AN IN-DEPTH UNDERSTANDING OF INDUSTRIAL RELATIONS IN INDIA By- Mr. J. Jerry Bastin & Ms. Krishnardhula Saruyu
AN IN-DEPTH UNDERSTANDING OF
INDUSTRIAL RELATIONS IN INDIA
ABSTRACT:
Industrial
relations play a very vital role in the day to day Industrial and manufacturing
sector. A good industrial relation promotes Economic growth and development,
enhanced democracy, and increases employee morale. The complexity of relations
between the parties: employers – employer, employees – employees, or employers
– employees must be maintained harmoniously for a greater productivity. This
also ensures better communication in the Industrial atmosphere. Industrial
relations are a major key for a successful business to run because these
relations have a direct repercussions on the working environment as well as the
production of goods and the delivery of services.
Keywords: Industrial Relations,
Employer Employee Relationship, Industries, International Labour Organization,
Laissez Faire Policy, International Labour Standards.
INTRODUCTION:
“The complex interrelations among the managers. Workers
and agencies of the government.”
~ Dunlop
The
employer employee relationship has given birth to the origin of Industrial
Relations. The moment employee is detached from the ownership of materials,
their course of action, and means of production, they become wage – earners.
The owners of such material, production and the masters who overview the course
of action become the employers. Initially, the relation shared between the
employer and employee was formal, but as time passed along with the growth of
giant stocked companies as well as business corporations where each employer
employed over thousands of workers, the relation shared between them was no
longer intimate and formal. Along with the growth among the aforesaid
enterprises, the scope of trade unions, laissez faire, and alternative dispute
resolution has increased. These factors has took a charge over the nature of
the relation between employer and employee and has transferred the private relationship
into a relationship with public importance.
Industrial
relations is dynamic in nature. The nature of the same is expressed via an
outcome through complex group of dealings within the important players like employers,
employees, State and trade unions.
Industrial Relations:
Industry
means an establishment in which an individual, or a group of individuals engage
themselves in primary, secondary or tertiary sector[3],
whereas relation means the way in which two or more people are connected. When
a relation arises among two people in an industry, it is known as Industrial
Relation. There are a few basic objectives of Industrial Relations,
1.Safeguarding the interest of labour
and management in the industrial establishment to promote mutual understanding
and good will among the employers and employees.
2.Avoiding any industrial conflict or
strike and developing harmonious relations within the employers and employees.
This shall also ensure productivity among the workers and the industrial
progress of a Country.
3.Increasing the productivity to a
higher level
4.Establishing and promoting the
growth of Industrial Democracy on the basis of labour partnerships by sharing
profits and being a part of managerial decision benefitting the industry as
well as the Country
5.Eliminating or minimizing the
strikes, and lockouts by providing reasonable wages to all the employees,
improving the living and working conditions of employees and other fringe
benefits
6.Improving the economic conditions
of the employees in political government and existing state of industrial
managements and
LABOUR LEGISLATION:
Labour
legislations means the laws and acts implemented by the concerned government
authorities in relation to labour. Labour falls under the category of the
Concurrent list and both the State and the Central government authorities can
draft and amend laws regarding the same. These labour legislations are
considered to be a vital part in the Industrial society as it helps in:
1.
Promoting Economic Justice
2.
Providing Equal opportunities to everyone at
employment
3.
Protecting the weaker sections of community in the
Country
4.
Promoting Industrial Peace
5.
Creating better conditions aiming at economic growth
6.
Improvising labour standards in the Industrial
sector
7.
Promoting the workers against exploitation from the
employers
8.
Forming Associations or Unions
9.
Ensuring Collective bargaining rights to all the
employers and employees
10. Minimizing
State Interference
11. Safeguarding
Human Rights and protecting the dignity of the employees
The Labour
Legislations aim at fulfilling the aforesaid objectives and importance while keeping
in mind the four principles of Labour Legislations. The four labour legislation
principles are Social Justice, Social Equality, Social Security, and Social
Welfare. Social Justice involves providing everyone an equal opportunity to
reach their full potential and assist in pursuing their goals equally whilst
realizing their Fundamental Freedom, Social Equality ensures equal education
and employment for all the citizens, Social Security guarantees that the State
shall provide all the basic amenities to those who are not in a position to
afford, and Social Welfare certifies that the shall provide all the necessary
reliefs to the citizens who face a calamity, or if anyone is suffering from any
illness or disability.
