Industrial relations has become one of the most delicate

and complex problems of modern industrial society.

Industrial progress is impossible without cooperation of
labors and harmonious relationships. Therefore, it is in the
interest of all to create and maintain good relations
between employees (labor) and employers (management).
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.
Industrial relations are the relationships between
employees and employers within the organizational
settings. The field of industrial relations looks at the
relationship between management and workers,

particularly groups of workers represented by a union.

Industrial relations are basically the interactions between
employers, employees and the government, and the
institutions and associations through which such
interactions are mediated.
The term industrial relations have a broad as well as a
narrow outlook. Originally, industrial relations were
broadly defined to include the relationships and
interactions between employers and employees. From this
perspective, industrial relations cover all aspects of the
employment relationship, including human resource
management, employee relations, and union-management
(or labor) relations. Now its meaning has become more
specific and restricted. Accordingly, industrial relations
pertains to the study and practice of collective bargaining,
trade unionism, and labor-management relations, while
human resource management is a separate, largely distinct
field that deals with nonunion employment relationships
and the personnel practices and policies of employers.
The relationships which arise at and out of the workplace
generally include the relationships between individual
workers, the relationships between workers and their

employer, the relationships between employers, the

relationships employers and workers have with the
organizations formed to promote their respective interests,
and the relations between those organizations, at all
levels. industrial relations also includes the processes
through which these relationships are expressed (such as,
collective bargaining, workers participation in decisionmaking, and grievance and dispute settlement), and the
management of conflict between employers, workers and
trade unions, when it arises.
Industry:
Industrial Disputes Act 1947 defines an industry as any
systematic activity carried on by co-operation between an
employer and his workmen for the production, supply or
distribution of goods or services with a view to satisfy
human wants or wishes whether or not any capital has
been invested for the purpose of carrying on such activity;
or such activity is carried on with a motive to make any
gain or profit. Thus, an industry is a whole gamut of
activities that are carried on by an employer with the help
of his employees and labors for production and
distribution of goods to earn profits

Employer:
An employer can be defined from different perspectives
as: a person or business that pays a wage or fixed payment
to other person(s) in exchange for the services of such
persons.
a person who directly engages a worker/employee in
employment.
any person who employs, whether directly or through
another person or agency, one or more employees in any
scheduled employment in respect of which minimum
rates of wages have been fixed.
As per Industrial Disputes Act 1947 an employer means: in relation to an industry carried on by or under the
authority of any department of [the Central Government
or a State Government], the authority prescribed in this
behalf, or where no authority is prescribed, the head of the
department;
in relation to an industry carried on by or on behalf of a
local authority, the chief executive officer of that
authority;

Employee: Employee is a person who is hired by another person or

business for a wage or fixed payment in exchange for
personal services and who does not provide the services
as part of an independent business.
An employee is any individual employed by an
employer.
A person who works for a public or private employer
and receives remuneration in wages or salary by his
employer while working on a commission basis, piecerates or time rate.
Employee, as per Employee State Insurance Act 1948, is
any person employed for wages in or in connection with
work of a factory or establishment to which the act
applies.
In order to qualify to be an employee, under ESI Act, a
person should belong to any of the categories:
o those who are directly employed for wages by the
principal employer within the premises or outside in
connection with work of the factory or establishment.

o those employed for wages by or through an immediate

employer in the premises of the factory or establishment
in connection with the work thereof
o those employed for wages by or through an immediate
employer in connection with the factory or establishment
outside the premises of such factory or establishment
under the supervision and control of the principal
employer or his agent.
o employees whose services are temporarily lent or let on
hire to the principal employer by an immediate employer
under a contract of service (employees of security
contractors, labor contractors, house keeping contractors
etc. come under this category).
Employment: The state of being employed or having a
job.
Labor market:

The market in which workers compete for jobs and

employers compete for workers. It acts as the external
source from which organizations attract employees. These
markets occur because different conditions characterize
different geographical areas, industries, occupations, and

professions at any given time.

Industrial Relations

Industrial relations is used to denote the collective

relationships between management and the workers.
Traditionally, the term industrial relations is used to cover
such aspects of industrial life as trade unionism, collective
bargaining, workers participation in management,
discipline and grievance handling, industrial disputes and
interpretation of labor laws and rules and code of
conduct.
In the words of Lester, "Industrial relations involve
attempts at arriving at solutions between the conflicting
objectives and values; between the profit motive and
social gain; between discipline and freedom, between
authority and industrial democracy; between bargaining
and co-operation; and between conflicting interests of the
individual, the group and the community.

The National Commission on Labor (NCL) also

emphasize on the same concept. According to NCL,
industrial relations affect not merely the interests of the
two participants- labor and management, but also the
economic and social goals to which the State addresses
itself. To regulate these relations in socially desirable
channels is a function, which the State is in the best
position to perform.
In fact, industrial relation encompasses all such factors
that influence behavior of people at work. A few such
important factors are below:
Institution: It includes government, employers, trade
unions, union federations or associations, government
bodies, labor courts, tribunals and other organizations
which have direct or indirect impact on the industrial
relations systems.
Characters: It aims to study the role of workers unions
and employers federations officials, shop stewards,
industrial relations officers/ manager,
mediator/conciliators / arbitrator, judges of labor court,
tribunal etc.

Methods: Methods focus on collective bargaining,

workers participation in the industrial relations schemes,
discipline procedure, grievance redressal machinery,
dispute settlements machinery working of closed shops,
union reorganization, organizations of protests through
methods like revisions of existing rules, regulations,
policies, procedures, hearing of labor courts, tribunals
etc.
Contents: It includes matter pertaining to employment
conditions like pay, hours of works, leave with wages,
health, and safety disciplinary actions, lay-off, dismissals
retirements etc., laws relating to such activities,
regulations governing labor welfare, social security,
industrial relations, issues concerning with workers
participation in management, collective bargaining, etc.

Industrial Relation System

An industrial relations system consists of the whole gamut

of relationships between employees and employees and

employers which are managed by the means of conflict

and cooperation.
A sound industrial relations system is one in which
relationships between management and employees (and
their representatives) on the one hand, and between them
and the State on the other, are more harmonious and
cooperative than conflictual and creates an environment
conducive to economic efficiency and the motivation,
productivity and development of the employee and
generates employee loyalty and mutual trust
Actors in the IR system:

Three main parties are directly involved in industrial

relations:
Employers: Employers possess certain rights vis--vis
labors. They have the right to hire and fire them.
Management can also affect workers interests by
exercising their right to relocate, close or merge the
factory or to introduce technological changes.

Employees: Workers seek to improve the terms and

conditions of their employment. They exchange views
with management and voice their grievances. They also
want to share decision making powers of management.
Workers generally unite to form unions against the
management and get support from these unions.

Government: The central and state government influences

and regulates industrial relations through laws, rules,
agreements, awards of court ad the like. It also includes
third parties and labor and tribunal courts.

SCOPE:
The concept of industrial relations has a very wide
meaning and connotation. In the narrow sense, it means
that the employer, employee relationship confines itself to
the relationship that emerges out of the day to day
association of the management and the labor. In its wider
sense, industrial relations include the relationship between
an employee and an employer in the course of the running

of an industry and may project it to spheres, which may

transgress to the areas of quality control, marketing, price
fixation and disposition of profits among others.
The scope or industrial relations is quite vast. The main
issues involved here include the following:
1. Collective bargaining
2. Machinery for settlement of industrial disputes
3. Standing orders
4. Workers participation in management
5. Unfair labor practices
Importance 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 employers
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. Wastages 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.
Objectives of Industrial Relations:
The main objectives 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.
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 organizations 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
view of industrial relations is a by product of a theory of

capitalist society and social change. Marx argued that:

Weakness and contradiction inherent in the capitalist
system would result in revolution and the ascendancy of
socialism over capitalism.
Capitalism would foster monopolies.
Wages (costs to the capitalist) would be minimized to a
subsistence level.
Capitalists and workers would compete/be in contention
to win ground and establish their constant win-lose
struggles would be evident.
This perspective focuses on the fundamental division of
interest between capital and labor, and sees workplace
relations against this background. It is concerned with the
structure and nature of society and assumes that the
conflict in employment relationship is reflective of the
structure of the society. Conflict is therefore seen as
inevitable and trade unions are a natural response of
workers to their exploitation by capital.
Bargaining Form And Tactics
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 partys gain is
another partys 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 alsoknown 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.
Collective Bargaining Process
Collective bargaining generally includes negotiations
between the two parties (employees representatives and

employers representatives). Collective bargaining

consists of negotiations between an employer and a group
of employees that determine the conditions of
employment. Often employees are represented in the
bargaining by a union or other labor organization. The
result of collective bargaining procedure is called the
collective bargaining agreement (CBA). Collective
agreements may be in the form of procedural agreements
or substantive agreements. Procedural agreements deal
with the relationship between workers and management
and the procedures to be adopted for resolving individual
or group disputes
This will normally include procedures in respect of
individual grievances, disputes and discipline. Frequently,
procedural agreements are put into the company rule book
which provides information on the overall terms and
conditions of employment and codes of behavior. A
substantive agreement deals with specific issues, such as
basic pay, overtime premiums, bonus arrangements,
holiday entitlements, hours of work, etc. In many
companies, agreements have a fixed time scale and a
collective bargaining process will review the procedural
agreement when negotiations take place on pay and

conditions of employment.
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 employers 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.

Importance Of Collective Bargaining

Collective bargaining includes not only negotiations
between the employers and unions but also includes the
process of resolving labor-management conflicts. Thus,
collective bargaining is, essentially, a recognized way of

creating a system of industrial jurisprudence. It acts as a

method of introducing civil rights in the industry, that is,
the management should be conducted by rules rather than
arbitrary decision making. It establishes rules which
define and restrict the traditional authority exercised by
the management.
Importance to employees
Collective bargaining develops a sense of self respect
and responsibility among the employees.
It increases the strength of the workforce, thereby,
increasing their bargaining capacity as a group.
Collective bargaining increases the morale and
productivity of employees.
It restricts managements freedom for arbitrary action
against the employees. Moreover, unilateral actions by the
employer are also discouraged.
Effective collective bargaining machinery strengthens
the trade unions movement.
The workers feel motivated as they can approach the
management on various matters and bargain for higher
benefits.
It helps in securing a prompt and fair settlement of

grievances. It provides a flexible means for the

adjustment of wages and employment conditions to
economic and technological changes in the industry, as a
result of which the chances for conflicts are reduced.
Importance to employers
1. It becomes easier for the management to resolve issues
at the bargaining level rather than taking up complaints of
individual workers.
2. Collective bargaining tends to promote a sense of job
security among employees and thereby tends to reduce the
cost of labor turnover to management.
3. Collective bargaining opens up the channel of
communication between the workers and the management
and increases worker participation in decision making.
4. Collective bargaining plays a vital role in settling and
preventing industrial disputes.
Importance to society
1. Collective bargaining leads to industrial peace in the
country
2. It results in establishment of a harmonious industrial
climate which supports which helps the pace of a nations
efforts towards economic and social development since
the obstacles to such a development can be reduced
considerably.

