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INDUSTRIAL RELATION
Meaning and Definition
The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’. Industry means any
productive activity in which an individual is engaged. It includes- (a) primary activities
like agriculture, fisheries, plantation, forestry, horticulture, mining etc. etc. and (b)
Secondary activities like manufacturing, construction, trade, transport, commerce,
banking, communication etc.
Economically speaking, industry means the secondary sector where factors of production
(land, labour, capital and enterprise or four M’s – men, materials, money and machines)
are gainfully employed for the purpose of production, and where a business organisation
exists.
‘Relations’ means ‘the relations that exist in the industry between the employer and his
work-force. Different authors have defined the term industrial relations in somewhat
different way.

According to V. Agnihotri, “The term industrial relations explains the

relationship between employees and management which stem directly or
indirectly from union-employer relationship.”

Salient Characteristics
The salient characteristics of industrial relations are discussed herein below:
1. Parties in the Industrial Relations Activities:
Basically, two parties-workers and management are involved in the process of establishing
relations. However, the government agencies regulate /maintain industrial relations.
2. Interactive Process:
Industrial relations arise out interactions between different persons/parties. They are supervisors,
workers trade unions, employers’ associations.
So, interactive process takes place between –
i. Supervisors and industrial workers
ii. Supervisors and group/team members
iii. Management and trade union leaders
iv. Employers’ federations and workers’ unions.
3. Two-Way Communication:
IRs is a two-way communication process. One party gives stimuli, other party responds to the
stimuli. So, the transaction occurring through such mechanism is either complementary or cross.
More the complementary transactions, better will be the industrial relations situations.
4. HRM Practices:
Effective human resource planning system, identification and stimulating prospective employees,
designing the most suitable selection technique to choose the right kind of people help to
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organization to get a committed and willing workforce that want to grow, develop and achieve.
Such employees in the process like to develop better relations with their bosses. So, HRM
practices influence IRs pattern in the industry.
5. Approaches to IRs:
Various approaches contribute to shape IRs pattern in industrial organizations. These approaches
include sociological, psychological, socio-ethical, human relations, Gandhian, system approaches
etc.
6. State Intervention:
State plays a vital role to influence industrial relations situations through its activities as facilitator,
guide, counsellor for both the parties in the industry.
7. Role of Trade Union:
Behavioural manifestations of workers are mostly governed by the trade unions to which they
belong. Hence, trade union’s perception, attitudes towards management influence workers to form
their mind set that regulates/promotes interaction with the management.
8. Organizational Climate:
If, congenial and conducive organizational climate prevails, workers feel homely, interact
spontaneously, communicate boss about their problems, difficulties directly and come close to him
to exchange/share the views each other in respect of work, change of job design, introduction of
any operative system, process etc. Under such situation, possibility of establishing healthy human
relations develops and these relations influence industrial relations pattern of organization.
9. Dispute Settlement Process:
If, the management personnel believe on the philosophy of settling workers’ grievances/ disputes
through bi-lateral negotiation process, they give much more emphasis on mutual talk, sharing
responsibility, collaboration, partnership dealing and mutual trust. In the process changes in
workers’ attitudes, behaviour and thought pattern are likely to occur which effect industrial
relations.
10. Outcomes of IRs:
Outcomes of IRs are reflected in production both in quantity and quality, services, man days lost,
wastes, accident rate, productivity, labour turnover rate, absenteeism rate, number of bipartite
negotiations, company’s image, growth, development etc.
11. Competency Development:
Healthy industrial relations help to develop workers’ skill, knowledge, ability, aptitude and change
their attitudes, perception to enable them to participate in collaborative activities / collective
bargaining process effectively.
12. Issues in IRs:
Industrial relations climate / situation is greatly influenced by the issues-economic, non-economic
governed by service contract / terms and conditions of employment. Besides, the issues not
covered under service rules viz., behavioural, and attitudinal issues influence IRs pattern.
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Importance of IR
1. The labours today are more educated and they are aware of their responsibilities and rights.
Management has to deal with them not merely as factors of production, but as individuals having
human dignity and self-respect. The objective is to change the traditional views of management
and labour towards each other and develop mutual understanding and co-operation and work
towards achievement of common goal. Good industrial relations lead to industrial peace and
increase in production.
2. Joint consultation between employees and management paves the way for industrial democracy
and they contribute to the growth of the organisation.
3. Conducive industrial relations motivate the workers to give increased output. Problems are
solved through mutual discussions, workers’ participation, suggestion schemes, joint meeting, etc.
Good industrial relations, increase labour efficiency and productivity.
4. With increased productivity, the management is in a position to offer financial and non-
financial incentives to workers.