MASTER – SERVANT RELATIONSHIP
AND CONTRACTOR:
Master
Servant relationship arises when a person agrees to work under the direction
and control of another person, with or without pay. Here, the person who agrees
to work is known as a servant and the person who controls and gives direction
is known as master. Here, the servant does not have the discretion to act on
his own or on behalf of the master. In the case of “P. Lal vs Union of India
& Ors”[4],
the severance pay was discussed in detail in regard with the master and
servant.
When the
master – servant relationship has been established, there are certain duties
that has to be executed by both, i.e., the master and the servant. The master
has an obligation of not to discharge the servant for a reason which is not
mentioned earlier, either spoken or written and he or she cannot discharge the
servant from his duty for exercising his or her personal right of filling a
complaint for discrimination or for seeking worker’s benefits via an
application. At the same time, the servant has the obligation be honest and
faithful in his or her performance and if any trade secrets are present, then
they must not be revealed, even after the course of their employment.
The
relationship between two parties in a Contract is completely different from
Master Servant Relationship. When an Industrial establishment gets into a
contract with the Contractor. The establishment will only specify what the work
is and not prescribe, control, or give directions to the Contractor as to how
to execute the said work. The Contractor has the discretion to act on his own,
unless the end result of the said acts is the work specified by the Industry.
TRIANGULAR RELATIONSHIP WITHIN
INDUSTRIAL RELATIONSHIP:
Employer
Employee
Government
All the
three corners of the said triangle are inter-connected and have various duties
to be discharged and purposes.
Employers:
The
employers are obliged to motivate the employees to make them more efficient and
enhance their commitment towards to Industrial Establishments. They have
certain rights over the employees and can fire them if the said requirements
are met, while at the same time, fire them in case they are found guilty of
violating any clauses or other reasons. The employers also have the power to
affect the interest of the employees by either closing or merging the
industrial establishments.
Employees:
Like the
employers, even the employee have certain obligations to be fulfilled. The
employees can, after going through the terms and conditions of their
employment, suggest changes regarding the same. They can also exchange their
views with the management and take part in the decision making process. The
employees have a special power to voice their grievances, if any, faced due to
the employers or the managerial decision taken by the management. The employees
can also get support from the Trade Unions and Labour Legislations.
Government:
The
Government plays a major role when a conflict arises between the employers and
employees. It ensures equal protection of interests of both the employers and
the employees. The Government also provides certain remedies in case of
violation of rights of the employers and employees via Wage Boards, Labour
Courts, and National Tribunals. The major reason for State intervention in
employer – employee relations is the requirements of the welfare state that are
listed in the Constitution of India.
LAISSEZ FAIRE:
The term
Laissez Faire was first originated in the 18th CE during the
Industrial Revolution. Laissez faire advocates government non – intervention,
meaning that it supports the idea of Industrial Establishment solving their
disputes that has arrived between the parties, i.e., employers and employers,
employees and employees, and employers and employees, within the said
establishment without having the government interference. Laissez Faire, in
other words, support in negotiation rather than seeking other remedial measures
like filing a case in front of the Wage Boards, Labour Courts, and National
Tribunals. In short, laissez faire means “Political Ideology that rejects the
practice of government intervention in an economy”. The main purpose of Laissez
Faire is to promote free as well as competitive market which seeks for liberty
in a natural state that humans emerge from. Adam Smith, a Scottish Economist
and Father of Economics, defined Laissez Faire as “The optimal functioning of markets
needed minimal government intervention”
Laissez Faire adopts few benefits,
such as Autonomy, innovation and Absence of taxes. Laissez Faire ensures
Autonomy, because the Industrial establishment, once adopts the Laissez Faire
policy, it will be free from government’s rules and regulations. Laissez Faire
Policy is more suitable for companies as it enables them to take risks and
invest highly in the economy. This will lead to greater incentives that would
maximize the profits of the company leading to economic growth. Laissez Faire
promotes Innovation that would facilitate in providing products in a wider
range along with more market advantage. Due to this, companies are compelled to
be more innovative and creative which, in return, leads to technological
advancements and economic growth. Laissez Faire safeguards the Industrial
Establishments from Taxes, i.e., there is absence of taxes. This enables the
concerned establishment, who implemented Laissez Faire Policy, to have a
greater spending power. It also leads to less corruption and discourages the
idea of corruption.
