Role of Different Parties Involved in Industrial Relations

Role of Government in Industrial Relations

In recent years the Government has played an important role in regulating industrial relations but the extent of its involvement in the process is determined by the level of social and economic development while the mode of intervention gets patterned in conformity with the political system obtaining in the country and the social and cultural traditions of its people. The degree of Government intervention is also determined by the stage of economic development. For example, in a developing economy like ours, work-stoppages to settle claims have more serious consequences than in a developed economy and similarly, a free market economy may leave the parties free to settle their relations through strikes and lockouts but in other systems varying degrees of Government participation is required for building up sound industrial relations.

In India, the role played by the Government is an important feature in the field of industrial relations and Government intervention in this area has assumed a more direct form. The Government has enacted procedural as well as substantive laws to regulate industrial relations in the country.

Role of Management in Industrial Relations

The management have a significant role to play in maintaining smooth industrial relations. For a positive improvement in their relations with employees and maintaining sound human relations in the organization, the management must treat employees with dignity and respect. Employees should be given ‘say’ in the affairs of the organization generally and wherever possible, in the decision-making process as well. A participative and permissive altitude on the part of management tends to give an employee a feeling that he is an important member of the organization – a feeling that encourages a spirit of cooperativeness and dedication to work.… Read the rest

Significance of Industrial Relations

Maintenance of harmonious industrial relations is on vital importance for the survival and growth of the industrial enterprise. Good industrial relations result in increased efficiency and hence prosperity, reduced turnover and other tangible benefits to the organization. The significance of industrial relations can be summarized as below:

  1. It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining, mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization.
  2. It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the country.
  3. It improves morale of the work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.
  4. It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.
  5. It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound.
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Difference Between Human Relations and Industrial Relations

The term human relations lays stress upon the processes of inter-personal relationships among individuals as well as the behavior of individuals as members of groups. The term industrial relations is used widely in industrial organizations and refers to the relations between the employers and workers in an organization, at any specified time.

Thus, while problem of human relations are personal in character and are related to the behavior of individuals where moral and social element predominate, the term industrial relation is comprehensive covering human relations and the relations between the employers and workers in an organization as well as matters regulated by law or by specific collective agreement arrived at between trade unions and the management.

However, the concept of industrial relations has undergone a considerable change since the objective of evolving sound and healthy industrial relations today is not only to find out ways and means to solve conflicts or resolve difference but also to secure unreserved cooperation and goodwill to divert their interest and energies toward constructive channel. The problems of industrial relations are therefore, essentially problems that may be solved effectively only by developing in conflicting social groups of an industrial undertaking, a sense of mutual confidence, dependence and respect and at the same time encouraging them to come closer to each other for removing misunderstanding if any, in a peaceful atmosphere and fostering industrial pursuits for mutual benefits.… Read the rest

Labor Administration

Labor administration is not simply the responsibility of the department of labor. Many international agencies and Government departments such as chambers of commerce, factory and mines inspectorate, social insurance directorate, and department of human resource development and education are involved in it. In some countries, the organizations of employers and workers are also involved in the administration of labor matters. But it is primarily the responsibility of the department of labor of lay down, develop and apply sound labor policies, coordinate various recommendations received from various departments which have a bearing on labor affairs. Formulation of policy decision are based on consultation with other interests (particularly of Employers and workers organizations) and of research and field investigation. Most of the labor policy proposals may emanate from the minister of labor himself or from his department. The department of labor is the body which receives most such proposals and initiates the preparatory process. In some cases, labor courts, arbitration bodies and different adhoc commissions can be regarded as forming part of the labor administration machinery, though they are usually outside of the department of labor.

Most of the work done in department of labor is either professional or technical. The meeting of experts on labor administration viewed that labor administration officials in particular services should have the basic academic qualifications required for such services (especially in law, economics, sociology, administrative sciences, psychology, statistics, actuarial sciences, medicine, engineering and so forth). The exact qualifications required for each post can be determined by the government of each country.… Read the rest

What is Arbitration?

Arbitration is the means of securing a definite judgment or award for any controversial issue by referring it to a third party. It may imply the existence of an authority set apart to adjudicate on industrial disputes under recognized conditions. Arbitration is by mutual consent of the parties. When the Government decides to refer a case to a Labor Court or Industrial Tribunal, it is called adjudication. Thus, compulsory arbitration is referred to as adjudication.

Arbitration involves the exercise of an authority to bring about an agreement or to help the process of settlement by adjudicating on industrial disputes. The arbitrator has powers to probe and in the process becomes acquainted with the facts of the industrial situation.

Arbitration in industry shares several common features with conciliation and mediation. Just like conciliation and mediation, there is also intervention of third party. It can either be voluntary or compulsory like conciliation and mediation. The note of distinction between arbitration and conciliation is that in the former the decision is finding on the parties, while in the case of later the parties may or may not accept the decision. Arbitration is characterized by a different approach than conciliation and mediation. Arbitration procedure is more of judicial nature and the award has the resemblance of a court’s judgment. The arbitrator has his own decision and does not care for the recommendations of the parties. The procedure of conciliation is not of judicial nature and the conciliator persuades the parties towards positive settlement of dispute without imposing any personal will or judgment.… Read the rest

Collective Bargaining Goals of Trade Unions

Trade unions have a wide range of economic and non-economic goals. All goals of them can not be won in one instance. All collective bargaining goals of trade unions are in conflict with each other since employers are willing to make only limited number of concessions at any particular bargaining session. Therefore, unions have to determine priorities, are five factors which affect the priority of collective bargaining goals.

  1. Economic conditions relevant to the bargaining relationship
  2. Precedent of recent major agreements,
  3. Inter-union rivalry,
  4. Influence of international situation,
  5. Intra-union influence.

The relative importance of these factors varies from one bargaining situation to another.

1. Economic Conditions

The cost of living is used by trade unions as an argument for higher wages during periods of rising prices. Although unions generally give more attention to money wages than real wages, a decline in real wages, resulting from cost of living, is always used as a potent argument for a wage increase, partly because it wins public support. But unions do not use this argument when prices are falling. The cost of living and the condition of firm in terms of ability to pay is used as a basis of setting terms of contract. Finally, since nothing succeeds like success, when a union feels that employer is vulnerable to a strike, e.g., if he is behind in filling his customers orders, it may decide that it is the appropriate time to win maximum concession.

2. Precedent of Recent Major Agreements

A major agreement made in an industry does not guarantee that other unions will receive the same concessions; there will be variations around the precedent.… Read the rest