Full Marks: 80
The figures in the margin indicate full marks for the questions.
1(a) Discuss briefly the concept of Industrial Relations. Explain the importance and scope of Industrial Relations. (6+10=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: Under institutional factors are included items like state policy, labor 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.
The importance of industrial relation is as follows:
1. It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining , mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization.
2. It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the country.
3. It improves morale of the work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.
4. It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.
5. It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in banning of the unfair practices being used by employers or trade unions.
6. It prompts enactment of sound labor legislation: Industrial relations necessitate passing of certain labor laws to protect and promote the welfare of labor and safeguard interests of all the parties against unfair means or practices.
7. It facilitates change: Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly
Scope of Industrial Relations:-
The scope of industrial relations includes:
(a) Relationship among employees, between employees and their superiors or managers.
(b) Collective relations between trade unions and management. It is called union-management relations.
(c) Collective relations among trade unions, employers’ associations and government.
Scott, Clothier and Spiegel remarked that industrial relations has to attain the maximum individual development, desirable working relationships between management and employees and effective moulding of human resources. They have also asserted that either industrial relations or personnel administration is primarily concerned with all functions relating man effectively to his environment.
Thus, the scope of industrial relations seems to be very wide. It includes the establishment and maintenance of good personnel relations in the industry, ensuring manpower development, establishing a closer contact between persons connected with the industry and that between the management and the workers, creating a sense of belonging in the minds of management, creating a mutual affection, responsibility and regard for each other, stimulating production as well as industrial and economic development, establishing a good industrial climate and peace and ultimately maximizing social welfare.
(b) Distinguish between Human Relation approach and System Approach in the context 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
Human Relations 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 labor-management relations.
2(a) Explain the objective of Trade Union and highlight the problems faced towards the functioning of Trade Unions. (8+8=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) What is Workers’ Education? Explain the scope and purposes of Workers’ Education. (6+10=16)
-> Workers’ education is a means of providing workers and their representatives with the training they need to play an effective role in the economic and social life of their societies. At the same time it can also make a significant contribution to the dissemination of information on the various aspects of the work of the International Labour Organization which affects the interest of workers.
Under the responsibility of the Bureau of Workers’ Activities (ACTRAV), an important labour education programme is delivered in all regions, as well as at the International. Training Centre of the ILO. The ACTRAV-Turin Programme responds to the training needs of workers’ organizations with the delivery of training courses, training materials, specific projects and advisory services. Some of the programme’s objectives are:
• strengthening the process of institution and capacity building of trade unions;
· increasing the capacity of trade unions to plan and deliver educational programmes in line with their educational policies;
· strengthening staff development within trade unions;
· developing human resource within workers’ organisations, particularly the staff serving those organisations;
· strengthening tripartism and social dialogue with the development of bipartite and tripartite courses;
· promoting gender mainstreaming in all the activities of trade unions;
· promoting the development of union networks with the support of information technology and the exchange of union practices and policies; and
· providing training to trade unions on ways and means to be better involved in the enforcement and development of ILO Standards and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up.
The ILO Convention about education and training, the Human Resources Development Convention, 1975 (No. 142) provides that the ratifying State shall adopt and develop comprehensive and co-ordinated policies and programmes of vocational guidance and vocational training closely linked with employment, in particular through public employment services.
BASIC PURPOSES OF WORKERS’ EDUCATION
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.
OBJECTIVES OF WORKERS’ EDUCATION
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) Explain the different forms of Industrial Disputes. Discuss about the role of Wage Policies to prevent Industrial Disputes. (8+8=16)
-> Different forms of Industrial Disputes:-
A strike is a very powerful weapon used by trade unions and other labour associations to get their demands accepted. It generally involves quitting of work by a group of workers for the purpose of bringing the pressure on their employer so that their demands get accepted. When workers collectively cease to work in a particular industry, they are said to be on strike.
According to Industrial Disputes Act 1947, a strike is “a cessation of work by a body of persons employed in an industry acting in combination; or a concerted refusal of any number of persons who are or have been so employed to continue to work or to accept employment; or a refusal under a common understanding of any number of such persons to continue to work or to accept employment”.
