ir & ll for sem iii for students

7/28/2019 IR & LL for Sem III for Students

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1. Industrial Relations :Concepts, Nature, Evolution and Growth

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Industrial Relations : Evolution and Growth

Features associated with changes of relations betweenemployer and workmen in a unit or industry:

Segmentation : Blue-color and White-collar Roles

Specialization : Horizontal Differentiation

Hierarchical levels : Vertical Differentiation

A New Relationship Interface : A Range of Interface,Maximization of production, Technological Transformation &

Innovations

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Changes in workplace relationships include: Increase in capital-labor ratio;

Work specialization

Fragmentation of work

Repetitive work to increase efficiency;

Fragmentation of work led to formation of groups and

employees and employers;

New perspective of an inter-group relationship;

Growing sense of insecurity required a collective effort to

counter any management initiative for retrenchment, dismissal,

etc.

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Changes in workplace relationships brought more playersassociated:

Groups of workmen / employees in the unit / industry;

Association of employers;

States to regulate public interest, social welfare

Hence Industrial Relations is Social Relations in Production

And, two dominant aspects of IR: Cooperat ion (among al l stake ho lders); and

Conf l ic t

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2. Objectives & Features of IR

Approaches; Role of State, TUs, EmployersOrganizations and ILO

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Industrial Relations : Objectives & Features

INDUSTRIAL RELATIONS : SOCIAL RELATIONS:

This term is generally associated with relations between

Employer and Employees in a Unit or Industry

Mass Production post Industrial Revolution, coupled with alaissez faire appro achled to Employers adopting a Mechanistic

approach to work and labor as a commodi ty and a factor of

product ion

Trade Unions emerged out of a necessity to restore somebalance in the relationship between pow erful capita land weak

labor

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Conflicting interests and ideological orientation conveyed anadversar ial and str i fe-torn relat ionship

The State sought to gain cooperation of the two partners in

industry supporting econom ic growth and development

through an improvement in the quality of work life (QWL).

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DEFINITION OF IR MUST TAKE THE FOLLOWING INTOACCOUNT:

IR is about relationship

The origin is in the relationship of employment

Employer Employee relationship pertains to all kinds oforganizations

There are actors other than employer and employee who

influence the relationship

The relationships are shaped by actors, structures, rules, law,

technology etc.

The impact of social, economic, political and technological

features of the context on the shaping of these relationships.

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SCOPE of Industrial Relations

SCOPE OF IR:

Management Union Relationship

Employer Employee Relationship

Relationships amongst various Groups of Employees

Effects of extraneous factors (State, Socio-Political-Economic

factors) on workplace relationships

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Scope of IR

IR deals with management of relationships, mainly with and

within groups or agencies like:

1. Employees:

Relat ion ship among / between employees and their sup er iors

2. Union Management or Labor Relations Collect ive Relat ions between TUs and Management

3.Government Management Union:

Collect ive Relat ionship between var ious organizat ions of

emplo yers and employ ees who represent management, thework force and th e State

4.Community or Public Relations

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Scope of IR

COMMUNITY OR PUBLIC RELATIONS:

Relat ion s between an ind ustry and the soc iety.

This explains impo rtance of CSR which h as become a part of

their work cul ture

SUBJECT MATTER OF SUCH RELATIONSHIP: Desirable working conditions

Establishment and maintenance of good personal relations

Developing a sense of belonging by ensuring closer contact

between persons from various rungs of industrial hierarchy

Developing situations characterized by mutual concern andsense of responsibility for improve performance

Maximization of social welfare

Maintenance of industrial peace and avoidance of industrial

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Aims of Industrial Relations

7. To ensure organizat ional disc ipl ine

8. To boost morale of workers and c reate a sense of

organizat ional pr ide

9. To enable wo rkers to solve problems th rough m utualnegot iat ions and c onsu l tat ions w i th management

10. To encourage and develop TUs in order to increase workers

strength and in st i tut io nal ize proc ess of co l lect ive bargaining

11.To correct imbalances in socio -econom ic order ar is ing out of

industr ia l development assoc iated wi th com plex relat ionships

and c onf l ic t ing interests.

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Objectives of Industrial Relations

OBJECTIVES OF IR: Different at enterprise / unit, industry and National levels

AT INDUSTRY OR ENTERPRISE LEVEL:

Healthy relat ionship

Mutual trust and un derstanding

Dysfunc t ional conf l ic t f ree envi ronment

Gain in produ ct iv i ty for m utual benef i ts

Minim izing los s of man-hou r due to acc idents, str i fe or

absenteeism

Reduced attr i t ion env ironm ent Part ic ipat ive working on pr inc ip les of industr ia l demo cracy

Enhancin g qual i ty of l i fe and work- l i fe balance

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Features of Industrial Relations

Arises out of employment relationship

Sets complex rules and regulations for the participants to

ensure industrial peace and harmony

Hinges on a cooperative spirit between all partners thereby

emphasizing the need for adjustments and accomodation in the

interest of growth and development.

Comprise employees and their organizations, employers and

their associations, and the government as participants.

