Concept of Industrial Relations:
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 explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.
Popular Definitions:
The term ‘industrial relations’ has been variously defined. J.T. Dunlop defines industrial relations as “the complex interrelations among managers, workers and agencies of the governments”.
According to Dale Yoder “industrial relations is the process of management dealing with one or more unions with a view to negotiate and subsequently administer collective bargaining agreement or labour contract”.
The HR Employee Relations Manager directs the organization's employee relations function. They develop employee relations policies and ensure consistent application of company policies and procedures. In addition, they are responsible for employee dispute resolution procedures, performing internal audits, and taking appropriate action to correct any employee relations issues.
The School of Industrial and Labor Relations at Cornell University was the world's first school for college-level study in HR located in Ithaca, New York, USA. ILR (Industrial and Labor Relations) specializes in the fields of human resource management, labor relations, and dispute resolution.
The Center for Human Resources at the University of Pennsylvania was founded in 1921. The Center's mission is to foster research on the strategic role of HR management in such areas as employment, labor relations, public policy, diversity, and training and education. The Center supports its mission through research, regular meetings, information bulletins, and conferences and public forums.
Significance of Industrial Relations:
The healthy industrial relations are key 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 reduce 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 employer’s 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. Wastage of man, material and machines are reduced to the minimum and thus national interest is protected.
Thus, it is evident that good industrial relations is 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.
Aim/goal of Industrial Relations:
The main aim of industrial relations system are:-
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.
Causes & Effects of Ineffective employment relations
Grievance Management
Perhaps the main cause or source of poor industrial relations resulting in inefficiency and labour unrest is mental laziness on the part of both management and labour. Management is not sufficiently concerned to ascertain the causes of inefficiency and unrest following the laissez-faire policy, until it is faced with strikes and more serious unrest. Even with regard to methods of work, management does not bother to devise the best method but leaves it mainly to the subordinates to work it out for themselves. Contempt on the part of the employers towards the workers is another major cause. However, the following are briefly the causes of poor industrial relations:
Mental inertia on the part of management and labour;
An intolerant attitude of contempt of contempt towards the workers on the part of management.
Inadequate fixation of wage or wage structure;
Unhealthy working conditions;
Indiscipline;
Lack of human relations skill on the part of supervisors and other managers;
Desire on the part of the workers for higher bonus or DA and the corresponding desire of the employers to give as little as possible;
Inappropriate introduction of automation without providing the right climate;
Unduly heavy workloads;
Inadequate welfare facilities;
Dispute on sharing the gains of productivity;
Unfair labour practices, like victimization and undue dismissal;
Retrenchment, dismissals and lock-outs on the part of management and strikes on the part of the workers;
Inter-union rivalries; and
General economic and political environment, such as rising prices, strikes by others, and general indiscipline having their effect on the employees’ attitudes.
Facts [+]
In USA there is no federal law or mandate that requires an employer to give workers lunch breaks or rest periods, although most companies allow and encourage them. Studies have found up to 58% of American workers skip their lunch break. Health and workplace experts suggest that this practice ultimately leads to worker burnout and diminished productivity.
Impact of poor Industrial Relations
Industrial relations are of great importance in industrial life. These relations have great bearing on the economic, social and political spheres of our society. If in an organisation, relations between labour and management are cordial, there will be industrial peace and interests of both the parties will be automatically safeguarded. However, organisations where industrial relations are strained, the organisations have to face lot of problems. The atmosphere of such organisations is always surcharged with industrial unrest leading either to strikes or lockouts. Organisations which ignore the importance of industrial relations face high cost of production. Adverse effect on efficiency, low-grade production, negligence in the execution of work, absenteeism among the workers, high rate of labour turn-over etc. are the evils that result from poor industrial relations.
Lack of cordiality in industrial relations not only adversely affects the interests of the labourers and employers but also cause harm to different sections of society. They are faced with lot of difficulties and problems.
Demerits of bad industrial relations can be expressed as under:
Effect on Workers: (i) Loss of wages, (ii) Physical injury or death on account of violence during labour unrest, (iii) Excesses by employers, (iv) Economic losses, (v) Bitterness in relations, (vi) Adverse affect on career.
Effect on Employers / Industrialists: (i) Less production, (ii) Less Profit, (iii) Bad affect on organisation, (iv) Bad effect on human relations, (v) Damage to machines and equipments, (vi) Adverse effect on development of companies, (vii) Burden of fixed expenses.