COLLECTIE BARGAINING:
“An agreement between a single
employer or an association of employers on the one hand and labour union on the
other, which regulates the terms and conditions of employment”
~Luidwig Teller
To understand the meaning of
collective bargaining in a better way, it is important to study the terms
separately first. The word collective is used in a sense which means bringing
together the representatives of the employers and the employees for discussing
the grievances and the word bargaining is used in a sense which means that the
parties negotiate via offering a counter proposal for the proposal already put
forth by either of the parties. Put together, collective bargaining means two
parties coming together to discuss their grievances and seeking for a feasible
solution via negotiation. In other words, “The Collective bargaining refers to
a process by which employers and representatives of employees attempt to arrive
at agreements covering the working conditions of employees.”
Collective Bargaining is considered
as a technique which is used to compromise on the conflicting interests among
the parties. It involves discussing and negotiating among the workers and the
management on pay for the work performed, work assigned to the employers or the
employees and working conditions in the Industrial establishment.
Collective bargaining carries several
characteristics. It is a Group Activity where the existence of two more people
is necessary for Collective Bargaining to carryon. Collective Bargaining is
mutual and flexible, both the parties enter into collective bargaining for the
safe of the other party and the proposals and arguments are not rigid. It is an
ongoing and continuous activity, and is a democratic process. Similarly,
Collective Bargaining aims at
1. Promoting Democratic Approach for
solving disputes which are work related.
2. Avoiding any need of third party
intervention
3. Improvising the employer and employee
relationship
4. Promoting Unilateral Action o the
part of the concerned management
5. Giving due recognition to the Trade
Unions
6. Assisting the parties in reaching a
mutually beneficial agreement
TYPES OF COLLECTIVE BARGAINING:
Collective Bargaining can be done
through various forms, i.e., Negotiation, Mediation, Conciliation and
Arbitration. Negotiation means two parties coming face to face and settling the
dispute via negotiating with each other, without third party intervention.
Mediation means, a neutral third
party will be present, who will act as a Mediator, to assist the parties in
solving the dispute. The Mediator will ensure the smooth functioning of the
Mediation session and provide for various remedies, which he / she deems it fit
for the conflict between the parties. It is not mandatory for the parties to
follow the said suggestions and can proceed with any other solution if the
parties does not think the suggestions beneficial.
In the process of Conciliation, the
third party will meet each party individually and then will fix a date for both
the parties to resolve the dispute. The third party in Conciliation is known as
the Conciliator.
In Arbitration, the Arbitrator will
act as Judge and an award is passed by the Arbitrator which acts like a
Judgment given by the Judge. The Award passed will be binding upon the parties
to the conflict. There are two types of Arbitration, Compulsory and Voluntary.
Compulsory Arbitration is the one that makes it compulsory for the parties to
resolve their disputes via Arbitration and not any other Remedial measures. The
same can be made mandatory via contracts signed by the parties, or any other
legal document mandating the parties to undergo Arbitration in case of disputes
among the parties. Voluntary Arbitration means both the parties agree mutually
to resolve the dispute among them via the process of Arbitration.
There are few stages that has to be
followed in the process of Collective Bargaining:
1. Drafting an Agenda
2. Offering Proposals and taking out
what is common among the said proposals. It also includes negotiating on
agreeable and non – agreeable terms
3. Arrive at a mutually agreeable
Solution / Settlement
4. Stage of Impasse: This is a stage
where no agreement is reached between the parties. In Impasse, an Arbitrator is
appointed and the Award passed by him / her will be final.