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Schematic Interplay of Industrial Relations

LEGISLATURE

E

X

EC

U

T

I

V

E

Employees

and Groups

representing

Employees

Protective

WELFARE

Regulatory (Rights)

JUDICIARY

Performance /

Compensation

Regulatory (Terms andconditions of employment)

WELFAREJOBSEmployees

and Groups

Representing

Employees

A Schematic Interplay amongst the main variables in IR 18


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Approaches to Industrial Relations

SIX APPROACHES TO IR:1. The unitary approach

2. The Systems Approach : Dunlop (Input Transformation

Output)

3. The Conflict Approach: Pluralism & Post Capitalism

4. Webers Social Action Approach individual and society

5. The Gandhian Approach or Trusteeship approach

6. The Marxian or Radical approach

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1. UNITARY APPROACH:

Unity in structure

Unity in purpos e

Having a sing le source of author i ty

Having a cohesive set of part ic ipants

HENCE :

Only one source of author i ty : Management

Sing le / Unif ied lo yalty

Prerogat ive of Management to make bus iness decisio n andemplo yee related decisions .

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UNITARY APPROACH LEADS TO:

Predominantly managerially oriented

CB and TUs are perceived as being anti-social and anti-

managerial

Prefer union-less environment

KRA of HR Manager : To prevent unionization

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2. System Approach:

Dunlops Framework of Industrial Relations System

Inputs Processes Outputs

BargainingConciliation

Arbitration

Lawmaking

etc

Rules

Actors

Environmental

Contexts

Ideology

Feedback

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The Actors

Managers & their representatives

Work ers & their Organizat ions

Special ized Government Agencies concerned with workers,

enterpr ises and their relat ions hips

The Context

Techn olog ical character ist ics of the workp lace and work

commun i ty

Product and factors markets or budgetory cons train ts that

imping e on the actors

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The ideology

A body of common ideas

Ideas that def ines role and place of each acto r

Ideas each actors ho ld tow ards place and fun ct ion o f others in

system

Ideology of a stable system com pat ib i l i ty amon g al l in thesystem

The Network or Web Rules

Concerns procedures for establ ishin g rules, regulat ions ,

decision s, orders, col lect ive bargaining agreements, cu stom s,

t rad i t ions of wo rkplace and communi ty

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Some limitations of Systems Frame Work:

Consum ers and Communi ty not included

Talks abou t Roles and no t Peop le

Behavioral aspects l ike hum an motiv at ions and preferences not

emphasized

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Modification of System Framework

Top tier : Strategic Decision

Making

Middle Tier : Collective

Bargaining and/or HR

policy making

Bottom Tier:Workplace,

individual and

organizational

relationships

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Approaches to IR Six Perspective

3. CONFLICT APPROACH PLURALISM & POST CAPITALISM

Organization is composed of ind iv iduals

Ind iv iduals make up dist inct ive groups, each w i th i ts own

interests , object ives and leadersh ips Hence give r ise to tensions , com peti t ion (intra and inter)

Plural ism a bel ief of existence of more than one rul ing

pr inc iple giving r ise to conf l ict of interests

Hence, conf l ict is inevi table but c ontainable through var ious

inst i tut io nal arrangements

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Approaches to IR - Six Perspective

3. CONFLICT APPROACH PLURALISM & POST CAPITALISM

Post Capita l ist-so ciety - viewed as an open society in which

pol i t ical , econom ic and soc ial power is increasingly disp ersed

Hence regu lat ion o f indu str ia l and po l i t ical con f l ict are ofnecessar i ly disso ciated

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4. MAX WEBRERS SOCIAL ACTION APPROACH

Social Action is behavior having subjective meaning for

individual actors, with social action theory focusing on

understanding particular actions in industrial relations

situations rather than on just observing explicit industrialrelations behavior control;

Maruti Manesar labor unrest?

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5. TRUSTEESHIP APPROACH

Propounded b y Mahatma Gandhi

Imp l ies s tewardships w i thout ownership

Company accepts i ts tota l responsib i l i ty towards c onsumers,

wo rkers, shareholders and communi ty

Mutual respo nsib i l i t ies to one another

Managements role is to balance all claims delivering justice

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6. RADICAL APPROACH

Also know n as Marxian Perspect ive

Capital sy stem not ion is pro duct ion s ystem is pr ivately ownedand is mo t ivated by prof i ts ;

Contro l over produ ct ion is exerc ised by Managers w ho areagents of Owners

Confl ict is inevi table which cannot be con tained or con trol led aslong as capital ism prevai ls

Role of Trade Unions in pro test ing exploi tat ion is inevi table

Favo rs transform ation of TUs into revolut ion ary organizat ions

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2. Role of State, Trade Unions, Employers

Organization and International Labor

Organization (ILO)

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Role of Government

Transi t ion from planned econom y to market economy resul ted

in major sh if ts in state intervent ion in IR in the f ie lds o f:

Legislat ion

Trade Union s

Wage sett ing

Col lect ive B argaining,

WPM; and

Employment Secur i ty and Welfare

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Role of Government

Relat ion ship b etween state and m ult inat ional corpo rat ion is

often caugh t between dif ferent histor ic al paradigms l iberal,

neo-l iberal and neo-imp erial tradit ions .

Maruti-Suzuki : Haryana and Gujarat

Center State relation s affecting : Relat ive distr ibut ion o f power and author i ty regarding po l icy

making, legislat ion and enforc ement of labor laws; and

Competi t ion between states results in plural ism and diversi ty;

Gujarat, B ihar, West Bengal

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Role of Employers Organizations (EO)

These are formal groups of employers

Can be registered under the Trade Union Act, 1926 or The

Indian Companies Act, 1956 or the Societies Act, 1860

Main Aims and Objectives:

To defend, represent or advise affiliated member-employersthat may be necessary for promoting, supporting, opposing

legislative and other measures affecting or likely to affect

directly or indirectly industry, trade and commerce in general

or particular interest

To strengthen position of such member-employers in society at

large with respect to labor matters as distinct from economic

matters.