Effect on Government: (i) Loss of revenue (less recovery of income tax. sales tax, etc.) (ii) Lack of order in society, (iii) Blame by different parties.
Effect on Consumers: (i) Rise in prices, (ii) Scarcity of goods, (iii) Bad affect on quality of goods.
Other Effects: (i) Adverse affect on International Trade (Fall in exports and rise in imports), (ii) Hindrance in Economic Development of the country, (iii) Uncertainty in economy.
To conclude, it can be said that almost all sections of the society suffer loss in one way or the other due to bad industrial relations. In order to maintain peace in industrial units it is of utmost importance that employers and workers should make constant endeavour to establish cordial human relations.
Approaches /Theories on Industrial Relations
Industrial conflicts are the results of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain his complex phenomenon. One observer has stated, “An economist tries to interpret industrial conflict in terms of impersonal markets forces and laws of supply demand. To a politician, industrial conflict is a war of different ideologies – perhaps a class-war. To a psychologist, industrial conflict means the conflicting interests, aspirations, goals, motives and perceptions of different groups of individuals, operating within and reacting to a given socio-economic and political environment”.
Psychological approach
The problems of IR have their origin in the perceptions of the management, unions and the workers. The conflicts between labour and management occur because every group negatively perceives the behaviour of the other i.e. even the honest intention of the other party so looked at with suspicion. The problem is further aggravated by various factors like the income, level of education, communication, values, beliefs, customs, goals of persons and groups, prestige, power, status, recognition, security etc are host factors both economic and non-economic which influence perceptions unions and management towards each other. Industrial peace is a result mainly of proper attitudes and perception of the two parties.
Sociological approach
Industry is a social world in miniature. The management goals, workers’ attitudes, perception of change in industry, are all, in turn, decided by broad social factors like the culture of the institutions, customs, structural changes, status-symbols, rationality, acceptance or resistance to change, tolerance etc. Industry is, thus inseparable from the society in which it functions. Through the main function of an industry is economic, its social consequences are also important such as urbanization, social mobility, housing and transport problem in industrial areas, disintegration of family structure, stress and strain, etc. As industries develop, a new industrial-cum-social pattern emerges, which provides general new relationships, institutions and behavioural pattern and new techniques of handling human resources. These do influence the development of industrial relations.
Human relations approach
Human resources are made up of living human beings. They want freedom of speech, of thought of expression, of movement, etc. When employers treat them as inanimate objects, encroach on their expectations, throat-cuts, conflicts and tensions arise. In fact major problems in industrial relations arise out of a tension which is created because of the employer’s pressures and workers’ reactions, protests and resistance to these pressures through protective mechanisms in the form of workers’ organization, associations and trade unions.
Through tension is more direct in work place; gradually it extends to the whole industry and sometimes affects the entire economy of the country. Therefore, the management must realize that efforts are made to set right the situation. Services of specialists in Behavioural Sciences (namely, psychologists, industrial engineers, human relations expert and personnel managers) are used to deal with such related problems. Assistance is also taken from economists, anthropologists, psychiatrists, pedagogists, tec. In resolving conflicts, understanding of human behavior – both individual and groups – is a pre-requisite for the employers, the union leaders and the government – more so for the management. Conflicts cannot be resolved unless the management must learn and know what the basic what the basic needs of men are and how they can be motivated to work effectively.
It has now been increasingly recognized that much can be gained by the managers and the worker, if they understand and apply the techniques of human relations approaches to industrial relations. The workers are likely to attain greater job satisfaction, develop greater involvement in their work and achieve a measure of identification of their objectives with the objectives of the organization; the manager, on their part, would develop greater insight and effectiveness in their work.
Theoretical perspectives
Industrial relations scholars have described three major theoretical perspectives or frameworks, that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radical. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories, although they are not limited to kosala.
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.
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 organization’s needs.
Pluralistic-Perspective
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups - 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
The Marxist approach looks at industrial relations from a societal perspective. It views industrial relations as a microcosm of the wider capitalist society. The basic assumption of this approach is that industrial relations under capitalism are an everlasting and unavoidable source of conflict According to this approach, industrial conflicts are the central reality of industrial relations, but open conflicts are uncommon.15 The Marxist approach views industrial disputes as a class struggle and industrial relations as a politicized concept and an element of the class struggle. As per the Marxist approach, the understanding of industrial relations requires an understanding of the capitalized society, the social relations of production and the mechanism of capital accumulation.