This definition throws light on a few aspects of a strike. Firstly, a strike is a referred to as stoppage of work by a group of workers employed in a particular industry. Secondly, it also includes the refusal of a number of employees to continue work under their employer.
In a strike, a group of workers agree to stop working to protest against something they think is unfair where they work. Labours withhold their services in order to pressurize their employment or government to meet their demands. Demands made by strikers can range from asking for higher wages or better benefits to seeking changes in the workplace environment. Strikes sometimes occur so that employers listen more carefully to the workers and address their problems.
A lockout is a work stoppage in which an employer prevents employees from working. It is declared by employers to put pressure on their workers. This is different from a strike, in which employees refuse to work. Thus, a lockout is employers’ weapon while a strike is raised on part of employees.
According to Industrial Disputes Act 1947, lockout means the temporary closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.
A lockout may happen for several reasons. When only part of a trade union votes to strike, the purpose of a lockout is to put pressure on a union by reducing the number of members who are able to work.
For example, if a group of the workers strike so that the work of the rest of the workers becomes impossible or less productive, the employer may declare a lockout until the workers end the strike. Another case in which an employer may impose a lockout is to avoid slowdowns or intermittent work-stoppages. Occupation of factories has been the traditional method of response to lockouts by the workers’ movement.
When workers are dissuaded from work by stationing certain men at the factory gates, such a step is known as picketing. If picketing does not involve any violence, it is perfectly legal. Pickets are workers who are on strike that stand at the entrance to their workplace. It is basically a method of drawing public attention towards the fact that there is a dispute between the management and employees.
The purpose of picketing is:
a. To stop or persuade workers not to go to work
b. To tell the public about the strike
c. To persuade workers to take their union’s side
Gherao in Hindi means to surround. It denotes a collective action initiated by a group of workers under which members of the management are prohibited from leaving the industrial establishment premises by workers who block the exit gates by forming human barricades. The workers may gherao the members of the management by blocking their exits and forcing them to stay inside their cabins. The main object of gherao is to inflict physical and mental torture to the person being gheraoed and hence this weapon disturbs the industrial peace to a great extent.
Industrial disputes are prevented by different methods:-
Method # 1. Through Function Labour Welfare Officer:
Under Factories Act, labour welfare officer has to discharge the following function:
a. Supervision of welfare programmes – He has to supervise welfare programmes like housing, recreation, sanitation, working of joint committees, grievance redressal, etc.
b. Counselling to workers – He has to provide counselling to workers on personal and family problems, rendering advice to enable them to adjust to work environment and education.
c. Advising on policy formulation – He has to educate management in the matter of formulating policies relating to labour welfare measures, training programmes meeting statutory obligations of workers, developing fringe benefits and workers education.
d. Liaison with workers – He has to establish liaison with workers so that the latter may appreciate the need for harmonious relations between management and worker, understand the implications of HR polices and come to a settlement with the management.
e. Liaison with management – Establishing liaison with management so that the management appreciates the worker’s view points on various matters, different heads of departments meet the statutory obligations under the Act, maintaining congenial relations with workers and implementing various welfare schemes.
f. Working with external public – This includes establishing contact with factory inspectors, medical officers and other agencies in the community to improve productivity and productive efficiency of workers.
Method # 2. Tripartite and Bipartite Bodies:
Tripartite bodies involve employee, employer and Government. Bipartite committee comprises of employer and employee. Tripartite committee includes committees on Conventions, steering committee on wages, central implementation and evaluation machinery, Central Board of Worker’s Education and National Productivity Council.
Workers committee is an example for Bipartite committee. This committee is represented by employer and employees. It is established through legislation. Method of constitution of this committee is specified in the enactment. .
Functions of Workers Committee:
i. Promoting industrial goodwill.
ii. Securing cooperation from the employer and the employees.
iii. Removing causes of friction between parties to dispute.
iv. Creating an atmosphere for voluntary settlement of issues like wage benefits, bonus, terms of employment, workload, welfare, training, promotion, transfer, etc. Inter-union-rivalry, union’s opposition, employee’s reluctance to use workers committee for setting dispute hinder its effective functioning.
