2014 – Solved Question Paper | Industrial Relation | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2014 – Solved Question Paper | Industrial Relation | Final Year – Masters of Commerce (M.Com) | Dibrugarh University



Paper: 205

(Industrial Relation)

Full Marks: 80

Time: Three Hours

The figures in the margin indicate full marks for the questions

1 (a) What are the factors which have influenced the Industrial Relation in an organization in India? (16)

-> Industrial relations or employment a relation is the multidisciplinary academic field that studies the employment relationship; that is, the complex interrelations between employers and employees, labor/trade unions, employer organizations and the state.

Factors Affecting Industrial Relations –

1. Institutional factors

2. Economic factors

3. Social factors

4. Technological factors

5. Psychological factors

6. Political factors

7. Enterprise-related factors

8. Global factors

These interrelated and interdependent factors determine the texture of industrial relations in any setting. In fact, they act, interact, and reinforce one another in the course of developing the industrial relations.

1. Institutional Factors: Under institutional factors are included items like state policy, labour laws, voluntary codes, collective bargaining agreements, labour unions, employers’ organizations / federations etc.

2. Economic Factors: Under economic factors are included economic organizations, (socialist, communist, capitalist) type of ownership, individual, company — whether domestic or MNC, Government, co­operative ownership) nature and composition of the workforce, the source of labour supply, labour market relative status, disparity of wages between groups, level of unemployment, economic cycle. These variables influence industrial relations in myriad ways.

3. Social Factors: Under social factors items like social group (like caste or joint family) creed, social values, norms, social status (high or low) — influenced industrial relations in the early stages of industrialization. They gave rise to relationship as master and servant, haves and have-nots, high caste and low caste, etc. But with the acceleration of industrialization, these factors gradually lost their force but one cannot overlook their importance.

4. Technological Factors: Under technological factors fall items like work methods, type of technology used, rate of technological change, R&D activities, ability to cope with emerging trends, etc. These factors considerably influence the patterns of industrial relations, as they are known to have direct influence on employment status, wage level, collective bargaining process in an organization.

5. Psychological Factors: Under psychological factors fall items pertaining to industrial relations like owners’ attitude, perception of workforce, workers’ attitude towards work, their motivation, morale, interest, alienation; dissatisfaction and boredom resulting from man-machine interface. The various psychological problems resulting from work have a far-reaching impact on workers’ job and personal life, that directly or indirectly influences industrial relation system of an enterprise.

6. Political Factors:The political factors are political institutions, system of government, political philosophy, attitude of government, ruling elite and opposition towards labour problems. For instance, the various communist countries prior to the adoption of new political philosophy, the industrial relations environment was very much controlled by the Government ever since change has altered considerably like other capitalist economics.

7. Enterprise-Related Factors: Under enterprise-related factors, fall issues like style of management prevailing in the enterprise, its philosophy and value system, organizational climate, organizational health, extent of competition, adaptability to change and the various human resources management policies.

8. Global Factors: Under global factors, the various issues included are international relations, global conflicts, dominant economic-political ideologies, global cultural milieu, economic and trading policies of power blocks, international trade agreements and relations, international labour agreements (role of ILO) etc.

(b) Distinguish between Human Relation approach and System Approach to the study of Industrial Relation. (16)

-> In the present scenario, the relationship between the employer and the employees has changed to a great extent what it used to be in the 1900s. The industries today are becoming more of technology-oriented, which has generated the need for skilled and educated personnel in the organizations.

Different scholars and experts have given various views in the context of industrial relations. To understand each of these approaches in details, read below:

Approaches to Industrial Relations

Systems Approach

Unitary Approach

Pluralist Approach

Marxist Approach

Sociological Approach

Gandhian Approach

Psychological Approach

Human Relations Approach

Systems Approach

John Dunlop gave the systems theory of industrial relations in the year 1958. He believed that every human being belongs to a continuous but independent social system culture which is responsible for framing his or her actions, behaviour and role.

The industrial relations system was based on three sets of different variables:

Actors: By actors here we mean that the individuals or parties involved in the process of developing sound industrial relations. This variable is denoted by ‘A’.

