Industrial Relations.

Introduction:
The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to any productive activity in which an individual (or a group of individuals) is (are) engaged. By relations we mean the relationships that exist within the industry between the employer and his workmen. The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship. Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers. The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers participation in decisionmaking, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.

Glossary of Industrial Relations:

For better understanding of industrial relations, various terms need to be defined here: Industry: Industrial Disputes Act 1947 defines an industry as any systematic activity carried on by co-operation between an employer and his workmen for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes whether or not any capital has been invested for the purpose of carrying on such activity; or such activity is carried on with a motive to make any gain or profit. Thus, an industry is a whole gamut of activities that are carried on by an employer with the help of his employees and labors for production and distribution of goods to earn profits. Employer: An employer can be defined from different perspectives as:

A person or business that pays a wage or fixed payment to other person(s) in exchange for the services of such persons. A person who directly engages a worker/employee in employment. Any person who employs, whether directly or through another person or agency, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed. As per Industrial Disputes Act 1947 an employer means:-

In relation to an industry carried on by or under the authority of any department of [the Central Government or a State Government], the authority prescribed in this behalf, or where no authority is prescribed, the head of the department;

In relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;

Employee:-

Employee is a person who is hired by another person or business for a wage or fixed payment in exchange for personal services and who does not provide the services as part of an independent business.

An employee is any individual employed by an employer. A person who works for a public or private employer and receives remuneration in wages or salary by his employer while working on a commission basis, piece-rates or time rate. Employee, as per Employee State Insurance Act 1948, is any person employed for wages in or in connection with work of a factory or establishment to which the act applies.

In order to qualify to be an employee, under ESI Act, a person should belong to any of the categories:
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those who are directly employed for wages by the principal employer within the premises or outside in connection with work of the factory or establishment. those employed for wages by or through an immediate employer in the premises of the factory or establishment in connection with the work thereof those employed for wages by or through an immediate employer in connection with the factory or establishment outside the premises of such factory or establishment under the supervision and control of the principal employer or his agent. employees whose services are temporarily lent or let on hire to the principal employer by an immediate employer under a contract of service (employees of security contractors, labor contractors, house keeping contractors etc. come under this category).

Employment: The state of being employed or having a job. Labor Market: The market in which workers compete for jobs and employers compete for workers. It acts as the external source from which organizations attract employees. These markets occur because different conditions characterize different geographical areas, industries, occupations, and professions at any given time.

Industrial Relation System:

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An industrial relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation. A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust. Actors in the IR system: Three main parties are directly involved in industrial relations: 1) Employers: Employers possess certain rights vis--vis labors. They have the right to hire and fire them. Management can also affect workers interests by exercising their right to relocate, close or merge the factory or to introduce technological changes. 2) Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions. 3) Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.

Employees.

Employers Associations.

Employers.

Industrial relations.

Trade Unions.

Government.

Courts & Tribunals.

Scope: The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others. The scopes of industrial relations are quite vast. The main issues involved here include the following: 1. Collective bargaining, 2. Machinery for settlement of industrial disputes, 3. Standing orders, 4. Workers participation in management & 5. Unfair labor practices.

Importance of Industrial Relations:

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The healthy industrial relations are keys to the progress and success. Their significance may be discussed as under Uninterrupted production The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption. Reduction in Industrial Disputes Good industrial relations reduces the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production. High morale Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.

Mental Revolution The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a

transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. On the other hand, workers must recognize employers authority. It will naturally have impact on production because they recognize the interest of each other. Reduced Wastage Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected. Thus, it is evident that good industrial relations are the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.

Objectives of Industrial Relations:

The main objectives of industrial relations system are:7

 To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production. To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism. To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well. To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits. To improve the economic conditions of workers in the existing state of industrial managements and political government. Socialization of industries by making the state itself a major employer Vesting of a proprietary interest of the workers in the industries in which they are employed.

Dunlop's Contribution to Industrial Relations:

One of the significant theories of industrial labor relations was put forth by John Dunlop in the 1950s. According to Dunlop industrial relations system consists of three agents management organizations, workers and formal/informal ways they are organized and government agencies. These actors and their organizations are located within an environment defined in terms of technology, labor and product markets, and the distribution of power in wider society as it impacts upon individuals and workplace. Within this environment, actors interact with each other, negotiate and use economic/political power in process of determining rules that constitute the output of the industrial relations system. He proposed that three partiesemployers, labor unions, and government-- are the key actors in a modern industrial relations system. He also argued that none of these institutions could act in an autonomous or independent fashion. Instead they were shaped, at least to some extent, by their market, technological and political contexts. Thus it can be said that industrial relations is a social sub system subject to three environmental constraints- the markets, distribution of power in society and technology. Dunlop's model identifies three key factors to be considered in conducting an analysis of the management-labor relationship: 1. Environmental or external economic, technological, political, legal and social forces that impact employment relationships. 2. Characteristics and interaction of the key actors in the employment relationship: labor, management, and government. 3. Rules that are derived from these interactions that govern the employment relationship. Dunlop emphasizes the core idea of systems by saying that the arrangements in the field of industrial relations may be regarded as a system in the sense that each of them more or less intimately affects each of the others so that they constitute a group of arrangements for dealing with certain matters and are collectively responsible for certain results.

