BBA 046

INDUSTRIAL RELATIONS
COURSE NOTES

Prepared By
Annah Kihanya
 TOPIC 1 INTRODUCTION TO INDUSTRIAL RELATIONS
MEANING AND SCOPE OF INDUSTRIAL RELATIONS (IR)

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.”
DEFINITIONS
According to Dale Yoder’, IR is a designation of a whole field of relationship that exists
because of the necessary collaboration of men and women in the employment processes of
Industry”.
Armstrong has defined IR as “IR is concerned with the systems and procedures used by
unions and employers to determine the reward for effort and other conditions of
employment, to protect the interests of the employed and their employers and to regulate
the ways in which employers treat their employees”

In the opinion of V. B. Singh “Industrial relations are an integral aspect of social relations
arising out of employer-employee interaction in modern industries which are regulated by
the State in varying degrees, in conjunction with organized social forces and influenced by
the existing institutions. This involves a study of the State, the legal system, and the
workers’ and employers’ organizations at the institutional level; and of the patterns of
industrial organisation (including management), capital structure (including technology),
compensation of the labour force, and a study of market forces all at the economic level”

Encyclopedia Britannica defined IR more elaborately as “The concept of industrial

relations has been extended to denote the relations of the state with employers, workers,
and other organizations. The subject, therefore, includes individual relations and joint
consultation between employers and workers at their places of work, collective relations
between employers and trade unions; and the part played by the State in regulating these
relations”.

Industrial relations encompasses a set of phenomena, both inside and outside the
workplace, concerned with determining and regulating employment relationship i.e.
Relationship between management and employees or among employees and their
organization that characterize and grow out of employment

Thus, IR can now safely be defined as a coin having two faces: Co- operation and Conflict.
This relationship undergoes change from thesis to antithesis and then to synthesis. Thus,
the relationship starting with co-operation soon changes into conflict and after its
resolution again changes into cooperation. This changing process becomes a continuous
feature in industrial system and makes IR concept as dynamic and evolving one.

NATURE OF IR

 IR arises out of employer- employee relations

 IR is a web of roles, formed by the interaction of government, industry and labour.
 IR is multi dimensional, influenced by complex set of institutional, economic and
technological factors
 IR is dynamic (changing) to keep pace with employee expectations, trade unions,
employer associations and other economic and social institutions of society.
 IR is characterized by forces of conflict and compromise, individual differences and
disagreements resolved through constructive means.
 Government influences and shapes IR with its laws, rules, and agreements through
executive and judicial machinery.
 The scope of IR is very wide as it covers grievances, disciplinary measures, ethics,
standing orders, collective bargaining, participatory schemes and dispute
settlement mechanisms etc.
  IR is interactive and consultative in nature, in resolving conflict, controversies and
disputes between labour and management.

SCOPE OF IR
Based on above definitions of IR, the scope of IR can easily been delineated as
follows:
1. Labour relations, i.e., relations between labour union and management

2. Employer-employee relations i.e. relations between management and employees.

3. Relationship amongst various groups of employees

3. The role of various parties’ ……., employers, employees, unions and state in maintaining
industrial relations.

4. The mechanism of handling conflicts between employers and employees, in case conflicts
arise.

OBJECTIVES OF IR
The primary objective of industrial relations is to maintain and develop good and healthy
relations between employees and employers or operatives and management. The same is
sub- divided into other objectives.

1. 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.

2. To avoid industrial conflict or strife and develop harmonious relations,.

3. To raise productivity to a higher level in an era of full employment by lessening the

tendency to high turnover and frequency absenteeism.

4. To improve the economic conditions of workers in the existing state of industrial

managements and political government
 5. To Protect management and labor interests by securing mutual relations between
the two groups.

6. To avoid disputes between management and labor, and create a harmonizing

relationship between the groups so productivity can be increased.

7. Ensure full employment and reduce absenteeism, hence, increasing productivity

and profits.

8. To provide better wages and living conditions to labor, so misunderstandings

between management and labor are reduced to a minimum.

9. To bring about government control over plants where losses are running high, or
where products are produced in the public interest.

