2017

COMMERCE

(Industrial Relation)

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

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 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 the purpose of workers’ education? Explain the different techniques used for 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.

Purpose of Workers’ Education:

Worker’s education is essential not only for protection and promotion of the interests of the workers but also for the development of the nation itself. Importance of educating workers in matters likes workers participation in management, labour laws, safety etc. is bound to grow in days to come. While on one hand workers need to be educated about their legitimate rights, clarified of wrong notions so that they may not be misguided into taking wrong action. It is important that workers are made fully aware of their fundamental duties as citizens of the country. The objectives of worker’s education as recommended by Workers Education Review Committee and accepted by Government are:

1. To equip all section of workers, including rural workers for their intelligent participation in social and economic development of the nation in accordance with its declared objectives.

2. To develop among workers a greater understanding of the problems of their social and economic environment, their responsibilities towards family members, and their rights and obligations as citizens, as workers in industry, as members and official of their trade union.

3. To develop leadership from among the rank and file of workers themselves.

4. To develop strong, united and more responsible trade unions through more enlightened members and better trained officials.

5. To strengthen democratic processes and traditions in the Trade Union Movement.

6. To enable trade union themselves to take over ultimately the functions of Worker’s Education.

Techniques of Worker’s Education:-

The techniques adopted for worker’s education keeps on changing from one place to another. Hence I am presenting in front of you some of the techniques commonly adopted in some advanced regions:

UK:-

The Workers’ Education Association is one of the pioneer association working hard for educating the workers in UK. The WEA is divided into nine regions in England (each matching a Government Office region), a Scottish Association and over 500 local branches. It creates and delivers about 14,000 courses each year in response to local need across England and Scotland, often in partnership with community groups and local charities. These courses provide learning opportunities for around 95,000 people per year, taught by over 3,000 professional tutors (most of whom work for the WEA part-time). These figures make the WEA the largest voluntary sector provider of adult education in Britain.

The WEA is a national charity and is supported by the Government through funding from the Learning and Skills Council in England, and in Scotland by the Scottish Executive and Local Authorities. It also receives fees from learners on many of its courses and is often successful in funding bids from government, lottery and other sources for educational projects in local communities around the country.

There are also Workers’ Educational Associations in Northern Ireland and in North and South Wales. Since 1992/3, these have been entirely separate organisations from the WEA National Association, which now operates only in England and Scotland.

Northern Ireland:-

The Workers’ Educational Association NI provides adult education in community and workplace settings. Its title is somewhat misleading as it provides education for all types. of people and in particular tries to reach out to those who missed out on learning first time round. It works mainly with those over 18.

Some background…

· It was set up in Belfast in 1910 and part of a wider network of WEAs, the first of which started in England in 1903.

· Today it operates across Northern Ireland and in the Border Counties in the Republic. It has around 6,500 learners in any given year.

Its courses are organized mainly in venues such as community halls, arts centres and training rooms in workplaces. In fact it can pretty much set up a course wherever and whenever a community group, voluntary organization, union or employer needs it.

The WEANI’s Vision is a prosperous, creative, and cohesive society where everyone is a learner. Its Mission is to make learning irresistible. Its values are:

• When it comes to learning no-one should be left behind. People learn best and create most when they are open to difference. Working collaboratively is second nature to the WEA Everyone receives a quality of service. Actively listening to learners is core to its business Innovation and risk taking is essential

The WEANI’s Vision, Mission and Values have shaped its Strategic Plan ‘Irresistible Learning’ which sets out its objectives up to 2009.

WEA London Region:-

WEA run a wide range of local courses all over London, from Basic Skills to Beethoven; from Community Interpreting to Contemporary Literature; from Digital Media to Dance; from E-learning and Egyptology to English as a Second Language, and from Health and Safety to Helping in Schools.

These courses all share common values:

Creating equality and opportunity, and challenging discrimination

Believing in people, communities and their potential to change through education

Putting the learner at the centre of everything one do.

Coleg Harlech WEA (North Wales):-

Workers’ Educational Association (North Wales) was established in 1925 as the North Wales District of the Workers’ Educational Association. On 1 April 1993 it became a separate charity in response to the new funding arrangements for further education in Wales, under the Further and Higher Education Act 1992 and on 1 August 2001 it merged with Coleg Harlech-a campus-based institution which shares the WEA’s ‘second chance’ ethos- to form Coleg Harlech Workers’ Educational Association (North Wales). The WEA in Wales is supported by DELLS (formerly ELWa), the funding arm of the Welsh Assembly Government.