3. The discrimination and exploitation of workers is

constantly being checked.
4. It provides a method or the regulation of the conditions
of employment of those who are directly concerned about
them.
Levels of Collective Bargaining
Collective bargaining operates at three levels:
1. National level
2. Sector or industry level
3. Company/enterprise level
Economy-wide (national) bargaining is a bipartite or
tripartite form of negotiation between union
confederations, central employer associations and
government agencies. It aims at providing a floor for
lower-level bargaining on the terms of employment, often
taking into account macroeconomic goals.
Sectoral bargaining, which aims at the standardization of
the terms of employment in one industry, includes a range
ofbargaining patterns. Bargaining may be either broadly
or narrowly defined in terms of the industrial activities
covered and may be either split up according to territorial

subunits or conducted nationally.

The third bargaining level involves the company and/or

establishment. As a supplementary type of bargaining, it
emphasizes the point that bargaining levels need not be
mutually exclusive.
Objectives Of Trade Unions
Trade unions are formed to protect and promote the
interests of their members. Their primary function is to
protect the interests of workers against discrimination and
unfair labor practices. Trade unions are formed to achieve
the following objectives:
Representation
Trade unions represent individual workers when they
have a problem at work. If an employee feels he is being
unfairly treated, he can ask /the union representative to
help sort out the difficulty with the manager or employer.
Unions also offer their members legal representation.
Normally this is to help people get financial compensation
for work-related injuries or to assist people who have to

take their employer to court.

Negotiation
Negotiation is where union representatives, discuss with
management, the issues which affect people working in an
organization. There may be a difference of opinion
between management and union members. Trade unions
negotiate with the employers to find out a solution to
these differences. Pay, working hours, holidays and
changes to working practices are the sorts of issues that
are negotiated. In many workplaces there is a formal
agreement between the union and the company which
states that the union has the right to negotiate with the
employer. In these organizations, unions are said to be
recognized for collective bargaining purposes.
Voice in decisions affecting workers
The economic security of employees is determined not
only by the level of wages and duration of their
employment, but also by the managements personal
policies which include selection of employees for lay offs,
retrenchment, promotion and transfer. These policies
directly affect workers. The evaluation criteria for such
decisions may not be fair. So, the intervention of unions in
such decision making is a way through which workers can

have their say in the decision making to safeguard their

interests.
Member services
During the last few years, trade unions have increased the
range of services they offer their members. These include:
o Education and training - Most unions run training
courses for their members on employment rights, health
and safety and other issues. Some unions also help
members who have left school with little education by
offering courses on basic skills and courses leading to
professional qualifications.
o Legal assistance - As well as offering legal advice on
employment issues, some unions give help with personal
matters, like housing, wills and debt.
o Financial discounts - People can get discounts on
mortgages, insurance and loans from unions.
o Welfare benefits - One of the earliest functions of trade
unions was to look after members who hit hard times.
Some of the older unions offer financial help to their
members when they are sick or unemployed
Functions Of Trade Unions
Trade unions perform a number of functions in order to
achieve the objectives. These functions can be broadly
classified into three categories:

(i) Militant functions,

(ii) Fraternal functions
Militant Functions
One set of activities performed by trade unions leads to
the betterment of the position of their members in relation
to their employment. The aim of such activities is to
ensure adequate wages, secure better conditions of work
and employment, get better treatment from employers,
etc. When the unions ffail to accomplish these aims by the
method ofcollective bargaining and negotiations, they
adopt an approach and put up a fight with the
management in the form of go-slow tactics, strike,
boycott, gherao, etc. Hence, these functions of the trade
unions are known as militant or fighting functions. Thus,
the militant functions of trade unions can be summed up
as:
To achieve higher wages and better working conditions
To raise the status of workers as a part of industry
To protect labors against victimization and injustice
Fraternal Functions

Another set of activities performed by trade unions aims

at rendering help to its members in times of need, and
improving their efficiency. Trade unions try to foster a
spirit of cooperation and promote friendly industrial
relations and diffuse education and culture among their
members. They take up welfare measures for improving
the morale of workers and generate self confidence
among them. They also arrange for legal assistance to its
members, if necessary. Besides, these, they undertake
many welfare measures for their members, e.g., school for
the education of children, library, reading-rooms, in-door
and out-door games, and other recreational facilities.
Some trade unions even undertake publication of some
magazine or journal. These activities, which may be
called fraternal functions, depend on the availability of
funds, which the unions raise by subscription from
members and donations from outsiders, and also on their
competent and enlightened leadership. Thus, the fraternal
functions of trade unions can be summed up as:
To take up welfare measures for improving the morale
of workers
To generate self confidence among workers
To encourage sincerity and discipline among workers
To provide opportunities for promotion and growth

 To protect women workers against discrimination

Importance Of Trade Unions
The existence of a strong and recognized trade union is a
pre-requisite to industrial peace. Decisions taken through
the process of collective bargaining and negotiations
between employer and unions are more influential. Trade
unions play an important role and are helpful in effective
communication between the workers and the
management. They provide the advice and support to
ensure that the differences of opinion do not turn into
major conflicts. The central function of a trade union is to
represent people at work. But they also have a wider role
in protecting their interests. They also play an important
educational role, organizing courses for their members on
a wide range of matters. Seeking a healthy and safe
working union activity.
Trade unions help in accelerated pace of economic
development in many ways as follows:
by helping in the recruitment and selection of workers.
by inculcating discipline among the workforce
by enabling settlement of industrial disputes in a rational
manner
by helping social adjustments. Workers have to adjust

themselves to the new working conditions, the new rules

and policies. Workers coming from different backgrounds
may become disorganized, unsatisfied and frustrated.
Unions help them in such adjustment.
Trade unions are a part of society and as such, have to
take into consideration the national integration as well.
Some important social responsibilities of trade unions
include:
promoting and maintaining national integration by
reducing the number of industrial disputes
incorporating a sense of corporate social responsibility
in workers
achieving industrial peace
Reasons For Joining Trade Unions
The important forces that make the employees join a
union are as follows:
1. Greater Bargaining Power
The individual employee possesses very little bargaining
power as compared to that of his employer. If he is not
satisfied with the wage and other conditions of
employment, he can leave the job. It is not practicable to
continually resign from one job after another when he is
dissatisfied. This imposes a great financial and emotional

burden upon the worker. The better course for him is to

join a union that can take concerted action against the
employer. The threat or actuality of a strike by a union is a
powerful tool that often causes the employer to accept the
demands of the workers for better conditions of
employment
2. Minimize Discrimination
The decisions regarding pay, work, transfer, promotion,
etc. are highly subjective in nature. The personal
relationships existing between the supervisor and each of
his subordinates may influence the management. Thus,
there are chances of favoritisms and discriminations. A
trade union can compel the management to formulate
personnel policies that press for equality of treatment to
the workers. All the labor decisions of the management
are under close scrutiny of the labor union. This has the
effect of minimizing favoritism and discrimination.
3. Sense of Security
The employees may join the unions because of their belief
that it is an effective way to secure adequate protection
from various types of hazards and income insecurity such
as accident, injury, illness, unemployment, etc. The trade
union secure retirement benefits of the workers and

compel the management to invest in welfare services for

the benefit of the workers.
4. Sense of Participation
The employees can participate in management of matters
affecting their interests only if they join trade unions.
They can influence the decisions that are taken as a result
of collective bargaining between the union and the
management.
5. Sense of Belongingness
Many employees join a union because their co-workers
are the members of the union. At times, an employee joins
a union under group pressure; if he does not, he often has
a very difficult time at work. On the other hand, those
who are members of a union feel that they gain respect in
the eyes of their fellow workers. They can also discuss
their problem with the trade union leaders.
6. Platform for self expression
The desire for self-expression is a fundamental human
drive for most people. All of us wish to share our feelings,
ideas and opinions with others. Similarly the workers also
want the management to listen to them. A trade union

provides such a forum where the feelings, ideas and

opinions of the workers could be discussed. It can also
transmit the feelings, ideas, opinions and complaints of
the workers to the management. The collective voice of
the workers is heard by the management and give due
consideration while taking policy decisions by the
management.

7. Betterment of relationships
Another reason for employees joining unions is that
employees feel that unions can fulfill the important need
for adequate machinery for proper maintenance of
employer-employee relations. Unions help in betterment
of industrial relations among management and workers by
solving the problems peacefully.
Trade Unionism In India
The trade unionism in India developed quite slowly as
compared to the western nations. Indian trade union
movement can be divided into three phases.
The first phase (1850 to1900)
During this phase the inception of trade unions took place.