Method # 3. Standing Orders:
These are orders governing the condition of employment under Industrial Employment (Standing Orders) Act of 1946. It regulates conditions of employment from the entry level to exit of employees. It serves as a code of conduct for employees during their service in a given undertaking.
National Commission of Labour, 1999, stipulates the following in the standing orders:
i. Establishment employing 20 or more should put in place standing orders or regulations.
ii. Standing orders can be prepared by employer and employees/ recognized unions/federations.
iii. In case of disagreement between the employer and the employee, matter would be determined by the certifying authority i.e., Labour Commissioner having jurisdiction. Once the standing order is passed, it is binding on the parties to dispute.
Method # 4. Grievance Committee:
Grievance committee comprising the representatives of employees and employer can be established .and can periodically examine the issues and give redressal. The committee may inform the progress or status of grievance reported, in case it is felt that redressal may take time.
The committee may explain its inability to the grievant whenever it is not possible to redress the grievance within the scope of its authority. It may advise the grievant as to what may be done to further have it redressed. Thus, such a professional functioning of grievance committee can shoot trouble which may snowball into dispute at a later stage.
Method # 5. Joint Management Council (JMC):
Industrial Policy Resolution, 1956, gave birth to JMC. It provides an opportunity to workers to participate in management.
Salient features of JMC include:
i. This scheme is voluntary.
ii. The strength of JMC may be a minimum of 6 members and maximum of 12 consisting equal number of representatives of employer and employees.
iii. Decision arrived at JMC has to be unanimous.
iv. It can be set up in units with a workforce of 500 or more workers.
Hindustan Insecticide, HMT, Indian Airlines, Air India, TISCO, Aravind mills, Modi Spinners etc. were pioneers to JMC scheme. Past experience indicates that industrial relation is smooth in units where JMCs are functioning effectively. In 1994, JMCs were introduced in 238 public sector units at the shop floor and plant levels. Like workers committee, JMCs are also plagued by inter-union rivalries, union opposition and indifferent attitude of management.
Method # 6. Code of Discipline:
Indian Labor Conference in its 15th session in 1958 evolved code of discipline for ensuring sound industrial relation climate. The code was ratified by employee unions like INTUC, AITUC, HMS and UTUC and employers’ associations likes Employer Federation of India, AIUE, AIMO, etc., w.e.f. June 1, 1958.
i. Strikes and lockout should be declared with prior notice.
ii. No party should take action without consulting the other.
iii. Existing machinery for dispute settlement should be fully exhausted.
Method # 7. Collective Bargaining:
a. Joint Consultation:
When parties to industrial relations know each other and have mutual confidence in each other, this mechanism is effective. Management should listen to worker’s grievance and the workers should understand the management and ensure maximum cooperation at consultative meetings. Formal procedure for consultation should be strictly observed. The discussions should be free and frank. Top management should use this forum to mirror the viewpoints of workers and drive home its point to the workers. Consultation should be practised at all levels of management.
b. Strong Trade Union:
Strong Trade Union through its mighty bargaining power can achieve a better deal from management.
c. Labor Partnership:
Sharing a portion of profit with workers in addition to normal wage creates very good psychological climate conducive to industrial peace. It enhances social justice. It sends a positive message about the attitude of management. Workers develop a sense of loyalty to the organization. This nips all the troubles in the bud and ensures a sound IR climate.
(b) Discuss the role of Grievance redressal procedures. Which could be set up in an industry for settlement of the grievance of employee? (6+10=16)
4(a) What is Collective bargaining? Why it is considered as the best way of determining employer- employee relations? (6+10=16)
-> Collective bargaining is a term used to describe the procedure, whereby employers must attempt to reach an agreement regarding terms of employment and the working conditions of labour with the trade unions, instead of with individual workers.
Collective bargaining is a process of discussion and negotiation between an employer and a trade union culminating in a written agreement and the adjustment of problems arising under the agreement. The Supreme Court of India has defined the process of collective bargaining as a technique by which, dispute as to conditions of employment is resolved amicably by agreement rather than coercion. Workers, who are generally represented by a trade union, use this medium to express their grievance about various issues such as wages and working conditions.
