Industrial Disputes

 Industrial disputes are organised protests against existing terms of employment or conditions of work.
According to the Industrial Dispute Act, 1947, an Industrial dispute means
“Any dispute or difference between employer and employer or between employer and workmen or
between workmen and workmen, which is connected with the employment or non-employment or terms
of employment or with the conditions of labour of any person”
In practice, Industrial dispute mainly refers to the strife between employers and their employees. An
Industrial dispute is not a personal dispute of any one person. It generally affects a large number of
workers’ community having common interests.

Prevention of Industrial Disputes:

The consequences of an Industrial dispute will be harmful to the owners of industries, workers,
economy and the nation as a whole, which results in loss of productivity, profits, market share and
even closure of the plant. Hence, Industrial disputes need to be averted by all means.
Prevention of Industrial disputes is a pro-active approach in which an organisation undertakes various
actions through which the occurrence of Industrial disputes is prevented. Like the old saying goes,
“prevention is better then cure”.

1.       Model Standing Orders: Standing orders define and regulate terms and conditions of employment
and bring about uniformity in them. They also specify the duties and responsibilities of both employers
and employees thereby regulating standards of their behaviour. Therefore, standing orders can be a
good basis for maintaining harmonious relations between employees and employers.
Under Industrial Dispute Act, 1947, every factory employing 100 workers or more is required to frame
standing orders in consultation with the workers. These orders must be certified and displayed properly
by the employer for the information of the workers.

2.       Code of Industrial discipline: The code of Industrial discipline defines duties and responsibilities of
employers and workers. The objectives of the code are:
  To secure settlement of disputes by negotiation, conciliation and voluntary arbitration.
  To eliminate all forms of coercion, intimidation and violence.
  To maintain discipline in the industry.
  To avoid work stoppage.
  To promote constructive co-operation between the parties concerned at all levels.

3.       Works Committee: The Industrial Dispute Act, 1947 has provided for the establishment of works
committees. In case of any industrial establishment in which 100 or more workers are employed, a
works committee consisting of employees and workers is to be constituted; it shall be the duty of the
Works Committee to promote measures for securing and preserving amity and good relations among
the employees and workers.

7.       Collective Bargaining: Collective Bargaining is a process in which the representatives of the

employer and of the employees meet and attempt to negotiate a contract governing the employer-
employee-union relationships. Collective Bargaining involves discussion and negotiation between two
groups as to the terms and conditions of employment.

8.       Labour welfare officer: The factories Act, 1948 provides for the appointment of a labour welfare
officer in every factory employing 500 or more workers. The officer looks after all facilities in the factory
provided for the health, safety and welfare of workers. He maintains liaison with both the employer and
the workers, thereby serving as a communication link and contributing towards healthy industrial
relations through proper administration of standing orders, grievance procedure etc.

9.       Tripartite bodies: Several tripartite bodies have been constituted at central, national and state
levels. The India labour conference, standing labour committees, Wage Boards and Industries
Committees operate at the central level. At the state level, State Labour Advisory Boards have been set
up. All these bodies play an important role in reaching agreements on various labour-related issues.
The recommendations given by these bodies are however advisory in nature and not statutory.

Machinery for settlement of Industrial Disputes:

1.       Conciliation: Conciliation refers to the process by which representatives of employees and

employers are brought together before a third party with a view to discuss, reconcile their differences
and arrive at an agreement through mutual consent. The third party acts as a facilitator in this
process. Conciliation is a type of state intervention in settling the Industrial Disputes. The Industrial
Disputes Act empowers the Central & State governments to appoint conciliation officers and a Board of
Conciliation as and when the situation demands.
Conciliation Officer: The appropriate government may, by notification in the official gazette, appoint
such number of persons as it thinks fit to be the conciliation officer. The duties of a conciliation officer
are:
a)      To hold conciliation proceedings with a view to arrive at amicable settlement between the parties
concerned.
b)      To investigate the dispute in order to bring about the settlement between the parties concerned.
c)       To send a report and memorandum of settlement to the appropriate government.
d)      To send a report to the government stating forth the steps taken by him in case no settlement has
been reached at.
The conciliation officer however has no power to force a settlement. He can only persuade and assist
the parties to reach an agreement. The Industrial Disputes Act prohibits strikes and lockouts during
that time when the conciliation proceedings are in progress.