During this period, the working and living conditions of

the labor were poor and their working hours were long.
Capitalists were only interested in their productivity and
profitability. In addition, the wages were also low and
general economic conditions were poor in industries. In
order to regulate the working hours and other service
conditions of the Indian textile laborers, the Indian
Factories Act was enacted in 1881. As a result,
employment of child labor was prohibited
The growth of trade union movement was slow in this
phase and later on the Indian Factory Act of 1881 was
amended in 1891. Many strikes took place in the two
decades following 1880 in all industrial cities. These
strikes taught workers to understand the power of united
action even though there was no union in real terms.
Small associations like Bombay Mill-Hands Association
came up by this time.
The second phase (1900 to 1946)
This phase was characterized by the development of
organized trade unions and political movements of the
working class. Between 1918 and 1923, many unions

came into existence in the country. At Ahmedabad, under

the guidance of Mahatma Gandhi, occupational unions
like spinners unions and weavers unions were formed. A
strike was launched by these unions under the leadership
of Mahatma Gandhi who turned it into a satyagrah. These
unions federated into industrial union known as Textile
Labor Association in 1920.In 1920, the First National
Trade union organization (The All India Trade Union
Congress (AITUC)) was established. Many of the leaders
of this organization were leaders of the national
Movement. In 1926, Trade union law came up with the
efforts of Mr. N N Joshi that became operative from 1927.
During 1928, All India Trade Union Federation (AITUF)
was formed.
The third phase began with the emergence of independent
India (in 1947). The partition of country affected the trade
union movement particularly Bengal and Punjab. By
1949, four central trade union organizations were
functioning in the country:
1. The All India Trade Union Congress,
2. The Indian National Trade Union Congress,
3. The Hindu Mazdoor Sangh, and
4. The United Trade Union Congress

The working class movement was also politicized along

the lines of political parties. For instance Indian national
trade Union Congress (INTUC) is the trade union arm of
the Congress Party. The AITUC is the trade union arm of
the Communist Party of India. Besides workers, whitecollar employees, supervisors and managers are also
organized by the trade unions, as for example in the
Banking, Insurance and Petroleum industries.
Trade unions in India
The Indian workforce consists of 430 million workers,
growing 2% annually. The Indian labor markets consist of
three sectors:
1. The rural workers, who constitute about 60 per cent of
the workforce.
2. Organized sector, which employs 8 per cent of
workforce, and
3. The urban informal sector (which includes the growing
software industry and other services, not included in the
formal sector) which constitutes the rest 32 per cent of the
workforce.
At present there are twelve Central Trade Union
Organizations in India:

1. All India Trade Union Congress (AITUC)

2. Bharatiya Mazdoor Sangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind Mazdoor Kisan Panchayat (HMKP)
5. Hind Mazdoor Sabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)
10. Trade Unions Co-ordination Centre (TUCC)
11. United Trade Union Congress (UTUC) and
12. United Trade Union Congress - Lenin Sarani (UTUC LS)
FIGURES REGARDING TRADE UNIONS
Table Showing Growth Of Trade Unions and Membership
is following below

Growth of trade unions and membership

Industrial Relation Policy

Prior to 1991, the industrial relations system in India

sought to control conflicts and disputes through excessive
labor legislations. These labor laws were protective in
nature and covered a wide range of aspects of workplace
industrial relations like laws on health and safety of
labors, layoffs and retrenchment policies, industrial
disputes and the like. The basic purpose of these laws was
to protect labors. However, these protectionist policies
created an atmosphere that led to increased inefficiency in
firms, over employment and inability to introduce
efficacy. With the coming of globalization, the 40 year old
policy of protectionism proved inadequate for Indian
industry to remain competitive as the lack of flexibility
posed a serious threat to manufacturersbecause they had
to compete in the international market.
With the advent of liberalization in1992, the industrial
relations policy began to change. Now, the policy was
tilted towards employers. Employers opted for workforce
reduction, introduced policies of voluntary retirement
schemes and flexibility in workplace also increased. Thus,
globalization brought major changes in industrial relations
policy in India. The changes can be summarized as
follows:

 Collective bargaining in India has mostly been

decentralized, but now in sectors where it was not so, are
also facing pressures to follow decentralization.
Some industries are cutting employment to a significant
extent to cope with the domestic and foreign competition
e.g. pharmaceuticals. On the other hand, in other
industries where the demand for employment is
increasing are experiencing employment growths.
In the expansionary economy there is a clear shortage of
managers and skilled labor.
The number of local and enterprise level unions has
increased and there is a significant reduction in the
influence of the unions.
Under pressure some unions and federations are putting
up a united front e.g. banking.
Another trend is that the employers have started to push
for internal unions i.e. no outside affiliation.
HR policies and forms of work are emerging that
include, especially in multi-national companies, multiskills, variable compensation, job rotation etc. These new
policies are difficult to implement in place of old practices
as the institutional set up still needs to be changed.
HRM is seen as a key component of business strategy.
Training and skill development is also receiving

attention in a number of industries, especially banking

and information technology
Labor Market Related Terms
Labor Market: A labor market is defined as a pool of all
potential workers who compete for jobs. It also includes
the employers who compete for workers. Labor markets
are based on the supply and demand of labor in a country
or a specific location that are able and willing to work.
Labor Force: Labor force includes all persons classified
either as employed or unemployed during a specified
period of time, usually a day or a week. Labor force can
be categorized as self-employed, wage and salary earners,
casual workers and unemployed.
Casual Workers: Casual workers are those workers who
are generally employedby small entrepreneurs on daily or
weekly basis on a low wage rate. They are not entitled to
any paid holiday leave or paid sick leaves.
Unemployed persons: The persons in the labor market
who are without work, that is, without paid employment
or self-employment and are currently either available for
work or are seeking any work are considered to be

unemployed.
Labor force participation rate: It is the number of persons
in the labor force as a percentage of the working-age
population. The working-age population is the population
above a certain reference age like15 years old and over or
1564, etc.
Employment rate: It is ratio of employed persons to the
total labor force. It is the percentage of working age
people who have jobs or are employed.

Unemployment rate: It is the ratio of unemployed people

to the total labor force.
Underemployed persons: Workers who are employed, but
not in the desired capacity, whether in terms of
compensation, hours, or level of skill and experience. The
skills of such persons are underutilized, for example
paying low wages to a highly skilled employee.
Underemployment also refers to a situation where a major
portion of labor force is unemployed.

Underemployment rate: It is the ratio of underemployed

to either total labor force or total employment
Labor Market In India
The Indian labor market can be categorized into three
sectors:
Rural workers , who constitute about 60% of the
workforce
Organized of the formal sector, that constitutes about 8%
of the workforce; and
Urban unorganized or informal structure which
represents the 32% of the workforce.
The chart below describes the estimated increase in the
number of labors from 1977-78 to 2004-05. The labor
force has grown from 276.3 million to 385.5 million
between 1977-78 and1993-94 showing an annual growth
rate of 2.1%. During the year 1999-2000, the workforce
was estimated to be 407 million. In 2004-05 the labor
market consisted of 430 million workers and has grown
up to 500 million in 2006

Two-third of Indias workforce is employed in agriculture

and rural industries. One-third of rural households are
agricultural labor households, subsisting on wage
employment. Only about 9 percent of the total workforce
is in the organized sector; the remaining 91 percent are in
the unorganized sector, self-employed, or employed as
casual wage laborers. The labor force in year 2006 has
grown up to 509.3 million out of which 60% are in
agriculture, 12% are employed in industries and the
residual 28% are in services.

Labor force can be divided into four categories: self

employed workers, wage and salary earners, casual
workers and unemployed. Of these, self-employed are
most loosely connected to labor market because of the
possibilities of work-sharing and work spreading in a selfemployed enterprise. Non-contractual casual laborers
have the closest connection to labor market on almost
day-to day basis. Same is the case with those unemployed
who are actively seeking work. Contractual and hence

stable hired employment (with the same employer and/or

in the same job) on a regular basis is covered in the
description wage and salary workers. Persons who are
engaged in their own farm or non- farm enterprises are
defined as self employed. The employees in an enterprise
can be either regular salaried/ wage employees or casual
wage employees who are normally engaged on a day
today basis. The casual wage workers both in public work
and other types of work dont have any job security or
social security. These workers, either in formal or
informal sector or in private households, are informal
workers. The regular salaried/wage employees are those
working in others farm or non- farm enterprises and
getting in return salary or wages on a regular basis and
not on the basis of daily or periodic renewal of work
contract. This category includes those getting time wage
as well as those receiving piece wage or salary and paid
apprentices, both full time and part time. This category of
persons may, therefore, include persons engaged regularly
on an hourly basis, temporary workers, out- workers, etc.
The table given below classifies labor force across malefemale and rural-urban dimensions. It is clear that
Self-employment and casual labor statuses are more
prevalent among rural than urban labor force and among

female than male workers.

The Incidence of unemployment is higher in the urban
than in the rural labor force with nearly 48 per cent of the
total unemployed persons coming from aggregate urban
labor force whose share in total (rural plus urban) work
force is 22 per cent.
Those reporting wage and salary earning dominate in the
urban labor force, their share being around 62 per cent
(lines 10 to 12 of Table).

Organized and Unorganized Labor

In India, a major chunk of labor force is employed in the
unorganized sector. The unorganized / informal
employment consists of causal and contributing family
workers; self employed persons in un-organized sector
and private households; and other employed in organized
and unorganized enterprises that are not eligible either for
paid, sick or annual leave or for any social security
benefits given by the employer.
According to the results of the National Sample Survey

conducted in 1999-2000, total work force as on 1.1.2000

was of the order of 406 million. About 7 % of the total
work force is employed in the formal or organized sector
(all public sector establishments and all non-agricultural
establishments in private sector with 10 or more workers)
while remaining 93% work in the informal or unorganized
sector. The NSS 55th round, 1999-2000 also covered nonagricultural enterprises in the informal sector in India. As
per that survey, there were 44.35 million enterprises and
79.71 million workers employed thereof in the nonagricultural informal sector of the economy. Among these
25.01 million enterprises employing 39.74 million
workers were in rural areas whereas 19.34 million
enterprises with 39.97 million workers in the urban area.
Among the workers engaged in the informal sector, 70.21
million are full time and 9.5 million part times.
Percentage of female workers to the total workers is 20.2
percent.
The table below describes major employment trends for
the organized and unorganized sector for the years 1983,
1987-88, 1993-94 and 1999-2000. It is evident that
throughout this period a large portion of the workforce in
India is found to be employed in the unorganized sector.

Out of 397million workers in 1999-2000, it is estimated

that 369 million workers (nearly 93 per cent) are
employed in the unorganized segment of the economy
whereas only 28 million workers (7 per cent) are engaged
in the organized sector. The share of unorganized
employment in the economy has displayed remarkable
steadiness over the years. The share of informal
employment has risen from 92 per cent (nearly 276
million out of 300 million) in 1983 to 93 per cent in the
1999-2000. It is clear that employment opportunity in the
organized sector has remained more or less stagnant,
showing only a marginal increase from 24 million in 1983
to 28 million in 1999-2000.
The largest numbers of informal workers are in
agriculture. In fact, 98.84 percent of the employment in
agriculture is informal. In the non-agricultural sector, the
highest numbers of informal employees are in retail trade,
construction, land transport, textiles etc.