Contexts: The contexts refer to the setup in which the actors perform the given tasks. It includes the industry markets (M), technologies (T) and the power distribution in the organization and labour unions(P).

Ideology: The similar ideas, mentality or beliefs shared by the actors helps to blend the system. It can be expressed by the initial (I)

Based on these variables, the following formula was derived by Dunlop:

John Dunlop’s Systems Approach Formula: R = f(A,T,M,P,I)

Human Relations Approach

The person behind the concept of the human relations approach is Keith Davis. The organization and the society comprise of human beings who vary in various aspects as their behaviour, emotions, attitude, mindset and personality. But, they have come together to achieve common organizational goals and objectives.

The concept of human relations approach underlines the need for making the individuals familiar with the work situations of the organization and uniting the efforts of the workers. The purpose is to meet the social, psychological and economic objectives, by enhancing the overall productivity.

Some of the primary objectives of the human relations approach are as follows:

To ensure cooperation by promoting the mutual interest of the organization;

To enhance the productivity of the individuals;

To satisfy the psychological, social and economic needs of the employees.

This theory focused on enhancing the level of efficiency, worker’s morale and job satisfaction by applying specific techniques or tools and policies.

The human relations approach highlighted a technique for enforcing proper control over the work environment by forming small workgroups and at the same time eliminating the hurdles of sound labour-management relations.

2(a) Explain the role of Trade Unions and highlight the problems faced towards the functioning of Trade Unions. (16)

-> A trade union generally negotiates with employers on behalf of its members, advocating for improvements such as better working conditions, compensation and job security. These unions play an important role in industrial relations

Unions Work With Employers to Resolve Labour Issues

One of the most important roles that labor unions perform is that when there is a dispute in the workplace, the union acts as an intermediary between employers and business owners. Labor union leaders are experienced at solving problems through formal arbitration and grievance procedures. I

Save Employer Time Through Collective Bargaining

Every labor union in the U.S. operates under what is known as the collective bargaining agreement, which helps secure fair wages, working hours, benefits, and the standards necessary for wage increases. The collective bargaining agreement also protects your employees from being fired without just cause, which protects you from litigation, because you can only terminate a worker if that worker violated your company’s standards and policies

Help Reduce Turnover Rate

The goal of most labor unions isn’t to create conflict with your business; the goal is to ensure that employees are treated fairly, and that they feel comfortable and secure on the job. When that goal is achieved, employees tend to stick around, instead of trying to find a more favorable situation.

Problems faced by Trade Unions in India

1. Small Size:

According to the veteran trade union leader V.V. Giri, “the trade union movement in India is plagued by the predominance of small sized unions”. To quote there were 9,023 trade unions submitting returns during the year 1992. The total membership of these unions was 57.4 lakhs, with an average membership of 632 per union. Nearly three-fourths of the unions have a membership of less than 500. Smallness in size of the union implies, among other things, weakness in bargaining power.

2. Poor Finance:

Small size of unions has its direct bearing on its financial health. Total income and total expenditure of 9,073 trade unions with a membership of 57.4 lakhs were Rs. 3,238 lakhs and Rs. 2,532 lakhs respectively in 1992. The per member income and expenditure, thus, come to Rs. 56.4 and Rs. 44.1 respectively”. These are, by all means, very low. It is the small size of trade unions accompanied by small subscriptions; the trade unions cannot undertake welfare activities.

3. Politicisation :

A serious defect of the trade union movement in India is that the leadership has been provided by outsiders’ especially professional politicians. Leaders being affiliated to one or the other party, the unions were more engrossed in toeing the lines of their political leaders than protecting workers’ interests.

Ironically, in many cases, the political leaders possess little knowledge of the background of labour problems, fundamentals of trade unionism, the techniques of industry, and even little general education. Naturally, unions cannot be expected to function efficiently and on a sound basis under the guidance of such leaders.