The Marxist approach views the power relationship between the two classes, namely, the employer (capital) and the employee (labour), as the crux of the industrial relations. Both classes struggle hard to consolidate their respective positions so that they can have a greater leverage over the other in the process of bargaining. The proponents of this approach perceive that the employers can survive longer without labour than the employees can without work. As far as theory is concerned, the compensation payable to the employees is an outcome of the power struggle. For instance, the employers seek to maximize their profits by paying less compensation to the employees, while the latter resist such attempts, and this resistance results in industrial conflicts. However, the weakness of this theory is that it is narrow in approach as it views industrial relations as a product or outcome of the industrial conflict.
The System Approach
The system approach was developed by J. P. Dunlop of Harvard University in 1958. According to this approach, individuals are part of an ongoing but independent social system. The behaviour, actions and role of the individuals are shaped by the cultures of the society. The three elements of the system approach are input, process and output. Society provides the cue (signal) to the individuals about how one should act in a situation. The institutions, the value system and other characteristics of the society influence the process and determine the outcome or response of the individuals. The basis of this theory is that group cohesiveness is provided by the common ideology shaped by the societal factors.
According to Dunlop, the industrial relations system comprises certain actors, certain contexts, and an ideology, which binds them together and a body of rules created to govern the actors at the workplace and work community. The actors in the system are the managers, the workers and their representatives, and the government agencies. The rules in the system are classified into two categories:
Substantive rules and Procedural rules.
The substantive rules determine the conditions under which people are employed. Such rules are normally derived from the implied terms and conditions of employment, legislations, agreements, practices and managerial policies and directives.
The procedural rules govern how substantive rules are to be made and understood. Ultimately, the introduction of new rules and regulations and revisions of the existing rules for improving the industrial relations are the major outputs of the industrial relations system. These may be substantive rules as well as procedural rules." The context in the system approach refers to the environment of the system which is normally determined by the technological nature of the organization, the financial and other constraints that restrict the actors of industrial relations, and the nature of power sharing in the macro environment, namely, the society.
Collective bargaining
In the work situation, an individual worker has to face many problems such as, low wages, long hours of work, loss incentive etc. These problems of an individual or few individuals cannot attract the attention of the employer because of their less bargaining power. The growth of trade union increased the bargaining strength of workers and enables them to bargain for their better conditions collectively.
Collective bargaining is a source of solving the problems of employees in the work situation collectively. It provides a good climate for discussing the problems of workers with their employers. The employees put their demands before the employers and the employers also give certain concession to them. Thus it ensures that the management cannot take unilateral decision concerning the work ignoring the workers. It also helps the workers to achieve responsible wages, working conditions, working hours, fringe benefits etc. It provides them a collective strength to bargain with employer. It also provides the employers some control over the employees.
The process of collective bargaining is bipartite in nature, i.e. the negotiations are between the employers and employees without a third party’s intervention. Thus collective bargaining serves to bridge the emotional and physiological gulf between the workers and employers though direct discussions.
The HR Labor Relations Manager directs the organization's labor relations agreement in accordance with executive level instruction and endorsement. They supervise labor relations support staff and serve as the management representative in labor negotiation, bargaining, or interpretive meetings
Meaning
The term collective bargaining is made up of two words, ‘collective’ – which means a ‘group action’ through representation and ‘bargaining’, means ‘negotiating’, which involves proposals and counter-proposals, offers and counter-offers. Thus it means collective negotiations between the employer and the employee, relating to their work situations. The success of these negotiations depends upon mutual understanding and give and take principles between the employers and employees.
Definitions
The phrase collective bargaining is made up of two words collective which implies group action through its representatives; and bargaining which suggests haggling and / or negotiating. The phrase, therefore, implies collective negotiation of a contract between the management’s representatives on one side and those of the workers on the other. Thus collective bargaining is defined as a process of negotiation between the employer and the organized workers represented by their union in order to determine the terms and conditions of employment.
Stevens: Collective Bargaining as a ‘social control technique for reflecting and transmitting the basic power relationships which underlie the conflict of interest in an industrial relations system.’