Thus, the unorganized sector plays a vital role in terms of

providing employment opportunity to a large segment of

the working force in the country and contributes to the

national product significantly. The contribution of the
unorganized sector to the net domestic product and its
share in the total NDP at current prices has been over
60%. In the matter of savings the share of household
sector in the total gross domestic saving mainly
unorganized sector is about three fourth. Thus
unorganized sector has a crucial role in our economy in
terms of employment and its contribution to the National
Domestic Product, savings and capital formation.
Employment In India
The organized sector in India consists of 293.77 thousand
industrial establishments. Out of these, 172.34 thousand
are public sector enterprises while 121.43 thousand are in
private sector. Since 2004, an increase of 1.4% has been
recorded in the number of establishments in the organized
sector. As on the 31st March, 2005 the total employment
in the organized sector was estimated to be 264.58 lakh
while in 2004, it was 264.43 lakh. This means there has
been an increase of 0.1% in employment. The public
sector employs about 180.7 lakh persons while the private
sector employs 84.52 lakh persons. The negative growth
of employment was recorded in public sector while

private sector showed an increasing trend, that is, the

employment in public sector decreased by 1 percent while
private sector increased by 2.5 percent.
The branch wise analysis of the public sector data reveals
that Central Govt. shows maximum negative growth in
employment followed by Quasi Govt., Local Bodies and
State Govt. The same trend continued in 2005 also, in
which the Central Govt. recorded a negative growth of
2.9% followed by Quasi Govt. with a negative growth of
2.2%. The Local Bodies and State Govt. were also
subjected to a negative growth of 0.4% and 0.3%
respectively

State wise analysis reflects that only Punjab and Kerala

recorded a decrease of more than 3 percent. Decrease in

employment above 1 percent was observed in Madhya

Pradesh Uttar Pradesh, Chandigarh and Andhra Pradesh.
An increase of more than 3 percent in employment was
observed in Goa, Himachal Pradesh and Gujarat and 1
percent or more in Pondicherry, Karnataka, West Bengal,
Uttaranchal, Assam and Nagaland.

While analyzing the figures zone wise, highest decrease

of 1.6 percent was seen in Central Zone followed by 1
percent in Northern Zone and 0.6 percent in Southern
Zone whereas the highest increase was 2 percent in
Western Zone followed by 1.1 percent in North-Eastern
Zone and 0.9 percent in Eastern Zone in employment
Women Employment
Women workforce constitutes an integral part of total
workforce in India. On 31st march 2004, women
constituted 19 per cent of the total workforce. The
participation of women in the labor force has always been
lower than that of men, in the rural as well as urban areas.

The work participation rate for women has increased

significantly. In 1981, work participation rate for women
was only 19.67 per cent which increased up to 22.73 per
cent in 1991 and 26.68 per cent in 2001. In the women
workforce, women from rural areas are greater in number
as compared to the urban women. Amongst rural women
workers, a majority is employed in agriculture and some
are employed in cottage industries. In the urban areas,
women workers are primarily employed in the
unorganized sectors. As on the 31st March, 2005 a total
number of 50.16 Lacs women employees were engaged in
the organized sector, out of which 29.21 lacs (58per cent)
in the public sector and 20.95 lacs (42per cent) in the
Private Sector. Employment of women in public sector
increased by 1.1 percent and by 2.5 percent in the private
sector during 2004-2005. The zone wise analysis showed
an increase of 8 percent in North-Eastern Zone, followed
by Western Zone (5.3per cent), Eastern Zone (3per cent)
and Central Zone (1.3per cent) and Northern Zone (1.2per
cent). Only Southern Zone registered a marginal dip of
0.8 percent

Some Vital Statistics

The number of women job seekers has increased from
99.3 lacs in 1999 to 106.1 lacs in 2004. Thus the
percentage of women job seekers to the total job-seekers
has also increased from 24.6per cent in 1999 to 26.2per
cent in 2004.
Table 1: Number of Women Job Seekers
Year Number of Women (in lacs) Percentage to total
1999 99.3 24.6
2000 104.5 25.3
2001 108.8 25.9
2002 106.0 25.9
2003 107.5 26.0
2004 106.1 26.0

Number of Educated Women Job Seekers as on

December 2004 was 7537.7 thousand. Educated Women
at the end of 2004 accounted for 25.8per cent of the total
educated job-seekers.
Table 2: Number of Educated Women Job Seekers
Year Number of Women Percentage to total
2000 7911.7 27.1
2001 8525.6 28.1

2002 7921.4 26.8

2003 8032.4 26.6
2004 7537.7 25.8

The state wise analysis reflects that Kerala has the

maximum (21.1 lacs) women job-seekers followed by
West Bengal (19.3 lacs) and Tamil Nadu (15.3 lacs) while
minimum number of women job-seekers are in Rajasthan
(1.0 lacs).
The percentage of educated women job seekers among
the total women job seekers has gone down from 73.3per
cent to 70.4per cent in 2004.
The work participation rate for women was 25.68 per
cent in 2001. This shows an improvement over 22.73 per
cent in 1991 and 19.67 per cent in 1981.
Women workers constituted 19 per cent of the total
organized sector employment in the country, as compared
to 18.4 per cent in the previous year. As on 31st March,
2004, there were about 49.34 lacs women workers
employed in the organized sector (Public and Private
Sector).
As far as industries are concerned, in 2005, the
manufacturing industry faced a dip of 1.1per cent in
women employment. On the other hand, other industries

reflected an increase in women employment. An increase

of 7.8 per cent was registered in Wholesale and Retail
Trade followed by 5.6 per cent in Mining and Quarrying,
5.5 per cent in Agriculture, Hunting, Forestry & Fishing,
5.2 per cent in Financing, Insurance Real Estate &
Business Services, 1.7 per cent in Electricity, Gas &
Water, 1.5 per cent in Construction, 1.4 per cent in
Community, Social and Personal Services and 1.2 per cent
in Transport, Storage & Communications.
Effective Discipline
Discipline is the key to success. Theodore Roosevelt has
said With self-discipline almost everything is possible.
Self discipline makes employee realize what is required at
work. Discipline can be positively related to performance.
It is the bridge between goals and accomplishments.
Effective discipline should be aimed at the behavior, and
not at the employee personality. This is because the
reason for discipline is to improve performance rather
than punishing the employee
Factors necessary for effective disciplinary system
include:
1. Training of supervisors is necessary: Supervisors and
mangers need to be trained on when and how discipline
should be used. It is necessary to provide training on

counseling skills as these skills are used while dealing

with problem employees. Moreover, discipline decisions
taken by trained supervisors are considered fair by both
employees and managers.
2. Centralization of discipline: Centralized means that the
discipline decisions should be uniform throughout the
organization. The greater the uniformity, higher will be
the effectiveness of discipline procedure.
3. Impersonal discipline: Discipline should be handled
impersonally. Managers should try to minimize the ill
feelings arising out of the decisions by judging the
offensive behavior and not by judging the person.
Managers should limit their emotional involvement in the
disciplinary sessions.
4. Review discipline decisions: The disciplinary decisions
must be reviewed before being implemented. This will
ensure uniformity and fairness of the system and will
minimize the arbitrariness of the disciplinary system.
5. Notification of conduct that may result in discipline:
Actions that lead to misconduct can be listed and
documented so the employees are aware of such actions.
This will unable them to claim that they have not been
notified, in advance, regarding the same.
6. Information regarding penalties: The employer should

define the penalties and other actions like warnings,

reprimands, discharge and dismissal well in advance. All
these action plans must be communicated to the
employees.
7. Discipline shall be progressive: Discipline system
should be progressive in nature. In a progressive
discipline approach the severity of actions to modify
behavior increases with every step as the employee
continues to show improper behavior. The advantage of
this approach is that employees cant take it for granted.
8. Documentation: Effective discipline requires accurate,
written record keeping and written notification to the
employees. Thus less chance will be left for the employee
to say the he did not know about the policy.
9. Discipline should be fair: The disciplinary decision
should be fair enough for the employee. Both overpenalization and under-penalization are considered to be
air for the problem employee. Moreover, an internal fairness is to be maintained,
that is, two employees who have committed the same offense should be equally
punished.

manager administering
discipline must consider the effect of actions taken by
other managers and of other actions taken in the past.
Consistent discipline helps to set limits and informs
people about what they can and cannot do. Inconsistent
10. Discipline shall be flexible and consistent: The

discipline leads to confusion and uncertainty.

11. Disciplinary action should be prompt: The effective
discipline should be immediate. The longer time lag
between the misconduct offense and the disciplinary
action will result in ineffectiveness of the discipline.
Approaches to Discipline
Handling employee misconduct is a very critical task to
be performed by the senior managers. Misconduct and
other offensive behaviors often lead to decreased levels of
productivity as they affect the individual performance of
the employees. To manage discipline among employees,
every company opts for a discipline policy which
describes the approach it will follow to handle misconduct
Broadly defined, there are two approaches to discipline
employees. They are:
Positive Discipline Approach
Progressive Discipline Approach
Code Of Discipline In Industry
To maintain harmonious relations and promote industrial
peace, a Code of Discipline has been laid down which
applies to both public and private sector enterprises. It
specifies various obligations for the management and the

workers with the objective of promoting cooperation

between their representatives.
The basic objectives of Code of Discipline are to:
Maintain peace and order in industry.
Promote constructive criticism at all levels of
management and employment.
Avoid work stoppage in industry
Secure the settlement of disputes and grievances by a
mutually agreed procedure
Avoiding litigations
Facilitate a free growth of trade unions
Eliminate all forms of coercion, intimidation and
violations of rules and regulations governing industrial
relations.
The Code is based on the following principles:
There should be no strike or lockout without prior
notice.
No unilateral action should be taken in connection with
any industrial matter.
Employees should follow go slow tactics
No deliberate damage should be caused to a plant or
property

