquiry
The first step is Preliminary Enquiry before the employer holds a domestic enquiry. It is conducted before the domestic enquiry in order to find out whether a prima facie case of misconduct is evident.
After the Preliminary investigation is conducted and a prima facie case of misconduct is established, the following steps of domestic enquiry should be followed:
Issuance of Charge Sheet
Consideration of explanation
Giving notice of enquiry into the charges in case the explanation is unsatisfactory
Suspension with or without pay, pending enquiry, if needed
Enquiry into charges
Award of punishment
Communication of Punishment
Issuance of Charge Sheet:
As soon as misconduct is observed and confirmed through preliminary enquiry, the manager should frame a Charge Sheet, which contains charges or a description of misconduct.
Thereafter, an explanation is asked for from the concerned employee.
The manager has to be careful in framing the Charge Sheet because if the punishment were not in consonance with the charges, it would be invalidated.
Following points should be considered while framing the Charge Sheet:
The Charge Sheet should be properly worded and loose language should not be used.
While stating the offence, the date, time, and place of its commission and all other relevant details should be given.
The wordings of the Charge Sheet should be in consonance with the Standing Orders wherever they are in force.
The proposed punishment may be mentioned.
It should call upon the worker to submit an explanation in writing within a specified time or date.
The Charge Sheet should be issued under the signature of the Disciplinary Authority and not of the Enquiry Authority.
The Charge Sheet should be properly served and there should be strict proof of issue and delivery so that later the worker may not deny it.
Consideration of Explanation:
The workman may admit guilt and ask for clemency. In such a case, the enquiry officer need not record evidence but should record findings on the basis of admission of charges in the worker’s presence and his signature may be obtained.
The workman may refute the charges. In this case, his explanation is carefully examined to ascertain whether his explanation is satisfactory. A further decision about proceeding in the mater and a detailed enquiry is taken on the basis of this examination.
Workman may apply for extension of time for submitting explanation. In this case, reasonable extension is given.
If the workman fails to submit his explanation within the stipulated time, the employer may follow further proceedings of enquiry.
Giving notice of enquiry:
The enquiry should be normally held within a reasonable time after receiving the explanation. Proper and sufficient advance notice should be given indicating the date, time, venue, and name of the enquiry officer so that the workman may prepare his case. It should also be notified that he should be ready with oral and documentary evidence on the date of enquiry and bring witnesses in case required.
If the nature of misconduct is grave and serious, and if it is in the interest of the security of enquiry officer and maintenance of good order and discipline in the enterprise, the worker may be suspended with or without pay till the disciplinary proceedings are complete. In case the modal Satanding Orders (as per the Industrial Employment (Standing Orders) Act 1946) stipulates a limit on period of suspension, the enquiry must either be completed within the period or wages should be paid for the extended period.
Conduct of Enquiry:
Enquiry Officer: Standing Orders may provide as to who should be the enquiry officer. Otherwise, an Assistant Manager or Administrative Officer or Labour Welfare Officer may be appointed as the enquiry Officer. Besides an outsider as lawyer or manager form other company may also be appointed as Enquiry Officer. However, the enquiry Officer should be a person who is a witness or himself involved in the case.
The Enquiry Officer has to collect information and arrive at conclusion. He should not act as a prosecutor. There should be no personal bias otherwise the principle of natural justice would be violated.
The Charge-sheeted employee may nominate some other employee to represent his case or assist him in defense. However, it is discretion of the management to allow a non-employee union official to represent the case of the charge-sheeted employee.
The Charge-sheeted employee may ask for an interpreter in case he does not understand the language of the Enquiry Officer.
The Enquiry Officer should record preliminary statements pertaining to date of holding enquiry, persons present, and statement of charge-sheeted employee and statement that the enquiry procedure was explained to the concerned workman.
Witnesses should be examined one by one in the presence of the accused workman so that prospective witness does not know what the previous one had said. Each witness should be first examined by the party, which has called him and then by the opposite party. Moreover, the management witness should be examined first. Documentary evidences should also be produced through witnesses and be made part of the enquiry proceedings.
The evidence may preferably be recorded by the Enquiry Officer in narrative form.
At the end of the recording of evidence given by the witnesses, they should be asked by the Enquiry Officer to sign and then the Enquiry Officer should countersign the evidence.
After that the worker’s witness including the worker should be examined. They can be cross-examined and then records should be signed.
Ex-partite Enquiry –When the charge-sheeted worker does not turn up for the enquiry without notice or reasonable cause or refuse to participate in the enquiry then the Enquiry Officer may proceed to hold the enquiry ex-parte.
At the conclusion of the enquiry proceedings, the enquiry officer should decide as to whether the charges made are valid or not along with the reasons for his findings. He may or may not recommend punishment. As far as possible, he should refrain from awarding punishment and leave it to the decision of the appropriate authority.
Award of Punishment: This is a management task and punishment awarded should be based on the findings of the enquiry and past record of the employee. The gravity of misconduct should be taken into account while determining the punishment. Moreover, punishment should be commensurate with the misconduct.
Communication of Punishment: After a decision is taken regarding punishment, it should be communicated as expeditiously as possible. The letter communicating the punishment should contain:
v Reference to the letter of charge issued to the employee
v Reference to the enquiry
v Reference to the findings of the enquiry
v Decision whether to punish or not
v Date from which the punishment is to be effective
Code of Discipline
v The Code of Discipline is based on the Report of the National Commission of Labour, 1969
v To maintain discipline in industry (both in public and private sector) there has to be : (i) a just recognition by employers and workers of the rights and responsibilities of either party, as defined by the laws and agreements including bipartite and tripartite agreements arrived at all levels from time to time; and (ii) a proper and willing discharge by either party of its obligatiuons consequent on such recognition. The central and state governments on their part will arrange to examine and set right any shortcomings in the machinery they constitute for the administration of labour laws.
v To ensure better discipline in the industries:
Management and Union agree –
1. That no unilateral action should be taken in connection with any industrial matter and that disputes should be settled at appropriate levels;
2. That the existing machinery for settlement of disputes should be utilized with utmost expedition;
3. That there should be no strike or lockout without notice;
4. That affirming their faith in democratic principles, they bind themselves to settle all future differences, disputes and grievances, by mutual negotiation, conciliation and voluntary arbitration;
5. That neither party will have recourse to: (a) coercion, (b) intimidation, (c) victimization, and (d) go-slow
6. That they will avoid: (a) litigation, (b) sit-down and stay-in strikes, and (c) lockouts;
7. They will promote constructive cooperation between their representatives at all levels and abide by the spirit agreements mutually entered into;
8. That they will establish upon a mutually agreed basis, a grievance procedure which will ensure a speedy and full investigation leading to settlement;
9. That they will abide by various stages in the grievance procedure and take no arbitrary action which would bypass this procedure; and
10. That they will educate the management personnel and workers regarding their obligations to each other.
Management agree –
1. Not to increase workloads unless agreed upon or settled otherwise;
2. Not to support or to encourage any unfair labour practices such as
(a) Interference with the right of employees to enroll or continue as union members,
(b) Discrimination, restraint or coercion against any employee because of recognized activity of trade unions, and
(c) Victimization of any employee and abuse of authority in any form.
3. To take prompt action for:
(a) Settlement of grievances,
(b) Implementation of settlements, awards, decisions.
4. To display in conspicuous places in the undertaking the provisions of this Code in local languages;
5. To distinguish between actions justifying immediate discharge and those where discharges must be preceded by a warning, reprimand, suspension, or some other form of disciplinary action and to arrange that all such disciplinary actions should be subject to an appeal through normal grievance procedure;
6. To take appropriate disciplinary against its officers and members in cases whose enquiries reveal that they were responsible for precipitate action by workers leading to indiscipline; and
7. To recognize the union in accordance the criteria (evolved at the 16th session of the Indian Labour Conference, 1958.
Unions agree –
1. Not to engage in any form of physical duress;
2. Not to permit demonstrations which are not peaceful and not to permit rowyism in demonstration;
3. That their members will not engage or cause other employees to engage in any union activity during working hours, unless as provided for by law, agreement or practice;
4. To avoid unfair labour practices such as negligence of duty, careless operation, damage to property, interference with or disturbance to normal work, insubordination.
5. To take prompt action to implement awards, agreements, settlements, and decisions.
6. To display in conspicuous places in the union offices, the provisions of the Code of Discipline in the local languages; and
7. To express disapproval and to take appropriate action against the spirit of this code.
Annexure A
Criteria for Recognition of Unions
1. Where there is more than one union, a union claiming recognition should have been functioning for at least one year after the registration;
2. The membership of the union should cover at least 15% of the workers in the concerned establishment and membership would be counted only of those workers who had paid their union dues for at least three months during the period of six months immediately preceding the reckoning;
3. A union may claim to be recognized as a representative union for an industry in a local area if it has a membership of at least of 25% of the workers of that industry in that area;
4. When a union has been recognized, there should be no change in its position for a period of two years;
5. Where there are several unions in an establishment or industry, the one with the largest membership should be recognized;
6. A representative union for an industry in an area should have the right to represent the workers in all the establishments in the industry, but if a union of workers in a particular establishment has a membership of 50% or more of the workers of that establishment it should have the right to deal with matters of purely local interest, such as grievances pertaining to its own members. All other workers who are not members of that union might either operate through the representative union for the industry or seek redress directly.
7. In the case of Trade Union Federations, which are not affiliated to any of the four central organizations of labour, the question of the recognition would be dealt with separately.
8. Only unions that observe the Code of Discipline would be entitled to recognition.
Tuesday, October 30, 2007
Indian Labour Relations
Issues to be discussed in the class
What is industry?
