DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

NAME OF THE PROJECT TOPIC

Industrial relations machinery under Industrial Dispute Act,1947

SUBJECT

Labour Law-I

NAME OF THE FACULTY

Assistant Prof: Mr.R.Bharat Kumar

NAME OF THE STUDENT

Kranthi Kiran. T

Regd No. 18LLB127

Sec: B

V Semester

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 Acknowledgment

I heart fully express my special thanks to my subject teacher Mr.R.Bharat kumar, Assistant professor of law for
giving me the opportunity to do the project on the topic “Industrial relations machinery under Industrial
Dispute Act,1947”. It helped me to know many things and gain knowledge. I also thank sir for guiding me
throughout the project and responding for my doubts regarding the project.

I would also like to thank my University ‘Damodaram Sanjivayya National Law University’ for providing me with
all the required materials for the completion of my project and I also came to know many new things.

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 Table of Contents

Abstract…………………………………………………………………………………….4-6

Concept and meaning of industrial relations……………………………………………...6

Features of Industrial Relations………………………………………………………….7

Objectives of Industrial Relations……………………………………….........................7-8

Importance of Industrial Relations……………………………………………………..8-9

Principal parties in the industrial relations in India…………………………………10-12

Authorities set up under the act: Settlement of industrial disputes………………….13-15

The Status of Collective Bargaining in India……………………………………………16-17

Economic reforms and Industrial Relations………………………………………….17-18

Workers Participation and Management(WPM)…………………………………….18-20

Case Laws………………………………………………………………………………….20-33

Suggestions for Improvement of Industrial Relations……………………………….33-34

Conclusion…………………………………………………………………………………..34

Bibliography………………………………………………………………………………….35

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 Abstract

The term ‘industrial relations’ refers to the collective relations between employers and employees as a group. It
underscores the importance of compromise and accommodation in place of conflict and controversy in resolving
disputes between labour and management

The law relating to industrial relations in India is contained in the Industrial Disputes Act, 1947. The Act applies
only to industries as defined under Section 2(j) of the Act. The scope of the Act was considerably widened by the
judgment of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa A.I.R. 1978 S.C.
548, while interpreting the definition of "industry". Following upon that judgment, the definition of "industry" has
been revised under the Industrial Disputes (Amend- ment) Act, 1982, which has been recently passed by
Parliament. Industry, under the revised definition, means any systematic activity carried on by cooperation between
an employer and his workmen for the production, supply or distribution of goods or services, with a view to satisfy
human wants and wishes. Wants or wishes which are merely spiritual or religious in nature are excluded from the
definition. It is not necessary that any capital should be invested for purposes of carrying on such activities; nor is
it necessary that such activity should be carried on with the motive of making any gain or profit. Professions are
encompassed within the term "industry" if the activity carried on by professional men otherwise satisfies the other
tests of "industry" and employs at least ten persons. Certain institutions like hospitals, educational, scientific,
research or training institutions or institutions owned or managed by organisations wholly or substantially engaged
in charitable, social or philanthropic services etc. are, however, excluded from the definition of "industry".

Industrial relations in these institutions are to be regulated by a separate Act dealing with them. In an industry,
however, all employees are not governed by the provisions of the Act; only workmen as defined under Section 2(s)
of the Act are so covered. Only those employees who are doing any skilled or unskilled manual, clerical,
operational or technical work for hire or reward, would be covered by the definition. Supervisory personnel would
be covered by the definition only if their wages do not exceed Rs.1600/= per mensem.Some of the major industrial
dispute settlement machinery are as described:- 1. Conciliation 2. Court of Inquiry 3. Voluntary Arbitration & 4.
Adjudication. This machinery has been provided under the Industrial Disputes Act, 1947. It, in fact, provides a
legalistic way of setting the disputes.As said above, the goal of preventive machinery is to create an environment
where the disputes do not arise at all.

Scope of the study

 The scope of this study is curtailed to laws applicable in India.

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  To study How the management treats its workers and how workers work in the interest of their employers is
the essence of industrial relations.

Objectives of the study

 To study Principal parties in industrial relations;Trend of industrial disputes and The settlement machinery
for industrial disputes.
 To study the features and importance of Industrial Relations under Industrial Dispute Act,1947.