WEA Australia:-

The WEA was established in NSW in 1913. Early work was patterned on the WEA in the UK. However, given the different demographic arrangements in Australia, and in the absence of other adult education providers, the WEA in Australia became a general adult education agency. In the 1980s, a range of other training providers started offering adult education and the WEA’s role has changed. The WEA has many clubs and societies including the WEA Film Study Group.

3(a) How far wage policies help to prevent Industrial Disputes? (16)

-> 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. The company had 445 strikes in 1990-91 resulting in a loss of production of 3.12 million tonnes and 34.19 lakh man-days. The reason is mainly union rivalry. One union or the other is always on strike and often the demands of rival unions on an issue are conflicting.

Multiplicity of unions poses peculiar problems to managers. One such problem relates to authenticity of memberships. Unions put up respective numbers of members in such a way that when added together the figure exceeds the total number of workers in the organisation. Another problem relates to the selection of a bargaining agent in the process of collective bargaining. Union rivalry leads to large-scale violence.

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.

What happens when unions get politicised? In the first place, distant ideological issues divide and fragment unions on party lines. When unions multiply, inter-union rivalry erupts and the consequences are too obvious. Second, inspired by their political ideologies, certain unions refuse to sign an agreement even if it is favourable to all the workers and thus these perpetual dissenters manage to keep the issue alive.

Third, every political party somehow engineers strikes to demonstrate its political strength. Invariably, the political party which is in power favours a union which is affiliated to it, and the result is end less disputes.

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.

Measures to prevent industrial disputes:-

1. Works Committees:

This Committee consists of representatives of workers and employers. Under the Industrial Disputes Act 1947, works committees exist in industrial establishments in which one hundred or more workmen are employed during the previous year. It consists of an equal number of representatives of workmen and employer.

It is the duty of the works committee to promote measures for securing and preserving amity and good relations between the employer and workmen. It also deals with certain matters viz., conditions of work, amenities, safety and accident prevention, educational and recreational activities, promotion of thrift and saving etc.

Works committees will not deal with the following items:

(i) Wages and allowance (ii) Bonus and profit sharing schemes (iii) Rationalisation and matters connected with fixation of workload (iv) Matters connected with the fixation of standard labour force (v) Programmes of planning and development (vi) Retrenchment and lay-off (vii) Victimisation for trade union activities (viii) Provident Fund, gratuity schemes and the retiring benefits (ix) Quantum of leave and national and festival holidays (x) Incentive schemes (xi) Housing facilities.

2. Conciliation Officers:

Conciliation Officers are appointed by the Government under the Industrial Disputes Act, 1947.

The duties of Conciliation officer are given below:

(i) He has to do everything for bringing a fair and amicable settlement of the dispute. In case of public utility service, he must hold conciliation proceedings in the prescribed manner.

(ii) He shall send a report to the government if the dispute is settled in the course of conciliation proceedings along with the memorandum of the settlement signed by the parties.

(iii) Where no settlement is reached, conciliation officer sends a report to the government setting forth the steps taken by him for ascertaining the facts, circumstances relating to dispute and the reasons on account of which settlement could not be reached. The report shall be submitted within 14 days of the commencement of the conciliation proceedings.

In India, government of Bombay first introduced Conciliation and Labour Officer in 1934 when the Bombay Trade Dispute Conciliation Act was passed.

3. Boards of Conciliation:

The Government can also appoint a Board of Conciliation for promoting settlement of industrial disputes. The chairman of the board is an independent person and other members (may be two or four) are to be equally represented by the parties to the dispute.

The duties of the board include:

(a) To investigate the dispute and all matters affecting the merits and do all things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement.

(b) A report has to be sent to the government by the board whether a dispute is settled or not within two months of the date on which the dispute was referred to it.

4. Court Of Enquiry:

The government may appoint a court of enquiry for enquiring into any industrial dispute. A court may consist of one person or more than one person in that case one of the persons will be the chairman. The court shall enquire into the matter and submit its report to the Government within a period of six months.