Concept of workmen
Meaning of Industrial Relations
Scope of Industrial Relations
Current status of Industrial Relations in India
Future of Industrial Relations
Trade Unionsim in India: Historical evolution and current environment
(Please note that the text is quite exhaustive and touches issues that are well beyond the boundary of structured curriculum)
What is Industry?
The word Industry comes from the Latin word industria, meaning ‘diligent activity directed to some purpose,’ and its descendant, Old French industrie, with the senses ‘activity’, ‘ability’, and ‘a trade or occupation’. The word ‘Industry’ (first recorded in 1475) originally meant ‘skill’, ‘a device’, and ‘diligence’ as well as ‘a trade’. In modern context, the term ‘Industry’ implies ‘systematic work or habitual employment’.
According to Sec.2(j) of The Industrial Disputes Act, 1947, ‘industry’ means any systematic activity carried on by the cooperation between an employer and his workmen. The workmen may be employed by the employer directly or by or through any agency, including a contractor. The employment should, however, be for the production, supply or distribution of goods and services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature). It makes no difference whether or not,-
i) any capital has been invested for the purpose of carrying on the activity referred to above; or
ii) such activity is carried on with a motive to make any gain or profit.
Concept of Workman
‘Workman’ means any person (including an apprentice) employed in any industry to perform any unskilled, manual, skilled, technical, operational and clerical job for hire or reward, whether the term of employment is expressed or implied. The term includes any such person who has been dismissed, discharged, or retrenched in connection with, or as consequence of dispute, or whose dismissal, discharge or retrenchment has led to that dispute. The term also includes supervisors drawing less than Rs.1600 per month. The term does not include within the purview of the Act, (Section 2s) any person employed in the managerial or administrative capacity.
Any employee is not a workman if his or her main task is supervision of work of others and if he or she is drawing more than Rs.1600 (Anand Bazar Patrika (P) Ltd, versus workmen,1970, 3, Supreme Court Case 248)
Even if the designation does not indicate that an employee is supervisor but if he or she is performing functions, which are mainly managerial, he or she is not a workman (All India Reserve Bank Employees Association versus RBI, 1966, Supreme Court 305).
However, if the employee is designated a supervisor but is not performing supervisory functions, he or she is still workman (Burma Shell Oil Storage versus their employees, All India Reporter 1971, Supreme Court 922).
Meaning of Industrial Relations
Industrial Relations is relatively a new academic discipline, which was formally launched in 1940s. British scholars Beatrice and Sidney Web coined the term in the beginning of 20th century. In USA, it was the Taft Commission, which first used the term Industrial Relations in 1912. The Taft Commission was appointed by the US Government to probe the causes of industrial unrest, which was then looming large.
Industrial Relations is viewed as ‘process by which people and their organization interact at place of work to determine the terms and conditions of employment’. The whole process is viewed as a ‘system’, in order to emphasize the interrelation among people, their work organization and the standards in industrial milieu.
The Trade Unions are organized by workers to solve their problems created by modern industry. They are voluntary organizations of workers formed to promote and protect their interest by collective action.
According to H A Clegg, the field of Industrial Relations includes the study of workers and their trade unions, management, employers associations, and the state institutions concerned with the regulation of employment.
In the Casselman’s Labour Dictionary, Industrial Relations has been explained as ‘the relations between employers and employees in industry, between various unions, between the state and the unions as well as those between employers and the state’.
According to John T Dunlop, Industrial Relations is ‘a complex of inter-relations among workers, managers and the government’. Dunlop suggested that there are three actors in Industrial Relations viz. workers, management and the state. These three actors determine the terms and conditions of employment.
According to National Commission: ‘Industrial Relations affect not merely the interests of the two participants –labour and management but also the economic and social goals to which the state addresses itself. To regulate these relations in socially desirable channels is a function, which the state is in the best position to perform.’
Scope of Industrial Relations
A. Constructive Labour-Management Relations
(i) Strong Trade Unions and Association of Employers for negotiations, consultation and discussion on mutual basis;
(ii) The Spirit of collective bargaining in good faith and on equal terms;
(iii) Labour Welfare.
B. Industrial Peace
(i) Mechanism for settlement of industrial disputes;
(ii) Provisions for bipartite and tripartite consultations;
(iii) Government intervention.
C. Industrial Democracy
(i) Workers’ participation in management;
(ii) Recognition of Trade Unions;
(iii) Joint pursuits of mutual interests.
Basic objectives of Industrial Relations
v The efficient production of goods and services and at the same time determination of adequate terms and conditions of employment in the interests of the employers, employees and the society as a whole;
v The establishment of a mechanism mechanisms for communication, consultations, and cooperation in order to resolve shop floor issues at enterprise and industry level, and to achieve consensus on labour policy at national level through a tripartite process;
v Avoidance and settlement of disputes and differences between employers and employees wherever possible through negotiation and disputes settlement mechanism;
v To provide social protection where needed e.g in the areas of social security, safety, health etc.
v Establishment of stable and harmonious relations between employers and employees and their organizations, and between them and the state.
Importance of Industrial Relations
Industrial Relations promotes the following:
1. Industrial Peace: Cordial Industrial Relations brings harmony and removes causes of disputes/conflicts. This leads to industrial peace, which is an ideal situation for any industrial unit.
2. Industrial Democracy: It is the foundation of cordial Industrial Relations. Views of the workers are respected and heard. Workers are allowed to participate in the decision making process.
3. Higher Productivity: Cordial Industrial Relations invariably leads to higher productivity.
4. Collective Bargaining: It is very important for cordial Industrial Relations. Through Collective Bargaining, both management and labour together determine the terms and conditions of employment including wages.
5. Labour Welfare: It is pre-requisite for cordial Industrial Relations.
6. Higher Morale: Cordial Industrial Relations leads to higher morale which in turn leads to higher labour productivity.
7. Management of Change: Cordial Industrial Relations facilitates management of change. In absence of cordial Industrial Relations, any initiative for change in the work organization will be resisted by the workers thus causing conflicts and delaying the process of change.
Factors affecting Industrial Relations
1. Institutional factors: State policies, labour laws, collective bargaining agreements, voluntary codes, polices of labour unions/employers’ federations.
2. Economic factors: Global economic changes and the impact of WTO agreements. MNCs have not only brought huge capitals but also innovative management practices new work culture.
3. Social factors: Social values, social structures.
4. Technological factors: Innovative technologies, new set of skills, automation.
5. Psychological factors: Attitude of the employers and the employees.
6. Political Factors: Orientations and ideologies of the ruling elite.
7. Global factors: international covenants, treaties and agreements advanced by international bodies like ILO, WTO, UNO.]
8. Organizational factors: Type of organization (private, public, welfare), organizational structures/hierarchies (flat or hierarchical organizations)
Components of Industrial Relations
1. Trade Unions, Employers’ Federations
2. Collective Bargaining
3. Workers Participation in Management
4. Grievance Procedure/Industrial discipline
5. Mechanism for settlement of industrial disputes
6. Tripartite bodies comprising representatives of Trade Unions, Employers’ Federations and the government.
7. Labour laws/Labour courts/Industrial Tribunals/National Tribunals.
8. International covenants and treaties
Role of Industrial Relations Officers/Managers
v Provide support to the management on employment relations issues.
v Prepare employment agreements.
v Participate in collective bargaining negotiations.
v Formulate polices and procedures about working and terms of employment.
v Resolve disputes and grievances over employment agreements.
v Investigate complaints about employees, employers and employment conditions.
v Work with management regarding performance issues.
v Act as spokesman of the management while dealing with the Trade Unions
v Train managers in employee relations and how to interpret agreements.
v Maintain contacts with the union officials.
v Monitor any changes in the labour policies and labour laws and keep the management informed about the same.
v Promote industrial discipline.
v Promote workers’ participation in management.
v Work towards improving quality of work life
Evolution of Industrial Relations
Factors that led to the development of Industrial Relations:
1. Shift from agrarian economy to industrial economy
2. Shift from cottage industry to factory system
3. Industrial Revolution
Stages of evolution:
1. Primitive stage or pastoral economy: People were largely engaged in hunting and produced as much as was required for consumption by the family. There was no concept of sale or purchase of any goods or services.
2. Agrarian economy: People were largely engaged in farming. They produced a little more than what they consumed. The system of barter was prevalent. Specialized trades had developed and craftsmen had gained importance. They were quite independent. They owned the tools of production and were self-employed. The concept of employer had not developed as yet.
3. Feudalism: For the first time the concept of retainership developed during the medieval period. Landlords employed peasants to work on their farms and also serve as soldiers during wars. However, the people thus employed, were not given any cash remuneration. Instead they were given small pieces of land for subsistence. They were tied for life to their landlords. In true sense, they were slaves.
4. Cottage industry and ‘putting out system’: Craftsmen began to cater to large population. Needs for goods and services had increased due to large-scale urbanization. Even the farmers were producing surplus. Craftsmen operated from their houses and owned the tools of production –hence the term cottage industry. Sometimes a trader would provide them raw materials to produce certain things –this refers to the putting out system –an earlier avtar of outsourcing. But the craftsmen were still their own masters. Other family members supported the family trade. Cottage industry was thriving without any employers or employees.
5. Factory or industrial capitalism: Industrial Revolution beginning in 1750 onwards led to the development of factory system. For the first time, people other than the craftsmen or skilled labour owned tools of production and capital. Production on a large scale began in a big way with new kind of machines. Workers were remunerated in cash and lived in small industrial towns away from their rural milieu. The concepts of employers and employees had taken shape. Gradually various laws governing their relations were enacted.
6. IT Revolution and Globalization: Employer-employee relations have developed new dimensions where employees have turned out to be serious stakeholders. Employers attitude towards the workers have also changed for the better.