Research Methodology

The research methodology is doctrinal in nature. In addition to this, the research article is:

a. Analytical;

b. Comparative;

c. Descriptive;

d. Critical.

Research Questions

 Whether harmonious industrial relations are essential for achieving the targets of production and
enhancing the productivity?
 Whether the relations between workers and management have undergone massive changes in our
country?

Literature Review

 A Contemporary Industrial Relations Scenario in India,B.R Patil, Vol. 33, No. 3 (Jan., 1998)

The author in this article gives a detail study on the role of workers unions and employers’ federations, officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of labour court,
tribunal etc.

 Developing New Perspective on Industrial Relations: Role of Government,Indian Journal of Industrial

Relations,Vol. 31, No. 2 (Oct., 1995), pp. 178-192 

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The present paper focuses on the Indian industrial law, its inadequacies for a growing industrial economy and its
judicial interpretations and implications.The author argues strongly for pragmatic and practical industrial laws
which meet the growing needs of a fast industrialising economy.

 Industrial Relations In India, Madras Law Journal,vol.1,1958

The author basically deals with, industrial relations cover a wide range of relationships, formal and/or informal,
that subsists between employers and the employees’ trade unions.

Concept and meaning of industrial relations

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The relationship between Employer and employee or trade unions is called Industrial Relation. Harmonious
relationship is necessary for both employers and employees to safeguard the interests of the both the parties of the
production. In order to maintain good relationship with the employees, the main functions of every organization
should avoid any dispute with them or settle it as early as possible so as to ensure industrial peace and higher
productivity. Personnel management is mainly concerned with the human relation in industry because the main
theme of personnel management is to get the work done by the human power and it fails in its objectives if good
industrial relation is maintained. In other words good Industrial Relation means industrial peace which is necessary
for better and higher productions.

Definition:- i. Industrial Relation is that part of management which is concerned with the manpower of the
enterprise – whether machine operator, skilled worker or manager-(Bethel, Smith & Group)

ii. Industrial Relation is a relation between employer and employees,employees and employees and employees and
trade unions. – (Industrial dispute Act 1947)

iii. While moving from jungle of the definitions, here, Industrial Relation is viewed as the “process by which
people and their organizations interact at the place of work to establish the terms and conditions of
employment.”The Industrial relations are also called as labour - management, employee-employers relations.

Features of Industrial Relations

1. Industrial Relation do not emerge in vacuum they are born of employment relationship in an industrial
setting.Without the existence of the two parties, i.e. labour and management, this relationship cannot exist. It is the
industry, which provides the environment for industrial relations.

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Industrial Relations ,Monthly labour review,Vol. 58, Issue 1 (January 1944), pp. 77

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2. Industrial Relation are characterised by both conflict and co-operations. This is the basis of adverse
relationship.So the focus of Industrial Relation is on the study of the attitudes, relationships, practices and
procedure developed by the contending parties to resolve or at least minimize conflicts.

3. As the labour and management do not operate in isolations but are parts of large system, so the study of
Industrial Relation also includes vital environment issues like technology of the workplace, country’s socio-
economic and political environment, nation’s labour policy, attitude of trade unions workers and employers.

4. Industrial Relation also involve the study of conditions conductive to the labour, managements co-operations as
well as the practices and procedures required to elicit the desired co-operation from both the parties.

5. Industrial Relations also study the laws, rules regulations agreements, awards of courts, customs and traditions,
as well as policy framework laid down by the governments for eliciting co-operations between labour and
management. Besides this, it makes an in- depth analysis of the interference patterns of the executive and judiciary
in the regulations of labour–managements relations. In fact the concepts of Industrial Relations are very broad-
based, drawing heavily from a variety of discipline like social sciences, humanities, behavioural sciences, laws etc

Objectives of Industrial Relations

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Following are the important objectives of industrial relation:

1) 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) 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.

3) To enhance productivity to a higher level in an era of full employment by lessening the tendency to high
turnover and frequency absenteeism.

4) 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.

5) To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos by providing reasonable wages,
improved living and working conditions, said fringe benefits.

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Developing New Perspective on Industrial Relations: Role of Government,Indian Journal of Industrial Relations,Vol. 31, No. 2 (Oct.,
1995), pp. 178
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 6) To establish 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.