Prof. Allan Flanders: Collective Bargaining is primarily a political rather than an economic process. He describes collective bargaining as a power relationship between a trade union organization and the management organization. The agreement arrived at is a compromise settlement of power conflicts. Collective Bargaining has also been described as “the great social invention that has institutionalized industrial conflict” Dubin
Richardson says, “Collective bargaining takes place when a number of work people enter into negotiation as a bargaining unit with an employer or a group of employers with the object of reaching agreement on conditions of the employment of the work people”.
The ILO has defined collective bargaining as "negotiations about working conditions and terms of employment between an employer and a group of employees or one or more employees' organizations 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 relations with one another; fix a large number of detailed conditions of employment, and derivatives validity, none of the matters it deals which can in normal circumstances be given as a ground for a dispute concerning an industrial worker".
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 party’s gain is another party’s 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.
Integrative 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 programme 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 restructuring:
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
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 by products 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.
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 employer’s 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. 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.
Functions
* a process of social change
* a peace treaty between two parties
* a system of industrial jurisprudence
1. Collective bargaining as a process of social change
Collective bargaining enhances the status of the working class in the society. Wage earners have enhanced their social and economic position in relation to other groups.
Employers have also retained high power and dignity through collective bargaining.
2. Collective bargaining as a peace treaty
Collective bargaining serves as a peace treat between the employers and employees. However the settlement between the two parties is a compromise.
3 Collective bargaining as an industrial jurisprudence
Collective bargaining creates a system of “Industrial Jurisprudence”. It is a method of introducing civil rights into industry. It establishes rules which define and restrict the traditional authority exercised by employers over their employees placing part of the authority under joint control of union and management.
In addition to the above, its functions include:
Increasing the economic strength to employers and employers.
Improving working conditions and fair wages.
Maintaining peace in industry
Prompt and fair redressel of grievances.
Promoting stability and prosperity of the industry.
Thus form the legal point of view, industrial dispute does not merely refer to difference between labour and capital as is generally thought, but it refers to differences that affect groups of workmen and employers engaged in an industry. Essentially, therefore, the differences of opinions between employers and workmen in regard to employment, non-employment, terms of employment or the conditions of labour where the contesting parties are directly and substantially interested in maintaining their respective contentious constitute the subject-matter of an industrial dispute.
The HR Employee Relations Manager directs the organization's employee relations function. They develop employee relations policies and ensure consistent application of company policies and procedures. In addition, they are responsible for employee dispute resolution procedures, performing internal audits, and taking appropriate action to correct any employee relations issues.
Causes of Industrial Disputes
The causes of industrial disputes can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc.
Wages and allowances: Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.
Personnel and retrenchment: [Forced lay-off of employees by a firm, usually to cut down its payroll.] The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% were caused by retrenchment.
Indiscipline and violence: From the given table, it is evident that the number of disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel with 20.4% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes.
Case
18-july-2012, India: leading car manufacturer Maruthi Suzuki, India, Maneser (Haryana), workers created violence by burning company's general manager human resource (Awanish Kumar Dev) to death, burnt down office furniture, several executives, managers, supervisors were attacked by them and the Japanese manager of the factory was also attacked. 91 workers were arrested for this brutal act done by them and they also caused damage to the company property. The sequence of events began in the morning with a worker beating up a supervisor on the shop floor. Workers union alleges that this incident was caused due to the supervisor made objectionable remark against a permanent worker, who belongs to the Scheduled Caste category. When we opposed it, they misbehaved with us and suspended the worker that led to violence. But the management alleges that the workers' union prevented the management from taking disciplinary action against the worker. Finally management declared to temporary close down the car Manufacturing plant produces about 1600 units per day. In terms of value the per day loss is about Rs. 70 crores. Cars waiting for delivery to its customers were more than one lakh units that may take more than five months to begin delivery due to lockout.
As company manufactures market demanded key models Swift hatchback and Dzire sedan faces a huge backlog. Maruthi Suzuki competitors like Ford, Skoda and Hyundai get benefited in the market as many people shift to other brands in the view of long waiting period for delivery of cars from Maruthi Suzuki.
Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively.
Leave and working hours: Leaves and working hours have not been so important causes of industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working hours.
Miscellaneous: The miscellaneous factors include
Inter/Intra Union Rivalry
Charter of Demands
Work Load
Standing orders/rules/service conditions/safety measures
Non-implementation of agreements and awards etc.
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