Impact of Industrial Revolution
The Industrial Revolution influenced and shaped the relations between the capitalists (employers) and the workers in several ways. There occurred prolonged conflict between workers and the management at the shop-floor before the terms and conditions of employment could take any shape with the intervention of the state. Following were the impact of Industrial Revolution:
1. Loss of freedom: In the agrarian economy, the framers (other than the retainers of the land lords) were fairly independent. They were their own masters. They owned the tools of production and land and took all the decisions themselves. However, surplus agricultural production grew over the period thanks to improved agricultural implants and fertilizers. Thus many of the farmers were not able to subsist in the agrarian economy. There was rampant disguised unemployment in the villages. When the factory system came after the Industrial Revolution, many of the farmers joined the workforce in the upcoming industrial towns. But the new employment led to loss of freedom for them. In the factories, they had to obey the managers to stay in the job. In the new scenario someone else was their master who dictated the terms and conditions of employment. This eventually led industrial conflicts and subsequently state intervention.
2. Unhygienic working conditions: Initially, working conditions in the factories were quite unhygienic. However, the workers could not protest for fear of losing their jobs. Discontent among workers was brewing which ultimately led to conflicts at the shop floor and the state had to intervene in order to ensure health and safety provisions for them.
3. Employment of children: In the beginning, children were employed in the factories. Their working hours were quite prolonged without any substantial break. They were paid less remuneration. Again the state had to intervene in order to regulate the employment of children.
4. Freedom to contract: The management had freedom to enter into contract with the employees. Thus the managers used to dictate the terms and conditions including wages while employing the workers. This scenario was not at all favourable for the workers. Gradually the state intervened to protect the interests of the workers.
5. Dynamics of market: The management always had an upper hand as there were more workers available in the labour market than the jobs available in the factories. This also favoured the management while hiring or firing the employees.
6. Elimination of physical labour: In the factories, workers were not required to work physically. Instead, the work environment was fairly mechanized.
7. Specialization of function: Workers were assigned a certain type of job in which he developed specialization. Thus workers with specialized skills in particular trades grew in numbers. Workers of the same trade developed fraternity and identical interests.
8. Increased sense of alienation: Farmers had left their villages and joined the work force in small industrial towns. Hence they
9. Capital formation: Rapid industrialization led to large-scale capital formation thus strengthening the capitalist class.
10. Evolution of entrepreneurial elite: During the agrarian economy, the feudal lords were the elites. After Industrial Revolution, new capitalists class emerged. The capitalists were ready to take risk and invest money in new ideas, new range of products and set new trends in business and economy.
Approaches to the study of Industrial Relations
1. Classical Approach: According to Karl Marx, the interests of the workers and the capitalists are antagonistic. Hence there cannot be industrial peace He had urged the workers to keep fighting against the capitalists till they get control over the means of production. As such, this is a negative approach to study Industrial Relations. It is based on perpetual conflicts at the shop floor as opposed to the basic objective of the Industrial Relations system.
2. Human Relations Approach: This approach to study Industrial Relations was developed by Elton Mayo, Abraham Maslow,, Fredric Herzeberg and Mc Gregor. It is also known as neo-classical approach. It is based on the principle that workers constitute the most sensitive resources in any industry and hence they should be handled with great care. It talks about creating small social groups within the work environment and a sound two-way communication system. This is contrary to the threat perception about informal or formal groups of workers in any organization. The critics of this approach say that informal social groups have been over-emphasized.
3. Sociological Approach: Frank Tannenbaum is the main advocate of this approach to study of Industrial Relations. According to him, workers organized themselves into a singular and composite unit despite coming from diverse backgrounds. The new community of labour was capable of demanding equality with the management regarding terms of the employment. This led to the reorientation of management’s attitude towards the workers. Thus Industrial Relations came to be determined by mutual interests in place of Unitarian approach of the management. (The Unitarian approach implies that the entrepreneur has the managerial prerogative)
4. Psychological Approach: According to this approach of studying Industrial Relations, the relations between the workers and the management are guided by attitudes, perceptions and personalities of both the parties. Mason Haire advanced this approach.
5. Gandhian Approach: Mahatma Gandhi viewed that the Industrial Relations should be based on the principle of trusteeship implying that the capitalists are not the owners of the means of production but merely trustees of the resources. Besides, the workers are the co-trustees of these resources. According to Gandhi, all industrial disputes should be settled by means of non-cooperation, non-violence and voluntary arbitration. This is an idealist approach.
6. System’s Approach: John Dunlop developed a system approach to Industrial Relations. According to Dunlop, there are three actors in the system viz. workers, management and government which interact within the social and economic framework in order to determine the terms and conditions of employment. A belief-system commonly held by the actors helps in constructing the system of industrial relations. Interactions of the three actors are influenced by certain environmental forces as market or budgetary constraints, technology and distribution of power in the society.
Trade Unions
‘The emergence of Trade Unionism is spontaneous and inherent in the growth of capitalism. The origin of the Trade Unionism lies in the Industrial Revolution which disrupted the older way of life and created a new society forged by shop, the factory, the mine and the industry.’ –Frank Tannenbaum, A Philosophy of Labour
What is a Trade Union?
Dale Yoder has defined a trade union as ‘continuing, long-term association of employees formed and maintained for the specific purpose of advancing and protecting the interests of their working relationships.
According to Sydney Web and Beatrice Webb, ‘A trade Union is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their working lives.’
Further, Edwin Flippo has defined Trade union as ‘an organization of workers formed to promote, protect, and improve, through collective action, the social economic and political interests of its members’.
According to Allen Flanders, ‘trade Union is not merely an economic organization but also a political institution directed towards wresting control over managerial authority’.
Trade Union as defined in the British Trade Union Act is ‘a combination with main aim of regulating Industrial Relations for imposing restrictive conditions on the conduct of any trade or business and also provision of benefits to members.
Section 2(h) of the Indian Trade Unions Act 1926 has defined Trade Union as ‘any combination whether temporary or permanent, formed primarily for the purpose of regulating the relations between the workmen and the employers, or between workmen and workmen, or between employers and the employers or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of their associations’.
Characteristic features of Trade Unions
It is an organization formed by the workers/employees.
It is formed on a continuous basis. It is not limited to a particular time-bound project.
It is formed to protect and promote all kind of interests of the workers –economic, political and social.
It achieves its objectives through collective action.
It enjoys certain immunities under the Trade Union Act.
Why workers form unions?
According to Randall S Schuller, ‘Dissatisfaction with the job and individual lack of power to bring about any change in the work situation motivates the workers to join union considering its instrumentality.
Generally speaking, following factors motivate the workers to form or join a Trade Union:
v Wage gains
v Job security
v Social needs
v Social security
v Political aspirations
v Collective bargaining
v Redressal of grievances
v Better quality of work-life
v Protection from exploitative managers
v Participation in decision-making process
Theoretical Perspectives on formation of Trade Unions
v Socio-psychosocial factor: According to F Hoxie, the trade unions grew out of the socio-psychological environment of the workers and not purely because of economic reasons. The farmers who had had joined the ranks of the industrial workers were quite alienated in the urban settings. This probably led to the formation of trade unions.
v Sociological factor: According to Frank Tannenbaum, trade unions began as a reaction to the philosophy of individualism that dominated the urban centers in 19th and 20th centuries. The industrial revolution had altered the older life-styles. They formed the union because they wanted to belong to homogenous groups.
v Scarcity Consciousness factor: According to Selig Perlman, unionism developed because of workers’ scarcity consciousness –realization of the fact that their economic position could not improve beyond the level of minimum essentials of an ordinary standard of living. Hence they needed an organization that would enable them to overcome the scenario by consistent struggle.
v General factor: According to John T Dunlop, the trade unions came into being out of the strain and stress of industrialization.
v Industrial Democracy factor: According to Sydney and Beatrice Web, the unions grew in order to overcome managerial dictatorship and seek a role in the decision-making process. Unions were formed so that their voices can be heard with all seriousness.
v Class-conflict factor: according to Karl Marx, the interests of the capitalists and the workers are opposed to each other. The capitalists want maximization of their profits at a lower cost while the workers want maximization of their earnings and job-security. The workers therefore must unite and fight for their due share in the industrial gains.
Types of Unions
Crafts Union: Organization of workers employed in a particular craft –Ahmedabad Weavers Union, Kanpur Suti Mill Mazdoor Sabha, Indian Pilots guild
Staff Union: Organization of staff members of an organization –SBI Officers Association
Industrial Union: Organization of workers which links all the craftsmen and skilled workers in a particular industry –Rashtriaya Mill Mazdoor Sangh (representing textile mill workers)
General Unions: Organization covering various industries and crafts/trades –all the federations.
Union security covers
There are certain security covers for the trade unions so that the members stick to the organization in order to derive benefits:
v Sole Bargaining Agent: The union is accepted as exclusive bargaining agent in a particular factory.
v Maintenance of membership: Under this system, all the employees who are or who become members of a union, must remain the members in good standing for the duration of the contract as a condition of employment.
v Preferential Union Shop: Additional recognition granted to a union by agreement that management shall give the first chance to Union members in recruitment.
v Agency Shop: Under this system, employees are obliged to pay union dues (membership fee) in lieu of collective bargaining services even if they do not join the union.
v Union Shop: Under this system, all the employees in the bargaining unit must be or become members of the union.
v Closed Shop: Under this system, only union members are employed by the employers.
v Open Shop: Under this system, union membership is not mandatory before or after recruitment.
v Check off: It is a practice under which the employer deducts union dues from the pay of the workers and hands over the same to the union.
Methods of Accomplishing Union objectives
Mutual Insurance: The Trade Unions provide welfare benefits to members in order to promote goodwill among them and maintaining solidarity within the organization. In India, not many unions can afford welfare activities for members due to inadequate funds. However, Ahmedabad Textile Labour Association, Tata Workers Union, Jamsehdpur, Rashtriya Mill Mazdoor Sangh, Mumbai, Madras Labour Union have employed this method.