7) Improvements in the economic conditions of workers in the existing state of industrial managements and
political government.

8) Control exercised by the state over industrial undertaking with a view to regulating production and promoting
harmonious industrial relations.

9) Socialisations or rationalization of industries by making the state itself a major employer.

10) Vesting of a proprietary interest of the workers in the industries in which they are employed.

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The main aspect of Industrial Relations

The main aspects or dimensions of industrial relations are.

I. Labour Relations, i.e. relations between union and management.

II. Employer-employees relations, i.e. relations between management and employees.
III. Group relations, i.e. relations between various groups of workmen.
IV. Community or Public relations, i.e. relations between industry and society
V. Promotions and development of healthy labour-managements relations.
VI. Maintenance of industrial peace and avoidance of industrial strike
VII. Development of true industrial Democracy

Importance of Industrial Relations

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 labour. The healthy industrial relations are key to the progress. Their significance are
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.
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Industrial Relations scenario, N. Krishna Moorthy, Vol. 40, No. 4 (Apr., 2005), pp. 470
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Reduction in Industrial Disputes – Good industrial relation reduces 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.

New Programmes – New programmes for workers development are introduced in an atmosphere of peace such as
training facilities, labour welfare facilities etc. It increases the efficiency of workers resulting in higher and better
production at lower costs.

Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and recognition of each
other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and
thus national interest is protected. Thus, from the above discussion, it is evident that good industrial relation 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.

Principal parties in the industrial relations in India

a) trade unions

b) employers’ associations

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Besides the two main parties in industrial relations, namely, employers or their associations, workers or their
unions, Government plays an important role in

(i) protecting the interests of workers, and

(ii) (ii) helping to resolve the conflicts whenever they arise.

Trade Unions

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Trade union movement in India is over a century old.Growth of trade unions received a fillip after the adoption of
the Constitution of India, which extended the right to form association to all citizens subject to the interest of
public order. These trade unions protect the interest of their members through a number of functions that they
perform. In the early 1990s around 9 per cent of the total working population was organised. In 1990, the number
of trade unions was 52,016 having 61,81,000 members. This number is more than 10 times the number in 1951.
The degree of unionisation is very high at over 90 per cent in the public sector and it is less in private sector
particularly in small and medium scale units. Only one-fifth registered unions are affiliated to one or the other ten
major trade union federations at the national level. There have been several weaknesses in working of trade unions
in India. The labour movement in India has been fragmented on ideological basis. Various trade union federations
have been formed on political party line. All India Trade Union Congress (AITUC) has been completely under the
control of the Communists since Independence. Indian National Trade Union Congress (INTUC) has been
associated with Congress party. Split in AITUC led to form Hind Mazdoor Sabha (HMS) by the socialists. Another
split in HMS took place by forming United Trade Union Congress(UTUC) by non-communists Marxist group. In
1955, Jan Sangh party formed Bhartiya Mazdoor Sangh (BMS). The split in the communists divided the AITUC
further leading to the emergence of Center of Indian Trade Unions (CITU) in 1970. Regional federations affiliated
to regional political parties such as DMK and AIDMK in Tamil Nadu and Shiv Sena in Maharashtra have also
emerged. Thus, the fragmentation of the labour movement on political line has caused disunity and weakened the
trade union movement. Due to lack of any statutory provision for recognition of trade union by the employer,
several trade unions are formed at the same work place and compete for the loyalty of the same body of workers
and their rivalry is usually bitter and sometimes violent. It is difficult even to say how many trade unions operate at
the national level since many are not affiliated to any all India federation. Much of the recent fragmentation,
however, has centered on personalities and occasionally on caste or regional considerations. Apart from the low
membership coverage and fragmentation of trade unions, decline in memberships, growing alienation between
trade unions and members are other main weaknesses of trade unions. Due to changing characteristics of the new
work force, new pattern of shifting from unions at regional or industry level to unions at enterprise level is
emerging.
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A Contemporary Industrial Relations Scenario in India,B.R Patil, Vol. 33, No. 3 (Jan., 1998), pp. 289

10
Trade unions are in a dilemma today. They do not like the entry of multinationals Industrial Relations but are
attracted by the relatively higher emoluments and fringe benefits they offer. They favour the growth of small
industry but do not like the work of the large units being contracted out to ancillary small-scale industries.
Similarly, unions resist closure of sick units but can hardly defend their being worked indefinitely as loosing
enterprises. They highlight the adverse effects of structural adjustment on employment and working conditions but
do not oppose reforms.