2.       Arbitration: A process in which a neutral third party listens to the disputing parties, gathers
information about the dispute, and then takes a decision which is binding on both the parties. The
conciliator simply assists the parties to come to a settlement, whereas the arbitrator listens to both the
parties and then gives his judgement.

Advantages of Arbitration:
  It is established by the parties themselves and therefore both parties have good faith in the arbitration
process.
  The process in informal and flexible in nature.
  It is based on mutual consent of the parties and therefore helps in building healthy Industrial Relations.
Disadvantages:
  Delay often occurs in settlement of disputes.
  Arbitration is an expensive procedure and the expenses are to be shared by the labour and the
management.
  Judgement can become arbitrary when the arbitrator is incompetent or biased.
There are two types of arbitration:
a)      Voluntary Arbitration: In voluntary arbitration the arbitrator is appointed by both the parties
through mutual consent and the arbitrator acts only when the dispute is referred to him.
b)      Compulsory Arbitration: Implies that the parties are required to refer the dispute to the arbitrator
whether they like him or not. Usually, when the parties fail to arrive at a settlement voluntarily, or
when there is some other strong reason, the appropriate government can force the parties to refer the
dispute to an arbitrator.

3.       Adjudication: Adjudication is the ultimate legal remedy for settlement of Industrial Dispute.

Adjudication means intervention of a legal authority appointed by the government to make a settlement
which is binding on both the parties. In other words adjudication means a mandatory settlement of an
Industrial dispute by a labour court or a tribunal. For the purpose of adjudication, the Industrial
Disputes Act provides a 3-tier machinery:
a)      Labour court
b)      Industrial Tribunal
c)       National Tribunal
a)      Labour Court: The appropriate government may, by notification in the official gazette constitute one
or more labour courts for adjudication of Industrial disputes relating to any matters specified in the
second schedule of Industrial Disputes Act. They are:
  Dismissal or discharge or grant of relief to workmen wrongfully dismissed.
  Illegality or otherwise of a strike or lockout.
  Withdrawal of any customary concession or privileges.

Where an Industrial dispute has been referred to a labour court for adjudication, it shall hold its
proceedings expeditiously and shall, within the period specified in the order referring such a dispute,
submit its report to the appropriate government.
b)      Industrial Tribunal: The appropriate government may, by notification in the official gazette,
constitute one or more Industrial Tribunals for the adjudication of Industrial disputes relating to the
following matters:
  Wages   Compensatory and other allowances   Hours of work and rest intervals
  Leave with wages and holidays   Bonus, profit-sharing, PF etc.   Rules of discipline
  Retrenchment of workmen   Working shifts other than in accordance with standing orders
 It is the duty of the Industrial Tribunal to hold its proceedings expeditiously and to submit its report to
the appropriate government within the specified time.
c)       National Tribunal: The central government may, by notification in the official gazette, constitute one
or more National Tribunals for the adjudication of Industrial Disputes in
  Matters of National importance
  Matters which are of a nature such that industries in more than one state are likely to be interested in,
or are affected by the outcome of the dispute.
It is the duty of the National Tribunal to hold its proceedings expeditiously and to submit its report to
the central government within the stipulated time.
Approaches/Theories of Trade Union
The five types of theories of trade union are as follows: 1. Revolutionary Theory 2. Evolutionary Theory
3. Theory of Industrial Jurisprudence 4. Rebellion Theory 5. The Gandhian Approach.
A cross-country examination of trade unions reveals different ideologies influencing the evolution and
development of trade unions depending on social, economic and political conditions prevalent therein.
That is precisely the reason the objectives of trade unions and their place have been emphasized
differently by different thinkers.
The various approaches/theories of trade unions can be classified into the following five types:
1.  Revolutionary Theory:
The revolutionary approach/theory of trade union is developed by Karl Marx “This theory is also known
as “the theory of class war and dialectical materialism”. According to Marx, trade union was the
foremost organising centre to provide locus for streamlining the forces of working classes The trade
unions are, for Marx, the instruments to overthrow capitalism.
These are, thus, prime instruments of the class struggle between proletarian workers and capitalist
businessmen. Marx advocated that the working class must not divert itself from its revolutionary
programme because it is labour struggle only that can abolish capitalism. To Marx, workers’
emancipation involves abolition of capitalism
2.  Evolutionary Theory:
This theory also known as “theory of industrial democracy” was enunciated by Sydney and Beatrice
Webbs. To Webbs, trade unionism is an extension of the principle of democracy in the industrial
sphere. In other words, trade unionism is not an instrument to overthrow the capitalism, but a means
of equalizing the bargaining power of labour and capital.
Trade unionism provides a means by which workers overcome managerial dictatorship, on the one
hand, and express their voice in the determination of the conditions under which they have to work, on
the other.
3.  Theory of Industrial Jurisprudence:
According to S. H. Slitcher the propounder of the “Theory of Industrial Jurisprudence”, workers
individually fail in bargaining with employers for protecting their interests. In his view, trade unionism
served as a means for workers to protect them in work. Such an approach of trade unionism, Slitcher
termed as “a system of industrial jurisprudence”.
4.  Rebellion Theory:
To Frank Tannenbaum, the propounder of “Rebellion Theory”, trade unionism is a spontaneous
outcome in the growth of mechanisation. He believes that the use of machines leads to exploitation of
workers. Thus, machine is the cause and labour movement, i.e., trade unionism is the result. In other
words, trade unionism is a rebellion approach against mechanisation automatization of industrial
society to protect workers’ interest in the enterprise.
5. The Gandhian Approach:
The Gandhian approach of trade unionism is based on “class collaboration rather than class conflict
and struggle”. The idea to take worker’s due share from capitalist by reform and self-consciousness
among workers led to the emergence of trade unionism. Thus the Gandhian approach of trade
unionism is not only related to material aspect but also moral and intellectual aspects.
Gandhi emphasised that the direct aim of a trade unionism is not, in the last degree political. Instead,
its direct aim is internal reform and also evolution of internal strength. Also, trade unionism, according
to the Gandhian approach, is not anti-capitalistic as is generally viewed