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Role of Employers Organizations (EO)

AIOE All India Organizat ion of Indian Employers

CIE Counci l of Indian Emplo yers

ASSOCHAM Associated Chamber of Commerce

FICCI Ind ian Chamber of Commerce & Indust ry

EFI Emp loyers Federat ion o f Ind ia

AIMO All Ind ia Manu facturers Organizat ion

SCOPE Standing Con ference of Pub l ic Enterpr ises

CIE Council of Indian Employers

Represent large scale industry in India Ensures closer cooperation and coordination between AIOE,

EFI and SCOPE

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Role of Trade Unions

Major A ims , Object ives & Ro le of Trade Union s

To promote and protect wo rkers interest throug h col lect ive

act ion

To ensure secur i ty of wo rkers

To obtain better econ om ic returns To Imp rove working condi t ions

To ensu re health, safety and welfare of w orkers at the work

place

Power to inf luence management

Power to inf luence government

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2. International Labor Organization (ILO)

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International Labor Organization (ILO)

Created in 1919

Fundamental Principles :

Labor is no t a commodi ty

Freedom of Exp ression and of asso ciat ion are essent ia l to

sus tain progress

Poverty anyw here con st i tutes danger to pros per i ty everywhere War against want requires to be carr ied on w ith unrelent ing

vigor w i th in each nat ion and by c ont inuance and conc erted

internat ional effor t in wh ich the representat ives of workers and

employers, enjoying equal status w i th those of governments,

jo in w ith them in free d iscuss ion and democrat ic dec is ion w itha view to promo t ion of common wel fare.

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General Conference 26th session at Philadelphia in 1944

Affirms:

All h uman beings , ir respect ive of race, creed o r sex, have r ight

to pursu e their mater ial wel l -being and s pir i tual developm ent in

condi t ions of freedom and digni ty , of econom ic secur i ty andequal oppor tun i ty ;

Member countries central aim would be to attain the above

throu gh national and internat ional pol icy

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Assist Member countries to recognize:

Ful l emp loyment and rais ing s tandards o f l iv ing

Minimum wages, hou rs of w ork, wages and earn ing for l iv ing

Effect ive recog nit ion o f co l lect ive bargaining

Cooperat ion of m anagement of labor in cont inuo us

improv ement of prod uct ive ef f ic iency Extension of socia l secur i ty measures

Adequate protect ion of l i fe and health of w orkers

Provisio n of ch i ld welfare and materni ty pro tect ion

Equali ty of educat ion and vocat ional oppor tun i ty

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ILC International Labor Conference:

Supreme body of ILO

Each member country send 4 delegates 2 from State and 1

each representing employers and workers

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International Labor Organization

INDIA AND THE ILO:

Ind ia is one of the founding members of ILO

ILO act iv i t ies have impacted IR in India in tw o important ways:

Ratif icat ion of the ILO con vent ion s and/or recommendationsform ed the basis for many labor legislat ion s

Requirement of the ILO to have representat ion from non-

government delegates helped to organize the employee and

employer group s

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CORE CONVENTIONS OF THE ILO:

ILO has made a total Eight Con vent ion s as Core Convent ion s

or Human Rights Convent ions.

INDIA HAS RATIFIED FOUR OF THE EIGHT CORE

CONVENTIONS: Forced Labor Con vent ion (No.29)

Equal Remunerat ion Convent ion (No.100)

Abol i t ion o f Forced Labor Convent io n (No.105)

Discr im inat ion (Emp loym ent Occupat ion) Convent ion (No.111)

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OTHER CORE CONVENTIONS OF THE ILO YET TO BE

RATIFIED BY INDIA:

Freedom of A ssoc iat ion and Right to organize (No.87)

Right to Col lect ive Bargaining (No.98)

Minimum Wage Convent ion (No.138)

Wors t Form o f Chi ld Labo r Convent ion (No.182)

IN RESPECT OF OTHER CONVENTIONS:

By 2004, India has rat if ied 39 includ ing 4 Core Convent ions of

the 184 Convent ion s

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International Labor Standards and their influence on Indian

Labor Legislation:

Conditions of work

Hours of work in:

Industry , Mines, Road Transport , Commerce and Off ices andOther Establ ishments

Weekly Rest

Holidays w ith Pay

Wages

Protect ion of wages

Minimum wages

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Labor Legislation:

LABOR ADMINISTRATION AND INSPECTION

EMPLOYMENT OF CHILDREN AND YOUNG PERSONS:

Minimum age of employment

Medical Examinat ion

Night Work

Preparat ion of employment

Worst form of chi ld labor

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Labor Legislation:

EMPLOYMENT OF WOMEN

Materni ty Protect ion

Night work

Employm ent in un heal thy processes

Equal Pay

HEALTH, SAFETY AND WELFARE

Safety

Indus tr ial Hyg iene and Health

welfare

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Labor Legislation:

SOCIAL SECURITY

Workmens Compensation

Sickn ess Insurance

Invalidity, Old Age and Survivors Insurance

Unemployment Provis ion

EMPLOYMENT AND UNEMPLOYMENT

Employm ent Off ices

Forced Labor

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I i l L b O i i


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Problems of Ratification:

Member countr ies can be grouped as:

Coun tr ies with Higher Labo r Standards

Countr ies having Federal Set-up

Coun tr ies where subject matter of Conv ent ions are regulated

by Col lect ive Agreements; and Indu str ia l ly Back -ward countr ies

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3.Industrial Relations in India