Employers’ Association

On all India basis there are three employers’ associations :

All India Organisation of Employers (AIOE) founded by the FICCI, New Delhi.

Employers’ Federation of India (EFI) founded by the ASSOCHAM in Bombay.

Standing Conference of Public Enterprises (SCOPE) in New Delhi set up by central public sector undertakings.

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These three have formed into a loosely federated umbrella organisation called the Council of Indian Employers
(CIE) for the purpose of relations with the Government and the international organisations like ILO. Besides these
three organisations, there is a fourth organisation called the All India Manufacturers’ Organisation (AIMO) which
mainly represents the interests of small and medium scale enterprises in the private sector. Fifth is the
Confederation of Indian Industry (CII). Both these organisations have been accorded representation separately by
Ministry of Labour in various tripartite forums including Indian Labour Conference and International Labour
Conference.

The individual and association members of AIOE are less than 160 and that of EFI is less than 240. The SCOPE
has a membership of nearly 95 per cent of the central public sector undertakings.

State

The State is the third main element, which has a vital role in industrial relations to protect the interest of workers
and to ensure industrial peace. It has enacted an extensive legislative system. Three important pieces of legislation
have played a major role in shaping Indian industrial relations. These Acts are : Indian Trade Unions Act, 1926,
Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947. The Trade Unions Act,
1926, confers on unions the basic minimum legality without which they could be construed to be unlawful
associations. Under this Law, any seven workers may form a trade union and seek registration with the Registrar of
Trade Unions. The Act protects registered unions from civil and criminal proceedings arising out of the conduct of
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Developing New Perspective on Industrial Relations: Role of Government,Indian Journal of Industrial Relations,Vol. 31, No. 2 (Oct.,
1995), pp. 180
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trade union disputes. The Industrial Disputes Act, 1947 is a crucial piece of legislation, which aims at the speedy
resolution of any conflict between labour and management through – conciliation, arbitration and adjudication.
Under this Act, 14 days’ notice is required to be given before a strike or lockout is declared in any industry

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Under the Industrial Employment (Standing Orders) Act, 1946, every establishment employing a hundred or more
workers is required to have a set of certified standing orders defining the conditions of employment. These
standing orders relate to the classification of workers, shifts, attendance, discipline, termination of employment and
grievance procedure. All these must confirm reasonable measure to model standing orders framed by the
Government. The purpose of the Act is to ensure that the conditions under which the workers are employed
conform to certain minimum standard. The government has also taken steps to regulate the working conditions of
the workers through several legislative measures covering specifically the conditions of work of industrial workers
in different areas. For instance, the Factories Act, 1948 regulates service and working conditions of workers in all
the industrial establishments employing ten or more workers where power is used and twenty or more workmen in
all other types of industrial establishments. The Act deals with the basic minimum facilities relating to health,
safety and welfare of workers. Similarly, Employees State Insurance Act, 1948, Payment of Bonus Act, 1965, etc.,
are examples of legislative measures to regulate the conditions in various industrial establishments. Industrial
Disputes (Banking and Insurance) Act, 1949, Shops and Establishment Act of various States’ etc. are illustrations
of industryspecific measures. Apart from above, many measures have been taken to protect the interest of
unorganised workers, which constitute about 91.5 per cent of labourers. These include : Minimum Wages Act,
1948, Bonded Labour System (Abolition) Act, 1976, Equal Remuneration Act, 1976, Child Labour Prohibition and
Regulation Act, 1986. Under Minimum Wages Act, 1948, State Governments and Central Government notify
minimum wages for various categories of labourers. Plantation Labour Act, 1951 provides certain basic facilities to
plantation workers. Bonded Labour System (Abolition) Act, 1976 seeks to abolish the bonded labour system and to
free labourers who have incurred a bonded debt and hence perform bonded or forced labour or service without any
wages at all, or for nominal wages. Other important measures, which have direct bearing on unorganised labourers,
are : Kerala Agricultural Workers Act, 1974, various Pension Schemes by different states. Keeping in view that
economic reforms since 1991 may help the growth of the corporate sector but would not be able to reduce the
number of unorganised workers in the foreseeable future, state’s role for amelioration of the working conditions of
unroganised labour is crucial and necessary.