4. Multiplicity of Unions:

Of late, trade unionism in India is also characterised by multiplicity of unions based on craft, creed and religion. This is well indicated by the socio-political realities after the mandalisation of polity and heightened sectarian consciousness after the demolition of the disputed structure of Ayodhya.

As noted earlier, the multiplicity of unions is mind-boggling in the DTC (50), the SAIL (240) and the Calcutta Corporations (100). The implication of multiplicity of trade unions is that it leads to union’s rivalry in the organization. Obviously, multiplicity of unions contributes to fragmentation to workers leading to small-sized unions.

5. Lack of Enlightened Labour Force:

The lack of an enlightened labour force capable of manning and conducting the movement efficiently, purposefully and effectively has been a major problem in the development of trade unions in the country. Lack of education, division by race religion, language and caste, migratory nature, lack of self consciousness, and non-permanent class of workers have been attributed as the causes for the lack of enlightened labour force in India.

6. Miscellaneous Problems:

The other problems from which trade union movement has suffered include:

(i) The majority of registered unions are independent unions as only 16,000 units out of 50,000 registered unions are affiliated to the Central Trade Unions (CTUs). One possible reason for this IS the educated workers’ preference to the independent unions,

(ii) It is also found that about 90% of workers in the public sector are unionized while in case of the private sector only 30 % workers are unionized”. This is a World-Wide trend, not only featuring in India. But it has a serious implication for trade union movement in India as more and more public sector undertakings are privatized. In turn, the trade union membership is to decline, a trend already visible by now.

(b) Explain the purpose and scope of Worker’ Education. (16)

Ans, Unionists and labour activists often speak about workers’ education, but what does the concept really imply and does it actually play a role for political consciousness?

Workers Education

“Workers’ Education” can be described as Education specially designed for workers and it may take the form of a single, short, practical talk to a simple group of plantation workers or three years of tuition for trade union officers.

Workers’ Education was defined by White Hall College, 1995, broadly as ”a process of acquiring knowledge, skills, awareness and appropriate attitudes for sustaining growth and performance of an individual worker, group, institution and the whole society.’‘

Workers’ Education concerns itself basically with the development of workers and understanding of labour problems in the broadest sense of the concept. Workers’ Education, therefore, is a basic instrument or tool for building an effective, sound and responsible labour movement in any given Country.


The basic purpose of is that; Workers’ education is designed to develop the workers’ understanding of “Labour Problems” in the broadest sense.

Thus it is not an end in itself and should always be regarded as a means to useful action.

However, education as a tool for individual and organizational growth cannot be over looked. Although social action is a key entity especially in workers education today, Workers’ education always regards knowledge as a potential tool.


The are basically five key objectives of workers education and these include;

1. Individual development

· A universal instrument for advancing the dignity of man and for gladdening his existence

· Will apply every power of thought and force of action to enlighten ignorance, alleviate misfortune, remove misery and banish vice

2. Stability and coherence in society

· The interaction between education and social change is clearly a more complex matter than appeared to such idealist reformers

· To avoid many uprisings by workers through providing equitable and uniform, and just treatment across board. But many times, this has not been the case especially in capitalist economies

3. Change and transformation in society

  • Positive instrument of change rather than just a protection

· Its object is not fit workers for their individual struggle for existence, but for the collective struggle for emancipation.

· Workers’ education is, not like a Man’s bridge as an end in itself, but as a means to social action.

· Largely Laissez-faire societies with relative freedom of speech, press and association

4. Efficient Workers’ organizations

Over-all programmes, namely:

· To improve their students ability to handle the tools of study and of social action

· To arouse and strengthen interest in trade unionism

· As a natural sequence, to give workers a better understanding of labour problems (including their political, economic and social implications).

· To equip trade unionists (officers and rank-and-file members) with livelihood skills and appropriate positive attitudes for social responsibility

Features of Workers’ Education

· Workers’ education is varied and varying from place to place and from time to time

· Workers education must be education of workers for workers’ needs-and, if it is to succeed, must be supported by workers and their organizations.

· Workers’ education must aim primarily at an understanding of labour, social and economic problems of direct interest to workers and their organizations.