Essay # Recommendations of the National Commission on Labour:

National Commission on Labour feels that the primary function of a union is to promote and protect
the interests of its members. Their goals should be to improve the economic position of workers. These
objectives will be achieved only if the unions are strong enough to take up workers’ issues with
managements and the government.
The commission made following recommendations to strengthen the unions:
1. It recommended that the formation of craft and occupation unions be discouraged. Industrial trade
unions and federations should be encouraged.
2. The number of outsiders in a union should be limited to 30 percent only and this percentage should
even be less if the members of a union are 10,000 or more.
3. The ex-employees of an organisation should be treated as insiders. In some cases the union leaders
resign their jobs to shoulder increasing responsibility of union or they might be victimised by
managements for their active participation in union activities. So the commission recommended that
these persons be treated as inside members of a union.
4. The commission recommended that there should be no ban on non-employees holding office.
5. Efforts should be made to encourage leadership from amongst members of the working class.
6. The management should be penalised for victimisation of members of unions and also for adopting
unfair practices to discourage members from joining unions.
7. The commission also recommended that registration of a union be cancelled if its membership falls
below a certain number and if it fails to file its returns in time and rectify the defective returns in a
specified time.
Essay # Problems of Trade Union Movement in India:
1. Uneven Growth:
Trade unions are concentrated more or less in major metropolitan cities in India and traceable only in
large scale units especially in cotton textile industry. The degree of unionism also varies from industry
to industry, iron and steel, tobacco, railways, cement, banking, insurance etc. There is very little trade
union activity in small scale sector, agricultural sector and domestic sector.
2. Low Membership:
Most of the unions have low membership. Though the number of unions and union membership are
increasing, average membership is inadequate. Because of their small size, unions suffer from lack of
adequate funds and find it difficult to engage the services of experts to aid and advise members in times
of need. They can’t bargain with employers effectively on their own.
3. Weak Financial Position:
Most of the trade unions in India suffer from inadequate funds. This unsound financial position is
mostly due to low membership and low rate of membership fee. Trade Union Act, 1926 prescribed the
membership fee at 25 p. per member per month.
4. Political Leadership:
Most of the trade unions in India have professional political leadership. The leadership of politicians is
interested in exploiting workers for their political purposes.
5. Multiplicity of Unions:
Multiple unions both at the plant and industry levels are responsible for unhealthy growth of trade
union movement. There exist several unions in the same establishment or industry. The existence of
this phenomenon can be attributed partly to the domination of outside leaders and partly to the labour
laws.
6. Inter-Union Rivalry:
Due to the multiplicity of unions, inter-union rivalry takes place. Unions try to play down each other in
a bid to gain greater influence on the workers. In the process, they do more harm than good to the
cause of unionism as a whole.
7. Problems of Recognition:
Many a times, the employers refuse recognition to trade unions under the contention that unions
consist of only a small number of workers or because of multiplicity of union. Employers are under no
obligation to give recognition to unions.
8. Absence of Paid Office Bearers:
Weak finances and political leadership do-not permit unions to engage the services of full time, paid
office bearers. Union activists, who work on a part-time basis, neither have the time nor the energy to
take up union activities sincerely and diligently.
Essay # Measures for Strengthening Trade Union Movement:
1. United Labour Front:
Unions must put a joint front. A strong and united trade union movement is necessary to safeguard the