Collective Bargaining: This method is used by trade unions as a representative organization of workers to prevent the employees from bargaining individually. Thus all the benefits pass on to all the members without any discrimination.
Legal Enactments: The method of legal enactments or political action and proper law enforcement helps the unions to realize their objective.
Other methods: Go slow, tool down, passive resistance, picketing, sabotage, boycott, strike.
Functions of Trade Unions
v Collective bargaining: Determining terms and conditions of employment including wages and bonus.
v Administrative: Running the union office
v Reformist: Suggesting suitable amendments in labour laws/policies, personnel policies of any particular organization.
v Protective: Protecting the legitimate rights of the workers.
v Pastoral: Taking care of the members in times of crisis such as death, disablement, and sickness.
v Legal: Taking industrial disputes to court in case all the measures to settle the issue amicably with the management fail.
v Communication: Sharing information with the members as well as management and other organizations.
v Education: Educating the members about various labour laws, policies, management of the unions, leadership, workers’ participation in management, grievance procedure.
v Welfare: Organizing welfare activities for the members like running clubs, schools, training programmes etc.
v Political: Participate in political action for ensuring better labour laws and labour policies.
Indian Trade Union Movement
Factors that led to evolution of industrial labour in India
1. Rural poverty and unemployment: As a result of rural poverty and unemployment, people migrated to cities and towns to join the industrial workforce.
2. Increase in population: Agriculture was not enough to support the burgeoning population. Hence people opted to work in factories.
3. Fragmentation of land: As the joint families were disintegrating, landholdings in villages got fragmented. Hence it was no longer lucrative to slog on the farms.
4. Defective land revenue system: There was no system of land revenue till the British came to India. Even the British government in India had put a defective land revenue system in place, which was quite arbitrary. Sometimes, taxes far exceeded the actual products. Collection of taxes was strict irrespective of the harvests. This led many farmers high and dry. Thus they began migrating to towns and cities.
5. Decline of cottage industry: Craftsmen and artisans got uprooted from traditional sources of livelihoods due to the policies of the British Raj.
6. Rapid Industrialization: Towards second half of 19th century, rapid industrialization took place in India. This provided new opportunities for the farmers who wanted to get out of the villages.
7. Infrastructure development: Rapid industrialization was further augmented by infrastructure development initiatives of the British Raj which desperately wanted to consolidate its position after the Revolt of 1857.
Immediate fall out of rapid industrialization and evolution of Industrial labour in the country was growth and development of Indian Trade Union movement as the workers had hopelessly low wages, long working hours, and job-insecurity. Even the attitude of the government was indifferent towards their problems.
For the convenience of study, growth of Indian Trade Union movement may be divided into six phases as under:
v Formative period (1875-1917): Trade unions were taking shape gradually
v Early activism (1918-1924): Workers were ready to take on the management against any injustices meted out to them
v Left-dominance (1925-1934): Left political parties dominated the Trade Union activities
v Consolidation Phase (1935-1938): Trade Unions of all hues come together.
v Marginal Activism (1939-1946): Trade Union activism slowed down due to World War II and split in All India Trade Union Congress over the issue of supporting the British Raj in war efforts.
v Post-Independence (1947 onwards): Trade Unions fought for the rights of the workers and played a significant role in the enactments of several laws that favoured the interests of the workers.
Significant milestones in Indian Trade Union movement
Formative period
v In 1875, a few philanthropists led by Sorabjee Shapurjee Bengali started an agitation to draw the attention of the Government towards the need to protect child and female workers in particular and others in general.
v The British Raj appointed the first Factory Commission the same year in 1875.
v Workers’ strike at Empress Mill Nagpur over a wage cut in 1877.
v The first Factories Act enacted in 1881
v Workers held a conference under the chairmanship of N M Lokhnaday in 1884 to discuss their problems.
v The government appointed second Bombay Factory Commission in 1884 to investigate the issues raised by the workers
v N M Lokhnaday launches the Bombay Mill Hands Association in 1890 after a successful rally of the workers held on 21 April 1890 in which 10000 workers participated. This was the first labour union of India.
v The Printers Union of Calcutta was formed in 1905.
v Bombay Postal Union formed in 1907. (Postal Union also formed at Madras and Calcuta)
v Kamgar Hitvardhak Sabha formed in 1909
v Social Service League formed in 1910
v Factories Act 1881 was amended in 1911
The objectives of the labour unions formed during the formative period were to promote welfare activities, spread literacy among the workers and redress their grievances through constitutional methods. The labour movement till 1918 was necessarily constitutional and relied mainly on moderate methods as investigations, memoranda, petitions, legal enactments, committees and commissions. The leaders were driven by philanthropy.
Early Activism
In 1918, the labour movement passed from the hands of philanthropist intellectuals to political activists. The new leaders spearheading the labour movement were full of confidence after the success of the Russian Revolution 1917 in which the monarchy was replaced by a government of the workers. The establishment of International Labour Organization provided an opportunity to Indian workers to send their delegates. On the other hand, the hardships of the workers grew due to lower wages, rising cost of living and job insecurity. After the end of World War I, many soldiers joined the ranks of the workers. The former soldiers were aware of the might of the Trade Unions in Europe and they were ready to consolidate their ranks in the country as well.
The Madras Textile Union was the first union in modern sense. This union was founded by BP Wadia in 1918. This union was formed in order to fight (i) extremely short interval for lunch (ii) frequent assaults on workers by the European assistants and (iii) inadequate wages. This union adopted collective bargaining and used trade unionism as weapon of class struggle.
Another powerful union –Ahmedabad Textile Labour Association was formed in 1920 at the behest of Mahatma Gandhi.
In 1920, representatives of 64 trade unions with a membership of 140854 congregated at Bombay and formed All India Trade Union Congress under the chairmanship of Lala Lajpat Rai. Immediate purpose of this conference was slection of delegates for the International Labour Organization although later this federation proved to be a catalyst in augmenting trade unionism in the country.
Left Dominance
After 1924, the radical left forces gradually enhanced their influence over the Indian Trade Union movement. In 1926, Peasants’ & Workers’ Party was organized in different parts of the country and later this political outfit assumed national identity in 1928 as All India Peasants’ & Workers’ Party.
All India Trade Union Congress split into three: the moderates led by N M Joshi formed All India Trade Union Federation in 1929, the communists and left-wing unionists formed Red Trade Union Congress in 1931. Militant nationalists continued to dominate All India Trade Union Congress although its strength had reduced remarkably.
Split in the AITUC had certainly weakened the Trade Union movement in India. In 1932, All India Railwaymen’s Federation initiated the process of unity among all the federations by forming Trade Union Unity committee
National Federation of Labour was formed in Delhi in 1933 to facilitate the the attempts towards unity. Later All India Trade Union Federation and Railwaymen’s unions amalgamated to form National Trade Union Federation. However, both All India Trade Union Congress and Red Trade Union Congress remained aloof from merger efforts.
Consolidation Phase
In 1935, the Red Trade Union Congress merged with All India Trade Union Congress.
In 1938, All India Trade Union Congress decided to accept the conditions for merger as laid down by National Trade Union Federation. The merger finally took place in 1940. Thus All India Trade Union Congress once again became the sole representative of Indian workers.
Marginal Activism
Due to outbreak of World War II, trade union activism in the country slowed down and in fact split once again on the issue of supporting the British Raj in war efforts.
In 1941, the radicals left the All India Trade Union Congress and formed Indian Federation of Labour. The radicals supported the British government in War efforts and thus got its patronage.
By and large, trade unions remained passive during the period of World War II.
Post-independence
After independence, All India Trade Union Congress came to be dominated by the Communists
In May 1948, Indian National Trade Union Congress was formed with the support of Indian National Congress. Guljari Lal Nanda was instrumental in the formation of Indian National Trade Union Congress.
In 1948, Hind Mazdoor Sabha was launched by a merger of Indian Federation of Labour and Hindustan Mazdoor Panchuyat (a splinter group of Indian National Trade Union Congress).
In April 1949, a few left-wing leaders formed United Trade Union Congress.
In July 1954, the Jan Sangh launched Bhartiya Mazdoor Sangh.
In 1967, National Front of Indian Trade Unions was formed. Promoters of this federation claimed neutrality with any political parties.
In 1970, the All India Trade Union Congress split once again on account of division in the Communist Party of India into two: Communist Party of India and Communist Party of India (Marxist). While the All India Trade Union Congress remained under the influence of Communist Party of inida, the Communist Party of India (Marxist) formed Centre of Indian Trade Union.
In 1972, there was split in Congress. While the Indian National Congress retained control over Indian National Trade Union Congress, the splinter group formed National Labour Otganization.
Indian National Trade Uni0n congress, Hind Mazdoor Sabha, Bhartiya Mazdoor Sangh, All India Trade Union congress and Centre of Indian Trade Union account for nearly 75% of the total trade union membership.