· Workers education must help workers and their leaders to assume more industrial, civic and social responsibility.

3(a) Discuss the concept and features of Labour Welfare enshrined in the Constitution. (16)

-> Labour welfare relates to taking care of the well-being of workers by employers, trade unions, governmental and non-governmental institutions and agencies. Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so as to retain the employees for longer duration.

The Constitution of India has conferred innumerable rights on the protection of labour. Articles 14, 19, 21, 23 and 24 form part of the Fundamental Rights guaranteed under Part III of the Constitution.

Articles 38, 39, 39-A, 41, 42, 43, 43-A and 47 form part of the Directive Principles of State Policy under Part IV of the Constitution.

The concept of ‘Labour welfare’ is flexible and elastic and differs widely with times, regions, industry, country, social values and customs, the degree of industrialization, the general social economic development of people and political ideologies prevailing at particular moments.

The Committee on Labour Welfare (1969)- “Such facilities and amenities as adequate canteens, rest and recreation facilities, sanitary and medical facilities arrangements for travel to and from and for accommodation of workers employed at a distance from their homes, and such other services, amenities and facilities including social security measures as contribute to conditions under which workers are employed.”

Labour welfare can be described in terms of three dimensions namely the holistic welfare initiatives, social and relative welfare programs taken by the organization.

Holistic Concept of Labour Welfare : The “holistic” concept of labour welfare can be described as the achievement of desirable state of existence involving physical, mental, moral and emotional well-being of the working class. One case could be cited here to illustrate holistic labour welfare.

Social Concept of Labour Welfare: The social concept of labour welfare involves the wellbeing of an individual and the harmonious relationship established with the community and even his/her own family, working groups, superiors, subordinates etc.

1. Relative Concept of Labour Welfare: Labour welfare could be considered as a more or less relative term; relative to the time, place and even the individual(s) concerned. Hence taking this into consideration labour welfare should be described in terms of a dynamic and flexible concept. Thus the concept of labour welfare may vary from place to place, industry to industry and even country to country.

The features of labour welfare are as follows:

· Addition to wages and salaries – Welfare measures are undertaken in addition to regular wages and other economic benefits provided to the workers under legal provisions and collective bargaining.

· Functions – Labour welfare programme includes various services, facilities and amenities provided to workers for improving their health, efficiency, economic betterment and to enhance social status of the employees.

· Dynamic – Labour welfare is dynamic in nature. It varies from country to country, region to region and organisation to organisation. Labour welfare activities depend upon the need of the workers, their social status, and social class and so on.

· Flexible – Labour welfare is a flexible and ever changing concept as new welfare measures are added from time to time to the existing measures. The needs of work force changes with time and the changing social environment.

· Voluntary and/or mandatory – Some labour welfare measures are provided by laws and mandatory, while some are voluntarily provided by the organisation for betterment of the employees. Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency.

· Purpose – The basic purpose of labour welfare is to improve the social life as well as work life of the work force.

(b) Explain the different forms and levels of worker participation in Management.

-> Workers participation in management means giving scope for workers to influence the managerial decision-making process at different levels by various forms in the organisation. There are various forms of workers’ participation operation, among these include works committees, joint management councils, shop councils, joint councils, unit councils, representation on board of directors and a variety of joint committees in the private sector with specialised functions.

Forms of Workers Participation in Management –

1. Information-Sharing: This is the most rudimentary form of participation under which the management keeps the employees informed about the business conditions of the enterprise, its general prospects and likely changes in the methods of production and technology before they are put into effect. This practice enables the employees and their union to understand the economic aspects of the enterprise and express their reactions to the likely changes and state of business.

2. Consultative Participation: Under this type of participation, the management consults the workers on matters of mutual concern and obtains their opinion before taking a decision. The management, however, retains its authority to take a final decision in the matter. “When consulted, the workers and their unions may offer their suggestions and give their viewpoints, but cannot insist that their viewpoints be accepted.”