interests of the members and to help in achieving the targets of production. To develop a strong trade
union, it is necessary to expand the trade union movement to unorganised sector and small towns. The
membership of unions should also be increased.
2.  Single Union:
The principle of one union in one industry should be adopted to avoid multiplicity of unions and inter
union rivalry. This will help in eliminating the problems created by multiplicity of unions.
3.  Financial Stability:
The financial problems of the unions can be solved by raising the membership and collecting for fees
from all the members, the membership fees should be raised as the amount of the wages of the workers
increased significantly compared to the situation in 1926 when Trade Union Act provided for the
collection of 25 paisa per month per member as subscription fees.
4.  Efficient Leadership:
Political leadership has developed due to the absence of internal leadership. Outside leadership is the
main cause of multiple problems of the trade unions.
These problems can be removed through the development of leadership talents from within.
Management should encourage internal workers to lead their own movement. Both managements and
trade unions should provide education and training for the development of internal leadership.
5.  Paid Union Officials:
Paid union officials should be employed who are persons of proven integrity and who are competent
and sincere. They should be able to evaluate workers’ aspirations and strong enough to negotiate with
employers on equal basis.
6.  Recognition of Trade Unions:
It should be made obligatory on the part of the employers to give recognition to the trade unions. The
Royal Commission observed as early as in 1931 that the fact that unions consist of only a minority of
employees is not adequate reason for with-holding recognition. Some procedure must be worked out so
that the most representative union in the plant is recognised by the management.
7.  Expansion of Union Activities:
Unions should widen the scope of their activities and provide certain benefits and facilities to the
workers. This will attract more workers towards unions and will make the unions strong and popular.
 Collective Bargaining: Meaning Objectives and Importance!
Meaning:
Collective bargaining is a process of negotiating between management and workers represented by their
representatives for determining mutually agreed terms and conditions of work which protect the
interest of both workers and the management. According to Dale Yoder’, “Collective bargaining is
essentially a process in which employees act as a group in seeking to shape conditions and relation-
ships in their employment”.
Michael J. Jucious has defined collective bargaining as “a process by which employers, on the one
hand, and representatives of employees, on the other, attempt to arrive at agreements covering the
conditions under which employees will contribute and be compensated for their services”.
Thus, collective bargaining can simplify be defined as an agreement collectively arrived at by the
representatives of the employees and the employers. By collective bargaining we mean the ‘good faith
bargaining’. It means that proposals are matched with counter proposals and that both parties make
every reasonable effort to arrive at an agreement’ It does not mean either party is compelled to agree to
a proposal. Nor does it require that either party make any specific concessions.
Why is it called collective bargaining? It is called “collective” because both the employer and the
employee act collectively and not individually in arriving at an agreement. It is known as ‘bargaining’
because the process of reaching an agreement involves proposals and counter proposals, offers and
counter offers.

Objectives:
The basic objective of collective bargaining is to arrive at an agreement between the management and
the employees determining mutually beneficial terms and conditions of employment.
This major objective of collective bargaining can be divided into the following sub-objectives:
1. To foster and maintain cordial and harmonious relations between the employer/management and
the employees.
2. To protect the interests of both the employer and the employees.
3. To keep the outside, i.e., the government interventions at bay.
4. To promote industrial democracy.