Procedure for initiating collective bargaining
1. A charter of demands
The trade union will notify the employer for initiating collective bargaining negotiations. The representatives of the trade union draft a charter of demands which contains issues related to terms of employment and the working conditions namely wages and allowances, bonuses, working hours, benefits, holidays. In some cases, an employer may also notify the trade union and initiate collective bargaining negotiations.
Negotiation is the next step after the submission of the charter of demands by the trade union. Both the employer and the employee seek opportunities to suggest compromise solutions in their favour until an agreement is reached. If it impossible to reach out to an agreement, a third party (mediator / arbitrator) may be brought in from outside. If, even with the assistance of the third party, no viable solution can be found to resolve the parties’ differences, the trade union may decide to engage in strikes.
3. Collective bargaining agreement
Pursuant to the negotiations between the parties, a collective bargaining agreement will be executed between the employer and workmen represented by trade unions, setting out the terms of employment and the working conditions of labour.
If both parties fail to reach an agreement because of mutual consensus, the union may go on a strike, which shall be in accordance with the provisions of the Industrial Disputes Act 1947 (“ID Act”).
Once the conciliation officer receives a notice of strike or lockout, the conciliation proceedings shall commence. The State Government may appoint a conciliation officer or a Board of Conciliation to investigate disputes, mediate and promote a settlement. Workers are prohibited from going on strike during the pendency of such conciliation proceedings. Conciliation proceeding may have one of the three outcomes, namely (i) a settlement; or (ii) no settlement; or (iv) reference being made to the appropriate labour court or any other industrial tribunal.
6. Compulsory arbitration or adjudication
When conciliation and mediation fail, parties may either resort to compulsory or voluntary arbitration. Arbitration and the recommendations of the arbitrator may be binding to the parties. Section 7A of the ID Act provides for a labour court or industrial tribunal within a state to adjudicate protracted industrial disputes such as strikes and lockouts. Section 7B of the ID Act provides for constitution of national tribunals to resolve disputes involving questions of national interest or issues concerning more than two states. In the event, a labour dispute is not resolved by conciliation
and mediation, the employer, and the workers may refer the case by a written agreement to a labour court, industrial tribunal or national tribunal for adjudication or compulsory arbitration.
Collective bargaining is considered as the best way of determining employer- employee relations:-
1. Collective bargaining develops better understanding between the employer and the employees:
It provides a platform to the management and the employees to be at par on negotiation table. As such, while the management gains a better and deep insight into the problems and the aspirations of die employees, on the one hand, die employees do also become better informed about the organisational problems and limitations, on the other. This, in turn, develops better understanding between the two parties.
2. It promotes industrial democracy:
Both the employer and the employees who best know their problems, participate in the negotiation process. Such participation breeds the democratic process in the organisation.
3. It benefits the both-employer and employees:
The negotiation arrived at is acceptable to both parties—the employer and the employees.
4. It is adjustable to the changing conditions:
A dynamic environment leads to changes in employment conditions. This requires changes in organisational processes to match with the changed conditions. Among other alternatives available, collective bargaining is found as a better approach to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective negotiation:
The direct participation of both parties—the employer and the employees—in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.
(b) Write a note on Workers’ Participation in Management in India. (16)
-> Workers’ participation in Management in India was given importance only after Independence. Industrial Disputes Act,1947 was the first step in this direction, which recommended for the setting up of works committees. The joint management councils were established in 1950 which increased the labour participation in management. Since July 1975 the two-tier participation called shop councils at shop level and Joint councils were introduced. Workers’participation in Management Bill, 1990 was introduced in Parliament which provided scope for up liftment of workers.
Reasons for failure of Workers participation Movement in India:
1. Employers resist the participation of workers in decision-making. This is because they feel that workers are not competent enough to take decisions.
2. Workers’ representatives who participate in management have to perform the dual roles of workers’ spokesman and a co-manager. Very few representatives are competent enough to assume the two incompatible roles.
3. Generally Trade Unions’ leaders who represent workers are also active members of various political parties. While participating in management they tend to give priority to political interests rather than the workers’ cause.
4. Schemes of workers’ participation have been initiated and sponsored by the Government.However, there has been a lack of interest and initiative on the part of both the trade unions and employers.