Authorities set up under the act: Settlement of industrial disputes

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Issues, Trends and Developments in Industrial Relations in India,J.R Sodhi,Vol. 30, No. 4 (Apr., 1995), pp. 359

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Industrial disputes are conflicts, disorder or unrest arising between workers and employers on any ground. Such
disputes finally result in strikes, lockouts and mass refusal of employees to work in the organization until the
dispute is resolved. So it can be concluded that Industrial Disputes harm both parties employees and employers
and are always against the interest of both employees and the employers.

Principles assigned by courts for judging the nature of disputes

The term Industrial Disputes has been interpreted differently in different situations by courts. So the court has
assigned some principles for judging the natures of Industrial Dispute, these principles are as follows; The dispute
must affect large number of workmen

1. The dispute should be taken up by the Industry Union

2. The parties involved in dispute must have direct interest

3. The consulted demand must become grievance

4. Workmen can raise Industrial Dispute himself under Section 2A of Industrial Disputes Act -1947

Industrial disputes are organised protests against existing terms of employment or conditions of work. In practice,
Industrial dispute mainly refers to the strife between employers and their employees. An Industrial dispute is not a
personal dispute of any one person. It generally affects a large number of workers’ community having common
interests.

There are two components to settlements of industrial disputes :

(i) prevention and (ii) settlement. Under prevention of disputes, arrangements are made so that differences
do not take the form of strikes or lockouts. In case of settlements, arrangements are made to settle the
disputes between the management and the workers.

Prevention of Disputes

For prevention of disputes and harmonious industrial relations, consultative machinery has been provided at three
levels : national level, industry level and enterprise level.

a) Tripartite consultations : At the national level, tripartite consultations have been provided through Indian
Labour Conference (ILC) and Standing Labour Conference (SLC). There are 44 tripartite committees at the
national level. The objectives of these tripartite committees are to :
 promote uniformity in labour legislation

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Industrial Relations ,Monthly labour review,Vol. 58, Issue 1 (January 1944), pp.85
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  lay down procedure for the settlement of industrial disputes
 discuss all matters of all India importance as between employers and employees

The implementation part of the recommendations made by the tripartite bodies is weak. Sometimes even the
unanimous recommendations are not accepted by the Government. By 1970s tripartite meetings became rare and
during 1980s, several of the national federations of trade unions were boycotting the tripartite meetings on several
ocassions.

b) Industrial Relations Consultation at company and shop floor level : Since Independence, various
schemes have been formulated to provide for employees participation/ consultation at company and shop
floor level; these include :
i) Works Committees, 1947 : The Industrial Disputes Act, 1947 provides limited participation of elected
representatives of workers in bipartite works committees. The objective behind setting up of the works
committees is to promote measures for securing and preserving amity and good relations between
employers and employees. However, the functioning of these committees is not satisfactory.
ii) Joint Management Council (JMC), 1958 : JMCs were set up in 1958. These were supposed to have
administrative responsibilities for various matters relating to welfare, safety, vocational training and
preparation of holiday schedules. These were also to be consulted on various matters like changes in
work practices, amendment/formulation of various standing orders, rationalisation, productivity etc.
JMCs did not receive much support either from the unions or from the management due to multiplicity
of bipartite consultative bodies.

Settlement of Disputes

For settlement of labour management disputes there are quite a few settlement machinery. These are :

a) Conciliation Officers : The Government appoints conciliation officers for particular regions and industries.
These officers bring both the parties together and help them to resolve their differences. If the dispute is settled
through their good offices and a settlement is reached, the report to this effect is sent to the Government. In case of
failure in settling the dispute, the officer informs the Government narrating steps taken and the reasons for its
failure.

b) Board of Conciliation : 8The government may appoint a Board of Conciliation to look into any industrial
dispute referred by it. The Board consists of a Chairman and two to four persons — representing the employers and

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Industrial Relations In India, Madras Law Journal,vol.1,1958

14
workers. The Chairman is an independent person. The Board reports to the Government about the success or
failure of its efforts including the steps taken and the reasons for its failures to bring about a settlement.