Problems of Trade Unions in India
v Uneven Growth: The Trade Unionism has not influenced a variety of industries. Trade Unionism has not spread beyond plantations, coalmines, food industries, textiles, printing presses, chemicals, transport and communications. Besides, the Trade Union activities are concentrated in the large-scale industry sector. Hardly any Trade Union activity exists in small-scale enterprises and unorganized sector.
v Small Size of Unions: Average size of the unions in India is very small. For registration of a trade union, only seven members are required. There are altogether 13 national level federations of Trade Unions. Thus every federation promotes a local unit in every plant as far as possible.
v Financial Weaknesses: Average annual income of the Trade Unions is quite inadequate. Check off system is not available to them in most of the plants as there is multiplicity of unions. Members do not bother to pay the union dues on time. Besides the membership fee of the unions is very low. Sometimes, they do not have enough funds to run their offices properly leave aside running welfare activities for members.
v Multiplicity of Trade Unions/Inter-Union Rivalry: The Trade Unions in India are plagued by rivalry and multiplicity. There are 13 federations and each one of them has some presence wherever there is any union activity. Due to multiplicity of Trade Unions plant level, each union commands only negligible membership. This affects their position so far as collective bargaining is concerned. Besides rival unions try to sabotage activities of one another.
v Dominance of Political Parties: Most of the Trade Unions in the country draw their sustenance from various political parties. Even the politicians take advantage of their presence in the arena of trade unions. Ideology of the Trade Unions is governed by the political parties to which they are affiliated. For example, Indian National Trade Union Congress is governed by the policies and ideologies of Congress Party while All India Trade Union Congress is run on the diktats of the Communist Party of India.
v Issue of Recognition of Trade Unions: In India, there is no legislation regarding the recognition of the Trade Unions. Hence, the recognition of a Trade Union for the purpose of Collective Bargaining is dependent on the discretion of the employers. In case there is only one union in a particular plant, management might consider recognizing the same. However, the issue turns complex due to multiplicity of unions. At times, their membership is also overlapping. This further complicates the issue.
v Threat from Management-sponsored Union: Sometimes the management promotes a union to undermine the influence of Trade Unions with large membership. Thus the management would recognize the union promoted by it and provide undue benefits to its members.
v Leadership issues: Most of the Trade Unions are plagued by a leadership crisis. There is remarkable presence of outside leaders while the internal leadership is not formidable. Hence the Trade Union are not able to maximize benefits for their members through collective action and other methods.
Weaknesses of the Trade Unions
v Excessive State Intervention;
v Complicated legalframework;
v Dependence on political parties;
v Low education of rank and file;
v Poor financial status;
v Internal Rivalry;
v Factionalism;
v Duplication of members;
v Personal aspirations;
v Outside interference;
v Lack of internal democracy;
v Vested interests of the leaders.
Union Leadership
Outside Leaders: The outside leaders of Trade Unions provide a professional edge to the organization. They are educated middle-class individuals who join the union from outside the ranks of wage earners. Indian Trade Unions Act 1926 provides that 10% of the leaders may be from the outside the sphere of the workplace.
Outsiders play a decisive role in organizing unions and conducting union-management relations. They are highly instrumental in formulation and implementation of labour policies favourable to the workers because they have better knowledge of industrial practices in comparable organizations and more experience in collective bargaining.
Outside leaders are activists and politically more dynamic than the ordinary members. Most of them combine political interest with the union work and consequently loose focus on internal functioning of the workplace. They hold multiple offices, thus union work suffers.
Although outside leaders lack knowledge of the plant-level functioning, their ultimate loyalty lies with trade union movement and they are not influenced by internal rivalry and factionalism.
Outside leaders cannot be intimidated by the management.
They devote full time to union work.
Internal Leadership: Internal leaders of the Trade Unions are full-time workers. They devote their time to union work after their shift is over. They have greater understanding of the plant-level problems.
Ideological convictions for them are less important than getting best deal under the given circumstances.
They are prone to intimidation by the management, internal rivalry, factionalism etc.
However, they lack wider perspective due to their poor academic background.
What is industry?
Concept of workmen
Meaning of Industrial Relations
Scope of Industrial Relations
Current status of Industrial Relations in India
Future of Industrial Relations
Trade Unionsim in India: Historical evolution and current environment
(Please note that the text is quite exhaustive and touches issues that are well beyond the boundary of structured curriculum)
What is Industry?
The word Industry comes from the Latin word industria, meaning ‘diligent activity directed to some purpose,’ and its descendant, Old French industrie, with the senses ‘activity’, ‘ability’, and ‘a trade or occupation’. The word ‘Industry’ (first recorded in 1475) originally meant ‘skill’, ‘a device’, and ‘diligence’ as well as ‘a trade’. In modern context, the term ‘Industry’ implies ‘systematic work or habitual employment’.
According to Sec.2(j) of The Industrial Disputes Act, 1947, ‘industry’ means any systematic activity carried on by the cooperation between an employer and his workmen. The workmen may be employed by the employer directly or by or through any agency, including a contractor. The employment should, however, be for the production, supply or distribution of goods and services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature). It makes no difference whether or not,-
i) any capital has been invested for the purpose of carrying on the activity referred to above; or
ii) such activity is carried on with a motive to make any gain or profit.
Concept of Workman
‘Workman’ means any person (including an apprentice) employed in any industry to perform any unskilled, manual, skilled, technical, operational and clerical job for hire or reward, whether the term of employment is expressed or implied. The term includes any such person who has been dismissed, discharged, or retrenched in connection with, or as consequence of dispute, or whose dismissal, discharge or retrenchment has led to that dispute. The term also includes supervisors drawing less than Rs.1600 per month. The term does not include within the purview of the Act, (Section 2s) any person employed in the managerial or administrative capacity.
Any employee is not a workman if his or her main task is supervision of work of others and if he or she is drawing more than Rs.1600 (Anand Bazar Patrika (P) Ltd, versus workmen,1970, 3, Supreme Court Case 248)
Even if the designation does not indicate that an employee is supervisor but if he or she is performing functions, which are mainly managerial, he or she is not a workman (All India Reserve Bank Employees Association versus RBI, 1966, Supreme Court 305).
However, if the employee is designated a supervisor but is not performing supervisory functions, he or she is still workman (Burma Shell Oil Storage versus their employees, All India Reporter 1971, Supreme Court 922).
Meaning of Industrial Relations
Industrial Relations is relatively a new academic discipline, which was formally launched in 1940s. British scholars Beatrice and Sidney Web coined the term in the beginning of 20th century. In USA, it was the Taft Commission, which first used the term Industrial Relations in 1912. The Taft Commission was appointed by the US Government to probe the causes of industrial unrest, which was then looming large.
Industrial Relations is viewed as ‘process by which people and their organization interact at place of work to determine the terms and conditions of employment’. The whole process is viewed as a ‘system’, in order to emphasize the interrelation among people, their work organization and the standards in industrial milieu.
The Trade Unions are organized by workers to solve their problems created by modern industry. They are voluntary organizations of workers formed to promote and protect their interest by collective action.
According to H A Clegg, the field of Industrial Relations includes the study of workers and their trade unions, management, employers associations, and the state institutions concerned with the regulation of employment.
In the Casselman’s Labour Dictionary, Industrial Relations has been explained as ‘the relations between employers and employees in industry, between various unions, between the state and the unions as well as those between employers and the state’.
According to John T Dunlop, Industrial Relations is ‘a complex of inter-relations among workers, managers and the government’. Dunlop suggested that there are three actors in Industrial Relations viz. workers, management and the state. These three actors determine the terms and conditions of employment.
According to National Commission: ‘Industrial Relations affect not merely the interests of the two participants –labour and management but also the economic and social goals to which the state addresses itself. To regulate these relations in socially desirable channels is a function, which the state is in the best position to perform.’
Scope of Industrial Relations
A. Constructive Labour-Management Relations
(i) Strong Trade Unions and Association of Employers for negotiations, consultation and discussion on mutual basis;
(ii) The Spirit of collective bargaining in good faith and on equal terms;
(iii) Labour Welfare.
B. Industrial Peace
(i) Mechanism for settlement of industrial disputes;
(ii) Provisions for bipartite and tripartite consultations;
(iii) Government intervention.
C. Industrial Democracy
(i) Workers’ participation in management;
(ii) Recognition of Trade Unions;
(iii) Joint pursuits of mutual interests.
Basic objectives of Industrial Relations
v The efficient production of goods and services and at the same time determination of adequate terms and conditions of employment in the interests of the employers, employees and the society as a whole;
v The establishment of a mechanism mechanisms for communication, consultations, and cooperation in order to resolve shop floor issues at enterprise and industry level, and to achieve consensus on labour policy at national level through a tripartite process;
v Avoidance and settlement of disputes and differences between employers and employees wherever possible through negotiation and disputes settlement mechanism;
v To provide social protection where needed e.g in the areas of social security, safety, health etc.
v Establishment of stable and harmonious relations between employers and employees and their organizations, and between them and the state.
Importance of Industrial Relations
Industrial Relations promotes the following:
1. Industrial Peace: Cordial Industrial Relations brings harmony and removes causes of disputes/conflicts. This leads to industrial peace, which is an ideal situation for any industrial unit.
2. Industrial Democracy: It is the foundation of cordial Industrial Relations. Views of the workers are respected and heard. Workers are allowed to participate in the decision making process.
3. Higher Productivity: Cordial Industrial Relations invariably leads to higher productivity.
4. Collective Bargaining: It is very important for cordial Industrial Relations. Through Collective Bargaining, both management and labour together determine the terms and conditions of employment including wages.
5. Labour Welfare: It is pre-requisite for cordial Industrial Relations.
6. Higher Morale: Cordial Industrial Relations leads to higher morale which in turn leads to higher labour productivity.
7. Management of Change: Cordial Industrial Relations facilitates management of change. In absence of cordial Industrial Relations, any initiative for change in the work organization will be resisted by the workers thus causing conflicts and delaying the process of change.
Factors affecting Industrial Relations
1. Institutional factors: State policies, labour laws, collective bargaining agreements, voluntary codes, polices of labour unions/employers’ federations.
2. Economic factors: Global economic changes and the impact of WTO agreements. MNCs have not only brought huge capitals but also innovative management practices new work culture.