5. In India, labour laws regulate virtually all terms and conditions of employment at the workplace. Workers do not feel the urge to participate in management, having an innate feeling that they are born to serve and not to rule.
6. The focus has always been on participation at the higher levels, lower levels have never been allowed to participate much in the decision-making in the organizations.
7. The unwillingness of the employer to share powers with the workers’ representatives, the disinterest of the workers and the perfunctory attitude of the government towards participation in management act as stumbling blocks in the way of promotion of participative management.
Measures for making Participation effective:
1. Employer should adopt a progressive outlook. They should consider the industry as a joint endeavor in which workers have an equal say. Workers should be provided and enlightened about the benefits of their participation in the management.
2. Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.
3. Workers and their representatives should be provided education and training in the philosophy and process of participative management. Workers should be made aware of the benefits of participative management.
4. There should be effective communication between workers and management and effective consultation of workers by the management in decisions that have an impact on them.
5. Participation should be a continuous process. To begin with, participation should start at the operating level of management.
6. A mutual co-operation and commitment to participation must be developed by both management and labour.
Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager; never the twain shall meet” should be replaced by “managers and workers are partners in the progress of business”
Forms of Workers Participation in Management in India
Forms of workers’ participation in management
The various forms of workers’ participation in management currently prevalent in the country are:
1. Suggestion schemes: Participation of workers can take place through suggestion scheme. Under this method workers are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed and any worker can write his suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the suggestion committee or suggestion screening committee. The committee is constituted by equal representation from the management and the workers. The committee screens various suggestions received from the workers. Good suggestions are accepted for implementation and suitable awards are given to the concerned workers. Suggestion schemes encourage workers’ interest in the functioning of an enterprise.
2. Works committee: Under the Industrial Disputes Act,
1947, every establishment employing 100 or more workers is required to
constitute a works committee. Such a committee consists of equal number of
representatives from the employer and the employees. The main purpose of
this committee is to provide measures for securing and preserving amity and
good relations between the employer and the employees.
Functions: Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:
o Conditions of work such as ventilation, lighting and sanitation.
o Amenities such as drinking water,canteens, dining rooms, medical and health services.
o Educational and recreational activities.
o Safety measures, accident prevention mechanisms etc.
o Works committees function actively in some organizations like Tata Steel, HLL, etc but the progress of Works Committees in many organizations has not been very satisfactory due to the following reasons:
o Lack of competence and interest on the part of workers’ representatives.
o Employees consider it below their dignity and status to sit alongside blue-collar workers.
o Lack of feedback on performance of Works Committee.
o Undue delay and problems in implementation due to advisory nature of recommendations.
3. Joint Management Councils: Under this system Joint Management Councils are constituted at the plant level. These councils were setup as early as 1958. These councils consist of equal number of representatives of the employers and employees, not exceeding 12 at the plant level. The plant should employ at least500 workers. The council discusses various matters relating to the working of the industry. This council is entrusted with the responsibility of administering welfare measures, supervision of safety and health schemes, scheduling of working hours, rewards for suggestions etc.
Wages, bonus, personal problems of the workers are outside the scope of Joint management councils. The council is to take up issues related to accident prevention, management of canteens,water, meals, revision of work rules, absenteeism, indiscipline etc. the performance of Joint Management Councils have not been satisfactory due to the following reasons:
o Workers’ representatives feel dissatisfied as the council’s functions are concerned with only the welfare activities.
o Trade unions fear that these councils will weaken their strength as workers come under the direct influence of these councils.
4. Work directors: Under this method, one or two representatives of workers are nominated or elected to the Board of Directors. This is the full-fledged and highest form of workers’ participation in management. The basic idea behind this method is that the representation of workers at the top-level would usher Industrial Democracy, congenial employee-employer relations and safeguard the workers’ interests. The Government of India introduced this scheme in several public sector enterprises such as Hindustan Antibiotics, Hindustan Organic Chemicals Ltd etc. However the scheme of appointment of such a director from among the employees failed miserably and the scheme was subsequently dropped.