In effect - Industrial relations is the system which produces the rules of the workplace. Such rules are the product of interaction between three key actors workers/unions, employers and associated organizations and government The Dunlops model gives great significance to external or environmental forces. In other words, management, labor, and the government possess a shared ideology that defines their roles within the relationship and provides stability to the system.

Perspectives of Industrial Relations:

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Unitary Perspective:
In unitarism, the organization is perceived as an integrated and harmonious system, viewed as one happy family. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as unnecessary and conflict is perceived as disruptive. From employee point of view, unitary approach means that: Working practices should be flexible. Individuals should be business process improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required. If a union is recognized, its role is that of a further means of communication between groups of staff and the company. The emphasis is on good relationships and sound terms and conditions of employment. Employee participation in workplace decisions is enabled. This helps in empowering individuals in their roles and emphasizes team work, innovation, creativity, discretion in problem-solving, quality and improvement groups etc. Employees should feel that the skills and expertise of managers supports their endeavors.

From employer point of view, unitary approach means that: Staffing policies should try to unify effort, inspire and motivate employees. 11

 The organization's wider objectives should be properly communicated and discussed with staff. Reward systems should be so designed as to foster to secure loyalty and commitment. Line managers should take ownership of their team/staffing responsibilities. Staff-management conflicts - from the perspective of the unitary framework - are seen as arising from lack of information, inadequate presentation of management's policies. The personal objectives of every individual employed in the business should be discussed with them and integrated with the organizations needs.

Pluralistic-Perspective:

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In pluralism the organization is perceived as being made up of powerful and divergent subgroups - management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change. Realistic managers should accept conflict to occur. There is a greater propensity for conflict rather than harmony. They should anticipate and resolve this by securing agreed procedures for settling disputes. The implications of this approach include:

The firm should have industrial relations and personnel specialists who advise managers and provide specialist services in respect of staffing and matters relating to union consultation and negotiation. Independent external arbitrators should be used to assist in the resolution of disputes. Union recognition should be encouraged and union representatives given scope to carry out their representative duties Comprehensive collective agreements should be negotiated with unions

Marxist Perspective:

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This view of industrial relations is a by product of a theory of capitalist society and social change. Marx argued that: Weakness and contradiction inherent in the capitalist system would result in revolution and the ascendancy of socialism over capitalism. Capitalism would foster monopolies. Wages (costs to the capitalist) would be minimized to a subsistence level. Capitalists and workers would compete/be in contention to win ground and establish their constant win-lose struggles would be evident. This perspective focuses on the fundamental division of interest between capital and labor, and sees workplace relations against this background. It is concerned with the structure and nature of society and assumes that the conflict in employment relationship is reflective of the structure of the society. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital.

Collective Bargaining
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Introduction:
Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firms and workers representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment industrial relations with one another. Thus collective bargaining:

Is a collective process in which representatives of both the management and employees participate. Is a continuous process which aims at establishing stable relationships between the parties involved. Not only involves the bargaining agreement, but also involves the implementation of such an agreement. Attempts in achieving discipline in the industry. Is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

Bargaining Form and Tactics

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A collective bargaining process generally consists of four types of activities- distributive bargaining, integrative bargaining, attitudinal restructuring and intra-organizational bargaining. Distributive bargaining: It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In distributive bargaining, one partys gain is another partys loss. This is most commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to get as much as they can for themselves. In general, distributive bargaining tends to be more competitive. This type of bargaining is also known as conjunctive bargaining. Investigative Bargaining: This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. For example, representatives of employer and employee sides may bargain over the better training program or a better job evaluation method. Here, both the parties are trying to make more of something. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperative bargaining. Attitudinal Bargaining: This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. When there is a backlog of bitterness between both the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops a bargaining environment and creates trust and cooperation among the parties. Intra- organizational Bargaining: It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be differences. Trade unions maneuver to achieve consensus among the conflicting groups.

Characteristics of Collective Bargaining:

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It is a group process, wherein one group, representing the employers, and the other, representing the employees, sit together to negotiate terms of employment. Negotiations form an important aspect of the process of collective bargaining i.e., there is considerable scope for discussion, compromise or mutual give and take in collective bargaining. Collective bargaining is a formalized process by which employers and independent trade unions negotiate terms and conditions of employment and the ways in which certain employment-related issues are to be regulated at national, organizational and workplace levels. Collective bargaining is a process in the sense that it consists of a number of steps. It begins with the presentation of the charter of demands and ends with reaching an agreement, which would serve as the basic law governing labor management relations over a period of time in an enterprise. Moreover, it is flexible process and not fixed or static. Mutual trust and understanding serve as the byproducts of harmonious relations between the two parties. It a bipartite process. This means there are always two parties involved in the process of collective bargaining. The negotiations generally take place between the employees and the management. It is a form of participation. Collective bargaining is a complementary process i.e. each party needs something that the other party has; labor can increase productivity and management can pay better for their efforts. Collective bargaining tends to improve the relations between workers and the union on the one hand and the employer on the other. Collective Bargaining is continuous process. It enables industrial democracy to be effective. It uses cooperation and consensus for settling disputes rather than conflict and confrontation. Collective bargaining takes into account day to day changes, policies, potentialities, capacities and interests. It is a political activity frequently undertaken by professional negotiators.