 Acts of violations, intimidation and coercion should not

be resorted
The existing machinery for the settlement of disputes
should be utilized.
Actions that disturb cordial relationships should be
avoided.
To ensure better discipline in industry, management and
unions agree on not indulging into various actions. These
actions can b summarized as follows:
Management and Union(s) agree
that no unilateral action should be taken in connection
with any industrial matter and that should be settled at
appropriate level
that the existing machinery for settlement of disputes
should be utilized with the utmost efficiency
that there should be no strike or lock-out without prior
notice
that neither party will have recourse to coercion,
intimidation, victimization or go slow tactics
that they will avoid litigation, sit-down and stay-in
strikes and lock-outs
that they will promote constructive co-operation
between their representatives at all levels and as between

workers themselves
that they will establish upon a mutually agreed
grievance procedure which will ensure a speedy and full
investigation leading to settlement;
that they will abide by various stages in the grievance
procedure and take no arbitrary action which would bypass this procedure; and
Management Agrees
not to increase work-loads unless agreed upon or settled
otherwise
not to support or encourage any unfair labor practice
such as discrimination and victimization of any employee
to take prompt action for settlement of grievances and
implementation of settlements, awards, decision and
orders
to take appropriate disciplinary action against its officers
and members in cases where enquiries reveal that they
were responsible for precipitate action by workers leading
to indiscipline
Union agrees
not to engage in any form of physical duress
not to permit demonstrations which are not peaceful
that their members will not engage or cause other
employees to engage in any union activity during working

hours
to discourage unfair labor practices such as negligence
of duty, damage to property and insubordination
to take prompt action to implement awards, agreements,
settlements and decisions
Factors Guiding Code Of Conduct
The code of discipline and conduct communicates to the
employees, the expected behavior and the professional
responsibilities. The significance of code of conduct is
that each employee should behave and perform in a way
that preserves the company values and commitments. The
code expects employees to conduct business with
integrity and honesty. Moreover, it expects the employer
to be an equal opportunity employer.
The Code of Conduct policy of a company is determined
on the basis of following factors:
1. Honesty and integrity: The organization expects the
employees to observe honesty and integrity and such
conduct should be fair and transparent. The employees
should show truthfulness in actions throughout their

tenure in the organization.

2. Disclosure of information: The employees should not
disclose the company information to third parties and
other outside organizations. However the employers
should reveal the various policies of the organization to
their employees and make them aware about the code of
conduct and other policies.
3. Harassment: The work environment should be free
from all kinds of harassments, especially sexual
harassments and verbal harassments. No physical
harassments like hitting or pushing are acceptable on part
of employees.
4. Outside employment: Employees should not indulge in
to any kind of concurrent employment without the prior
knowledge of employer.
5. Conflict of interest: An employee should not indulge
into other professions or services or other interests which
might conflict with the interest of the company. This
means personal interests should not overshadow
organizational interests.
6. Confidentiality: Employees should protect companys
confidential information. The financial records and
unpublished data should be kept within the organizations
and should not be spread outside the organization.

7. Equal opportunity employer: This factor expects the

employer to be an equal opportunity, that is, no
discrimination should be done on the basis of caste, color,
race, gender, religion or physical disabilities.
8. Misusing company resources: Employees should not
misuse company resources, intellectual property, time and
other facilities. They are provided to them for business
purposes and thus, should be used in a cost effective way.
9. Health and safety: An employer should provide a safe
and healthy work environment to its employees. Proper
cleanliness and lightening should be provided. A health
and safety committee can be set up by the employer
consisting of representatives of workers as well.
10. Payment and gifts: The employees should neither
accept nor offer any kind of illegal payments, donations,
remuneration and gifts from outsiders.
Grievance In Industry
Grievance means any type of dissatisfaction or
discontentments arising out of factors related to an
employees job which he thinks are unfair. A grievance
arises when an employee feels that something has
happened or is happening to him which he thinks is
unfair, unjust or inequitable. In an organization, a

grievance may arise due to several factors such as:

Violation of managements responsibility such as poor
working conditions
Violation of companys rules and regulations
Violation of labor laws
Violation of natural rules of justice such as unfair
treatment in promotion, etc
Various sources of grievance may be categorized under
three heads: (i) management policies, (ii) working
conditions, and (iii) personal factors
1. Grievance resulting from management policies include:
o Wage rates
o Leave policy
o Overtime
o Lack of career planning
o Role conflicts
o Lack of regard for collective agreement
o Disparity between skill of worker and job responsibility
2. Grievance resulting from working conditions include:
o Poor safety and bad physical conditions
o Unavailability of tools and proper machinery
o Negative approach to discipline

o Unrealistic targets
3. Grievance resulting from inter-personal factors include
o Poor relationships with team members
o Autocratic leadership style of superiors
o Poor relations with seniors
o Conflicts with peers and colleagues
It is necessary to distinguish a complaint from grievance.
A complaint is an indication of employee dissatisfaction
that has not been submitted in written. On the other hand,
a grievance is a complaint that has been put in writing and
made formal.
Grievances are symptoms of conflicts in industry.
Therefore, management should be concerned with both
complaints and grievances, because both may be
important indicators of potential problems within the
workforce. Without a grievance procedure, management
may be unable to respond to employee concerns since
managers are unaware of them. Therefore, a formal
grievance procedure is a valuable communication tool for
the organization

Grievance Procedure
Grievance procedure is a formal communication between
an employee and the management designed for the
settlement of a grievance. The grievance procedures differ
from organization to organization.
1. Open door policy
2. Step-ladder policy
Open door policy: Under this policy, the aggrieved
employee is free to meet the top executives of the
organization and get his grievances redressed. Such a
policy works well only in small organizations. However,
in bigger organizations, top management executives are
usually busy with other concerned matters of the
company. Moreover, it is believed that open door policy is
suitable for executives; operational employees may feel
shy to go to top management.
Step ladder policy: Under this policy, the aggrieved
employee has to follow a step by step procedure for

getting his grievance redressed. In this procedure,

whenever an employee is confronted with a grievance, he
presents his problem to his immediate supervisor. If the
employee is not satisfied with superiors decision, then he
discusses his grievance with the departmental head. The
departmental head discusses the problem with joint
grievance committees to find a solution. However, if the
committee also fails to redress the grievance, then it may
be referred to chief executive. If the chief executive also
fails to redress the grievance, then such a grievance is
referred to voluntary arbitration where the award of
arbitrator is binding on both the parties.
GRIEVANCE PROCEDURE IN INDIAN INDUSTRY
The 15th session of Indian Labor Conference held in 1957
emphasized the need of an established grievance
procedure for the country which would be acceptable to
unions as well as to management. In the 16th session of
Indian Labor Conference, a model for grievance
procedure was drawn up. This model helps in creation of
grievance machinery. According to it, workers
representatives are to be elected for a department or their
union is to nominate them. Management has to specify the

persons in each department who are to be approached first

and the departmental heads who are supposed to be
approached in the second step. The Model Grievance
Procedure specifies the details of all the steps that are to
be followed while redressing grievances. These steps are:
STEP 1: In the first step the grievance is to be submitted
to departmental representative, who is a representative of
management. He has to give his answer within 48 hours.
STEP 2: If the departmental representative fails to provide
a solution, the aggrieved employee can take his grievance
to head of the department, who has to give his decision
within 3 days.
STEP 3: If the aggrieved employee is not satisfied with
the decision of departmental head, he can take the
grievance to Grievance Committee. The Grievance
Committee makes its recommendations to the manager
within 7 days in the form of a report. The final decision of
the management on the report of Grievance Committee
must be communicated to the aggrieved employee within
three days of the receipt of report. An appeal for revision
of final decision can be made by the worker if he is not
satisfied with it. The management must communicate its

decision to the worker within 7 days

STEP 4: If the grievance still remains unsettled, the case
may be referred to voluntary arbitration.
Employee Health and Safety
For smooth functioning of an organization, the employer
has to ensure safety and security of his employees. Health
and safety form an integral part of work environment. A
work environment should enhance the well being of
employees and thus should be accident free.
The terms health, safety and security are closely related to
each other. Health is the general state of well being. It not
only includes physical well being, but also emotional and
mental well being. Safety refers to the act of protecting
the physical well being of an employee. It will include the
risk of accidents caused due to machinery, fire or diseases.
Security refers to protecting facilities and equipments
from unauthorized access and protecting employees while
they are on work.
In organizations the responsibility of employee health and
safety falls on the supervisors or HR manager. An HR

manager can help in coordinating safety programs,

making employees aware about the health and safety
policy of the company, conduct formal safety training, etc.
The supervisors and departmental heads are responsible
for maintaining safe working conditions. Responsibilities
of managers:
Monitor health and safety of employees
Coach employees to be safety conscious
Investigate accidents
Communicate about safety policy to employees
Responsibilities of supervisors/departmental heads:
Provide technical training regarding prevention of
accidents
Coordinate health and safety programs
Train employees on handling facilities an equipments
Develop safety reporting systems
Maintaining safe working conditions
Legislations governing Occupational Health & safety in
India
* Factories act1948
* Mines act 1952
* Dock workers act(Safety, Health & Welfare)1986

Issues in Employee Health & Safety

Organizations frame many approaches to ensure health
and safety of their employees. But not all of the
approaches focus on contribution of both work design and
employee behavior to safety. An organizational approach
to safety is effective only when both the work design and
employee behavior work in coordination towards it. Many
organizational and individual issues emerge in
management of employee health and safety. They can be
summarized as follows:
1. Physical Work Settings: The physical settings of work
affect the performance of employees to a great extent.
Some of these factors include temperature, noise levels,
and proper lighting affect job performance. Other work
setting factors include size of work area, kinds of
materials used, distance between work areas, cubicle
arrangement, et al.
2. Sick Building Syndrome: It is a situation in which
employees experience acute health problems and
discomfort due to the time spent in a building
(particularly their workplace). Some factors that lead to

sick buildings include poor air quality, inadequate

ventilation, improper cleanliness, rodents, stench of
adhesives and glues, et al.
3. Ergonomics: The term comes from the Greek word
ergon, which means work, and omics which means
management of. Ergonomics is the study of
physiological, psychological, and engineering design
aspects of a job, including such factors as fatigue,
lighting, tools, equipment layout, and placement of
controls. It is the interface between men and machines.
Ergonomics is taken into consideration when designing
the workstation for computer operators. Problems of back
ache, eye strain and headache arise due to long working
hours spent in front of computers.
4. Engineering of Work Equipments and Materials:
Accidents can be prevented in a way by proper
placements of dangerous machines. Moreover design of
such machines and equipments also plays an important
role in safety. Providing safety guards and covers on
equipments, emergency stop buttons and other provisions
help in reducing the accidents considerably.
5. Cumulative Trauma and Repetitive Stress: Cumulative
trauma disorder occurs when same muscles are used
repetitively to perform some task. This results in injuries

of musculoskeletal and nervous system. Employees

encounter high levels of mental and physical stress also.
6. Accident Rates and Individuals: An individual approach
to safe environment helps in reducing the accident rates.
This is generally because more problems are caused by
careless employees than by machines or employer
negligence. A positive attitude towards work environment
and other practices promotes employee safety.