Importance:
The need for and importance of collective bargaining is felt due to the advantages it offers to an
organisation.
The chief ones are as follows:
1. Collective bargaining develops better understanding between the employer and the employees:
It provides a platform to the management and the employees to be at par on negotiation table. As such,
while the management gains a better and deep insight into the problems and the aspirations of die
employees, on the one hand, die employees do also become better informed about the organisational
problems and limitations, on the other. This, in turn, develops better understanding between the two
parties.
2. It promotes industrial democracy:
Both the employer and the employees who best know their problems, participate in the negotiation
process. Such participation breeds the democratic process in the organisation.
3. It benefits the both-employer and employees:
The negotiation arrived at is acceptable to both parties—the employer and the employees.
4. It is adjustable to the changing conditions:
A dynamic environment leads to changes in employment conditions. This requires changes in
organisational processes to match with the changed conditions. Among other alternatives available,
collective bargaining is found as a better approach to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective negotiation:
The direct participation of both parties—the employer and the employees—in collective decision making
process provides an in-built mechanism for speedy implementation of decisions arrived at collective
bargaining.

 Process of Collective Bargaining

1.       Preparation for Negotiation: Preparation for negotiation in Collective Bargaining is as important as

the negotiation process itself. Upto 83% of the outcomes are influenced by pre-negotiation process.
Such preparation is required for both management as well as the union representatives. From the
management’s point of view, pre-negotiation preparation is required as:
  Management should decide when and how to open the negotiations/dialogue.
  Management must choose the representatives to negotiate at the negotiation table.
  Draft for likely decisions should be prepared in advance so that the final agreement draft can be
prepared as soon as the negotiation process is over.
From the employees’ side also, preparation is required for the following reasons:
  The union should collect the information related to the financial position of the company and their
ability to pay the employees.
  The union must also be aware of the various practices followed by other companies in the same region
or industry.
  The union must assess the attitudes and expectations of the employees over concerned issues so that
the outcome of negotiations does not face any resistance from them.

2.       Identifying issues for Bargaining: The second step in bargaining process is the determination of
issues which will be taken up for negotiations. The different types of issues are:
  Wage-related issues: Include wage or salary revision, allowance for meeting increased cost of living like
Dearness Allowance (D.A), financial perks, incentives etc.
  Supplementary economic benefits: These include pension plans, gratuity plans, accident compensation,
health insurance plans, paid holidays etc.
  Administrative issues: Include seniority, grievance procedures, employee health and safety measures,
job security and job changes.
The wage and benefits issues are the ones which receive the greatest amount of attention on the
bargaining table.

3.       Negotiation: When the first two steps are completed, both parties engage in actual negotiation
process at a time and place fixed for the purpose. There a re two types of negotiations:

 Boulwarism: In this method, the management themselves takes the initiative to find out
through comprehensive research and surveys the needs of the employees. Based on the analysis of the
findings, the company designs its own package based on the issues to be bargained. Thereafter, a
change is incorporated only when new facts are presented by the employees or their unions.
 Continuous Bargaining: Involves parties to explore particular bargaining problems in joint
meetings over a long period of time, some throughout the life of each agreement. The basic logic behind
this method is that all persistent issues can be addressed through continuous negotiation over a period
of time. The success of negotiations depends on the skills and abilities of the negotiators.

4.       Initial negotiated agreement: When two parties arrive at a mutually acceptable agreement either
in the initial stage or through overcoming negotiation breakdown, the agreement is recorded with a
provision that the agreement will be formalized after the ratification by the respective organizations.

5.       Ratification of agreement: Ratification of negotiated agreement is required because the

representatives of both the parties may not have ultimate authority to decide various issues referred to
for collective bargaining. The ratification of agreement may be done by the appropriate manager
authorized for the purpose in the case of management, or trade executives in the case of the employees.
Ratification is also required by the Industrial Disputes Act. It is important that the agreement must be
clear and precise. Any ambiguity leads to future complications or other such problems.