3. Social factors: Social values, social structures.
4. Technological factors: Innovative technologies, new set of skills, automation.
5. Psychological factors: Attitude of the employers and the employees.
6. Political Factors: Orientations and ideologies of the ruling elite.
7. Global factors: international covenants, treaties and agreements advanced by international bodies like ILO, WTO, UNO.]
8. Organizational factors: Type of organization (private, public, welfare), organizational structures/hierarchies (flat or hierarchical organizations)
Components of Industrial Relations
1. Trade Unions, Employers’ Federations
2. Collective Bargaining
3. Workers Participation in Management
4. Grievance Procedure/Industrial discipline
5. Mechanism for settlement of industrial disputes
6. Tripartite bodies comprising representatives of Trade Unions, Employers’ Federations and the government.
7. Labour laws/Labour courts/Industrial Tribunals/National Tribunals.
8. International covenants and treaties
Role of Industrial Relations Officers/Managers
v Provide support to the management on employment relations issues.
v Prepare employment agreements.
v Participate in collective bargaining negotiations.
v Formulate polices and procedures about working and terms of employment.
v Resolve disputes and grievances over employment agreements.
v Investigate complaints about employees, employers and employment conditions.
v Work with management regarding performance issues.
v Act as spokesman of the management while dealing with the Trade Unions
v Train managers in employee relations and how to interpret agreements.
v Maintain contacts with the union officials.
v Monitor any changes in the labour policies and labour laws and keep the management informed about the same.
v Promote industrial discipline.
v Promote workers’ participation in management.
v Work towards improving quality of work life
Evolution of Industrial Relations
Factors that led to the development of Industrial Relations:
1. Shift from agrarian economy to industrial economy
2. Shift from cottage industry to factory system
3. Industrial Revolution
Stages of evolution:
1. Primitive stage or pastoral economy: People were largely engaged in hunting and produced as much as was required for consumption by the family. There was no concept of sale or purchase of any goods or services.
2. Agrarian economy: People were largely engaged in farming. They produced a little more than what they consumed. The system of barter was prevalent. Specialized trades had developed and craftsmen had gained importance. They were quite independent. They owned the tools of production and were self-employed. The concept of employer had not developed as yet.
3. Feudalism: For the first time the concept of retainership developed during the medieval period. Landlords employed peasants to work on their farms and also serve as soldiers during wars. However, the people thus employed, were not given any cash remuneration. Instead they were given small pieces of land for subsistence. They were tied for life to their landlords. In true sense, they were slaves.
4. Cottage industry and ‘putting out system’: Craftsmen began to cater to large population. Needs for goods and services had increased due to large-scale urbanization. Even the farmers were producing surplus. Craftsmen operated from their houses and owned the tools of production –hence the term cottage industry. Sometimes a trader would provide them raw materials to produce certain things –this refers to the putting out system –an earlier avtar of outsourcing. But the craftsmen were still their own masters. Other family members supported the family trade. Cottage industry was thriving without any employers or employees.
5. Factory or industrial capitalism: Industrial Revolution beginning in 1750 onwards led to the development of factory system. For the first time, people other than the craftsmen or skilled labour owned tools of production and capital. Production on a large scale began in a big way with new kind of machines. Workers were remunerated in cash and lived in small industrial towns away from their rural milieu. The concepts of employers and employees had taken shape. Gradually various laws governing their relations were enacted.
6. IT Revolution and Globalization: Employer-employee relations have developed new dimensions where employees have turned out to be serious stakeholders. Employers attitude towards the workers have also changed for the better.
Impact of Industrial Revolution
The Industrial Revolution influenced and shaped the relations between the capitalists (employers) and the workers in several ways. There occurred prolonged conflict between workers and the management at the shop-floor before the terms and conditions of employment could take any shape with the intervention of the state. Following were the impact of Industrial Revolution:
1. Loss of freedom: In the agrarian economy, the framers (other than the retainers of the land lords) were fairly independent. They were their own masters. They owned the tools of production and land and took all the decisions themselves. However, surplus agricultural production grew over the period thanks to improved agricultural implants and fertilizers. Thus many of the farmers were not able to subsist in the agrarian economy. There was rampant disguised unemployment in the villages. When the factory system came after the Industrial Revolution, many of the farmers joined the workforce in the upcoming industrial towns. But the new employment led to loss of freedom for them. In the factories, they had to obey the managers to stay in the job. In the new scenario someone else was their master who dictated the terms and conditions of employment. This eventually led industrial conflicts and subsequently state intervention.
2. Unhygienic working conditions: Initially, working conditions in the factories were quite unhygienic. However, the workers could not protest for fear of losing their jobs. Discontent among workers was brewing which ultimately led to conflicts at the shop floor and the state had to intervene in order to ensure health and safety provisions for them.
3. Employment of children: In the beginning, children were employed in the factories. Their working hours were quite prolonged without any substantial break. They were paid less remuneration. Again the state had to intervene in order to regulate the employment of children.
4. Freedom to contract: The management had freedom to enter into contract with the employees. Thus the managers used to dictate the terms and conditions including wages while employing the workers. This scenario was not at all favourable for the workers. Gradually the state intervened to protect the interests of the workers.
5. Dynamics of market: The management always had an upper hand as there were more workers available in the labour market than the jobs available in the factories. This also favoured the management while hiring or firing the employees.
6. Elimination of physical labour: In the factories, workers were not required to work physically. Instead, the work environment was fairly mechanized.
7. Specialization of function: Workers were assigned a certain type of job in which he developed specialization. Thus workers with specialized skills in particular trades grew in numbers. Workers of the same trade developed fraternity and identical interests.
8. Increased sense of alienation: Farmers had left their villages and joined the work force in small industrial towns. Hence they
9. Capital formation: Rapid industrialization led to large-scale capital formation thus strengthening the capitalist class.
10. Evolution of entrepreneurial elite: During the agrarian economy, the feudal lords were the elites. After Industrial Revolution, new capitalists class emerged. The capitalists were ready to take risk and invest money in new ideas, new range of products and set new trends in business and economy.
Approaches to the study of Industrial Relations
1. Classical Approach: According to Karl Marx, the interests of the workers and the capitalists are antagonistic. Hence there cannot be industrial peace He had urged the workers to keep fighting against the capitalists till they get control over the means of production. As such, this is a negative approach to study Industrial Relations. It is based on perpetual conflicts at the shop floor as opposed to the basic objective of the Industrial Relations system.
2. Human Relations Approach: This approach to study Industrial Relations was developed by Elton Mayo, Abraham Maslow,, Fredric Herzeberg and Mc Gregor. It is also known as neo-classical approach. It is based on the principle that workers constitute the most sensitive resources in any industry and hence they should be handled with great care. It talks about creating small social groups within the work environment and a sound two-way communication system. This is contrary to the threat perception about informal or formal groups of workers in any organization. The critics of this approach say that informal social groups have been over-emphasized.
3. Sociological Approach: Frank Tannenbaum is the main advocate of this approach to study of Industrial Relations. According to him, workers organized themselves into a singular and composite unit despite coming from diverse backgrounds. The new community of labour was capable of demanding equality with the management regarding terms of the employment. This led to the reorientation of management’s attitude towards the workers. Thus Industrial Relations came to be determined by mutual interests in place of Unitarian approach of the management. (The Unitarian approach implies that the entrepreneur has the managerial prerogative)
4. Psychological Approach: According to this approach of studying Industrial Relations, the relations between the workers and the management are guided by attitudes, perceptions and personalities of both the parties. Mason Haire advanced this approach.
5. Gandhian Approach: Mahatma Gandhi viewed that the Industrial Relations should be based on the principle of trusteeship implying that the capitalists are not the owners of the means of production but merely trustees of the resources. Besides, the workers are the co-trustees of these resources. According to Gandhi, all industrial disputes should be settled by means of non-cooperation, non-violence and voluntary arbitration. This is an idealist approach.
6. System’s Approach: John Dunlop developed a system approach to Industrial Relations. According to Dunlop, there are three actors in the system viz. workers, management and government which interact within the social and economic framework in order to determine the terms and conditions of employment. A belief-system commonly held by the actors helps in constructing the system of industrial relations. Interactions of the three actors are influenced by certain environmental forces as market or budgetary constraints, technology and distribution of power in the society.
Trade Unions
‘The emergence of Trade Unionism is spontaneous and inherent in the growth of capitalism. The origin of the Trade Unionism lies in the Industrial Revolution which disrupted the older way of life and created a new society forged by shop, the factory, the mine and the industry.’ –Frank Tannenbaum, A Philosophy of Labour
What is a Trade Union?
Dale Yoder has defined a trade union as ‘continuing, long-term association of employees formed and maintained for the specific purpose of advancing and protecting the interests of their working relationships.
According to Sydney Web and Beatrice Webb, ‘A trade Union is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their working lives.’
Further, Edwin Flippo has defined Trade union as ‘an organization of workers formed to promote, protect, and improve, through collective action, the social economic and political interests of its members’.
According to Allen Flanders, ‘trade Union is not merely an economic organization but also a political institution directed towards wresting control over managerial authority’.
Trade Union as defined in the British Trade Union Act is ‘a combination with main aim of regulating Industrial Relations for imposing restrictive conditions on the conduct of any trade or business and also provision of benefits to members.
Section 2(h) of the Indian Trade Unions Act 1926 has defined Trade Union as ‘any combination whether temporary or permanent, formed primarily for the purpose of regulating the relations between the workmen and the employers, or between workmen and workmen, or between employers and the employers or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of their associations’.
Characteristic features of Trade Unions
It is an organization formed by the workers/employees.
It is formed on a continuous basis. It is not limited to a particular time-bound project.
It is formed to protect and promote all kind of interests of the workers –economic, political and social.
It achieves its objectives through collective action.
It enjoys certain immunities under the Trade Union Act.
Why workers form unions?