Phases of IR in India & IRMachineries In India

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I d t i l R l ti i I di


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Industrial Relations in India

PHASE OF IR IN INDIA :

1. Pre- independence Phase

2. The protective phase (1947 56)

3. The consolidation phase (1956-65)

4. The conflict ridden phase (1965 -1977)

5. The directionless phase (1977 1980)6. The productivity - Efficiency- Quality-orientation phase (1981

1990)

7. The competitive phase (post 1990)

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FORCES SHAPING IR SYSTEM IN INDIA:

The colonial history

Governments role in IR preventive and regulatory

India being a founder member of ILO

Political movement for Freedom and labor participation

Worker-centric State policies Protection of domestic industries important substitution

Multiplicity of TUs and political affiliation of TUs

Labor in concurrent list in COI

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BASIC CHARACTERISTICS OF IR SYSTEM IN INDIA:

Overall control through regulatory provisions

Regulated primarily through legislations

Though the laws promulgated are extensive, they are

confounded with serious ambiguities and gaps

Unionization largely restricted to organized sector

Most unions have political affiliations

Multiplicity of unions and external leadership

State intervention has continued to prevail since time of

Independence, although in the last decade, it has shown a

declining trend

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Basic Characterist ic s of IR System in Ind ia:

Marked difference in labor management relations in differentstates, organized and unorganized sectors, private and private

enterprises and multinationals and domestic companies

There is no National IR policy

Collective Bargaining is more a matter of optional practice with

no statutory backing

The changes brought in by the New Economic Policy have

resulted in changes in the IR structure

The heterogeneity of the emerging workforce has made it

difficult to establish standards or uniform IR practices in the

Indian industry.

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BIPARTISM:

A system of IR where social and labor issues are discussed

between Employee Groups (Trade Unions) and Employer/

Employers Groups (Management) usually at the Enterprise

level

TRIPARTISM:

A system of Consultations amongst three actors of IR:

Employers, Employees and the State

Can take place at either or both macro and micro level;

A binding spirit of mutuality and reciprocity

Tripartism is an important feature and cornerstone of the IRsystem and Policy in India

To give shape to this element of policy, a number of bodies

were created:

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Important tripartite bodies in India:

Indian Labor Conference (ILC)

Standing Labor Committee (SLC)

Committee on Conventions

The Industrial Committees

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Industrial Relations Machineries in India

Central Level:

Ministry of Labor Central Labor Commissioner (CLC) and its offices in various

Regions (RLC) and ALC

Conciliation Officers

State Level

Ministry of Labor

State Labor Commissioner and ALC

Labor Enforcement Officers (LEOs)

Conciliation Officers

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UNDER VARIOUS LABOR LEGISLATIONS:

Conc i l iat ion Off icer

ALC and RLC

Board of Conci l iat ion

Labor Cour ts

Regional PF Comm issio ner

Commissioner under Employees Compensation Act

Chief Factor ies Insp ector under the Facto r ies Act

Au thor i t ies as prescr ibed un der PoW A ct, Min imum Wages Act ,

Gratui ty Act, Shops & Establ ishments Ac t, ESI Ac t, ContractLabor Ac t etc.

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JUDICIAL MACHINERIES:

Distr ic t Cour t

High Cour t

Supreme Court

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4. Global Industrial Relations

Major Industrialized Economies

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Global Industrial Relations


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In most industrialized countries, initial primary goal of IR

system was to maintain labor peaceand more generallyindu str ia l stabi l i ty

In many countries, IR system began to be institutionalized only

in post-war period, coinciding with independence of some of

the countries

Factors affecting across industrialized work:

Decentral ization of bargainin g

Movement towards increased f lexibi l i ty in wages, labordeployment and wo rkplace pract ices

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FACTORS INFLUENCING IR FRAME WORK IN MAJOR

ECONOMIES:

Globalization

Imp act of Informat ion Technology

Changing demog raphic p rof i le of workers

Restructu r ing of industr ia l enterpr ises

Emergence of kn ow ledge economies and know ledge work ers Outsourc ing of non-core act iv i t ies

Uncer ta in ty in trade union movement

LEADING TO:

Decentral izat ion of Bargaining

Increased f lexibi l i ty in wages, labor deployment and w orkplace

pract ices.

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IR in UK


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IR in UK

Early 20thCentury:

Largely shaped around chal lenge of staple industry

Resulted in indu stry level col lect ive bargaining to take care of

the twin p roblem

Post war per iod: Bargain ing took place mo re and mo re at indu stry level

Hardly any sc ope of CB at enterpr ise level

Post 1979 and Thatcher ism:

Indu str ia l Chaos & Strong -arm tact ics of Tus

Passin g of Emp loym ent Relat ions Ac t (1979)

Marget Thatchers Economic and Political Philosophy of

reduc ed state intervention , Free Market and En trepreneurism66Prof. T.K. Goon

IR in UK


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IR in UK

Post 1979 and Thatcher ism:

Passin g of Emp loym ent Relat ions Ac t (1979)

Margaret Thatchers Economic and Political Philosophy of

reduc ed state intervention , Free Market and En trepreneurism

Resulted in:

Industr ia l Chaos & Strong -arm tact ics of Tus

Character ist ics of Tus in B ri tain:

Tradit ion o f Voluntar ism

Representat ion of workers through TU Off icers at workp laces

in the form of shop steward;

TU membership on occu pat ional rather than indus tr ia l l ines.