Industrial Dispute
Definition
According to Sec. 2 of the Industrial Dispute Act, 1947, “Industrial dispute means any dispute or difference
between employers and employers or between employers and workmen or between workmen and workmen,
which is connected with the employment or non-employment or the terms of employment or with the conditions
of labour of any person” Industrial disputes are of symptoms of industrial unrest in the same way that boils are
symptoms of a disordered body.
Whenever an industrial dispute occurs, both management and workers try to pressurize each other. The
management may resort to lock-out and the workers may resort to strike, gherao, picketing, etc.
Strike:
Strike is a very powerful weapon used by a trade union to get its demands accepted. It means quitting work by a
group of workers for the purpose of bringing pressure on their employer to accept their demands. According to
Industrial Disputes Act, 1947, “Strike means a cessation of work by a body of persons employed in any industry
acting in combination, or a concerted refusal or a refusal under a common understanding of any number of
persons who are or have been so employed, to continue to work or to accept employment.”

There are many types of strikes. A few of them are discussed below:
(i) Economic Strike: Under this type of strike, members of the trade union stop work to enforce their economic
demands such as wages, bonus, and other conditions of work.
(ii) Sympathetic Strike: The members of a union collectively stop work to support or express their sympathy
with the members of other unions who are on strike in the other undertakings.
(iii) General Strike: It means a strike by members of all or most of the unions in a region or an industry. It may
be a strike of all the workers in a particular region of industry to force demands common to all the workers. It
may also be an extension of the sympathetic strike to express general protest by the workers.
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(iv) Sit Down Strike: When workers do not leave their place of work, but stop work, they are said to be on sit
down or stay in strike. It is also known as tools down or pen down strike. The workers remain at their work-place
and also keep their control over the work facilities.
(v) Slow Down Strike: Employees remain on their jobs under this type of strike. They do not stop work, but
restrict the rate of output in an organised manner. They adopt go- slow tactics to put pressure on the employers.

Lock-out: Lock-out is declared by the employers to put pressure on their workers. It is an act on the part of the
employers to close down the place of work until the workers agree to resume the work on the terms and
conditions specified by the employers
The Industrial Disputes Act, 1947 has defined lock-out as closing of a place of employment or the suspension of
work or the refusal by an employer to continue to employ any number of persons employed by him. Lock-outs
are declared to curb the activities of militant workers. Generally, lock-out is declared 25 a trial of strength
between the management and its employees.

Gherao:
It is a Hindi word which means to surround. The term ‘Gherao’ denotes a collective action initiated by a group of
workers under which members of the management of an industrial establishment are prohibited from leaving the
business or residential premises by the workers who block their exit through human barricade.

Picketing:
When workers are dissuaded from reporting for work by stationing certain men at the factory gates, such a step is
known as picketing. If picketing does not involve any violence, it is perfectly legal. It is basically a method of
drawing the attention of public towards the fact there is a dispute between the management and the workers.

Causes of Industrial Disputes:

We can classify the causes of industrial disputes into two broad groups:
(i) Economic causes, and
(ii) Non-economic causes.
Economic causes include:
(i) Wages, (ii) Bonus (iii) Dearness allowance, (iv) Conditions of work and employment,
(v) Working hours, (vi) Leave and holidays with pay, (vii) Unjust dismissals or retrenchments.
Non-economic causes include:
(i) Recognition of trade unions, (ii) Victimisation of workers, (iii) Ill-treatment by supervisory staff(iv)
Sympathetic strikes, (v) Political causes,
1. Wages and Allowances:
Since the cost of living has generally showed an increasing trend, the workers have been fighting for higher
wages to meet the rising cost of living and to increase their standard of living. 34.1% of the industrial disputes in
1973 were due to demand for higher wages and allowances. This percentage was 36.1% in 1974. During 1985,
22.5% of the disputes were due to wages and allowances. Wages and allowances accounted for 25.7% of disputes
in 1986, 26.6% in 1992, 25.0% in 1996 and 20.2% in 2000.
2. Personnel and Retrenchment:
Personnel and retrenchment causes have also been important. During 1973, 24.3% of the industrial disputes were
because of dismissals, retrenchment, etc. as compared to 29.3% in 1961. In 1979, personnel and retrenchment
topped the list of causes of industrial disputes with 29.9%. The number of disputes because of personnel and
retrenchment was 32.0% in 1971, 23.1% in 1985 and 19.8% in 1996. In 2000, about 12.1% of the disputes
occurred due to dismissals, layoffs, retrenchments, etc.
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3. Bonus:
Bonus has been an important factor in the industrial disputes, 10.3% of the industrial disputes in 1973 were
because of bonus as compared to 6.9% in 1961. 13.8% and 15.2% of the disputes were due to bonus during 1976
and 1977 respectively. It is worth noting that during 1982 only 4.7% of the disputes were due to bonus as
compared to 7.3% in 1985. This percentage was 4.2 in 1992, 3.6 in 1996 and 8.5 in 2000.
4. Indiscipline and Violence:
The number of disputes because of indiscipline and violence among the workers has been significant. During
1987, 15.7% of the disputes were because of indiscipline and violence as compared to only 5.7% in 1973. During
1985, 16.1% of industrial disputes were caused by indiscipline and violence and during 1996, about 21.6% of the
industrial disputes arose due to indiscipline and violence in industrial undertaking. This shows that indiscipline
and violence have continued to be a serious problem in industry during the past two decades.
5. Leave and Hours of Work:
Leave and hours of work have not been so important causes of industrial disputes. During 1973, 1.5% of the
causes were because of leave and hours of work. Their percentage share in the industrial disputes was 2.2% in
1977, 1.8% in 1985, 2.2% in 1996 and 0.9% in 2000.
6. Miscellaneous Causes:
Miscellaneous causes include modernisation of plant and introduction of computers and automatic machinery
recognition of union political factors, etc. These factors have caused a significant number of industrial disputes in
the country, 24.1% of the industrial disputes in 1973 were due to miscellaneous causes. They accounted for
19.5% of the industrial disputes in 1977, 29.2% in 1985, 27.8% in 1996 and 33.2% in 2000.
Miscellaneous causes of industrial disputes are as follows:
(a) Workers’ resistance to rationalisation, introduction of new machinery and change of place of factory.
(b) Non-recognition of trade union.
(c) Rumours spread out by undesirable elements.
(d) Working conditions and working methods.
(e) Lack of proper communication.
(f) Behaviour of supervisors.
(g) Trade union rivalry etc.
Thus, industrial disputes do not arise only when workers are dissatisfied on economic grounds, they also arise
over issues which are of non-economic nature. Instances may be quoted when strikes where successfully
organised to protest against the management’s decision to change the location of the plant from one state to
another. Similarly, even causes like behaviour of supervisor and trade union rivalries may give rise to industrial
disputes.
The whole concept of industrial relations revolves around the principle of friction dynamics which is the key to
the establishment of harmonious relations between labour and management. We cannot think of any society
completely obliviant of some sort of friction between labour and management.

Measures to Improve Industrial Relations:

The following measures should be taken to achieve good industrial relations:
1. Progressive Management:
There should be progressive outlook of the management of each industrial enterprise. It should be conscious of its
obligations and responsibilities to the owners of the business, the employees, the consumers and the nation. The
management must recognise the rights of workers to organise unions to protect their economic and social
interests.
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The management should follow a proactive approach, i.e., it should anticipate problems and take timely steps to
minimise these problems. Challenges must be anticipated before they arise otherwise reactive actions will
compound them and cause more discontent among the workers.
2. Strong and Stable Union:
A strong and stable union in each industrial enterprise is essential for good industrial relations. The employers
can easily ignore a weak union on the plea that it hardly represents the workers. The agreement with such a union
will hardly be honoured by a large section of workforce. Therefore, there must be a strong and stable union in
every enterprise to represent the majority of workers and negotiate with the management about the terms and
conditions of service.
3.Atmosphere of Mutual Trust:
Both management and labour should help in the development of an atmosphere of mutual cooperation,
confidence, and respect. Management should adopt a progressive outlook, and should recognise the right of
workers.
Similarly, labour unions should persuade their members to work for the common objectives of the organisation.
Both the management and the unions should have faith in collective bargaining and other peaceful methods of
settling industrial disputes.
4. Mutual Accommodation:
The right of collective bargaining of the trade unions must be recognised by the employers. Collective bargaining
is the cornerstone of industrial relations. In any organisation, there must be a great emphasis on mutual
accommodation rather than conflict or uncompromising attitude. Conflicting attitude does not lead to amicable
labour relations; it may foster union militancy as the union reacts by engaging in pressure tactics. The approach
must be of mutual “give and take” rather the “take or leave”.
5. Sincere Implementation of Agreements:
The management should sincerely implement the settlements reached with the trade unions. The agreement
between the management and the unions should be enforced both in letter and spirit.
6. Workers’ Participation in Management:
The participation of workers in the management of the industrial unit should be encouraged by making effective
use of works committees, joint consultation and other methods. This will improve communication between
managers and workers, increase productivity and lead to greater effectiveness.
7. Sound Personnel Policies:
Personnel policies should be formulated in consultation with the workers and their representatives if they are to
be implemented effectively. The policies should be clearly stated so that there is no confusion in the mind of
anybody. The implementation of the policies should be uniform throughout the organisation to ensure fair
treatment to each worker.
8. Government’s Role:
The Government should play an active role for promoting industrial peace. It should make law for the
compulsory recognition of a representative union in each industrial unit. It should intervene to settle disputes if
the management and the workers are unable to settle their disputes. This will restore industrial peace.

Meaning and Definition of Trade Union:

A trade union is an association of workers formed with the object of improving the conditions of workers. It is
formed for protecting the interests of workers. Workers have little bargaining capacity when they are unorganized.
In fact, trade union movement began against the exploitation of workers by certain managements under the
capitalist system.
The trade union has been defined by different authors as follows:
(1) Webb:
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Trade union may be defined as “a continuous association of wage earners for the purposes of maintaining or
improving the conditions of their working lives.”
(2) Lester:
“A trade union is an association of employees designed primarily to maintain or improve the condition of
employment of its members.”
(3) Indian Trade Union Act 1926:
“Any combination whether temporary or permanent formed primarily for the purpose of regulating the relations
between the workmen and employers”.

Objectives of Trade Union:

The following are the objectives of trade union:
(1) To improve the economic lot of workers by securing them better wages.
(2) To secure for workers better working conditions.
(3) To secure bonus for the workers from the profits of the enterprise/organization.
(4) To ensure stable employment for workers and resist the schemes of management which reduce employment
opportunities.
(5) To provide legal assistance to workers in connection with disputes regarding work and payment of wages.
(6) To protect the jobs of labour against retrenchment and layoff etc.
(7) To ensure that workers get as per rules provident fund, pension and other benefits.
(8) To secure for the workers better safety and health welfare schemes.
(9) To secure workers participation in management.
(10) To inculcate discipline, self-respect and dignity among workers.
(11) To ensure opportunities for promotion and training.
(12) To secure organizational efficiency and high productivity.
(13) To generate a committed industrial work force for improving productivity of the system.
Functions of Trade Unions:
(1) Collective bargaining with the management for securing better work environment for the workers/ employees.
(2) Providing security to the workers and keeping check over the hiring and firing of workers.
(3) Helping the management in redressal of grievances of workers at appropriate level.
(4) If any dispute/matter remains unsettled referring the matter for arbitration.
(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and medical facilities
and other welfare schemes.
(6) To develop cooperation with employers.
(7) To arouse public opinion in favour of labour/workers.
Benefits of Trade Union:

Workers join trade union because of a number of reasons as given below:

1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve his objectives with
the support of his fellow colleagues.
2. Union protects the economic interest of the workers and ensures a reasonable wage rates and wage plans for
them.
3. Union helps the workers in getting certain amenities for them in addition to higher wages.
4. Union also provides in certain cases cash assistance at the time of sickness or some other emergencies.
5. Union organize negotiation between workers and management and are instruments for settlement of disputes.
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6. Trade union is also beneficial to employer as it organizes the workers under one banner and encourages them
follow to peaceful means for getting their demands accepted.
7. Trade union imparts self-confidence to the workers and they feel that they are an important part of the
organization.
8. It provides for promotion and training and also helps the workers to go to higher positions.
9. It ensures stable employment for the workers and opposes the motive of management to replace the workers by
automatic machines.
10. Workers get an opportunity to take part in the management and oppose any decision which adversely effects
them.