5. Co-partnership: Co-partnership involves employees’ participation in the share capital of a company in which they are employed. By virtue of their being shareholders, they have the right to participate in the management of the company. Shares of the company can be acquired by workers making cash payment or by way of stock options scheme. The basic objective of stock options is not to pass on control in the hands of employees but providing better financial incentives for industrial productivity. But in developed countries, WPM through co-partnership is limited.
6. Joint Councils: The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more workers; there should be a Joint Council for the whole unit. Only such persons who are actually engaged in the unit shall be the members of Joint Council. A joint council shall meet at least once in a quarter. The chief executive of the unit shall be the chairperson of the joint council. The vice-chairman of the joint council will be nominated by the worker members of the council. The decisions of the Joint Council shall be based on the consensus and not on the basis of voting.
In 1977 the above scheme was extended to the PSUs like commercial and service sector organizations employing 100 or more persons. The organizations include hotels, hospitals, railway and road transport, post and telegraph offices, state electricity boards.
7. Shop councils: Government of India on the 30th of October 1975 announced a new scheme in WPM. In every Industrial establishment employing 500 or more workmen, the employer shall constitute a shop council. Shop council represents each department or a shop in a unit. Each shop council consists of an equal number of representatives from both employer and employees. The employers’ representatives will be nominated by the management and must consist of persons within the establishment. The workers’ representatives will be from among the workers of the department or shop concerned. The total number of employees may not exceed 12.
5. Write short notes on any two:
a) 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.
b) Procedure for Adjudication.
-> An adjudication is a legal ruling or judgment, usually final, but can also refer to the process of settling a legal case or claim through the court or justice system, such as a decree in the bankruptcy process between the defendant and the creditors.
Normally, adjudication represents the final judgment or pronouncement in a case that will determine the course of action taken regarding the issue presented. Outside of a legal process, adjudication can also more generally refer to other formal processes of judgment or ruling that render a final decision, such as the process of validating an insurance claim .
Adjudication describes the legal process that helps expedite and deliver a court’s resolution regarding an issue between two parties. The result of the process is a judgment and court opinion that is legally binding. Most adjudication hearings center on disputes that involve money or nonviolent infractions and result in the distribution of rights and obligations for all parties involved.
Adjudication specifically refers to the process and decision issued by a government-appointed (or elected) judge, as opposed to a decision issued by an arbitrator in a private proceeding or arbitration . While both judges and arbitrators are expected and required to follow the law, judges’ adjudications also must take into account the interests of the government and general public interest. Arbitration, meanwhile, only needs to consider the interests of the parties involved.
This legal process differs from other justice-seeking or evidence-based court cases. It is instead used to settle disputes between private parties, political officials and a private party, and public bodies and public officials. In the healthcare industry, for example, adjudication can determine a carrier’s liability for monetary claims submitted by an insured person.
Adjudication Process Disputes
The types of disputes handled or resolved through adjudication include the following:
· Disagreements between private parties, such as single-persons, individual entities, or corporations
- Disagreements between private parties and public officials
- Disagreements between public officials and/or public bodies
Requirements for full adjudication include requisite notice to all interested parties (all legally-interested parties or those with a legal right affected by the disagreements) and an opportunity for all parties to have their evidence and arguments heard.
The Adjudication Process
Formal rules of evidence and procedure govern the process where the initiating party, or Trier, gives a notice establishing the facts in controversy and defines any applicable laws. The notice also sometimes outlines the nature of the dispute between the parties and recounts where and when the dispute occurred, and the desired result based on law. However, there are no specific requirements regarding the notice of adjudication.
An adjudicator is then appointed and a notice is sent to the defending party, who responds by submitting a defense to the claim of adjudication by the plaintiff. The adjudicator gives the plaintiff and defendant a chance to present their arguments at a hearing and makes a final ruling. This is not too dissimilar from an arbitrator in an arbitration hearing settling a business dispute.
c) Types and Procedures of Arbitration.