c) Court of Enquiry : Whenever an industrial dispute is not settled by the conciliation officers or by the Board of
Conciliation, the matter is referred to a court of enquiry. The court investigates the whole matter and submits its
report to the Government. Afterwards the case is referred to an Industrial Tribunal for adjudication.

d) Labour Courts : State Governments have set up labour courts to go into the matters like disputed orders of the
employers, dismissals and suspensions of employees by the management, the legality of strikes, lockouts, etc. The
labour courts are expected to decide the matters speedily.

e) Industrial Tribunals : Industrial Tribunals are two types— State Tribunals and National Tribunals. State
Tribunals are appointed by state governments for adjudication of disputes relating to wages, bonus, etc. National
Tribunal is appointed by the Central Government for adjudication of industrial disputes of national importance that
affect industrial establishments located in more than one state. The adjudication of the State and National tribunals
are binding on the parties concerned.

Apart from the above system of settling disputes, the following practices are becoming common in recent years

a) Code of Discipline : In 1958, the Indian Labour Conference evolved a code of discipline in industry. Under this
code, employers and workers voluntarily agree to maintain and create an atmosphere of mutual trust and
cooperation in the factory and to settle all disputes and grievances by mutual negotiations, conciliations and
voluntary arbitration and avoid resort to direct action.

b) Industrial Truce : A joint meeting of the central organisation of employers and workers adopted an Industrial
Truce Resolution in November, 1962. It was agreed upon by the employers and the workers that during an
emergency in the country, interruption or slowing down of production will be avoided and efforts will be made to
maximise the production.

c) National Arbitration Promotion Board : The Board was set up in July, 1967 by the Government to promote
voluntary arbitration to settle industrial disputes. The Board attempts to ensure that employers and workers take
greater recourse to the voluntary approach to settle industrial disputes.

The Status of Collective Bargaining in India

Collective bargaining is the procedure by which employer(s) and a group of employees agree upon the conditions
of work. It is a process of joint decisionmaking and basically represents a democratic way of life in industry. It
helps in establishing industrial peace without disrupting the production activities.

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Conditions for the success of collective bargaining :

 Strong democratic union

 employer’s recognition to trade unions
 bargaining in good faith
 mutual acceptance of the agreements by employers and employees.

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In India collective bargaining has been limited to national federations of trade unions and employers’
organizations. From employer’s side we have small nucleus industrial associations like - Ahmedabad Mill Owners’
Associations, Bombay Mill Owners’ Associations, Indian Sugar Mills Association, Indian Paper Mills Association,
etc. In some industrial centres, both trade unions and employers have set up coordination committees to adopt
collective strategy in collective bargaining matters.

Due to large number of unions in multi-plant companies, bargaining has become coercive than collective. In public
sector, in the name of uniformity, bargaining has become competitive. In recent years due to economic crisis and
the need to improve the level of productivity, there have been several innovative approaches in collective
bargaining. For example, in order to survive the ailing firms and to ensure job-security, unions and managements
have been agreeing for a variety of concessions including wage and employment cuts, wage freeze, moratorium on
strikes and other trade union actions, changes in work practices, flexible deployment of work forces, etc. In the
process, some trade unions have also been able to get the commitment from the employers to regularise the
services of those who remain casual labour for several years. Firms are re-structuring without unions’ involvement
through one or more of the strategies. A number of firms have entered into re-structuring agreements such as :

1) transfer of jobs from the bargaining category to general category,

2) ban on recruitment,

3) transfer of production to subcontracted units,

4) introduction of parallel production

5) transfer of permanent jobs to contract, casual, and temporary workers,

6) introduction of voluntary retirement schemes,

7) flexibility and productivity,

8) automation,

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A Contemporary Industrial Relations Scenario in India,B.R Patil, Vol. 33, No. 3 (Jan., 1998), pp.89
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9) management proposals in negotiating pay revisions,

10) closures/sale of business, and

11) shop floor restructuring.

Unusual and unconventional clauses are incorporated in collective agreements. Such clauses include : age
discrimination, gender discrimination in the definition of dependents, linking dearness allowances to productivity,
voluntary retirement schemes to contract labour, sub-contracting, two-tier wage systems, etc.

