Evolution of Industrial

Relations

Industrial Relations in India Prior to

British Raj
India was predominantly a pastoral and
agrarian economy during ancient and
medieval times.
Trade and business were few and far
between.
Manual services formed the third rung of
organizational occupation.

A large number of occupations were

carried on by small manufacturers in
their cottages, mostly on hereditary
basis.
Slavery was common.
The Employer-Employee relations were
those of master and slave and, later on,
of those of master and servant.

Ancient scriptures and laws of our

country laid emphasis on the promotion
and maintenance of peaceful relations
between capital and labour.
From very early times, craftsmen and
workers felt the necessity of being united.
The commercial character of the East
India Company did not change the
conditions of workers.

After the abolition of the monopoly of

the East India company in 1883, the
British Industrialists and merchants
were able to develop some industries
(Cotton, Jute, Railways, Plantation, Coalmines etc.) and trade in India.

Industrial
Relations
during
Colonial period
Industrial relations is a by-product
of Industrial Revolution and it owes
its
origin
from
excessive
exploitation of workers by the
owners of industries.

The relationship was that of two unequal'sthe powerful employers and powerless
workers.
Many events happened which accelerated the
pace of industrial relations during the period:The success of Russian Revolution in 1917
Establishment of ILO (1919) and the influence
of its conventions and recommendations.

Establishment of AITUC in 1920

Emergence of Left wing on the Indian political
horizon in 1924 The Indian Trade Union Act of
1926 The Trade Dispute Act, 1929 Formation of
Royal Commission on labour, 1929-31, which
made a comprehensive study of Indian Labour
problem regarding health, safety and welfare of
workers and made recommendations of farreaching consequences

Industrial Relations in postindependence era

Following forces were operating at the

time of Independence.
Industrial relations were inherited
from the legacies of colonial
masters with colonial mindset,
colonial habits and colonial culture.

Coincidentally, the freedom struggle

coincided with the struggle by the working
class for better industrial relations.
In course of these struggles, the top
leaders made promises and pledges to
workers. Therefore, after Independence,
leaders had to fulfil those "promises" and
the "pledges" made to the workers during
freedom struggle.

Most leaders were influenced by Socialist

philosophies and after independence they
were to be put in practice. Industrial
relations were deeply influenced by all the
above forces.
These philosophies got reflected in the
Constitution - (1) The Preamble of the
Constitution (2) The Fundamental Rights (3)
The Directive Principles of State Policies.

Industrial Relations in PostGlobalization period from 1991

till date
The requirements and imperatives
of global competitiveness are of
international standards in quantity,
quality,
cost-effectiveness
and
customers' concerns.

This, in turn, requires introduction of stateof-art of technology, followed by innovation,

creativity and strategic alignment of
divergent resources to create performing
climate.
Such a performing climate requires a
dynamic
and
synergetic
employee
relationship.
The traditional IR was made to "fight the
fire" or "douse the fire".

It was reactive, negative, passive, ad

hoc and legalistic.
The tradition of industrial relations is
under tremendous pressure, because it
was made to cater to the requirements
of a controlled, protected and regulated
market and was unable to address the
new imperatives of a competitive,
global market.

Traditional institutions of IR were losing

their importance and relevance. Trade
unions were marginalized and kept
outside the mainstream of business.
In
the
Post-Industrial
Society,
technological revolution has created a
situation where space, distance and
time have lost their relevance.

National boundaries have completely

withered away. The world has really
become a global village.
The
business
skyline
is
completely
changing by continuous mergers and
acquisitions across the globe.
Global competitiveness is the only rule of
the global business game where only the
fittest can survive

In this situation, it was not possible for

India to remain isolated and insulated from
the global charges. Hence, India embarked
on a New Economic Policy (1991).
Some of the features of this Policy were as
under:Core sectors have been opened for Private
Sectors.

Multinationals are allowed to invest in

India in non-strategic sectors - Inflow of
FDIs.
Banking and Insurance Sectors are
opened to investment by foreign FIIs.
Restrictions and regulations on Industrial
licensing and inspections were relaxed.
India, being member of W.T.O.- declared
as its policy to follow their guidelines.

Quantitative
restrictions
on
imports/exports are reduced.
Core conventions (forced labor, child
labor, etc.) of ILO started influencing our
trade and business. Disinvestments of
PSUs (both Central and State) have
become a reality.

Changing Dimensions of Industrial

Relations
in
India
Emerging business scenario has brought in
new market imperatives.
The traditional IR system is under
unprecedented pressure because it is not
geared to meet this.
A market determined profile of Industrial
Relations is required to meet the challenges
of the market.

Therefore, traditional IR is giving way to

emerging employee relations.
Some of the features of this phenomenon
are given below:The institution of trade union is getting
weak.
Employers are going for unitarism and
non-unionism.
In IT & ITES, there are hardly any TUs.

The institution of collective bargaining is being

decentralized and being replaced by unit
bargaining,
individual
bargaining
and
commercial
bargaining
/
collaborative
bargaining.
Disinvestment / Privatization and VRS are almost
accepted facts of Industrial Relations.
Changing Pattern of Compensation /Rewards
Management - Fixed/Assured Time Rate Wages
are replaced by variable/performance- based
wages.

Court sent clear messages to the unions

that they mean business.
There is a proposal for Labour Law
simplification/codification
There is a trend to make employerfriendly conciliation

There has been ease in labour inspection

There has been use of Section 10 (3) of
IDA, declaring strikes illegal
Strict enforcement of Unfair Labour
Practices
Use of Police for diluting labor struggle
Re-engineering and Rationalization of
work - Job mobility, Redeployment, Job
Rotation, Shedding surplus manpower

Competencies management and skill formation

- multi-skilling and career development
Employee
involvement,
participation
and
communication
Trade Union participation
Enterprise-based unions
Responsive Trade Unionism and Diluting
political ideology