Employee Relations - Copy

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Industrial Relations/ Employee

Relations


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Objectives

Concept of IR

Subjects under IR

Theories Perspectives

Roles of Workers, Management and Govt.

IR scenario in India


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What is Industrial Relations?

Relation between Employer - Employee?

Relation between Employer Employees?

Synonymously used as Employee Relations

No more unions

Its about dealing with individuals

Regulation of employment relationship between employer

and employee


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What is Industrial Relations?

Contd.

Industry refers to any productive activity in which anindividual (or a group of individuals) is (are) engaged

Relations means the relationships that exist within theindustry between the employer and his workmen/ employees.

Basically it is the:

Relationship between union and management

Conducted within a legislative framework devised by Govt.,institutions

Have implications for all including society

All aspects of employment relationships


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Definition

IR is considered as a system of rules and regulations, whichgovern the relationship between the major parties i.e.employer and employees.

Various Schools of Thoughts:

1. Industrial relations is a rule making process.

2. Industrial relations is the process of interaction amonginstitutions of job regulation.

3. Industrial relations is a process of struggle for controlover work structures and work processes.


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IR includes

Relationships between: individual workers, workers - their employer, employers -

employers, employers and workers - organizations

formed to promote their respective interests Processes through which these relationships are

expressed: collective bargaining, workers participation in decision-

making, and grievance and dispute settlement Management of conflict between

employers, workers and trade unions


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How is it Different from HRM?

Industrial Relation pertains to the study and

practice of collective bargaining, trade unionism,and labor-management relations.

Human resource management is a separate,largely distinct field that deals with nonunion

employment relationships and the personnel

practices and policies of employers.


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Why are we studying IR?

Is it relevant in todays organizations?

Industrial progress is impossible without cooperation oflabors and harmonious relationships It is in the interest of all to create and maintain good

relations between employees (labor) and employers(management)

Ensures continuity of production

Reduction in Industrial Disputes Improves Morale


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Objectives of IR System is to:

Safeguard the interest of labor and management

Avoid industrial conflict or strife and develop

harmonious relations Raise productivity by reducing cost

Establish and promote the growth of an

industrial democracy Minimize industrial unrest (strike, lockout)


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IR System

Actors in the IR system:

Three main parties are directly involved in industrial relations:

Employers: Employers possess certain rights vis--vis labors. They have the rightto hire and fire them. Management can also affect workers interests by exercising

their right to relocate, close or merge the factory or to introduce technologicalchanges.

Employees:Workers seek to improve the terms and conditions of theiremployment. They exchange views with management and voice their grievances.

They also want to share decision making powers of management. Workersgenerally unite to form unions against the management and get support from

these unions.

Government:The central and state government influences and regulatesindustrial relations through laws, rules, agreements, awards of court etc.. It alsoincludes third parties (arbitrators and adjudicators) and labor and tribunal courts.


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Approaches to study IR

No single strong explanatory theory

Dunlop (1958) Systems Theory of IR

Kochan et al, (1984) - Strategic Choice Theory


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Employment Relations

Dunlops model


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Dunlops Model of IR

Industrial relations is the system which produces the rules of theworkplace.

Actors: Management

Employees and their representatives (Trade Unions)

Govt. agencies (Arbitrators)

Environment/ Context: in which actors operate Technological

Market (economy) and budget constraints

Locus and distribution of power (political)

Ideology: Set ideas held by actors

Rules: (product of interaction between the actors) Through this process the rules are framed which govern the relations

between the employer and employees


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Dunlops Model of IR

Dunlop's model identifies three key factors to beconsidered in conducting an analysis of themanagement-labor relationship: Environmental or external economic, technological,

political, legal and social forces that impactemployment relationships

Characteristics and interaction of the key actors in

the employment relationship: labor, management,and government

Rules that are derived from these interactions thatgovern the employment relationship


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Kochan et al, (1984) - Strategic Choice

Theory

Integrates strategy, structure, and decision making

IR activities among actors happen at 3 levels:

Top tier: Strategic decision making

Middle tier: Collective Bargaining and/or Personnelpolicy-making

Bottom tier: Workplace, individual andorganizational relationships

IR strategies are made in response to the firms overallcompetitive strategies


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Perspectives on Industrial Relations

Unitary

Organization is perceived as an integrated andharmonious system, viewed as one happy family

Only one source of authority: Management They own so they control

All share same objectives, interests and purposes;thus working together, hand-in-hand, towards the

shared mutual goals. Conflict is unnecessary &Trade unions are avoidable

Still prevails in unorganized sectors and tiny, small-scale industries


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Contd.

Pluralist

Organization comprises of distinct groups (Management and

Trade Unions) with different objectives and leadership

Role of management is towards enforcing and controlling andmore toward persuasion and co-ordination

Conflict between management and employees is rational and

inevitable

Conflict is necessary, but can be and needs to be managed and

resolved Mutuality and reciprocal influence of trade unions and

management


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Contd.