Economic reforms and Industrial Relations

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Labour market reforms are a part of the overall economic reforms package and hence there is a demand for labour
market flexibility so that it can respond more efficiently to the market signals. On these lines, some countries like
New Zealand and Australia have introduced reforms in labour market. However, the impact of these reforms are
not very encouraging. These countries are facing high incidence of unemployment, declining real wages, and
adverse balance of payment. Further, whether the economic performance of these economies have improved as a
result of economic reforms is still not confirmed.

1) Flexibility in the labour market leads to decline in employment, deterioration in the quality of employment, rise
in employment of casual, contract and female labour in place of permanent labour. It also encourages medium and
largescale factories to sub-contract part of their production to small enterprises to cut on labour costs. All these
features weaken the trade unions, widen the scope for labour exploitation and hence have severe repercussions for
industrial relations. Hence introducing the flexibility in the labour market in a way that increases productive
employment, improves the quality of employment and avoids exploitation is really a difficult task.

2) To attract foreign direct investment, changes in the industrial relations system are being demanded. In this
context, in some countries export-processing zones have been set up which are free of trade controls. Trade unions
in these countries have been banned and wages are low. Safeguards with regard to health, safety and holidays
either do not apply or are not enforced. But the study on the conditions of workers in foreign enterprises in China
shows that workers have faced serious problems like postponement of wages, extension of work hours, poor
standards of occupational safety and health, and non-payment of social security benefits. As a result, unionised
labour 57 disputes and strikes have taken place frequently. Introducing the changes in the labour laws to attract the
flows of foreign investments without weakening labourers’ working and living conditions is really difficult.

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17
3) Weakening of trade unions : Increases in the employment of temporary, casual, contract labour and female
labour in place of permanent labour creates insecurity among workers. these developments divide the workers and
weaken the trade unions.

4) Taking advantages of tax holidays, interest concessions, subsidies and de-licensing, the companies in private
sector are relocating their production units in backwards areas. Labourers employed in such units are casual,
temporary, non-unionised and on contract basis . This is adversely affecting industrial relations.

5) Labour-saving technologies have also resulted in distortions in the compensation structure even within the same
unit for doing the same work. National federations of labourers are not interested in taking up the cases of contract
and casual labourers. This is leading to fragmentation of labour movement and poor impact on industrial relations.

Workers Participation and Management(WPM)

11
In a wider sense, workers’ participation in management refers to a process in which employees have some role in
decision-making of the organisation they work in.

Objectives of WPM

The broad underlying objectives of WPM are:

1) To motivate employees towards contributing their best for successful running of the organization and make them
feel as a part of it.

2) To bring the attitudinal change in both employees and employers towards collaboration than conflict.

3) To develop an approach of working ‘with the strengths’ rather than ‘the weaknesses’ of each other.

Pre-requisites for the Success of WPM

The following factors help in better industrial relations:

 mutual trust and cooperation between the management and workers

 proper industrial climate l absence of exploitation/selfish interest
 sense of belonging
 open communication and free flow of information both ways
 attitudinal change
 willingness to change the challenges/changing environment.
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Industrial Relations scenario, N. Krishna Moorthy, Vol. 40, No. 4 (Apr., 2005), pp. 477

18
WPM in India

12
The idea of workers’ participation in management was first visualised by Gandhiji when he said that industry was
a joint venture of labour and capital in which both owners and workers were co-trustees for society. The idea of
WPM was first introduced in formal sense when the need of WPM was recognised in the Second Five Year Plan.
The third Plan favoured progressive extension of the WPM. The fourth Plan advocated its extension to public
sector undertakings and emphasised its importance as an essential functional link in the structure of industrial
relations. The 15th and 29th session of Indian Labour Conference held in 1957 and 1990 respectively are historic
when it was focused that there was a need to find a new order based on reconciling the demands for social justice
and individual freedom with modern-industrial development and technology. WPM was a step in that direction.