-> Types of Arbitration:-
A few types of arbitrations in India on the basis of jurisdiction
Domestic arbitration is that type of arbitration, which happens in India, wherein both parties must be Indians and the conflict has to be decided in accordance with the substantive law of India. The term ‘domestic arbitration’ has not been defined in the Arbitration and Conciliation Act of 1996. However when reading Section 2 (2) (7) of the Act 1996 together, it is implied that ‘domestic arbitration’ means an arbitration in which the arbitral proceedings must necessarily be held in India, and according to Indian substantive and procedural law, and the cause of action for the dispute has completely arisen in India, or in the event that the parties are subject to Indian jurisdiction.
When arbitration happens within India or outside India containing elements which are foreign in origin in relation to the parties or the subject of the dispute, it is called as International Arbitration. The law applicable can be Indian or foreign depending upon the facts and circumstances of the case and the contract in this regard between the respective parties. To fulfill the definition of International Arbitration it is sufficient if any one of the parties to the dispute is domiciled outside India or if the subject matter of dispute is abroad.
International Commercial Arbitration
‘International Commercial Arbitration’ is defined as ‘the substitution of many burning questions for a shouldering one’. [i] NaniPalkhiwala has stated that ‘International Commercial Arbitration’ ‘is a 1987 Honda car, which will take you to the same destination with far greater speed, higher efficiency and dramatically less fuel consumption’ [ii] International Arbitration is considered to be ‘commercial’ if it related to disputes arising out of a legal relationships irrespective of their contractual nature and are considered as commercial under the law in force in India and where at least one of the parties is-
(1) A national of, or habitual resident in, any country other than India or
(2) a body corporate which has to be incorporated in any foreign country, or
(3) An association or a body of individuals whose core management and control in a country which is not India or
(4) the government of a country other an India. [iii] In International Commercial Arbitration the arbitral tribunal is bound to decide the conflict according to the rules of law chosen by the parties as applicable to the substance of the dispute; any designation by the parties of the law or legal system of a given country can be interpreted, unless it has been expressed otherwise, one which directly refers to the substantive law of that country and does not refer to its conflict of laws rules.
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.
d) Conciliation Concept.
-> Conciliation is one of the non binding procedures where an impartial third party, known as the conciliator, assists the parties to a dispute in reaching a mutually agreed settlement of the dispute. As per the Halsbury Laws of England, conciliation is a process of persuading parties to each an agreement. Because of its non judicial character, conciliation is considered to be fundamentally different from that of litigation. Generally Judges and Arbitrators decide the case in the form of a judgment or an award which is binding on the parties while in the procedure of the conciliation ,the conciliator who is often a government official gives its report in the form of recommendations which is made public.
Procedure of conciliation
1) Commencement of the conciliation proceedings [Section 62]-
The conciliation proceeding are initiated by one party sending a written invitation to the other party to conciliate. The invitation should identify the subject of the dispute. Conciliation proceedings are commenced when the other party accepts the invitation to conciliate in writing. If the other party rejects the invitation, there will be no conciliation proceedings. If the party inviting conciliation does not receive a reply within thirty days of the date he sends the invitation or within such period of time as is specified in the invitation, he may elect to treat this as rejection of the invitation to conciliate. If he so elects he should inform the other party in writing accordingly.
2) Submission of Statement to Conciliator [Section 65] –
The conciliator may request each party to submit to him a brief written statement. The statement should describe the general nature of the dispute and the points at issue. Each party should send a copy of such statement to the other party. The conciliator may require each party to submit to hima further written statement of his position and the facts and grounds in its support. It may be supplemented by appropriate documents and evidence. The party should send the copy of such statements , documents and evidence to the other party. At any stage of the conciliation proceedings , the conciliator may request a party to submit to him any additional information which he may deem appropriate.
3) Conduct of Conciliation Proceedings[Section 69(1),67(3)]-
The conciliator may invite the parties to meet him. He may communicate with the parties orally or in writing. He may meet or communicate with the parties together or separately. In the conduct of the conciliation proceedings, the conciliator has some freedom. He may conduct them in such manner as he may consider appropriate. But he should take in account the circumstances of the case, the express wishes of the parties, a party’s request to beheard orally and the need of speedy settlement of the dispute.
4) Administrative assistance [S. 68]-
Section 68 facilitates administrative assistance for the conduct of conciliation proceedings. Accordingly , the parties and the conciliator may seek administrative assistance by a suitable institution or the person with the consent of the parties.