3. Associative Participation: This form of participation is similar to consultative participation with the difference that under this form, the unanimous decisions of the joint forums are generally accepted and implemented by the management. The employees and their union also extend their co-operation even at the implementation stage. Problem solving is also an example of associative participation. Under it, an employer facing an urgent problem in business requests the union to extend help to which the union often responds positively.

4. Administrative Participation: Under this form, certain joint forums such as canteen committee and welfare committee are entrusted with the responsibility of administering the agreed programmes.

5. Decisive Participation: This is the highest form of participation under which the management and workers’ representatives jointly take final decision with regard to specified matters. The representation of unions on the board of directors of a firm is an example of such participation.

The forms and levels of workers’ participation would be clearer from the study of the features of particular schemes in operation in different countries.

The following are the forms(Levels) of participation:

1. Works Committee: Enterprises with a workforce of 100 or more workers constitute a works committee with equal number of representatives from employees and the management. This committee has to evolve ways and means for maintaining cordial and harmonious relations between employees and the management.

2. Joint Management Council (JMC): JMCs were introduced in 1958. These councils are formed at plant level with equal number of employee and employer representatives. These are mainly consultative and advisory ones. The scope of JMCs encompasses to matters like working conditions, indiscipline, absenteeism, accident prevention, preparation of holiday schemes etc. It is generally alleged that both works committee and JMC are similar in scope and function. Hence multiplicity of bipartite consultative bodies did not serve the purpose.

3. Board of Representation: Under this scheme, one or two representatives of workers are nominated or elected to the Board of Directors. The basic idea is to safeguard worker’s interest, and usher in industrial harmony and good relations between workers and management. This is the highest form of participation. Government of India introduced this schemes in public sector enterprises like Hindustan Antibiotics Ltd, BHEL, NTC, National Coal Mines Development Corporation, Hindustan Organic Chemicals, etc.

4. Participation through Ownership: Workers by becoming shareholders take part in management. Management sell shares at reduced price to its committed and loyal workforce. Such workers are allowed to pay the price in installments or allowed financial accommodation to buy the shares. But participation is distinct from management. But its effect on participation is observed to be limited. In some cases, sick companies are allowed to be taken over by workers. For example, Kamani Tubes, New Central Jute mills, etc., are some of the companies taken over by worker’s cooperatives.

5. Participation through Complete Control: It is called self-management. Yugoslavia is the country practicing this model. This gives a complete control to the workers to directly manage all aspects of industries through their representatives. This method ensures complete identification of workers with their organization. The scope for industrial conflict becomes lesser under the self-management method. But the success of the method depends on the intensity of interest shown by workers in the management.

6. Collective Bargaining: This mechanism gives the management and the employees to lay down rules relating to working conditions and contract of employment. This type of participation is in practice.

7. Job Enlargement and Job Enrichment: Job enlargement means addition of task elements horizontally. Job enrichment means adding motivators to the existing job. Both are mechanisms to relieve the job holders of the monotony of work. They serve as participative mechanisms as they offer freedom and scope to use their wisdom.

8. Suggestion Scheme: Suggestions are invited from workers on the various aspects of work. Management reviews the suggestions made and put the constructive suggestions into action. Some companies share financial benefits accruing through good suggestions with the workers who contribute the suggestion. This mechanism kindles the creative or innovative urge in the workers. This is a win-win mechanism. The rewards awarded should be commensurate with the benefits derived from the suggestion.

9. Quality Circle (QC): A Quality Circle (QC) consists of 7 to 10 people drawn from the same work area, who meet regularly to define, analyse and solve quality and related problems in their area. Membership is voluntary and meetings are held once a week for an hour. During the meetings, members are trained in problem-solving. This concept originated from Japan. In India, the experience of quality circle is a mixed one

4(a) Highlight the importance of Collective Bargaining. How does it help towards settlements of Industrial Disputes? (6+10)

-> “Collective Bargaining” A process by which employers and representatives of the employees, attempt to arrive at agreement covering the conditions under which employees will contribute and be compensated for their services.