Occupational Health & Safety Management System

The Bureau of Indian Standards has formulated a standard
for Occupational health and safety management systems.
This standard is known as IS 18001:2000 Occupational
Health and Safety Management System. Any OHS
management system adopted by an organization should
incorporate all the requirements specified in this
standard.
Organizations willing to adopt OH&S Management
System have to obtain a license for the same. For this
purpose, they have to ensure that they are operating
according to the IS 18001:2000 standard. The
organization has to apply at the nearest Regional Office of

Bureau of Indian Standards in the prescribed proforma

along with a questionnaire and application fee
The application has to be signed by the Chief Executive
Officer of the organization or any person who has been
assigned by the CEO for this purpose. Also, manual or the
documentation of OHS management system is to be
submitted along with the application.
Once an application is received by the regional office of
BIS, it is scrutinized for all the requirements. If the
application is complete, it is accepted, otherwise more
information is sought from the applicant organization. If
the application is accepted, an adequacy audit takes place
and a preliminary visit (pre-audit) is conducted by an
audit team. Immediately after this, initial certification
audit takes place on the basis of which an audit report is
prepared by the audit team. If the report comes out to be
satisfactory, recommendations for the award of
certifications are made by the team and the certificate is
granted to the organization by the concerned authorities.
However if the report does not meet all the requirements,
the applicant organization is asked to take corrective
actions after which another audit is conducted.

Process of OH&S Management System certification

* Source: Bureau of Indian Standards (BIS Home Page)
Employee Welfare
Welfare includes anything that is done for the comfort and
improvement of employees and is provided over and
above the wages. Welfare helps in keeping the morale and
motivation of the employees high so as to retain the
employees for longer duration. The welfare measures
need not be in monetary terms only but in any kind/forms.
Employee welfare includes monitoring of working
conditions, creation of industrial harmony through
infrastructure for health, industrial relations and insurance
against disease, accident and unemployment for the
workers and their families.
Labor welfare entails all those activities of employer
which are directed towards providing the employees with
certain facilities and services in addition to wages or
salaries
Labor welfare has the following objectives:

1. To provide better life and health to the workers

2. To make the workers happy and satisfied
3. To relieve workers from industrial fatigue and to
improve intellectual, cultural and material conditions of
living of the workers.
The basic features of labor welfare measures are as
follows:
1. Labor welfare includes various facilities, services and
amenities provided to workers for improving their health,
efficiency, economic betterment and social status.
2. Welfare measures are in addition to regular wages and
other economic benefits available to workers due to legal
provisions and collective bargaining
3. Labor welfare schemes are flexible and ever-changing.
New welfare measures are added to the existing ones
from time to time.
4. Welfare measures may be introduced by the employers,
government, employees or by any social or charitable
agency.
5. The purpose of labor welfare is to bring about the
development of the whole personality of the workers to
make a better workforce.
The very logic behind providing welfare schemes is to
create efficient, healthy, loyal and satisfied labor force for

the organization. The purpose of providing such facilities

is to make their work life better and also to raise their
standard of living. The important benefits of welfare
measures can be summarized as follows:
They provide better physical and mental health to
workers and thus promote a healthy work environment
Facilities like housing schemes, medical benefits, and
education and recreation facilities for workers families
help in raising their standards of living. This makes
workers to pay more attention towards work and thus
increases their productivity.
Employers get stable labor force by providing welfare
facilities. Workers take active interest in their jobs and
work with a feeling of involvement and participation.
Employee welfare measures increase the productivity of
organization and promote healthy industrial relations
thereby maintaining industrial peace.
The social evils prevalent among the labors such as
substance abuse, etc are reduced to a greater extent by the
welfare policies
Labor Welfare Fund
Labor welfare refers to all the facilities provided to labor
in order to improve their working conditions, provide

social security and raise their standard of living. Majority

of labor force in India is working in unorganized sector. In
order to provide social security to such workers,
Government has introduced Labor Welfare Fund to ensure
assistance to unorganized labors. Five different welfare
funds, which are governed by different legislations, are
administered by Ministry of Labor. The purpose of these
welfare funds is to provide housing, medical care,
educational and recreational facilities to workers
employed in beedi industry and non-coal mines and cine
workers.
The five legislations governing welfare funds are as
follows:
The Mica Mines Labor Welfare Fund Act, 1946
The Limestone and Dolomite Mines Labor Welfare Fund
Act, 1972
The Iron Ore, Manganese Ore and Chrome Ore Mines
Labor Welfare Fund Act, 1976
The Cine Workers Welfare Fund Act, 1981
Schemes under welfare funds provide assistance with
respective to the following:
Public health and sanitation
Housing

 Recreational (including standard of living)

Social security
Educational facilities
Water supply
Transportation
Medical facilities (prevention of diseases)
Social security
o Group Insurance Schemes for Beedi and Cine workers
o Social Security under Mine Workers Welfare Fund
Family welfare
The welfare funds are raised by government by imposing
cess on manufactured beedis, feature films, export of
mica, consumption of limestone & dolomite and
consumption and export of iron ore, manganese ore &
chrome ore. An explanation of the cess levied under
different legislations is given below:
Beedi Workers Welfare Cess Act, 1976 provides for levy
of cess by way of excise duty on manufactured beedis
from Re.1/- to Rs.5/- per thousand manufactured beedis.
This is presently Rs 2 per 1000 beedis with effect from
28th June 2000.
The Cine Workers Welfare Cess Act, 1981 provides for
duty of cess, at such rate not being less than one thousand

rupees and not exceeding twenty thousand rupees, on

every feature film submitted to the Chairman, Central
Board of Film Certification. This is Rs 20000 per feature
film of Hindi and English and for regional films it is Rs
10000 per film with effect from 20th April 2000.
The Iron Ore, Manganese Ore & Chrome Ore Mines
Labor Welfare Cess Act, 1976 provides for levy and
collection of cess on Iron Ore, Manganese Ore & Chrome
Ore between 50p to Re.1/-, Re.1/- to Rs.6/- and Rs.3/- to
Rs.6/- respectively.
The Limestone and Mines Labor Welfare Fund Act,
1972 provides for the levy and collection of cess on
Limestone and Dolomite as a duty of excise at such rate
not exceeding one rupee per metric tone of limestone &
dolomite. The rate of cess on Limestone and Dolomite is
Re.1/- with effect from 27th December 2000.
Mica Mines Labor Welfare Fund Act, 1946, provides for
levy and collection of cess on all mica exported as duty of
Customs not exceeding 6.25% ad valorem. This is 4.5%
ad valorem on export with effect from 1st November
1990.
Employee Welfare Schemes
Organizations provide welfare facilities to their
employees to keep their motivation levels high. The

employee welfare schemes can be classified into two

categories viz. statutory and non-statutory welfare
schemes. The statutory schemes are those schemes that
are compulsory to provide by an organization as
compliance to the laws governing employee health and
safety. These include provisions provided in industrial
acts like Factories Act 1948, Dock Workers Act (safety,
health and welfare) 1986, Mines Act 1962. The non
statutory schemes differ from organization to organization
and from industry to industry
STATUTORY WELFARE SCHEMES
The statutory welfare schemes include the following
provisions:
1. Drinking Water: At all the working places safe hygienic
drinking water should be provided.
2. Facilities for sitting: In every organization, especially
factories, suitable seating arrangements are to be
provided.
3. First aid appliances: First aid appliances are to be
provided and should be readily assessable so that in case
of any minor accident initial medication can be provided
to the needed employee.
4. Latrines and Urinals: A sufficient number of latrines

and urinals are to be provided in the office and factory

premises and are also to be maintained in a neat and clean
condition.
5. Canteen facilities: Cafeteria or canteens are to be
provided by the employer so as to provide hygienic and
nutritious food to the employees.
6. Spittoons: In every work place, such as ware houses,
store places, in the dock area and office premises
spittoons are to be provided in convenient places and
same are to be maintained in a hygienic condition.
7. Lighting: Proper and sufficient lights are to be provided
for employees so that they can work safely during the
night shifts.
8. Washing places: Adequate washing places such as
bathrooms, wash basins with tap and tap on the stand pipe
are provided in the port area in the vicinity of the work
places.
9. Changing rooms: Adequate changing rooms are to be
provided for workers to change their cloth in the factory
area and office premises. Adequate lockers are also
provided to the workers to keep their clothes and
belongings.
10. Rest rooms: Adequate numbers of restrooms are
provided to the workers with provisions of water supply,

wash basins, toilets, bathrooms, etc.

NON STATUTORY SCHEMES
Many non statutory welfare schemes may include the
following schemes:
1. Personal Health Care (Regular medical check-ups):
Some of the companies provide the facility for extensive
health check-up
2. Flexi-time: The main objective of the flextime policy is
to provide opportunity to employees to work with flexible
working schedules. Flexible work schedules are initiated
by employees and approved by management to meet
business commitments while supporting employee
personal life needs
3. Employee Assistance Programs: Various assistant
programs are arranged like external counseling service so
that employees or members of their immediate family can
get counseling on various matters.
4. Harassment Policy: To protect an employee from
harassments of any kind, guidelines are provided for
proper action and also for protecting the aggrieved
employee.
5. Maternity & Adoption Leave Employees can avail
maternity or adoption leaves. Paternity leave policies have
also been introduced by various companies.

6. Medi-claim Insurance Scheme: This insurance scheme

provides adequate insurance coverage of employees for
expenses related to hospitalization due to illness, disease
or injury or pregnancy.
7. Employee Referral Scheme: In several companies
employee referral scheme is implemented to encourage
employees to refer friends and relatives for employment
in the organization.
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: 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.
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.