5. Strike or Lockout: If the Award
passed by the Arbitrator is still unsatisfactory, the employees can strike
against the same.
INTERNATIONAL LABOUR ORGANIZATION:
International Labour Organization
(ILO) is an Agency of the United Nations Organization which is set up to lay
down the Universal Labour Standards and ensure Labour peace. It was founded in
the year 1919 by the League of Nations. League of Nations was formed after the
World War I to safeguard peace and security in the world. Basic objective of
the International Labour Organization is to provide a condition to the
employees or workers in which they have security, freedom and dignity. They aim
at stipulating opportunities for women equal to that of men. The International
Labour Standards, laid down by ILO certifies the advancement of the global
economy, which in result, is constructive to all.
The ILO has drafted eight Fundamental
Conventions, which are listed below:
1. Forced Labour Convention, 1930 (No.
29), along with its 2014 Protocol
2. Freedom of Association and Protection
of the Right to Organise Convention, 1948 (No. 87)
3. Right to Organise and Collective
Bargaining Convention, 1949 (No. 98)
4. Equal Remuneration Convention, 1951
(No. 100)
5. Abolition of Forced Labour
Convention, 1957 (No. 105)
6. Discrimination (Employment and
Occupation) Convention, 1958 (No. 111)
7. Minimum Age Convention, 1973 (No.
138)
8. Worst Forms of Child Labour
Convention, 1999 (No. 182)
The ILO has also drafted four governance
conventions, which are:
1. Labour Inspection Convention, 1947
(No. 81)
2. Employment Policy Convention, 1964
(No. 122)
3. Labour Inspection (Agriculture)
Convention, 1969 (No. 129)
4. Tripartite Consultation
(International Labour Standards) Convention, 1976 (No. 144)
INTERNATIONAL LABOUR STANDARDS:
International Labour Standards are
the Legal Instruments drafted by the International Labour Organization
Constituents, i.e., Government, Employers, and Employees / Workers. They set
out the basic Right and Principles that are to be followed in a work place.
They can be in the form of Conventions, protocols, declarations, or
legislations. These instruments are legally binding to the International
Treaties, where the member states are given a special privilege to make
amendments or ratify the said documents.
The member states also have the
authority to post their recommendations, which are drawn up by the
representatives of ILO during the International Labour Conference. Once the
legal instruments are adopted by the member states, the member states are
obliged to submit their consent to the respected competent authority, usually
Parliament, within 12 months for consideration. If the respected amendments are
made in the Constitution parallel to the legal instruments, then the said legal
instruments comes into force after a year from the date pf ratification.
The International Labour Standards
are essential and has to be adopted by every state because,
1. The Basic target of ILS is the Labour
Laws of respected Countries and improvising the labour conditions in each and
every State.
2. Applying International Laws and
Policies at National Level
3. ILS lays down the Social Policy that
has to be followed by the Nations
4. It also incorporates Social responsibility
by ensuring and promoting responsible, inclusive and sustainable practices in
the workplace
5. ILS ensure free trade agreement among
the concerned establishments.
CONCLUSION:
To conclude, the relationship between
the employers and the employees is a nifty academic arena which helps in
studying the employment relation, i.e. the multifaceted interface among the
parties, trade unions, and the Government. A good industrial relation among the
parties also ensure higher productivity among the employees and a better
cooperation within the Industrial Establishment. Encouraging the Industrial
Establishments to take up Laissez Faire Policy for their benefits, and
promoting Collective Bargaining will be beneficial, both for the industries as
well as the economy.
[1] III
BA LLB (Hons.), Student At School of Law, Sathyabama Institute of Science and
Technology, Chennai, India
[2] III
BA LLB (Hons.), Student At School of Law, Sathyabama Institute of Science and
Technology, Chennai, India
[3] https://www.economicsdiscussion.net/industries/industrial-relations/32249
[4] Appeal
(civil) 1050-1051 of 2003