Management Point of View:

The main object of the organization is to utilize maximum work from the workers at the minimum cost which is must for the effective management of the organization and to earn a high rate of profit. For this purpose, co-operation is required from the side of the employees as the labor disputes arise mostly due to certain direct or indirect causes, and based on the rumors and misconceptions. The remedial measure for maintaining the cordial affable relations in collective bargaining.

Labour and Trade Union Point of View:

Due to the perishable and poor condition of the laborers the employers succeed in exploiting them. The collective bargaining helps the labour by putting restrictions upon the employer’s unilateral action, as the terms of the agreement can be changed only through negotiations with the labour. Trade unions work as an agent for the workers and collective bargaining can be made only through the trade unions. Trade union protect the economic and non-economic interests of the workers and negotiate with the employers for better employment opportunities.

Government Point of View:

Collective bargaining help in increasing the national income of the country as a peaceful settlement of any dispute between worker and employers will promote industrial peace and higher productivity. Several labor legislation is passed by the Government and if any person violates them, the government enforces them by force. The mutual agreement reached between the employer and employees for implementing the legislative provisions minimize the labour problems and industrial peace is promoted in the country without any force.

“A dispute needs to be settled as early as possible. Various methods are available for resolving disputes. “Collective Bargaining” is one of the best method to resolving disputes.”

Collective Bargaining

Collective bargaining is probably the most effective method of resolving industrial disputes. It occurs when representatives of a labour union meet management representatives to determine employees’ wages and benefits, to create or revise work rules, and to resolve disputes or violations of the labour contract.

The bargaining is collective in the sense that the chosen representative of the employees (i.e. the union) acts as a bargaining agent for all the employees in carrying out negotiations and dealings with the management. The process may also be considered collective in the case of the corporation in which the paid professional managers represent the interests of the stockholders and the board of directors in bargaining with the union leaders. On the employer side, it is also collective in those common situations in which the companies have joined together in an employer association for purposes of bargaining with a union.

Approaches to Collective Bargaining

Collective bargaining has been viewed from three perspectives:

1. As a process of social change,
2. As a peace treaty between the conflicting parties, and
3. As a system of industrial jurisprudence

Collective bargaining benefits both employees as well as employers. This means that the basic interests of the management are protected and also the rights of the employees. The two sides have a responsibility towards each other. For example, unions should not expect the management to concede on issues which would ultimately impair the company’s ability to stay in business. Likewise, the management must recognize the rights of employees to form unions and to argue for improved wages and working conditions.

Collective bargaining infuses democratic principles into the industrial world. Workers participate in decisions that affect their work and work life. Thus, collective bargaining may be viewed as a form of participative management.

(b). Crtically discuss the various causes of Industrial Disputes.

-> An industrial dispute is defined as a conflict or a difference in opinion between management and workers regarding employment. It is a disagreement between an employer and employees representative i.e. trade union. The issue of disagreement is usually pay or other working conditions.

Causes of Industrial Disputes

The causes of industrial disputes are many and varied. The major ones related to wages, union rivalry, political interference, unfair labour practices, multiplicity of labour laws, economic slowdown and others.

Wage Demands

By far, the most important cause for disputes is related to wages. The demand for wages has never been fully met because of inflation and high cost of living. High inflation results in increased cost of living resulting in never-ending demands from unions. Management and Unions have wage agreement generally valid for three years. Each new agreement is preceded by a prolonged battle between managements and unions, often resulting in strikes and lockouts. Agreement reached in one company will inspire unions in other plants in the locality, and make them pitch tents demanding similar rise in wages.
Closely related to wages are bonus, incentives, and other allowances. Of all these, wages have been a major issue of contention that leads to disputes.

Union Rivalry

Multiplicity of unions leads to inter-union rivalries. If one union agrees to a wage settlement, another union will oppose it. The consequence is never-ending disputes, as has been happening at the Singareni Collieries.

Political Interference

Major trade unions are affiliated to political parties. Political affiliation is not peculiar to our country alone. Even a cursory assessment of labour movements around the world would show that trade unions are, by their very nature, political, and that politicisation of labour is the rule rather than the exception.