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IR in EU


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IR in EU

EC attemptin g a pool ing o f research on IR structures,

pro cesses, laws and pract ices in Member Coun tr ies with a viewto b r ing in g radual uni formi ty on larger pol icy matters

pertain ing to IR

Character ist ics o f TUs in EU:

Dist inct m ovement towards TU organizat ion at pan-EU level;

Some diversi ty in National level , effor ts are on at some sort of

integrat ion. ETUC set up in that direct ion

Unions in most m ember countr ies are organized on a sectora l

or oc cupat ional basis; Blu e-col lar un ion los ing inf luence and wh ite col lar unions

gaining signi f icance.

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IR in USA


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IR in USA

National and B us iness Culture : Ethnocentr ic

IR in USA paral lels in development of TUs, organized labor and

labor legislat ions, as it do es elsewhere;

Major Legislat ions :

The Norris L aGuardia Ac t, 1932

The Wagner A ct, 1935

The Taft Hartley A ct, 1947

The Landrum Griff in A ct, 1959

Trade Unions in USA:

AFL-CIO : American Federat ion of Labor And Congress o f

Ind us tr ial Organizations (1955); larges t federation s of unio ns in

USA

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IR in Australia


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IR in Australia

Bo th Federal and State Governments can legislate on labor

matters;

Oldest legislation : Con ci l iat ion and A rbi trat ion Act, 1904;

This was replaced in 1988 w ith Industr ial Relation s Ac t, 1988

This act requires federal trade unions to register themselves

w ith registrar to be able to take assistance of arbi trat ion

process and other legal r ights f lowing from the act .

Most s igni f icant is Wo rkplace Relat ions Ac t 1996 object ive tosett lement of conf l icts and dispu tes at wo rkplace itsel f .

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IR in China


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IR in China

Histor ical ly main ch aracter ist ics of th e IR System inc ludes:

State owner sh ip of indus tr ial enterpr ises;

Imp l ic i t guarantee of emp loyment for workers;

Central ized wage structu re;

A rigid labor market with l i t t le inter-enterpr ise or inter-regional m obi l i ty ;

Abs ence of pr ice- or eff ic iency-dr iven co ntrols o ver the indu stry

Post 1978, system is in a state of ferment, more part icular ly

sin ce 1983;

Government enacted a new labor law in 1994 essent ial ly to

create a new IR System with in thesocialist market economybut implementat ion has not been uni form.

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IR in Japan


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IR in Japan

IR System is an ins t i tut ional ized one

Histor ical ly i t focu sed :

Enterpr ise Unions

Lifet ime- employment systems ,

Broad based training; and

Senior i ty based wages

Key ou tcome of IR System is s imul taneous achievement of

stabi l i ty in labor-market and consid erable func t ional f lexibi l i ty

in workp lacelevel IR

Then c ame sudden and dramatic increase in outso urc ing wi th in

Japan, termed as work commissioning;

Result :

Increase in wage flexibi l i ty

Result ing into reduced power of trade unions

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EMERGING INTERNATIONAL TRENDS IN IR:


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Decl ine in un ion m embership and union densi ty

Consol idat ion and merger of trade unions

Variat ions in col lect ive bargaining pract ices

A shift in the relationship from employers organizations and

t rade unions to emp loyer and an individ ual emplo yee

Organization restructuring and emergence of atypical forms

of emp loyment.

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Changing Characteristics of Industry and Workforce in India


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g g y

MAJOR FORCES DRIVING INDUSTRIAL CHANGE:

Computerization

Automation

Rationalization

Globalization

EFFECT OF INDUSTRIAL CHANGE ON LABOR MARKET:

Changed occupational structure

Changed nature of work

Integrated job markets leading to a global occupational

structure

Improved education facilitating economic growth.

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g g y

RESULT OF CHANGES IN TECHNOLOGY:

Mechanization

Automation

Information-based services

Disintermediation

ABOVE IN TURN IS FORCING:

Rationalization of manpower

Labor substitution in case of automation

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g g y

Participation rate:

Proportion of people in labor force out of total cohort

population:

In 1999-2000:

7.32% of labor force i.e. 26.58 million were unemployed

A large proportion of those employed are in subsistence

employment

Only 8% of those employed are in organized sector

Education and skill profile of current workforce is still poor.

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MAIN CHANGES IN LABOR DEMOGRAPHICS:

Decline in participation rates across age groups

Entry of the younger age groups into labor force

More active participation of older people in labor force

A reduction in differentials between male and female

participation

Relatively low education and skill levels

An attitudinal change towards Technical and Vocational

courses.

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g g y

MAJOR TRENDS IN UNORGANIZED SECTOR

93% of employees in unorganized sector

Absence of an institutionalized IR system

Labor legislations not for smaller establishments

Social security --->out of reach

Absence of unions does not provide any opportunity forcollective bargaining

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TRENDS IN INDUSTRY:

Profit and market leadership are prime drivers, not social

objectives

Changes on market ad technology are throwing up newer

competency requirements

Large employment opportunities in private sector

Public sector employment faces stagnation and decline

Government employment is practically NIL

More opportunities in tertiary sectors

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Growing internationalization of business and workforce has its

impact on HRM in terms of:

Problems of unfami l iar laws;

Languages,

Pract ices,

Att i tudes, Management s tyles,

Work eth ics and more

HR & IR professionals Challenge :

To deal wi th m ore and mo re heterogeneous sets of w orkers;

and

More involvement in employees personal life

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Liberalization has led to Large scale reorganization of business

in terms of:

Expansions

Mergers and Acquis i t ions (M&A );

Jo int ventures (JVc);

Takeovers Internal restru ctu r ing of o rganizat ions

Situation is dynamics as well as uncertain and the

challenges for HR & IR professionals :

To manage employees anxiety, uncertainties, insecurities andfears.