According to Randall S Schuller, ‘Dissatisfaction with the job and individual lack of power to bring about any change in the work situation motivates the workers to join union considering its instrumentality.
Generally speaking, following factors motivate the workers to form or join a Trade Union:
v Wage gains
v Job security
v Social needs
v Social security
v Political aspirations
v Collective bargaining
v Redressal of grievances
v Better quality of work-life
v Protection from exploitative managers
v Participation in decision-making process
Theoretical Perspectives on formation of Trade Unions
v Socio-psychosocial factor: According to F Hoxie, the trade unions grew out of the socio-psychological environment of the workers and not purely because of economic reasons. The farmers who had had joined the ranks of the industrial workers were quite alienated in the urban settings. This probably led to the formation of trade unions.
v Sociological factor: According to Frank Tannenbaum, trade unions began as a reaction to the philosophy of individualism that dominated the urban centers in 19th and 20th centuries. The industrial revolution had altered the older life-styles. They formed the union because they wanted to belong to homogenous groups.
v Scarcity Consciousness factor: According to Selig Perlman, unionism developed because of workers’ scarcity consciousness –realization of the fact that their economic position could not improve beyond the level of minimum essentials of an ordinary standard of living. Hence they needed an organization that would enable them to overcome the scenario by consistent struggle.
v General factor: According to John T Dunlop, the trade unions came into being out of the strain and stress of industrialization.
v Industrial Democracy factor: According to Sydney and Beatrice Web, the unions grew in order to overcome managerial dictatorship and seek a role in the decision-making process. Unions were formed so that their voices can be heard with all seriousness.
v Class-conflict factor: according to Karl Marx, the interests of the capitalists and the workers are opposed to each other. The capitalists want maximization of their profits at a lower cost while the workers want maximization of their earnings and job-security. The workers therefore must unite and fight for their due share in the industrial gains.
Types of Unions
Crafts Union: Organization of workers employed in a particular craft –Ahmedabad Weavers Union, Kanpur Suti Mill Mazdoor Sabha, Indian Pilots guild
Staff Union: Organization of staff members of an organization –SBI Officers Association
Industrial Union: Organization of workers which links all the craftsmen and skilled workers in a particular industry –Rashtriaya Mill Mazdoor Sangh (representing textile mill workers)
General Unions: Organization covering various industries and crafts/trades –all the federations.
Union security covers
There are certain security covers for the trade unions so that the members stick to the organization in order to derive benefits:
v Sole Bargaining Agent: The union is accepted as exclusive bargaining agent in a particular factory.
v Maintenance of membership: Under this system, all the employees who are or who become members of a union, must remain the members in good standing for the duration of the contract as a condition of employment.
v Preferential Union Shop: Additional recognition granted to a union by agreement that management shall give the first chance to Union members in recruitment.
v Agency Shop: Under this system, employees are obliged to pay union dues (membership fee) in lieu of collective bargaining services even if they do not join the union.
v Union Shop: Under this system, all the employees in the bargaining unit must be or become members of the union.
v Closed Shop: Under this system, only union members are employed by the employers.
v Open Shop: Under this system, union membership is not mandatory before or after recruitment.
v Check off: It is a practice under which the employer deducts union dues from the pay of the workers and hands over the same to the union.
Methods of Accomplishing Union objectives
Mutual Insurance: The Trade Unions provide welfare benefits to members in order to promote goodwill among them and maintaining solidarity within the organization. In India, not many unions can afford welfare activities for members due to inadequate funds. However, Ahmedabad Textile Labour Association, Tata Workers Union, Jamsehdpur, Rashtriya Mill Mazdoor Sangh, Mumbai, Madras Labour Union have employed this method.
Collective Bargaining: This method is used by trade unions as a representative organization of workers to prevent the employees from bargaining individually. Thus all the benefits pass on to all the members without any discrimination.
Legal Enactments: The method of legal enactments or political action and proper law enforcement helps the unions to realize their objective.
Other methods: Go slow, tool down, passive resistance, picketing, sabotage, boycott, strike.
Functions of Trade Unions
v Collective bargaining: Determining terms and conditions of employment including wages and bonus.
v Administrative: Running the union office
v Reformist: Suggesting suitable amendments in labour laws/policies, personnel policies of any particular organization.
v Protective: Protecting the legitimate rights of the workers.
v Pastoral: Taking care of the members in times of crisis such as death, disablement, and sickness.
v Legal: Taking industrial disputes to court in case all the measures to settle the issue amicably with the management fail.
v Communication: Sharing information with the members as well as management and other organizations.
v Education: Educating the members about various labour laws, policies, management of the unions, leadership, workers’ participation in management, grievance procedure.
v Welfare: Organizing welfare activities for the members like running clubs, schools, training programmes etc.
v Political: Participate in political action for ensuring better labour laws and labour policies.
Indian Trade Union Movement
Factors that led to evolution of industrial labour in India
1. Rural poverty and unemployment: As a result of rural poverty and unemployment, people migrated to cities and towns to join the industrial workforce.
2. Increase in population: Agriculture was not enough to support the burgeoning population. Hence people opted to work in factories.
3. Fragmentation of land: As the joint families were disintegrating, landholdings in villages got fragmented. Hence it was no longer lucrative to slog on the farms.
4. Defective land revenue system: There was no system of land revenue till the British came to India. Even the British government in India had put a defective land revenue system in place, which was quite arbitrary. Sometimes, taxes far exceeded the actual products. Collection of taxes was strict irrespective of the harvests. This led many farmers high and dry. Thus they began migrating to towns and cities.
5. Decline of cottage industry: Craftsmen and artisans got uprooted from traditional sources of livelihoods due to the policies of the British Raj.
6. Rapid Industrialization: Towards second half of 19th century, rapid industrialization took place in India. This provided new opportunities for the farmers who wanted to get out of the villages.
7. Infrastructure development: Rapid industrialization was further augmented by infrastructure development initiatives of the British Raj which desperately wanted to consolidate its position after the Revolt of 1857.
Immediate fall out of rapid industrialization and evolution of Industrial labour in the country was growth and development of Indian Trade Union movement as the workers had hopelessly low wages, long working hours, and job-insecurity. Even the attitude of the government was indifferent towards their problems.
For the convenience of study, growth of Indian Trade Union movement may be divided into six phases as under:
v Formative period (1875-1917): Trade unions were taking shape gradually
v Early activism (1918-1924): Workers were ready to take on the management against any injustices meted out to them
v Left-dominance (1925-1934): Left political parties dominated the Trade Union activities
v Consolidation Phase (1935-1938): Trade Unions of all hues come together.
v Marginal Activism (1939-1946): Trade Union activism slowed down due to World War II and split in All India Trade Union Congress over the issue of supporting the British Raj in war efforts.
v Post-Independence (1947 onwards): Trade Unions fought for the rights of the workers and played a significant role in the enactments of several laws that favoured the interests of the workers.
Significant milestones in Indian Trade Union movement
Formative period
v In 1875, a few philanthropists led by Sorabjee Shapurjee Bengali started an agitation to draw the attention of the Government towards the need to protect child and female workers in particular and others in general.
v The British Raj appointed the first Factory Commission the same year in 1875.
v Workers’ strike at Empress Mill Nagpur over a wage cut in 1877.
v The first Factories Act enacted in 1881
v Workers held a conference under the chairmanship of N M Lokhnaday in 1884 to discuss their problems.
v The government appointed second Bombay Factory Commission in 1884 to investigate the issues raised by the workers
v N M Lokhnaday launches the Bombay Mill Hands Association in 1890 after a successful rally of the workers held on 21 April 1890 in which 10000 workers participated. This was the first labour union of India.
v The Printers Union of Calcutta was formed in 1905.
v Bombay Postal Union formed in 1907. (Postal Union also formed at Madras and Calcuta)
v Kamgar Hitvardhak Sabha formed in 1909
v Social Service League formed in 1910
v Factories Act 1881 was amended in 1911
The objectives of the labour unions formed during the formative period were to promote welfare activities, spread literacy among the workers and redress their grievances through constitutional methods. The labour movement till 1918 was necessarily constitutional and relied mainly on moderate methods as investigations, memoranda, petitions, legal enactments, committees and commissions. The leaders were driven by philanthropy.
Early Activism
In 1918, the labour movement passed from the hands of philanthropist intellectuals to political activists. The new leaders spearheading the labour movement were full of confidence after the success of the Russian Revolution 1917 in which the monarchy was replaced by a government of the workers. The establishment of International Labour Organization provided an opportunity to Indian workers to send their delegates. On the other hand, the hardships of the workers grew due to lower wages, rising cost of living and job insecurity. After the end of World War I, many soldiers joined the ranks of the workers. The former soldiers were aware of the might of the Trade Unions in Europe and they were ready to consolidate their ranks in the country as well.
The Madras Textile Union was the first union in modern sense. This union was founded by BP Wadia in 1918. This union was formed in order to fight (i) extremely short interval for lunch (ii) frequent assaults on workers by the European assistants and (iii) inadequate wages. This union adopted collective bargaining and used trade unionism as weapon of class struggle.
Another powerful union –Ahmedabad Textile Labour Association was formed in 1920 at the behest of Mahatma Gandhi.
In 1920, representatives of 64 trade unions with a membership of 140854 congregated at Bombay and formed All India Trade Union Congress under the chairmanship of Lala Lajpat Rai. Immediate purpose of this conference was slection of delegates for the International Labour Organization although later this federation proved to be a catalyst in augmenting trade unionism in the country.
Left Dominance
After 1924, the radical left forces gradually enhanced their influence over the Indian Trade Union movement. In 1926, Peasants’ & Workers’ Party was organized in different parts of the country and later this political outfit assumed national identity in 1928 as All India Peasants’ & Workers’ Party.