Unfair Labour Practices

Majority of disputes are management inspired. The following points 2 justify the assertion:

1. The management is generally not willing to talk over any disputes with the employees or the representatives, or refer it to ‘arbitration’ even when trade unions want it so, and this enrages the workers.

2. A management’s unwillingness to recognise a particular trade union and the dilatory tactics to which it resorts while verifying the representative character of any trade union have been a source of industrial strife.

Multiplicity of Labour Laws

Labour laws in our country, as in several other countries, have been enacted to create conditions for the protection of labour from unfair employment practices and to provide a legal framework within which Industrial Relations is to be regulated.

Labour legislation is regarded as the most dynamic institution. From a simple restraint on child labour in 1881, labour legislation in our country has become an important agency of the State for the regulation of working and living conditions of workers, as indicated by the rising number and variety of labour acts. This rapid development of labour legislation is an integral part of the modern social organisation.

Economic Causes

Really, the most common causes of industrial disputes are economic causes. The demand for wage increase is the prime-most cause of the industrial disputes.

Managerial Causes of Industrial Disputes:

These causes include autocratic managerial attitude and defective labour policies etc. …

Government Machinery :

Government measures to prevent and machinery to settle the disputes are not much effective. Incapability of understanding and answering imperatives of development.

Wage Boards

Wages and allowances is the main issue in industrial disputes. The Government of India set up wage boards for various industries.

Standing Orders

In order to avoid frictions between employer and his workmen over the terms of employment, the Government enacted the Industrial Employment (Standing Order) Act 1946.

5. Write short note on : (Any two) (8×2=16)

(i) Procedure of Arbitration

-> Procedure of Arbitration:

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

Its principal characteristics are:

Arbitration is consensual

Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

The parties choose the arbitrator(s)

Under the WIPO Arbitration Rules , the parties can select a sole arbitrator together. If they choose to have a three-member arbitral tribunal, each party appoints one of the arbitrators; those two persons then agree on the presiding arbitrator. Alternatively, the Center can suggest potential arbitrators with relevant expertise or directly appoint members of the arbitral tribunal. The Center maintains an extensive roster of arbitrators ranging from seasoned dispute-resolution generalists to highly specialized practitioners and experts covering the entire legal and technical spectrum of intellectual property.

Arbitration is neutral

In addition to their selection of neutrals of appropriate nationality, parties are able to choose such important elements as the applicable law, language and venue of the arbitration. This allows them to ensure that no party enjoys a home court advantage.

Arbitration is a confidential procedure

The WIPO Rules specifically protect the confidentiality of the existence of the arbitration, any disclosures made during that procedure, and the award. In certain circumstances, the WIPO Rules allow a party to restrict access to trade secrets or other confidential information that is submitted to the arbitral tribunal or to a confidentiality advisor to the tribunal.

The decision of the arbitral tribunal is final and easy to enforce

Under the WIPO Rules, the parties agree to carry out the decision of the arbitral tribunal without delay. International awards are enforced by national courts under the New York Convention , which permits them to be set aside only in very limited circumstances. More than 165 States are party to this Convention.

(ii) Industrial Democracy

-> Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decision-making process, in organizations employing industrial democracy they also have the final decisive power (they decide about organizational design and hierarchy as well).

In company law, the term generally used is co-determination , following the German word Mitbestimmung. In Germany, companies with more than 2000 employees (or more than 1000 employees in the coal and steel industries) have half of their supervisory boards of directors (which elect management) elected by the shareholders and half by the workers. Although industrial democracy generally refers to the organization model in which workplaces are run directly by the people who work

The salient features of industrial democracy are as follows:

(i) Workers are treated as partners in the organisation and are given an opportunity to participate in the management.

(ii) The various methods through which industrial democracy can be introduced are work committees, joint management councils, suggestion schemes etc.

(iii) Workers are generally allowed to participate indirectly i.e. through their representatives. This participation is restricted to certain aspects of management only. The participation of workers is sought only in those areas which are directly related to them.