Analysis Of Industrial Disputes

The number of industrial disputes in country has shown

slow but steady fall over the past ten years. In 1998, the
total number of disputes was 1097 which fell by more
than half to 440 in 2006.It is being estimated that this
trend will continue in 2007 as well. To support this, only
45 cases of disputes have been recorded during the first
four months of 2007. This significant decline is attributed
to the serious attempts made by industries to improve
industrial relations with their workers. However, a deeper
look at the data reveals that the number of mandays (i.e.,
the industrial unit of production equal to the work one
person can produce in a day) lost due to disputes has not
come down as significantly. The country, on an average,
lost 25.4 million mandays of work annually between 1998
and 2006, which might have affected its industrial output.
More than 2.14 lakh mandays were lost due to work
stoppages in 23 industrial disputes during January to
March 2007. Though there has been a decline in the
number of strikes, the country still witnessed some major
strikes between 2004 and 2006, like those in Honda,
Escorts, Apollo, and Skumars factories and in SBI bank.

On analyzing the data sector wise, it is clear that the

private sector has witnessed greater number of disputes as
compared to the public sector. In 2005, only 57 disputes
were recorded in public sector which resulted in a wage
loss of 79 Crores. In contrast to this, 399 disputes were
recorded in the private sector. In the recent past,
maximum number of disputes has been recorded in the
manufacturing, agriculture and mining and quarrying
industries.
Strikes
A strike is a very powerful weapon used by trade unions
and other labor associations to get their demands
accepted. It generally involves quitting of work by a
group of workers for the purpose of bringing the pressure
on their employer so that their demands get accepted.
When workers collectively cease to work in a particular
industry, they are said to be on strike.
According to Industrial Disputes Act 1947, a strike is a
cessation of work by a body of persons employed in an

industry acting in combination; or a concerted refusal of

any number of persons who are or have been so employed
to continue to work or to accept employment; or a refusal
under a common understanding of any number of such
persons to continue to work or to accept employment.
This definition throws light on a few aspects of a strike.
Firstly, a strike is a referred to as stoppage of work by a
group of workers employed in a particular industry.
Secondly, it also includes the refusal of a number of
employees to continue work under their employer.
In a strike, a group of workers agree to stop working to
protest against something they think is unfair where they
work. Labors withhold their services in order to
pressurize their employment or government to meet their
demands. Demands made by strikers can range from
asking for higher wages or better benefits to seeking
changes in the workplace environment. Strikes sometimes
occur so that employers listen more carefully to the
workers and address their problems.
Causes of strikes:
Strikes can occur because of the following reasons:
Dissatisfaction with company policy

 Salary and incentive problems

Increment not up to the mark
Wrongful discharge or dismissal of workmen
Withdrawal of any concession or privilege
Hours of work and rest intervals
Leaves with wages and holidays
Bonus, profit sharing, Provident fund and gratuity
Retrenchment of workmen and closure of establishment
Dispute connected with minimum wages
TYPES OF STRIKE
1. Economic Strike: Under this type of strike, labors stop
their work to enforce their economic demands such as
wages and bonus. In these kinds of strikes, workers ask
for increase in wages, allowances like traveling
allowance, house rent allowance, dearness allowance,
bonus and other facilities such as increase in privilege
leave and casual leave.
2. Sympathetic Strike: When workers of one unit or
industry go on strike in sympathy with workers of another
unit or industry who are already on strike, it is called a
sympathetic strike. The members of other unions involve
themselves in a strike to support or express their
sympathy with the members of unions who are on strike

in other undertakings. The workers of sugar industry may

go on strike in sympathy with their fellow workers of the
textile industry who may already be on strike.
3. General Strike: It means a strike by members of all or
most of the unions in a region or an industry. It may be a
strike of all the workers in a particular region of industry
to force demands common to all the workers. These
strikes are usually intended to create political pressure on
the ruling government, rather than on any one employer.
It may also be an extension of the sympathetic strike to
express generalized protest by the workers.
4. Sit down Strike: In this case, workers do not absent
themselves from their place of work when they are on
strike. They keep control over production facilities. But
do not work. Such a strike is also known as 'pen down' or
'tool down' strike. Workers show up to their place of
employment, but they refuse to work. They also refuse to
leave, which makes it very difficult for employer to defy
the union and take the workers' places. In June 1998, all
the Municipal Corporation employees in Punjab observed
a pen down strike to protest against the non-acceptance of
their demands by the state government.
5. Slow Down Strike: Employees remain on their jobs
under this type of strike. They do not stop work, but

restrict the rate of output in an organized manner. They

adopt go-slow tactics to put pressure on the employers.
6. Sick-out (or sick-in): In this strike, all or a significant
number of union members call in sick on the same day.
They dont break any rules, because they just use their
sick leave that was allotted to them on the same day.
However, the sudden loss of so many employees all on
one day can show the employer just what it would be like
if they really went on strike.
7. Wild cat strikes: These strikes are conducted by
workers or employees without the authority and consent
of unions. In 2004, a significant number of advocated
went on wildcat strike at the City Civil Court premises in
Bangalore. They were protesting against some remarks
allegedly made against them by an Assistant
Commissioner
Lockouts
A lockout is a work stoppage in which an employer
prevents employees from working. It is declared by
employers to put pressure on their workers. This is
different from a strike, in which employees refuse to
work. Thus, a lockout is employers weapon while a strike
is raised on part of employees. Acc to Industrial Disputes
Act 1947, lock-out means the temporary closing of a

place of employment or the suspension of work or the

refusal by an employer to continue to employ any number
of persons employed by him.
A lockout may happen for several reasons. When only
part of a trade union votes to strike, the purpose of a
lockout is to put pressure on a union by reducing the
number of members who are able to work
For example, if a group of the workers strike so that the
work of the rest of the workers becomes impossible or
less productive, the employer may declare a lockout until
the workers end the strike. Another case in which an
employer may impose a lockout is to avoid slowdowns or
intermittent work-stoppages. Occupation of factories has
been the traditional method of response to lock-outs by
the workers' movement.
PICKETING
When workers are dissuaded from work by stationing
certain men at the factory gates, such a step is known as
picketing. If picketing does not involve any violence, it is
perfectly legal. Pickets are workers who are on strike that
stand at the entrance to their workplace. It is basically a

method of drawing public attention towards the fact that

there is a dispute between the management and
employees.
The purpose of picketing is:
to stop or persuade workers not to go to work
to tell the public about the strike
to persuade workers to take their union's side
GHERAO
Gherao in Hindi means to surround. It denotes a collective
action initiated by a group of workers under which
members of the management are prohibited from leaving
the industrial establishment premises by workers who
block the exit gates by forming human barricades. The
workers may gherao the members of the management by
blocking their exits and forcing them to stay inside their
cabins. The main object of gherao is to inflict physical
and mental torture to the person being gheraoed and
hence this weapon disturbs the industrial peace to a great
extent
Analysis Of Strikes and Lockouts
In 1990, 1,825 strikes and lockouts were recorded. As a
result, 24.1 million workdays were lost, from which 10.6

million were lost to strikes and 13.5 million to lockouts.

More than 1.3 million workers were involved in these
labor disputes. The number and seriousness of strikes and
lockouts have varied from year to year. As can be seen
from the below chart, there has been a steep decline in the
number of strikes and lockouts. This continuous decline in
strikes and lockouts indicates that the industrial relations
in India are improving. There were 227 strikes in 2005,
resulting in the loss of 10.81 million man-days, while the
number of lockouts stood at 229 with a loss of 18.86
million man-days. In January-September 2006, there were
only 154 strikes and 192 lockouts across the country, as
compared to the statistics of 2005, which resulted in the
time loss of 3.16 million man-days and 10.60 million
man-days respectively.

The number of strikes and lockouts, taken together, was

down by 4.4 per cent in 2005. During 2005, West Bengal

experienced the maximum instances of strikes and
lockouts (19216) followed by Kerala (3619) and
Rajasthan (19247). Industrial disturbances were
concentrated mainly in manufacturing (textile), financial
intermediation, agriculture and mining and quarrying
industries during 2005.

During 2000, 426 strikes and 325 lockouts were observed

which resulted in total time-loss of 28.76 million
mandays. Maximum time-loss was caused by 297
lockouts during 2003 which resulted in a time-loss of
27.05 million mandays. As compared to previous years, in
2006 only 13.76 million mandays were lost due to strikes
and lockouts.
Prohibition of Strikes and Lock-Outs
Employees are prohibited from striking according to the
section 22 of Industrial Disputes Act 1947. Employees,

who are working in a public utility service, cannot go on a

strike without giving a notice of strike within the six
weeks before striking. They can not go on strike either
within fourteen days of providing the strike notice or
before the expiry of the date of strike specified in any
such notice. The same rule applies to the employers.
Employers who are carrying on a public utility service
can not lockout any of their employees without giving
them a prior notice within six weeks before the lock out
or within the fourteen days of giving such a notice.
Moreover, the notice of strike or lockout is to be given in
a prescribed manner showing the number of persons
involved in the strike/lockout
The notice of strike or lockout is not necessary when there
is already a strike or lockout going on in the company.
However, a notice should be issued on the day on which
the lockout is declared just to intimate the appropriate
authorities about the lockout. The employer is supposed to
report the number of notices of strikes received by him to
the appropriate Government or the authority prescribed by
the government within the five days of receiving such
notices.