All India Trade Union Congress split into three: the moderates led by N M Joshi formed All India Trade Union Federation in 1929, the communists and left-wing unionists formed Red Trade Union Congress in 1931. Militant nationalists continued to dominate All India Trade Union Congress although its strength had reduced remarkably.
Split in the AITUC had certainly weakened the Trade Union movement in India. In 1932, All India Railwaymen’s Federation initiated the process of unity among all the federations by forming Trade Union Unity committee
National Federation of Labour was formed in Delhi in 1933 to facilitate the the attempts towards unity. Later All India Trade Union Federation and Railwaymen’s unions amalgamated to form National Trade Union Federation. However, both All India Trade Union Congress and Red Trade Union Congress remained aloof from merger efforts.
Consolidation Phase
In 1935, the Red Trade Union Congress merged with All India Trade Union Congress.
In 1938, All India Trade Union Congress decided to accept the conditions for merger as laid down by National Trade Union Federation. The merger finally took place in 1940. Thus All India Trade Union Congress once again became the sole representative of Indian workers.
Marginal Activism
Due to outbreak of World War II, trade union activism in the country slowed down and in fact split once again on the issue of supporting the British Raj in war efforts.
In 1941, the radicals left the All India Trade Union Congress and formed Indian Federation of Labour. The radicals supported the British government in War efforts and thus got its patronage.
By and large, trade unions remained passive during the period of World War II.
Post-independence
After independence, All India Trade Union Congress came to be dominated by the Communists
In May 1948, Indian National Trade Union Congress was formed with the support of Indian National Congress. Guljari Lal Nanda was instrumental in the formation of Indian National Trade Union Congress.
In 1948, Hind Mazdoor Sabha was launched by a merger of Indian Federation of Labour and Hindustan Mazdoor Panchuyat (a splinter group of Indian National Trade Union Congress).
In April 1949, a few left-wing leaders formed United Trade Union Congress.
In July 1954, the Jan Sangh launched Bhartiya Mazdoor Sangh.
In 1967, National Front of Indian Trade Unions was formed. Promoters of this federation claimed neutrality with any political parties.
In 1970, the All India Trade Union Congress split once again on account of division in the Communist Party of India into two: Communist Party of India and Communist Party of India (Marxist). While the All India Trade Union Congress remained under the influence of Communist Party of inida, the Communist Party of India (Marxist) formed Centre of Indian Trade Union.
In 1972, there was split in Congress. While the Indian National Congress retained control over Indian National Trade Union Congress, the splinter group formed National Labour Otganization.
Indian National Trade Uni0n congress, Hind Mazdoor Sabha, Bhartiya Mazdoor Sangh, All India Trade Union congress and Centre of Indian Trade Union account for nearly 75% of the total trade union membership.
Problems of Trade Unions in India
v Uneven Growth: The Trade Unionism has not influenced a variety of industries. Trade Unionism has not spread beyond plantations, coalmines, food industries, textiles, printing presses, chemicals, transport and communications. Besides, the Trade Union activities are concentrated in the large-scale industry sector. Hardly any Trade Union activity exists in small-scale enterprises and unorganized sector.
v Small Size of Unions: Average size of the unions in India is very small. For registration of a trade union, only seven members are required. There are altogether 13 national level federations of Trade Unions. Thus every federation promotes a local unit in every plant as far as possible.
v Financial Weaknesses: Average annual income of the Trade Unions is quite inadequate. Check off system is not available to them in most of the plants as there is multiplicity of unions. Members do not bother to pay the union dues on time. Besides the membership fee of the unions is very low. Sometimes, they do not have enough funds to run their offices properly leave aside running welfare activities for members.
v Multiplicity of Trade Unions/Inter-Union Rivalry: The Trade Unions in India are plagued by rivalry and multiplicity. There are 13 federations and each one of them has some presence wherever there is any union activity. Due to multiplicity of Trade Unions plant level, each union commands only negligible membership. This affects their position so far as collective bargaining is concerned. Besides rival unions try to sabotage activities of one another.
v Dominance of Political Parties: Most of the Trade Unions in the country draw their sustenance from various political parties. Even the politicians take advantage of their presence in the arena of trade unions. Ideology of the Trade Unions is governed by the political parties to which they are affiliated. For example, Indian National Trade Union Congress is governed by the policies and ideologies of Congress Party while All India Trade Union Congress is run on the diktats of the Communist Party of India.
v Issue of Recognition of Trade Unions: In India, there is no legislation regarding the recognition of the Trade Unions. Hence, the recognition of a Trade Union for the purpose of Collective Bargaining is dependent on the discretion of the employers. In case there is only one union in a particular plant, management might consider recognizing the same. However, the issue turns complex due to multiplicity of unions. At times, their membership is also overlapping. This further complicates the issue.
v Threat from Management-sponsored Union: Sometimes the management promotes a union to undermine the influence of Trade Unions with large membership. Thus the management would recognize the union promoted by it and provide undue benefits to its members.
v Leadership issues: Most of the Trade Unions are plagued by a leadership crisis. There is remarkable presence of outside leaders while the internal leadership is not formidable. Hence the Trade Union are not able to maximize benefits for their members through collective action and other methods.
Weaknesses of the Trade Unions
v Excessive State Intervention;
v Complicated legalframework;
v Dependence on political parties;
v Low education of rank and file;
v Poor financial status;
v Internal Rivalry;
v Factionalism;
v Duplication of members;
v Personal aspirations;
v Outside interference;
v Lack of internal democracy;
v Vested interests of the leaders.
Union Leadership
Outside Leaders: The outside leaders of Trade Unions provide a professional edge to the organization. They are educated middle-class individuals who join the union from outside the ranks of wage earners. Indian Trade Unions Act 1926 provides that 10% of the leaders may be from the outside the sphere of the workplace.
Outsiders play a decisive role in organizing unions and conducting union-management relations. They are highly instrumental in formulation and implementation of labour policies favourable to the workers because they have better knowledge of industrial practices in comparable organizations and more experience in collective bargaining.
Outside leaders are activists and politically more dynamic than the ordinary members. Most of them combine political interest with the union work and consequently loose focus on internal functioning of the workplace. They hold multiple offices, thus union work suffers.
Although outside leaders lack knowledge of the plant-level functioning, their ultimate loyalty lies with trade union movement and they are not influenced by internal rivalry and factionalism.
Outside leaders cannot be intimidated by the management.
They devote full time to union work.
Internal Leadership: Internal leaders of the Trade Unions are full-time workers. They devote their time to union work after their shift is over. They have greater understanding of the plant-level problems.
Ideological convictions for them are less important than getting best deal under the given circumstances.
They are prone to intimidation by the management, internal rivalry, factionalism etc.
However, they lack wider perspective due to their poor academic background.
Course Structure
Apeejay School of Management, New Delhi
PGDM 2007-2009
Management of Industrial Relations
Faculty: Dr Srirang Jha
Pedagogy:
Lectures
Case Studies
Assignments
Evaluation:
Internal: 40%
Assignments: 15%
Mid Term Exam: 15%
Class Participation: 5%
Attendance: 5%
External: 60%
Course Outline
1. Indian Labour Relations: Background, Current Status and Future of Industrial Relations, Trade Unionism in India: Its Historical Evolution and Present Environment (3 Lectures)
2. Grievances Management (3 Lectures)
3. Discipline Management: Standing orders, Industrial Conflict, Conciliation, Arbitration, Adjudication (3 Lectures)
4. Labour Tribunals (3 Lectures)
5. Wage Boards & Wage plans (3 Lectures)
6. Labour Productivity and Remuneration Structure (3 Lectures)
7. Collective Bargaining: Concept and Process (3 Lectures)
8. Workers Participation (3 Lectures)
9. Labour Acts (6Lectures)
Suggested Readings:
Joseph, Jerome, Industrial Relations, Response Books, New Delhi
Monappa, Arun, Industrial Relations, Tata McGrawHill, New Delhi
Venkat Ratnam, Industrial Relations, Oxford University Press, New Delhi
Venkat Ratnam, Globalization and Labour Management Relations: Dynamics of Change, Response Books, New Delhi
Srivastava, S C, Industrial Relations and Labour Laws, Vikas Publishing House, New Delhi
Taxmann’s Labour Laws 2007
Bare Acts
PGDM 2007-2009
Management of Industrial Relations
Faculty: Dr Srirang Jha
Pedagogy:
Lectures
Case Studies
Assignments
Evaluation:
Internal: 40%
Assignments: 15%
Mid Term Exam: 15%
Class Participation: 5%
Attendance: 5%
External: 60%
Course Outline
1. Indian Labour Relations: Background, Current Status and Future of Industrial Relations, Trade Unionism in India: Its Historical Evolution and Present Environment (3 Lectures)
2. Grievances Management (3 Lectures)
3. Discipline Management: Standing orders, Industrial Conflict, Conciliation, Arbitration, Adjudication (3 Lectures)
4. Labour Tribunals (3 Lectures)
5. Wage Boards & Wage plans (3 Lectures)
6. Labour Productivity and Remuneration Structure (3 Lectures)
7. Collective Bargaining: Concept and Process (3 Lectures)
8. Workers Participation (3 Lectures)
9. Labour Acts (6Lectures)
Suggested Readings:
Joseph, Jerome, Industrial Relations, Response Books, New Delhi
Monappa, Arun, Industrial Relations, Tata McGrawHill, New Delhi
Venkat Ratnam, Industrial Relations, Oxford University Press, New Delhi
Venkat Ratnam, Globalization and Labour Management Relations: Dynamics of Change, Response Books, New Delhi
Srivastava, S C, Industrial Relations and Labour Laws, Vikas Publishing House, New Delhi
Taxmann’s Labour Laws 2007
Bare Acts
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