(iv) The morale of the workers is boosted as they have an effective say in the working of the enterprise where they are working. They feel as if they have been elevated to a higher status.

The objectives of industrial democracy are:

(i) The create a sense of belongingness of workers to the organisation.

(ii) To improve a sense of commitment to the organisational objectives, plans and activities among employers.

(iii) To satisfy the psychological needs of the employees.

(iv)To respect the human dignity of the employees.

The advantages of industrial democracy are as follows:

(i) There would be full cooperation of employees for the implementation of decisions as they participate in decision making.

(ii) Industrial harmony can be maintained as the employees feel the sense of belongingness.

(iii) Productivity can be increased.

(iii) Types of Adjudication

-> Types of Adjudication

Adjudication is the process of evaluating the results of a job candidate’s background check against your company’s employment screening policy to help filter out candidates who may not meet your hiring guidelines. By identifying candidates with relevant offenses, adjudication allows you to quickly filter out job applicants whose specific criminal histories disqualify them from the job.

For example, suppose a background check for a delivery driver job applicant shows she was recently convicted of driving under the influence. Depending on your company’s policy, that may prohibit her from being hired for the driver position. Adjudication allows you to spot this and filter her out of the list of qualified candidates.

Types of Adjudication Processes

Employers typically handle the adjudication process for background checks in one of two ways.


In the manual adjudication method, employers compare the results of background checks against their lists of hiring criteria. This often involves using a screening matrix or spreadsheet to sort candidates—disqualifying some, moving others along in the hiring process, and identifying those who need further investigation.

Manual adjudication also introduces a greater possibility of human error, compounded by states, counties and cities that may report the same criminal offense differently. Busy hiring managers may even forget to start the adverse action process for disqualified candidates.

Adjudication in the screening process is an important step, and while manual adjudication might seem like a good way to reduce hiring expenses, when you consider the labor and risks involved, it can actually be very costly.


Some third-party background screening providers offer adjudication as an additional service. A screening provider that automates much of the process can eliminate many of the challenges and weaknesses of manual adjudication.

Of course, you cannot completely automate your adjudication process, nor would you want to. Automated adjudication doesn’t free you from ultimate responsibility for whom you hire and reject.

A good automated adjudication solution lets you customize filters to fit your company’s needs and comply with state and local laws and industry regulations. This means you can focus on the information that matters most to your business.

Setting filters and automating workflows can also help eliminate hiring bias, reducing the possibility that preconceived notions or human prejudices will affect your hiring process.

(iv) Conciliation versus Arbitration

-> Conciliation versus Arbitration

Arbitration is a powerful means of resolving disputes between the organisation and its employees. It is a process in which an independent third party analyses the bargaining situation, listens to both parties and collects necessary data and make recommendations which are binding on the parties concerned.

Conciliation is the process wherein the representative of both employer and employees are brought together in front of a third party so as to persuade them to arrive at a decision by agreement between them. Any party can request the other, for appointing the conciliation officer. The conciliation officer or conciliator can be an individual or a group of people. There will be no conciliation if anyone of the two parties rejects the offer to conciliate.

The primary difference between arbitration and conciliation is that arbitration is the process by which parties select an independent person, who renders a decision regarding the case. Conversely, conciliation attempts to make parties come to an agreement, about the problem at hand.

Comparison Chart





Arbitration is a dispute settlement process in which a impartial third party is appointed to study the dispute and hear both the party to arrive at a decision binding on both the parties.

Conciliation is a method of resolving dispute, wherein an independent person helps the parties to arrive at negotiated settlement.


An arbitrator has the power to enforce his decision.

A conciliator do not have the power to enforce his decision.

Prior Agreement


Not Required

Available for

Existing and future disputes.

Existing disputes.

Legal proceeding




Industrial disputes are nothing but the differences and conflicts between the employer and employees of the organisation. It can arise because of unfair labour practices, wage demand, political interference, labour laws and so on. The methods discussed above are alternative dispute resolution, undertaken with the view to agreeably and peacefully settling the disputes, out of court. You can choose any of these two methods, as per your choice and requirements.

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