Illegal Strikes and Lock-Outs

A strike or a lock-out is illegal if it is declared in
noncompliance with the section 22 (as defined above) of
Industrial Disputes Act 1947, that is, if the notice period is
not served or if the strike is held within the fourteen days
of issuing the notice of strike. If a strike or lockout has
already taken place and is being referred to a Board, the
continuance of such a strike or lock out is not illegal
provided it is in compliance with the provisions of act.
Moreover, a lockout declared in consequence of an illegal
strike or a strike declared in consequence of an illegal
lock-out shall not be deemed to be illegal.
Penalty for Illegal Strikes and Lock-outs
A workman who is involved in an illegal strike can be
penalized with imprisonment for a term extendable to a
month or with a fine or fifty rupees or both. In similar
way, an employer who initiates and continues a lockout is
punishable with imprisonment extendable to a month or
with a fine of one thousand rupees or both. According to
Section 25 of Industrial Disputes Act 1947, no person
should provide any sort of financial aid to any illegal

strike or lock-out. Any person who knowingly provides

such a help in support of any illegal strike or lock-out is
punishable with imprisonment for a term which may
extend to six months, or with fine which may extend to
one thousand rupees, or with both
Measures For Improving Industrial Relations
The following measures should be taken to achieve good
industrial relations:
Strong and Stable Union: A strong and stable union in
each industrial enterprise is essential for good industrial
relations. The employers can easily ignore a weak union
on the plea that it hardly represents the workers. The
agreement with such a union will hardly be honored by a
large section of workforce. Therefore, there must be
strong and stable unions in every enterprise to represent
the majority of workers and negotiate with the
management about the terms and conditions of service.
Mutual Trust: Both management and labor should help
in the development of an atmosphere of mutual
cooperation, confidence and respect. Management should
adopt a progressive outlook and should recognize the
rights of workers. Similarly, labor unions should persuade

their members to work for the common objectives of the

organization. Both the management and the unions should
have faith in collective bargaining and other peaceful
methods of settling disputes.
Workers Participation in Management: The
participation of workers in the management of the
industrial unit should be encouraged by making effective
use of works committees, joint consultation and other
methods. This will improve communication between
managers and workers, increase productivity and lead to
greater effectiveness.
Mutual Accommodation. The employers must recognize
the right of collective bargaining of the trade unions. In
any organization, there must be a great emphasis on
mutual accommodation rather than conflict or
uncompromising attitude. One must clearly understand
that conflicting attitude does not lead to amicable labor
relations; it may foster union militancy as the union reacts
by engaging in pressure tactics. The approach must be of
mutual give and take rather than take or leave. The
management should be willing to co-operate rather than
blackmail the workers.
Sincere Implementation of Agreements. The
management should sincerely implement the settlements

reached with the trade unions. The agreements between

the management and the unions should be enforced both
in letter and spirit. If the agreements are not implemented
then both the union and management stop trusting each
other. An environment of uncertainty is created. To avoid
this, efforts should be made at both ends to ensure the
follow up of the agreements.
Sound Personnel Policies: The following points should
be noted regarding the personnel policies. The policies
should be:
o Formulated in consultation with the workers and their
representatives if they are to be implemented effectively.
o Clearly stated so that there is no confusion in the mind
of anybody.
o Implementation of the policies should be uniform
throughout the organization to ensure fair treatment to
each worker.
Governments Role: The Government should play an
active role for promoting industrial peace. It should make
law for the compulsory recognition of a representative
union in each industrial unit. It should intervene to settle
disputes if the management and the workers are unable to
settle their disputes. This will restore industrial harmony.

 Progressive Outlook: There should be progressive

outlook of the management of each industrial enterprise.
It should be conscious of its obligations and
responsibilities to the owners of the business, the
employees, the consumers and the nation. The
management must recognize the rights of workers to
organize unions to protect their economic and social
interests.
Ethics at work place
Ethics are most important in one's life, unethical, whether
it is individual or corporation is bad and are doing harm to
the society. In corporate social responsibility reports,
every company have spell out its policy on ethics of
company and follow code of conduct to conduct business
and ask the employees to follow ethics and code of
conduct to accomplish economic, social and
environmental responsibilities of the company to the
society.
According to the study titled Nothing Ethical about Ethics
encapsulates views of the corporate workforce on
workplace ethics across eight cities in India New
Delhi, Mumbai, Bangalore, Chennai, Kolkata,

Ahmedabad, Hyderabad and Pune.

Around 55.7 per cent of the workers had no qualms in
fudging their cost details and almost 61 per cent felt that it
is fine to take printouts and photocopies in offices for
personal work, says a survey by Team Lease Services.
The fourth survey in the World of Work series tries to
understand the changing scenario at workplaces in India.
It says any company trying to tackle productivity issues
needs to check internally. 55% of staff misuse company
facilities. Around 63 per cent of the respondents are fine
with doing personal work during office hours, reveals
World of Work survey The study titled Nothing Ethical
about Ethics encapsulates views of the corporate
workforce on workplace ethics across eight cities in India
-New Delhi, Mumbai, Bangalore, Chennai, Kolkata,
Ahmedabad, Hyderabad and Pune.
Surabhi Mathur, general manager, permanent staffing,
TeamLease Services, said, The acceptable code of
conduct in Corporate India is morphing from dogmatic
thought police, whose card-carrying members were the
HR department, to a more fluid situation that accepts
diversity, relativity and materiality. Some people view this
as a devaluation, but companies are getting better at
defining non-negotiable without interfering in trivia.

Nearly 62 per cent of the respondents were willing to use

any means to get competitor information. The study
further reveals that Kolkata reacted strongly to unethical
office behaviour, whereas the most lenient city was
Ahmedabad.
While Mumbaikars would confront their co-workers
directly for unethical behaviour, Ahmedabad believed in
the indirect route, according to the report. Hyderabad and
Kolkata insisted that leaders and managers should walk
the talk on office ethics, with Hyderabad stressing on the
need for frequent training on ethics in offices and by
increasing open lines of communication.
75% respondents from Bangalore, Hyderabad and Pune
conceded they lied to take leave and did not considered it
unethical. However 78% of the Kolkatta work force
differed on this. Taking credit for subordinate ideas is not
unethical said Ahmedabad and Bangalore, the other cities
differ with an average score of 42 per cent. One third
respondents in Bangalore, Delhi and Hyderabad are
unaware of their companys ethical policy, while those in
Mumbai and Chennai felt they were better information on
this. Mumbai, Bangalore and Chennai felt having open
lines of communication would help check it. Those in
Delhi and Ahmedabad felt flexible work schedule will

curtail it.
The study commissioned by Team Lease Services and
conducted by global research company Synovate in May
and June, covered top 500 companies and had a sample
size of401.
IT majors Infosys, TCS and Wipro have emerged as the
three most admired companies in India, followed by Sunil
Mittal-led telecom giant Bharti Airtel and another Tata
group company Tata Steel in the top five, according to a
list prepared by the Wall Street JournalAsia.
From the survey it is evident that the ethics in corporate
sector are eroding. It is the duty of individual employee
and employer to enforce ethics for benefit of the company
and society. An ethical company will achieve its social
economic and environmental objectives towards society, it
should feel it is its duty and responsibility to serve the
society. With out the help of employee this is not possible.
Your ethical behaviour is most important.
You are key person to make or unmake better society

The Role of Trade Union

Trade unions are unique organisations whose role is
variously interpreted and understood by different interest

groups in the society. Traditionally trade unions role has

been to protect jobs and real earnings, secure better
conditions of work and life and fight against exploitation
and arbitrariness to ensure fairness and equity in
employment contexts. In the wake of a long history of
union movement and accumulated benefits under
collective agreements, a plethora of legislations and
industrial jurisprudence, growing literacy and awareness
among the employees and the spread of a variety of social
institutions including consumer and public interest groups
the protective role must have undergone, a qualitative
change. It can be said that the protective role of trade
unions remains in form, but varies in substance.
There is a considerable debate on the purposes and role of
trade unions. The predominant view, however, is that the
concerns of trade unions extend beyond 'bread and butter'
issues. Trade unions through industrial action (such as
protests and strikes) and political action (influencing
Government policy) establish minimum economic and
legal conditions and restrain abuse of labour wherever the
labour is organised. Trade unions are also seen as moral
institutions, which will uplift the weak and downtrodden
and render them the place, the dignity and justice they
deserve.

The State of Trade Unions in the World.

Public opinion is hostile to trade unions in most countries.
The public is not against unionism in principle. It is
against the way unions and union leaders function. The
public image of union leaders is that they are autocratic,
corrupt and indifferent to the public interest 'Too much
power, too little morality' sums up the publics' assessment
of unions
There have been many opinion surveys especially in the
United States, which bring out the poor public image of
trade unions. In surveys which rank the confidence of the
American public in fourteen institutions (as for example
the army, church, supreme court, stock market, legal
profession, industrialists, newspapers etc.) trade unions
have been consistently placed at the bottom of the list.
There is a serious decline in union membership in most
industrialized nations. There are two possible ways of
looking at union membership figures. The first method is
to simply add up all union members in a factory, office or
country. This gives overall membership position. In the
second method, the density of membership is calculated.
Density is the percentage of union members in relation to
total employment, for example, if unions have 50

members in a factory employing 100, the density is 50

percent. When the reference is to entire country, density is
measured by comparing union members against total
employment in all sectors. Density is generally accepted
as a better indicator because it shows not only how many
are members but also how many are not.
Trade Unions in India
The trade union movement in India is over a century old.
It is useful to take stock to see whether the trade unions in
India are at the centre stage or in periphery. In order to do
that, one may peruse the following relevant, though
selective, statistics.
The Indian workforce 31.479 Crore (314.79 million)
constitutes 37.3 percent of the total population. Of the
total workforce, 91.5 percent is accounted for by the
informal sector, while the formal sector accounts for 8.5
percent. Further, only abut 3 Crore (30 million) (i.e. 9.5
percent of the workforce) are employed on permanent
basis, implying 90.5 percent being employed on casual
basis. It has also been reported that by December 1991,
the claimed membership of the Indian trade union
movement was 3.05 Crore (30.5 million) (i.e. 9.68 percent
of the workforce) with 82.24 percent of the trade union

membership being accounted for by the organised sector.

Thus the unorganised sector is meagrely represented.
The World Labour Report summarises the trade union
situation in India "Indian unions are too very fragmented.
In many work places several trade unions compete for the
loyalty of the same body of workers and their rivalry is
usually bitter and sometimes violent. It is difficult to say
how many trade unions operate at the national level since
many are not affiliated to any all- India federation. The
early splits in Indian trade unionism tended to be on
ideological grounds each linked to a particular political
party. 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 the trade unions, several studies point to
a decline in membership, growing alienation between
trade unions and membership particularly due to changing
characteristics of the new workforce and waning
influence of national federations over the enterprise
unions. New pattern of unionisation points to a shift from
organising workers in a region or industry to the
emergence of independent unions at the enterprise level
whose obsession is with enterprise level concerns with no

forum to link them with national federations that could

secure for them a voice at national policy making levels.
Several studies also point to a shift in employment from
the organised to the unorganised sector through
subcontracting and emergence of a typical employment
practice where those work for the organisation do not
have employment relationship, but a contractual
relationship.
Unfortunately trade unionism in India suffers from a
variety of problems such as politicisation of the unions,
multiplicity of unions, inter-union rivalry, uneconomic
size, financial debility and dependence on outside
leadership.