IMPORTANCE OF INDUSTRIAL RELATIONS

 Uninterrupted production
 Reduction in Industrial Disputes
 High morale of employees
 Mental Revolution
 Reduced Wastage
 Foster Industrial Peace
 Promote Industrial Democracy

CAUSES OF POOR INDUSTRIAL RELATIONS

The main reasons are as follows:

 An attitude of contempt towards the workers on the part of the management.

 Inadequate fixation of wages or improper wage structure.
 Indiscipline
 Unhealthy working conditions at the workplace.
  Lack of human relations skills on the part of supervisors and managers.
 Desire of workers for higher bonus, wages or daily allowances.
 Desire of employers to pay as little as possible to its workers.
 Inadequate welfare facilities.
 Dispute on sharing the gains of productivity.
 Retrenchment, dismissal and lockouts by the management.
 Strikes by the workers.
 Inter-union rivals.
 General economic and political environment such as rising prices, strikes by others
and general indiscipline having their effect on the employees attitudes.
 Mental inertia on the part of the management.

APPROACHES TO IR

There are mainly three approaches to IR

1. Unitary approach

2. Pluralistic Approach

3. Marxist Approach
1. Unitary Approach
 IR is grounded in mutual co-operation, individual treatment, team work and shared
goals.
 Workplace conflict is seen as temporary aberration (departure from what is normal,
usual, or expected, typically one that is unwelcome.), resulting from poor
management and employees who do not mix well with organizations culture.
 Unions co-operate with the management and the management’s right to manage is
accepted because there is no ‘ we they feeling’
 The underlying assumption is that everyone benefits when the focus is on common
interest & promotion of harmony
 It’s based on reactive IR strategy and seeks direct negotiations with employees.
 Participation of government, tribunals and unions are not sought or are seen as
necessary for achieving harmonious employee relation.

2. Pluralistic Approach (Conflict Approach)

  Pluralism is the belief in the existence of more than one ruling principle, giving
rise to a conflict of interests.
 It accepts that conflict between management and workers is inevitable but
containable through various institutional arrangements like collective
bargaining, conciliation, arbitration, etc. and is in fact considered essential for
innovation and growth.
 It perceives organizations as coalitions of competing interest, where the
management’s role is to mediate among different groups.
 It perceives organizations as coalitions of competing interests, where the
managements role is to mediate among the different interest groups
 It perceives Trade Unions as legitimate representatives of employee interests.
 It perceives stability in IR as the product of concessions and compromises
between management & unions.
 Employees join unions to protect their interests and influence decision making
by the management. Unions thus balance the power between management and
employees.
 Hence a strong union is not only desirable but necessary.
3. Marxist Approach
 Regard conflict as inevitable just like the pluralists…
 Marxists see conflict as a product of the capitalist society.
 Conflict arises not because of the rift between management and workers but due to the
division in the society between those who own resources and those who have only labor
to offer.
 Marxists approach thus focuses on the type of the society in which an organization
functions.
 Industrial conflict is thus equated with political and social unrest. Trade Unions are seen
both as labor reaction to exploitation by capitalists, as- well-as a weapon to bring about a
revolutionary social change. Wage related disputes as secondary.
 For Marxist all strikes are political.
  They regard state intervention via legislation & the creation of Industrial tribunals as
supporting mgt’s interest rather than ensuring a balance between the competing groups.

4. Systems Approach
 IR is a social subsystem within the economic and political systems
 Components are
Actors
Contexts (influences & constraints on decisions & action e.g. markets contexts,
technology, demography, industrial structure)
 Ideology - beliefs affecting actor views - shared or in conflict
 Rules - regulatory elements i.e. the terms & nature of the employment relationship
developed by IR processes.

PARTIES TO IR.

The main parties to Industrial Relations are

1. Employees
2. Employers
3. Government
4. Trade Unions
5. Employer Associations
6. Courts and Tribunals
ROLE OF THE PARTIES TO IR

Role of Employees

 To redress the bargaining advantage on one-on-on basis

 To secure better terms and conditions for their members
 To obtain improved status for the worker in his/her work
 To increase implementation of democratic way of decision making at various
levels

Role of Employers

 Creating and sustaining employee motivation

 Ensuring commitment from employees
 Negotiating terms and conditions of employment with TU leaders
 Sharing decision making with employees

Role of the State

Establishment and overseeing of,

 Labor policies
 Labor laws
 Industrial tribunals
 Wage boards
 Industrial relations policy