Radical/ Marxian

Production system is privately owned and profitoriented

Class conflict is necessary for social change to endthe disparity between class & mass

Two classes of society - workers and capitalists

Sees industrial conflict synonymous with political

and social conflict Conflict in employment relationship is reflective of

the structure of the society

Role of trade union is to protest exploitation


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Contd.

Trusteeship (Gandhian Philosophy)

When company accepts its total responsibility

Seeking justice is the aim of business

The principle of trusteeship expresses the inherent responsibilityof a company to its consumers, workers and shareholders

Conflict is inherent

Interests of groups can be negotiated through collective bargaining

Main concern is motivation of workers

Seeks to motivate through positive incentives, not fear

Interested in employee involvement

Work cooperatively with them


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Labor Market Situation in India

How many are covered under Industrial

Relations System?

Only about 7% of the workforce is employed inorganized and formal sector (1999-2000 survey)

Although the growth of employment is

increasing in this sector largest chunk is inAgricultural sector


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Role of Govt.

Constitutional and legislative framework Management and TU should abide by constitution, legislations and

gazette notifications

Evolve norms through tripartite forums to act as guidelines

for shaping industrial relation Responsibility to ensure conformity to these norms through

its judicial and administrative machineries

State intervention has primarily aimed at ensuring industrialpeace by avoiding industrial disputes, and expeditious

settlement of such disputes when do they arise Labour and management were gradually brought under the

umbrella of governments labour policy which primarilycenters around the legal system


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Role of Govt.

Contd. Directive principles of state policy embodied in the constitution

Art 14: Equality before law

Art 15: Right against discrimination

Art 16: Equality of opportunity in matters of public appointment

Art 19:

Freedom of Speech and expression Freedom to form associations / unions

Freedom to assemble peacefully

Art 21: Protection of life and personal liberty

Art 21: Protection from forced labor

Art 24: Child labour

Art 38: Welfare of people Art 39: Equal pay for equal work

Art 41: Right to work

Art 21: Just and humane conditions of work

Art 43: Living wage

Art 43 A: Participation in Management


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Role of Govt.

Contd.

Enactment of Labor Laws

Indusrial Disputes Act 1947:

How to solve the disputes arising out ofemployment relations?

Trade Unions Act 1926:

What are the rights and responsibilities of Unions?

Industrial Employment (Standing orders) Act1946:

What are the accepted principles between

management and union in general?


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Role of Management / Employer

In the early phase very few participatory forums

like quality circles, suggestion schemes wereencouraged by the employers in some of the

companies to give workers a say in the wholedecision making process though not giving the

actual autonomy and empowerment to influence

it fully.


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Role of Trade Unions

Beginning years (1850-1900)

Years of growth (1900-1947

Militant phase (1947-1970) and

Decline phase (1980s onwards)

Absence of legitimacy

Lack of credibility among trade union leaders.

Kerala Govt. Employees Strike 2003

New era of IR

Emergence of white collar managerial unions


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IR in India

Contd.

Movement towards unity and collectivity among

working class giving rise to unionism (1970s)

Major Trade Unions were formed Number of strikes in different sectors and

industries

Emergence of white collar unionism in sectorslike banking, insurance and other serviceorganizations (1990s)


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IR in India

Contd.

First phase was dominated by the state intervention markedly influencedby large national trade union federations, collective bargaining wascentralized

The first stage (1980 - 1991) reflects the period when domestic economicpolices significantly changed to increase both internal competition andexport growth. It witnessed a gradual retreat of the state from not onlythe economic arena but also from the IR arena.

The second stage (1991-present) represents the structural adjustmentreforms period and beyond. During this period the whole range ofeconomic reforms were put into place; however labour laws reforms have

not formally reorganized (Bhattacherjee, 1999). Minimal interference of State and inter-region variation has made it

difficult to generalize the present Indian IR system.


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IR in India

Contd.

Trade Unionism has declined

Bargaining system has become more decentralized Preference of unit level wage settlements based on

productivity rather than national level agreements Concession bargaining is gaining ground

Labour law reforms (Cosmetic Change) Industrial Disputes Amendment Act 2002

Easier for employers for Closure or Lay-off in economically unviableprivate establishments

Contract Labour (Regulation and Abolition) Amendment Act2003

Regulate Contract Labour in services sector

Maternity Benefit Amendment Act 2007


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Pre-

independence

Era

Early-

independence

Era

Pre-

Liberalization

Era

Post-

Liberalization

Era

Worker Exploitation,poor workingconditions andlong working

hours

Protected withpro-labourpolicy ofGovt.

Docile andDependent onUnions

Emergence ofknowledgeworkers &massive casual

and contractlabour

Management Most powerfuland

exploitative

Restrictionsof Labour

lawsForced toadopttripartism

Preferredbipartite

agreementsand avoidedunions

Becamepowerful with

free traderegime butlost controlover business


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