The term ‘Industrial Relations’ comprises of two terms – ‘Industry’ and ‘Relations’. ‘Industry’ refers to “any productive activity in which an individual/group of individuals is/are engaged”. Relations’ refers to “the relationships that exist within the industry between the employer and his workmen”.
Hence, ‘industrial relations’ means “the relationship between employees and management which stem directly or indirectly from union-employer relationship”. Industrial relations also known as labour-management relations or labour relations constitute one of the most delicate and complex problems of the modern industrial society, which is characterised by rapid change, industrial unrest and conflicting ideologies in the national and international spheres. It is a dynamic concept, which depends upon the pattern of society, economic system and political set-up of a country and changes with the changing economic and social order.
Nature of Industrial Relations
(1) Complex Relationship – Industrial relations do not constitute a simple relationship between the employers and employees rather it is an art of living together for the purposes of production, productive efficiency, human well-being and industrial progress. The existence of good human relations, organised labour movement, collective bargaining, fair dealing by management with the workers, joint consultation at all levels is necessary for the establishment and maintenance of harmonious industrial relations and for building up healthy attitudes and institutions.
(2) Mixture of Cooperation and Conflict – Industrial relations are always a mixture of cooperation and conflict. However much cooperation may be sought as an organisational objective, some conflict will always remain. There are atleast three reasons for this-
- Both the groups (labour and management) develop different orientations and perceptions of their interests. They also develop generally negative images about each other.
- There are no mutuaļly accepted yardsticks or norms to tell to the two groups how far they should go in the pursuit of their objectives. In the absence of norms, both groups claim complete rationality for their demands.
- There is no neutral field for the groups to meet on. This means that whenever the two groups meet each other for negotiations they bring with them some carry over from the past besides their inherent distrust and suspicion for each other.
Industrial relations are concerned with the organisation and practice of multi-pronged relationship between the workers and the union in an industrial enterprise. Such relationships may be either in organised form or unorganised form.
(3) Multi-Dimensional in Nature – Industrial relations do not function in a vacuum but multi-dimensional in nature and are conditioned with various determinants – institutional, economic and technological factors, etc.
Scope of Industrial Relations
(1) Participative Management – In participative (or participatory) management, otherwise known as employee involvement or participative decision-making employees are invited to share in the decision-making process of the firm by participating in activities such as setting goals, determining work schedules, and making suggestions.
(2) Dispute Settlement – Industrial disputes are the disputes which arise due to any disagreement in an industrial relation. These disputes may take various forms such as protests, strikes, demonstrations, lock-outs, retrenchment, dismissal of workers, etc. In India, the Industrial Disputes Act, 1947 is the main legislation for investigation and settlement of all industrial disputes.
(3) Grievance Redressal – The grievances of the employees are related to the contract, work rule or regulation, policy or procedure, health and safety regulation, past practice, changing the cultural norms unilaterally, individual victimisation, wages, bonus, etc. Grievance handling procedure is used to handle the grievances. The grievance handling procedure of the organisation can affect the harmonious environment of the organisation. Therefore, effective grievance handling is an essential part of cultivating good industrial relations and running a fair, successful, and productive workplace.
(4) Trade Unions – A trade union is an organisation of employees formed on a continuous basis for the purpose of securing diverse range of benefits. It is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives.
(5) Collective Bargaining – It is a formal process that involves negotiation, consultation, and the exchange of information between employers and workers, the end goal being an agreement that is mutually acceptable to all parties. It is traditionally a bipartite process (i.e., a process involving two parties) although in many countries, the state plays in important role in promoting collective bargaining by establishing relevant national legislation.
(6) Employers’ Organisations – Employers’ Organisations (EOs), comprising business enterprises, are key actors in industrial relations. In India, the All India Organisation of Indian Employers (AIOE) and Council of Indian Employers (CIE) are the umbrella organisations for Indian employers. Chambers of Commerce and trade, industry associations, and representative organisations of the public sector are all members of these EOs.
Objectives of Industrial Relations
(1) Safeguard Interest of Labour and Management – To safeguard the interest of labour 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.
(2) Enhance Economic Status of Workers – To improve the economic status of the worker by improving wages, benefits and by helping the worker in evolving sound budget.
(3) Regulate Government Control – To regulate government control of such plants and units as are running at a loss or in which productions has to be regulated in the public interest.
(4) Provide Workers’ Participation – To provide an opportunity to the workers to have a say in the management and decision-making. To improve workers’ strength with a view to solve their problems through mutual negotiations and consultation with the management.
(5) Encourage and Develop Trade Unions – To encourage and develop trade unions in order to improve the workers’ strength.
(6) Avoid Industrial Conflicts – To avoid industrial conflict, it is important to develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country.
(7) Eliminate Strikes and Lock-Outs – To eliminate, as far as is possible and practicable, strikes, lock-outs by providing reasonable wages, improved living and working conditions, said fringe benefits.
(8) Maintain Industrial Democracy – To establish and nurse the growth of an industrial democracy based on labour 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.
(9) Raise Productivity – To increase productivity to a higher level in an era of full employment by reducing the tendency of high turnover and frequency absenteeism.
(10) Vesting of a Proprietary Interest – Vesting of a proprietary interest of the workers in the industries in which they are employed.