INDUSTRIAL RELATIONS AND

LABOUR LAWS
WEEK # 1
CHAPTER # 1
 Origins of the Concept of IR
• Concept developed in consequence to Industrial Revolution
• Before Industrial Revolution employer & employee had master-slave
relationship… a very personal and 1-on-1 relationship
• Industrialization and large scale production weakened this relationship
• Employers started dominating, oppressing, and exploiting workmen
• Gave rise to problems like low-wage, poor working conditions, ill treatment…
• As a result to oppression, workers organized themselves into trade unions
• Workers started to retaliate (eg. strike) and so does the employers (eg. layoffs)
• Government also intervened to settle the employer-workmen disputes
• Thus began the Industrial War and the concept of Industrial Relations
 Definition of IR
• Industrial relationship is often used as a synonym to personnel
management, employer-employee relationship, labour relationship, labour
management relationship, and employee relationship
• But it is not true
• Dale Yoder says “IR is a relationship between management and employees
or between employees and their organization that characterize or grow out
of employment”
• Complex, multi-faceted, multi dimensional relationship that has economic,
social, legal, ethical, moral, psychological, political and occupational levels
 Characteristics of IR
1. IR is a set of relations arising out of the employment relationship in an
industrial organization

2. Government plays a vital role in shaping the IR through labour legislation,

Rules and Regulations

3. Three major partners of IR: (a) employers & their organizations, (b)
employees & their organizations, and (c) government & its agencies
 Theoretical Perspectives of IR

• 4 major theoretical perspectives:

1. Unitary perspective
2. Pluralistic perspective
3. Radical perspective
4. Trustee perspective
 Theoretical Perspectives of IR
• Unitary perspective:

• Management has all ownership, power, control, and authority

• Only managers can make decision in organization
• Trade unions, and thus, conflict is avoidable
 Theoretical Perspectives of IR
• Pluralistic perspective:

• An organization consists of multiple, distinct groups and each of them has

its own objectives, interests and leadership
• So obviously there will be conflict between those groups
• Conflict should be resolved for the sake of common interest
 Theoretical Perspectives of IR
• Radical perspective:
• Based on the concept of class conflict
• 2 classes in an organization:
• One class (workers) supply labour, other class (employers) owns capital and
control production. One class has lesser say in organizational matters and
also often gets exploited by the other class
• There will be obvious class conflict between them
• To end this conflict, radical social change is needed
 Theoretical Perspectives of IR
• Trustee perspective:

• Gandhi, the pioneer of this perspective

• Organization is a trust. Its managers responsibility is to protect the interest
of all stakeholders
• Stakeholders should in turn take care of each others’ mutual interest
• Just an idea, that is hard to practice
 Approaches to IR
• Oxford Approach:

• r = f (b) or r = f (c)
• r: rules governing IR, f: function, b: collective bargaining, c: conflicts resolved
through collective bargaining
• It refers to rule make through collective bargaining
• Very narrow approach as it focuses only on collective bargaining while
discounting other keys factors like technology, economics, ideology,
sociology etc.
 Approaches to IR
• Industrial Sociology Approach:

• Conflict: the basic concept in IR

• The crux of IR is the nature and development of conflict
• Not a good approach… focuses too much on conflict in IR
 Approaches to IR
• Systems Approach:
• Systems: an organized or complex whole
• Systems approach: do not deal with an element without considers its interacting
consequences with the other elements
• Dunlop says there are 4 important elements in an organization:
1. Actors (who give input), 2. Context (economic, technological, power
relations, etc.), 3. Output (formulation and administration of IR rules), 4.
Ideology (shared values in the workplace)
• Systems model’s formula… r = f (a, t, e, s, i)
• a: actors, t: organization’s technological context, e: organization’s economic
context, s: status of the parties, i: ideology of the system
 Approaches to IR
• Pluralist Approach:

• Every Industrial organization is a coalition of various conflicting groups like,

employers, employees, customer , community, Govt etc. with distinct,
separate interests
• The center piece or heart of IR is job regulation
• Job regulation: formulation and administration of rules regarding employee
relations
 Approaches to IR
• Marxist Approach:

• IR cannot be defined exclusively in terms of rules and regulations

• Conflicts can never be curtailed unless the ruling class accepts that labour
has a right to equal share in power
 Fahlbeck’s View on Approaches to IR
• Employers follow any four of the 4 major views:

1. My boat attitude… get off is you don’t like it (little concern for
employees)
2. Shared boat attitude… we sail together, don’t rock it (some concern for
employees)
3. Our boat attitude… its our common enterprise, lets coordinate our
efforts for the betterment of it (equal concern for employees)
4. Your boat attitude… make employees feel like owners, motivate them
to do their best
 Objectives of IR
1. To promote mutual understanding and goodwill
2. To avoid misunderstanding and conflict
3. To minimize strikes and lock-outs
4. To reduce absenteeism and turnover
5. To improve organization’s and labour’s productivity
6. To promote organizational democracy through collective bargaining, profit sharing,
workers’ participation in management, etc.
7. To promote general welfare of workers
8. To promote healthy labour-management relations
9. To integrate the interests of workers and management
10.To promote the overall growth of the organization
 Scope of IR
• The scope of IR is classified into 3 categories:
1. Relations within the industry:
A. Individual relations: these are concerned with
• Grievance handling of individuals or that of groups
• Matters related to discipline
B. Collective relations: these include
• Matters pertaining to trade unions
• Negotiations and collective bargaining
• Functioning of joint committees
• Prevention and settlement of industrial disputes
 Scope of IR
2. Role of State
Refers to labour policy, labour legislation, rules, regulations, procedures
formulated by the government

3. International aspects
Refers to international organizations of workers and employers, or the bodies
like ILO which basically represent different interests of the member countries
 Functions of IR Staff
1. Establishing a good rapport btw management and trade unions
2. Ensuring free flow of communication btw management and trade
unions
3. Ensuring creative contribution by unions in order to avoid conflicts, and
also to protect and promote the interests of all organizational
stakeholder
4. Taking all necessary steps to promote healthy environment in the
organization so that industrial harmony may be maintained
 Significance of Good IR
• Healthy IRs lead to:
• Industrial peace
• Uninterrupted and higher production
• High morale
• Increased mutual trust between management and labour
• Reduced wastage
• Reduced cost of production
• Mental revolution of employees
• Higher profits
• Increased worker efficiency
 Major Actors and their Role in IR
1. Workers and their unions… protection and promotion of workers’ interest
through collective bargaining, pressurizing, strikes, lock-outs, threats

2. Employers and their associations… protection and promotion of

employers’ interest by pressuring, threatening unions and governments

3. Government… includes central and provincial governments, courts and

tribunals… exert influence through labour legislation, rules, regulations,
policies, ordinances, standards, processes, etc
 IR and HRM
• Similarity between IR and HRM:
• HRM practices, policies and objectives influence IR rules and regulations
• Industrial conflicts or poor IR lead to reformulation of HRM strategies
and policies
• Difference between IR and HRM:
• HRM has 2 actors, IR has 3 actors. HRM is soft, IR is aggressive
• In case of conflict, IR uses strategies like collective bargaining, while HRM
uses grievance handling machinery and disciplinary procedures
• HRM formulates things, while IR implements those things