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There are signs of changing demographics of the workforce

reflected in:

Age and Qual if icat ion mix;

Dual career couples;

Large chun k of young blood w i th contrast ing ethos of work; \ Growing number of women in workforce;

Work ing m others ;

More educated and aware workers;

Growing n umber of able superannuated workforce

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6. Trade Unionism and Trade Unions

86Prof. T.K. Goon

Trade Unionism and Trade Unions


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Trade Unionism, developed as an effort of the laborers to

organize during the Industrial Revolution era, promoted the

Factory System o f Product ionand a laissez-faireapproach ofthe State towards participants of Factory System

BASIC THEORIES EXPLAINING TRADE UNIONISM:

Revolut ionary Ownership based

Industr ia l Democracy , Rights b ased

Business Economic Power

Socio-psyc hologica l belongingness

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REASONS FOR JOINING A TRADE UNION:

1. To attain ec on om ic sec ur ity

2. To be ab le to imp ro ve bargain in g power

3. Fo r ven ti lat io n of workers g rievances

4. For an in fo rm ation med ium

5. To pro tec t unexpec ted econom ic needs

6. To satis fy soc ial needs

7. For secur ing power

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TOOLS OF TRADE UNIONISM:

Mutual insurance

Collect ive Bargaining

Legal enactment

Direct act ion

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LINK BETWEEN POLITICS AND TRADE UNIONS:

Politically committed members account for 15-20% of total

membership in a union, but their influence is high

Political parties and unions function in close cooperation, but

there is an essential difference between the two

TUs in India are fragmented due to their allegiance to different

political parties

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RIGHTS OF TUS:

ILO recognized the rights of association through Freedom of

Association and Protection of the Rights to Organize

Convention (Convention No.87)

Many countries have not ratified this convention

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MAJOR OBJECTIVES OF TUS:

1. Ens ure s ec ur ity o f work ers

2. Ob tain better econom ic retu rn s

3. Im prove work ing cond it ions

4. Power to in flu en ce managemen t

5. Power to in flu en ce governmen t

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Role of Trade Unions


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Major A ims , Object ives & Ro le of Trade Union s

1. To p romo te and p ro tec t workers interes t th rough co ll ec t ive

act ion

2. To en su re sec urity of work ers

3. To obtain better econom ic retu rn s 4. To Impro ve work in g co nd it io ns

5. To ensu re heal th , safety and wel fare o f workers at the work

place

6. Power to in flu en ce managemen t

7. Power to in flu en ce governmen t

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BROAD AREAS OF TU FUNCTIONS:

Organizational

Economic

Polit ical- legal

Welfare

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SPECIFIC TU FUNCTIONS:

1. Pro tec t Econom ic in teres ts o f th e members

2. In fl uence soc ial relat ionsh ips at the workplace

3. In fluence po lic ies at Nat ional level

4. Co llec tive ac tion fo r sec tional in ter es t

5. Co llabo rat ion fo r p roduc tiv it y and gain shar ing6. Enhan cin g p ro fes sio nal s tatu s

7. Research

8. Commun icat io n, welfare and educat io n

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FEATURES OF AN EFFECTIVE TU:

Internal ly Democ rat ic

Have a stro ng leadership and large fol lower ship

Exhib i t a responsib i l i ty tow ards their workers members

Comm it ted to promote industr ial peace and harmon y

Inc l ined towards co l lect ive bargaining that is col laborat ive andnot compet it ive

Possess f inancial secur i ty

Adaptable to change

Trade unions may be classi f ied on the basis of purpo se and th e

purpo se of membership

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Features of an Effective TU:

TRADE UNIONS MAY BE CLASSIFIED ON THE BASIS OF

PURPOSE AND THE PURPOSE OF MEMBERSHIP:

ON THE BASIS OF PURPOSE:

Regulatory

Reformist Revolutionary

ON THE BASIS OF MEMBERSHIP:

Craft

Industry

Staff

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6. Trade Unions in India

98Prof. T.K. Goon

Trade Unions in India


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Indian TUs are very fragmented

Early splits in Indian TUs tended to be on ideological grounds

Recent fragmentations have centered on personalities and

occasionally on regional and caste considerations

Trade union activities are restricted to industrial areas

AITUC was formed in 1920 on a national basis

PHASES IN THE GROWTH OF TUS:

First post-independence growth phase

Second post-independence growth phase (1960s -1980s)

Pre-liberalization era (1980-1991)

Post liberalization era (beyond 1991)

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UNION SECURITY:

Through membership that is sought by providing benefits of

collective bargaining only to those who remain their members

Union derives its meaning and strength from number of

members it has;

Unions (and management) look for measures that enhance

security i.e. maintaining a healthy membership in comparison

to others

Free riders are discouraged

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UNION SECURITY:

CAN BE ACHIEVED THROUGH PRACTICES SUCH AS:

Recognition (by management) as the sole bargaining agent

Maintenance of membership (preferential shop, agency shop,

closed shop, open shop, union shop)

Check-off system

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MAJOR PROBLEMS FACED BY TUS IN INDIA:

Outsid e or Pol i t ical Leadership

Mult ip l ic i ty of un ions and in ter-un ion r ivalry

Small size of the un ions

Low membersh ip

Uneven grow th Poor f inancial pos i t ion

Low level of know ledge of labor legislat ion

Fear of vict im izat ion

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TRADE UNIONISM IN INDIA:

Unionization according to Industry / Region / State

70,000 registered TUs, large number not registered

2% of workers unionized

PSUs: Industry-level collective bargaining in coal / steel/oil and

gas Enterprise wise elsewhere

Private sector : Plant level Collective Bargaining Union density according to the size of the industry

Craft unions in the government transport sector

Low unionization in SMEs

Twin battle against inter-union competition and assertive

management

Unionization in India under recession

104Prof. T.K. Goon

TRADE UNIONS IN INDIA


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REGISTRATION AND RECOGNITION

10% of workers members or 100, subject to a minimum ofseven, can apply for Registration of a union

One-third of the office bearers can be outsiders;

Trade Union can raise and maintain political funds as aseparate account;

Office bearers of a Registered TU are exempt from civil and

criminal liability;

But accountable under the Consumers Protection Act.

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REGISTRATION AND RECOGNITION

Registration is with the Registrar of TUs to enjoy certainprivileges

Recognition is by the management for collective bargaining

TU Act does not have provision of Recognition of TU

Certain State have enacted Law for Recognition viz Maharastra,Gujarat, Rajasthan and UP

Certain State have formulated recognition rules viz AP, Orissa

and WB.

In India all registered TUs have de facto, not de jure

recogn it ion. De facto m eansvirtually and De juremeans by law.

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PRIVILEGES OF RECOGNIZED UNIONS

Right to represent their members grievances

Right to collective bargaining / agreements on wages, working

conditions etc.

May ask for special benefits like office space and

infrastructure, notice board, time off for union work as well as

financial and other support for education, training and other

non-bargaining activities

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CLOSED SHOP / OPEN SHOP

Closed shop means union membership is pre-requisite foremployment.

UK had it, now illegal under EU Law.

Open Shop means joining union membership is after

employment within a specified period.

CHECK OFF

Means a system by which workers give in writing to deduct

union membership fees from their wages

Neither TU Act nor Payment of Wages Act explicitly provides

for it.

Not legal for employer to deduct union subscription without

members authorization and unions request.108Prof. T.K. Goon



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CODE OF DISCIPLINE

15th

Session of Indian Labour Conference (1957) laid down aset of principles for maintaining harmonious inter-union

relationship:

Every employee in an indus try or unit shal l have freedom and

r ight to jo in the union of his/her cho ice.

No coercion shal l be exercised in this m atter . There shall be no dual membership o f un ions

There shall be unreserved acceptance of and respect for the

democ rat ic funct ion ing o f TUs

There shall be regular and demo crat ic elect ions o f execut ive

bodies and o ff ice bearers of TUs

Ignorance and backw ardness of workers shal l not be exploi ted

by an organizat ion.

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CODE OF DISCIPLINE

No o rganizat ion shal l make excessive or extravagant deamnd s Casteeism , communalism and provinc ial ism s hall be

eschewed by al l unions.

There shall be no violence, coercion, int im idat ion or p ersonal

vi l i f icat ion in inter-un ion deal ings.

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CODE OF DISCIPLINE & CRITERIA FOR RECOGNITION OF TU

Where there is more than one union , a union c laim ingrecogn it ion sho uld be of one year old. For one union, this

condi t ion not apply;

Membership o f unio n sh ould have at least 15% of the wo rkers

A representat ive union shou ld have at least 25% of workers of

that industry in that area. Recogn i t ion shou ld remain valid for 2 yrs

Union w i th largest membership should be recogn ized

If a TU is not aff i l iated to any o f the four central organizat ions

of labor, issue of recogn it ion would be dealt separately.

In an industry in an area, i f a union o f that indus try enjoys 50%

or m ore membership, that union wi l l have r ight to deal wi th

issu es of local interests

Only unions w hich ob served Code of Discip l ine would be

recognized. 111Prof. T.K. Goon

TRADE UNIONS IN INDIA - CHALLENGES


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INTERNAL CHALLENGES

Low Membership Density Formal and Informal Sector Declining Union Membership

Reprentativity AITUC, CITU, INTUC, BMS, HMS etc.

Poor Finances

Major sources and Uses of Funds

Financial Strength of Trade Unions

112Prof. T.K. Goon

TRADE UNIONS IN INDIA - CHALLENGES


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EXTERNAL CHALLENGES

Global Competition Rapid Changes in Technology

Shifting Attitudes of Government

Managerial Strategies and HRM Policies

Assertion of their Rights by the Community and Consumers

ORGANIZATIONAL ISSUES

Leadership

Changing Demographics

Internal Democracy

Declining Union Power and Influence

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TRADE UNIONS ACT, 1926:

Enacted mainly in deference to ILO Convention, in recognition

of the right of workers to organize and also to strengthenbargaining power of workers

Act aims to provide for registration of TUs and in certain

aspects, to define the law relating to registered TUs

OBJECTIVES OF THE ACT:

Lay down conditions governing registration of TUs

10% or 100 subject to min imum of seven members can apply

for registrat ion .

Define obligations of a registered TU

Prescribe rights and liabilities of a registered TU

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SOME OBLIGATIONS & DUTIES OF REGISTERED TRADE

UNIONS:

Not more than 1/3 rd outsiders can be office bearers;

There has to be a separate fund for political purpose;

Must encourage collective bargaining

Must protect interest of its members

PROTECTION TO OFFICE BEARERS OF REGISTERED TRADE

UNION:

Office bearers are exempt from civil and criminal liability; butaccountable under Consumer Protection Act

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MANAGERIAL TRADE UNIONISM:

TUs in Executive cadre like Civil services, doctors, electricityboard, bank officers, merchant navy officers etc.