Arrangements for WPM

The scheme of WPM is implemented through mutual agreements, statuary and non-statuary committees, councils
and equity participations.

i) By Mutual Agreements: Mutual agreements covering service conditions like wages, scale of pay,
increment, recruitment policy, promotion policy, retirement policy, retirement benefits etc. are entered into
between employers and trade unions.
ii) By Statutory Committees: Provisions have been made under various Acts to set up committees for
performing various functions. The name of such committees and the Act under which these are set up have
been given below :

a) Works Committee - under Industrial Disputes Act, 1947

b) Canteen Management Committee - under Factories Act, 1948

c) Safety Committee - under Factories Act, 1948

d) Trustees in EPF Scheme - under Employees Provident Fund Act

e) Disciplinary Redressal Committee - under Industrial Disputes Act, 1947

iii) Non-statutory Participation: Some organisations induct a few workers’ representatives in their decision-
making bodies. Workers are nominated at the following levels :

a) Board Level b) Joint Management Council c) Plant Council d) Shop Council

iv)Voluntary

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Industrial Relations ,Monthly labour review,Vol. 58, Issue 1 (January 1944), pp.88
19
a) shareholders (equity participation)

b) recreational activities etc.

In spite of all these efforts, the WPM has not produced much impact on the industrial relations in the country. The
underlying causes behind poor implementation of WPM are:

 inter-union and intra-union rivalries and infringement of trade union rights and responsibilities
 lack of free flow of information
 lack of initiatives towards developing a proper work culture
 the more serious drawback of the scheme of WPM in India has been that it was officially inspired and
sponsored. Neither there was much pressure from the trade unions for induction of such schemes nor any
initiative from the part of managements

Suggestions for Improvement of Industrial Relations

Few suggestions are given below that come with the promises of improving the industrial relations and reducing
the disputes between the parties

1. Trade unions should be strengthened democratically so that they can be a potent part of the industrial relations
system.

2. Employers should be more transparent in their dealings with the workers which in other way will help to build
respective confidences and progressive outlooks of the workers.

3. They should have open minded flexible collective Bargaining.

4. Workers should be allowed to participate in the management through forums, committees and councils.

5. Sound labour policy, planning and articulation of the action plans should get extreme priorities.

6. Proper leadership and communication are the essential requirements of good industrial relations.

7. Enforcement of discipline is another prerequisite of good industrial relations.

8. Trade unions activities should be controlled by the workers themselves and not by the outside leadership.

9. Equity in distribution of wealth by acknowledging workers as team members

Conclusion

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Generally industrial relations refer to the relationship that emerges out of day to day working and association of
labour and management. With the growth of professional management and advancement in production and
information technology, the scope of industrial relations has widened. There are three principal actors in industrial
relations - trade unions, employers’ association and government. In India upto 1975 (prior to imposition to
emergency) strikes dominated industrial disputes. During emergency period (1975-76), employers’ militancy
increased and the maydays lost due to lockouts rose steeply. Since 1980, particularly after 1984-85 lockouts both in
magnitude and intensity imposed much more severe punishments on the working class. Large number of disputes
takes place in the private sector. The intensity of disputes in terms of maydays lost, average number of days a
worker involved is greater in the private sector as compared to the public sector. There are two components of
industrial disputes— prevention and settlement. For prevention of disputes, there are provisions for tripartite
consultations at national level and works committees and joint management council at company and shop floor
levels. For settlement of industrial disputes, Industrial Disputes Act, 1947 provides settlement machinery
comprising of conciliation officers, board of conciliation, court of enquiry, labour courts, and industrial tribunals.
National Arbitration Promotion Board, code of disciplines, industrial truce are other voluntary measures for settling
the disputes. Collective bargaining in India is confined to few pockets of industrial centres and many obstacles
come in its operation. Workers’ participation in management has also not produced much impact on industrial
relations in the country. This scheme is suffering from several weaknesses such as, inter and intra union rivalries,
non-settlement of union recognition and so on.

Bibliography

 Labour and Industrial Laws,P.K Padhi,2nd edn,2012

 Compliances Under Labour Laws,H.L Kumar,2010
 A Contemporary Industrial Relations Scenario in India,B.R Patil, Vol. 33, No. 3 (Jan., 1998)
 Industrial Relations In India, Madras Law Journal,vol.1,1958

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 Issues, Trends and Developments in Industrial Relations in India,J.R Sodhi,Vol. 30, No. 4 (Apr., 1995)
 Developing New Perspective on Industrial Relations: Role of Government,Indian Journal of Industrial
Relations,Vol. 31, No. 2 (Oct., 1995).

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