Collective Bargaining Process:

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Collective bargaining generally includes negotiations between the two parties (employees representatives and employers representatives). Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. Often employees are represented in the bargaining by a union or other labor organization. The result of collective bargaining procedure is called the collective bargaining agreement (CBA). Collective agreements may be in the form of procedural agreements or substantive agreements. Procedural agreements deal with the relationship between workers and management and the procedures to be adopted for resolving individual or group disputes. This will normally include procedures in respect of individual grievances, disputes and discipline. Frequently, procedural agreements are put into the company rule book which provides information on the overall terms and conditions of employment and codes of behavior. A substantive agreement deals with specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc. In many companies, agreements have a fixed time scale and a collective bargaining process will review the procedural agreement when negotiations take place on pay and conditions of employment. The collective bargaining process comprises of five core steps: 1. Prepare: This phase involves composition of a negotiation team. The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employers representatives and the union examine their own situation in order to develop the issues that they believe will be most important. The first thing to be done is to determine whether there is actually any reason to negotiate at all. A correct understanding of the main issues to be covered and intimate knowledge of operations, working conditions, production norms and other relevant conditions is required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process well begun is half done and this is no less true in case of collective bargaining.

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An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached. 3. Propose: This phase involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as brainstorming. The exchange of messages takes place and opinion of both the parties is sought. 4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the time when what ifs and supposals are set forth and the drafting of agreements take place. 5. Settlement: Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.

Importance of Collective Bargaining:

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Collective bargaining includes not only negotiations between the employers and unions but also includes the process of resolving labor-management conflicts. Thus, collective bargaining is, essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing civil rights in the industry, that is, the management should be conducted by rules rather than arbitrary decision making. It establishes rules which define and restrict the traditional authority exercised by the management. Importance to employees:

Collective bargaining develops a sense of self-respect and responsibility among the employees. It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group. Collective bargaining increases the morale and productivity of employees. It restricts managements freedom for arbitrary action against the employees. Moreover, unilateral actions by the employer are also discouraged. Effective collective bargaining machinery strengthens the trade unions movement. The workers feel motivated as they can approach the management on various matters and bargain for higher benefits. It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced.

Importance to employers:

It becomes easier for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers.

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Collective bargaining tends to promote a sense of job security among employees and thereby tends to reduce the cost of labor turnover to management. Collective bargaining opens up the channel of communication between the workers and the management and increases worker participation in decision making. Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance to society:

Collective bargaining leads to industrial peace in the country It results in establishment of a harmonious industrial climate which supports which helps the pace of a nations efforts towards economic and social development since the obstacles to such a development can be reduced considerably. The discrimination and exploitation of workers is constantly being checked. It provides a method or the regulation of the conditions of employment of those who are directly concerned about them.

Levels of Collective Bargaining:

Collective bargaining operates at three levels:

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1. 2. 3.

National level, Sector or industry level & Company/enterprise level.

Economy-wide (national) bargaining is a bipartite or tripartite form of negotiation between union confederations, central employer associations and government agencies. It aims at providing a floor for lower-level bargaining on the terms of employment, often taking into account macroeconomic goals. Sectorial bargaining, which aims at the standardization of the terms of employment in one industry, includes a range of bargaining patterns. Bargaining may be either broadly or narrowly defined in terms of the industrial activities covered and may be either split up according to territorial subunits or conducted nationally. Company/enterprise level bargaining involves the company and/or establishment. As a supplementary type of bargaining, it emphasizes the point that bargaining levels need not be mutually exclusive.

Conclusion:

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Thus, the study makes it clear that industrial relations are key to progress and success. It facilitates uninterrupted production, reduces industrial disputes, increases moral in the employees in the organization, it revolutionizes mental state of employees in the organization and also reduces wastage of resources available. Collective bargain includes not only negotiation between employers and unions but also includes the process of resolving labor-management conflicts. Thus collective bargaining is, essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing civil rights in the industry, that is, the management should be conducting by rules rather than arbitrary decision making. Collective bargaining develops a sense of self- respect and responsibility among the employees. It increases the strength of workforce, thereby, increasing their bargaining capacity as a group. Collective bargaining leads to industrial peace in the country. It plays a vital role in setting and preventing industrial disputes.

Bibliography

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Website:
http://industrialrelations.naukrihub.com/collective-bargaining.html www.google.com

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