These associations among white-collared workers more

pronounced in public sector.

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RIGHTS OF RECOGNIZED TRADE UNIONS:

Right to raise issue with the management

Right to collect membership fees within the premises of the

organization

Ability to demand check-off facility

Ability to put up Notice Board on premises for union

announcements

Ability to hold discussions with members at a suitable placewithin the premises

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Rights of Recognized Trade Unions:

Right to discuss members grievances with employer

Ability to inspect beforehand a place of employment or work of

its members

Nomination of its representatives on Committees formed by

Management for industrial relations purpose as well as

statutory bipartite committees

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7. Conflict Management -

Causes, Approach & Leadership Style

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Conflict Management


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Specific causes of conflict:

Economic: Terms o f emp loyment

Hours of work

Shif t work ing

Promot ion

Demotion Layoffs

Retrenchment

Dismissal

Job-secur i ty

Retirement etc.

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Conflict Management


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Institutional: Recogn it ion of TUs

Membership o f TUs

Subjects of CB

Bargaining Unit Union Secur i ty

Unfair pract ices

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Conflict Management


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Psychological: Clash of p ersonal i t ies

Behavioral maladjustm ent

Demands for recognition of workers personality

Au thor i tar ian admin istrat ion Lack o f sc ope for self expression and par t ic ipat ion

Undue emphasis on disc ip l ines

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Conflict Management


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Denial of Legal and Contractual Rights:

Non-implementat ion of labor laws and regulat ions , standin g

orders, adjudicat ion awards and so on;

Violation of collective agreements, wage boards

recommendat ions, customer r ights and pr iv i leges and so on

124Prof. T.K. Goon

Modes of resolving conflict


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AVOIDANCE MODES

APPROACH MODE

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Modes of resolving conflict


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APPROACH MODE

Take more aggressive or understanding forms byusing positive steps to confront conflicts and find

solutions by way of:

1. Confrontat ion2. Compromise

3. Arb i trat ion

4. Negot iat ion

127Prof. T.K. Goon

Avoidance Mode


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1. RESIGNATION

Extreme avoidance of a conflict with a sense of helplessness

Conflict is seen as a part of reality, arising out of unreasonable

stand of out-group, usually seen as hostile.

Another form of Resignation is to ignore the conflict

Also denying unpleasant situation in the hope that conflict will

get resolved itself in due course. Many organizations resigns to recurring conflicts with Trade

Unions and do not attempt to resolve them, hoping solutions

may emerge in due course of time and other will understand

some day.

128Prof. T.K. Goon

Avoidance Mode


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2. WITHDRAWAL

Getting away from a conflict

Out-group is seen as belligerent but still open to reason

One way to get away from the conflict is to avoid situation ofpotential conflict, by leaving the two groups to work together.

Another way to withdraw from collaborative work with out-group

Another way is to withdraw from a conflict when it takes place.

Physical separation is a third way to withdraw

Fourth way of withdrawal is to define boundaries of interactionwith out-group and make arrangement to limit these.

Psychological withdrawal when one of the spouses stop

arguing and keep quiet whenever there is a difference ofopinion do not sort out the difference but even leave thehouse for sometime (physical withdrawal) herself

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Avoidance Mode


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3. DEFUSION

Buying time for dealing with a conflict

May take several forms

Let the participants cool down before taking up the real issue

Allow passage of time to settle down the emotions

Best example separate statehood of Telengana PM allowed

time to defuse the situation Another way to appeal to good sense of both groups, to the

sentiment that both are part of a larger group and have

common interests, interdependence, mutuality etc

Another way to develop temporary arrangement of interaction

through a third group creating buffer to absorb excessemotions.

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Approach Mode


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6. COMPROMISE

A process of sharing the gain without resolving the conflict.

Can be done by Bargaining

Often used in conflicts between managements and unions

If the out group is seen as being interested in peace (and hence

as reasonable), attempt is made to seek a compromise

Example: If management is interested in fulfilling certain export orders,

they may agree to increase incentive for a particular period and

union may agree to work for longer hours for that time

133Prof. T.K. Goon

Approach Mode


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7. ARBITRATION

A third party giving an award acceptable to both groups

If out group is perceived as being belligerent and not interested

in peace, and yet not totally unreasonable, arbitration is

resorted to;

Usually the conflict remains unresolved it is only postponed

for a time

In many managementunion conflicts, arbitration by labor

commissioner is sought.

134Prof. T.K. Goon

Approach Mode


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8. NEGOTIATION

Continuous interaction and dialogue between groups in order

to find a solution with maximum advantages to both

Most satisfactory solution can emerge in confronting the

problem and exploring alternative solutions

Possible when out group is perceived both as interested in

peace and as reasonable. Number of steps are involved in the process:

Unfreezing, Being Open, Learning Empathy, Searching for

common themes, Generating Alternatives, Searching for a

solution, Breaking the deadlock, Committing to the solution

within the group, and Committing the Whole Group

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Conflict Management Style


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Mode Perception of Out-group Style

Approach Unreasonable Opposed to our

interest, and

belligerent

Confrontation

Approach Open to reason Opposed to our

interests, and

belligerent

Arbitration

Approach Unreasonable Having own

interests, but

interested in

peace

Compromise

Approach Open to reason Having owninterests, but

interested in

Negotiation

ir & ll for sem iii for students

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