6.       Implementation of agreement: Signing the agreement is not the end of collective bargaining,

rather it is the beginning of the process when the agreement is finalized, it becomes operational from
the date indicated in the agreement. The agreement must be implemented according to the letter and
spirit of the provisions made by the agreement agreed to by both parties. The HR manager plays a
crucial role in the day-to-day administration implementation of the agreement.
WPM:

WPM means different things to different people depending upon their objectives and expectations. Thus,
WPM is an elastic concept. For example, for management it is a joint consultation prior to decision making,
for workers it means co-determination, for trade unions It is the harbinger of a new order of social
relationship and a new set of power equation within organisations, while for government it is an association
of labour with management without the final authority or responsibility in decision making.
According to Keith Davis, “Workers’ participation refers to the mental and emotional involvement of a person
in a group situation which encourages him to contribute to group goals and share in responsibility of
achieving them”.

Workers’ participation in management may take the form of ascending or descending participation. In
ascending participation an opportunity is given to the workers to participate in the decision making process
at a higher level.
Characteristics:
The following are the main characteristics of WPM:
1. Participation implies practices which increase the scope for employees’ share of influence in decision-
making process with the assumption of responsibility.
2. Participation presupposes willing acceptance of responsibility by workers.
3. Workers participate in management not as individuals but as a group through their representatives.
4. Worker’s participation in management differs from collective bargaining in the sense that while the former
is based on mutual trust, information sharing and mutual problem solving; the latter is essentially based on
power play, pressure tactics, and negotiations.
5. The basic rationale tor worker’s participation in management is that workers invest their Iabour and their
fates to their place of work. Thus, they contribute to the outcomes of organization. Hence, they have a
legitimate right to share in decision-making activities of organisation.

The workers’ participation in management may take the following forms:

1.  Co-Ownership:
Workers are made shareholders by allotting those shares in the company. They are employees as well as
owners of the business concern. Thus, their participation in the management is automatically guaranteed.
2.  Seat On Board Of Directors:
In this case the workers’ representative is given a seat on the boards of directors. In advanced countries like
Britain and U.S.A., trade unions have already rejected this idea. It is generally felt that the workers do not
understand the intricacies of management.
Moreover, their representatives being in minority may not have much say in the decision making whereas
that decision will be applicable to all the employees. By remaining out of the board, they can keep a better
check on the management.
The Sachar Committee studied the problems of workers’ participation in management and observed
“Conditions must be created where the worker directors are able to play a helpful and effective role. It is
apparent that as a member of the board, the worker director will familiarise himself with subjects with which
he was not associated before. The training of the employees must, therefore, be immediately taken in hand”.
3.  Works Committee:
These committees have been regarded as the most effective social institution of industrial democracy. The
need for their constitution has been emphasised as early as 1931 by the Royal Commission on Labour.
It was again emphasised by the Industrial Truce Resolution on 1947, which recommended their constitution
in each industrial undertaking for the settlement of any dispute which may arise in future.
This recommendation was given effect to in the Industrial Disputes Act of 1947. Section 3 of the Act provides
for these bodies in every undertaking employing 100 or more workmen.
These committees are consultative bodies. Their functions include discussion of conditions of work like
lighting, ventilation, temperature and sanitation etc., and amenities like water supply for drinking purposes,
canteen, medical services, safe working conditions, administration of welfare funds etc.
The works committee should not deal with matters connected with collective bargaining which are
exclusively reserved for trade unions.
4.  Joint Management Councils:
Joint committees for settlement of grievances or specific problems may be set up for promoting workers’
participation in management. Workers representatives sit with the management across the table to discuss
matters which fall within its purview.
The main object of such councils is to give an opportunity to workers to understand the working of the
industry and satisfy their urge for self-expression.
Should Joint Councils control policy? A policy is formulated against a background of numerous factors most,
of them being out of the control of the management. In fact, the real interest of the workers participating in
such councils is to see that its claims are given due weightage along with the claims of government,
consumer and shareholders.
The participation is, therefore, on the job itself (formation of autonomous work group’s determination of
production standards, control of pace and rhythm etc.) rather than in the policy making.
5. Profit Sharing:
Workers feel involved in the management especially when they are given a share in profits of the business.
6. Suggestion Scheme:
Suggestion scheme may also be introduced for creating interest in the work by announcing a suitable reward
for original and useful suggestions. Employees can put their suggestions in the suggestion boxes which are
installed in the various departments.
Introduction and Definition of Grievance:

A grievance is any dissatisfaction or feeling of injustice having connection with one’s employment situ-
ation which is brought to the attention of management. Speaking broadly, a grievance is any
dissatisfaction that adversely affects organizational relations and productivity.
According to Michael Jucious, ‘grievance is any discontent or dissatisfaction whether expressed or not,
whether valid or not, arising out of anything connected with the company which an employee thinks,
believes or even feels to be unfair, unjust or inequitable’.
In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or unwritten, justified
or unjustified, having connection with employment situation.
Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.
2. The dissatisfaction must arise out of employment and not due to personal or family problems.
3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice has
been done to them, they have a grievance. The reason for such a feeling may be valid or invalid,
legitimate or irrational, justifiable or ridiculous.
4. The discontent may be voiced or unvoiced, but it must find expression in some form. However,
discontent per se is not a grievance. Initially, the employee may complain orally or in writing. If this is
not looked into promptly, the employee feels a sense of lack of justice. Now, the discontent grows and
takes the shape of a grievance.
5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s expec-
tations from the organization.

Causes of Grievances:
Grievances may occur due to a number of reasons:
1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are paid less when
compared to others. For example, late bonus, payments, adjustments to overtime pay, perceived
inequalities in treatment, claims for equal pay, and appeals against performance- related pay awards.
2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or poor
physical conditions of workplace, defective tools and equipment, poor quality of material, unfair rules,
and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the supervisor
towards the employee such as perceived notions of bias, favouritism, nepotism, caste affiliations and
regional feelings.
4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the implementation of
revised company policies or new working practices.
5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and victimization
and become an object of ridicule and humiliation, or other inter- employee disputes.
6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety methods, transfer,
disciplinary rules, fines, granting leaves, medical facilities, etc.

Effects of Grievance:
Grievances, if not identified and redressed, may adversely affect workers, managers, and the org.
The effects are the following:
1. On the production:
a. Low quality of production
b. Low productivity
c. Increase in the wastage of material, spoilage/leakage of machinery
d. Increase in the cost of production per unit
2. On the employees:
a. Increase in the rate of absenteeism and turnover
b. Reduction in the level of commitment, sincerity and punctuality
c. Increase in the incidence of accidents
d. Reduction in the level of employee morale.
3. On the managers:
a. Strained superior-subordinate relations.
b. Increase in the degree of supervision and control.
c. Increase in indiscipline cases
d. Increase in unrest and thereby machinery to maintain industrial peace
Need for a Formal Procedure to Handle Grievances:
A grievance handling system serves as an outlet for employee frustrations, discontents, and gripes like
a pressure release value on a steam boiler. Employees do not have to keep their frustrations bottled up
until eventually discontent causes explosion.
The existence of an effective grievance procedure reduces the need of arbitrary action by supervisors
because supervisors know that the employees are able to protect such behavior and make protests to
be heard by higher management. The very fact that employees have a right to be heard and are actually
heard helps to improve morale. In view of all these, every organization should have a clear-cut proce-
dure for grievance handling.

Steps
The following steps will provide a measure of guidance to the manager dealing with grievances.
i. Acknowledge Dissatisfaction:
Managerial/supervisory attitude to grievances is important. They should focus attention on grievances,
not turn away from them. Ignorance is not bliss, it is the bane of industrial conflict. Condescending
attitude on the part of supervisors and managers would aggravate the problem.
ii. Define the Problem:
Instead of trying to deal with a vague feeling of discontent, the problem should be defined properly.
Sometime the wrong complaint is given. By effective listening, one can make sure that a true complaint
is voiced.
iii. Get the Facts:
Facts should be separated from fiction. Though grievances result in hurt feelings, the effort should be
to get the facts behind the feelings. There is need for a proper record of each grievance.
iv. Analyse and Decide:
Decisions on each of the grievances will have a precedent effect. While no time should be lost in dealing
with them, it is no excuse to be slip-shod about it. Grievance settlements provide opportunities for
managements to correct themselves, and thereby come closer to the employees.
Horse-trading in grievance redressed due to union pressures may temporarily bring union leadership
closer to the management, but it will surely alienate the workforce away from the management.
v. Follow up:
Decisions taken must be followed up earnestly. They should be promptly communicated to the
employee concerned. If a decision is favourable to the employee, his immediate boss should have the
privilege of communicating the same.

Grievance Handling Procedure