5. Labour Courts:

The government has set up Labour Courts for dealing with the matters specified in the Second Schedule of the Industrial Disputes Act 1947. These matters include:

(i) The propriety or legality of an order passed by an employer under the standing orders.

(ii) The application and interpretation of standing orders.

(iii) Discharge or dismissal of workmen including reinstatement, or grant or, relief to workmen wrongfully dismissed.

(iv) Withdrawal of any customary concession or privilege.

(v) Illegality or otherwise of a strike or lock-out, and

(vi) All matters other than those specified in the Third Schedule.

6. Industrial Tribunals:

A Tribunal is appointed by the Government for the adjudication of Industrial Disputes relating to any matter specified in the Third Schedule. These matters are given below:

(i) Wages including the period and mode of payment.

(ii) Compensatory and other allowances.

(iii) Hours of work and rest intervals.

(iv) Leave with wages and holidays.

(v) Bonus, profit sharing, provident fund and gratuity.

(vi) Shift working otherwise than in accordance with standing orders.

(vii) Classifications by grades.

(viii) Rules of discipline.

(ix) Rationalization.

(x) Retrenchment of workmen and closure of establishment.

(xi) Any other matter that may be prescribed.

The Industrial Tribunal consists of only one person who is appointed by the Government. He should either be a Judge of a High Court or District Judge for a period of not less than three years. It makes an award after hearing the parties to the dispute and the award is binding on them.

7. National Tribunal:

A National Tribunal is constituted by the Central Government for the adjudication of industrial disputes involving questions of national importance. A National Tribunal shall consist of one person only to be appointed by the Central Government. A person who is or has been a Judge of High Court or who has held the office of the Chairman or member of the Labour Appellate Tribunal is eligible for the appointment of this tribunal.

(b) Bring out the merits and demerits of Grievance handling procedure in an organization? (16)

-> A grievance is when an employee feels they have been wronged in some way, enabling them to file a complaint with the company.

The wrongness can be of any type. Be it an unfair pay cheque, racial or sexual harassment, or even overload of work. The grievance is basically a formal complaint.

It consists of steps and procedures, with a few rules that the investigation party must follow before pitching their resolution. These processes usually vary from firm to firm, but they are generally specified in contracts and company policies.

Advantages of Grievance Procedures

The ability to file a grievance with the company is the right of every employee. It is necessary and not developing proper grievance procedures is a violation of the law – not to mention the ethical violations. Regardless, it has several advantages, a few of them are:

1. Familiar Procedure.
It is a very formal procedure. The investigative and solution strategies are predefined and easily accessible for the employee. This gives the complainant somewhat a definite idea of the steps the company will follow in response to their complaint.

2. Nothing Overlooked.
It is a well-detailed process, so there’s only a minor chance of missing any important details.

3. Take it in writing.
This is the fundamental of any business dealing – to have the agreement in writing. Similarly, the grievance procedure is well-documented and can be referred to in the future. This gives rise to another important advantage.

4. Awareness cannot be denied.
As it is a documented procedure, the company cannot claim that they were unaware of the complaint. For example, if there was a complaint of an employee being burdened with extra tasks, the company cannot get away by simply claiming: “Oh, we didn’t know they were overloaded”.

5. Transparent Procedure.
The processes followed for investigation and conclusion can be made quite transparent. This eliminates the chances of corruption or exploitation.

6. Lawyers ain’t cheap.
Some unions also allow the filer of complaint to be represented by a professional union representative or an attorney. As they don’t cost the complainant, it removes the hesitance within them to come forth with their problem.

Disadvantages of Grievance Procedures

As with every facility, the grievance has also a few disadvantages, in some cases, it can even be misused. Following are some of the disadvantages caused by grievance:

1. Hassle.
Sometimes, the procedure may seem “a bit too much hassle”. This might discourage employees from coming forth with complaints. Likewise, it may also discourage employers from acting upon a complaint unless it’s formally written down.

2. When will it be resolved?
As it is a detailed procedure, it can tend to become quite lengthy. This means it could be unnecessarily dragged until the final resolution. The main reason for this is to ensure all necessary procedures are followed down to the minute detail.

3. Too much paperwork and retardation of workflow.
It can halt workload and drench the company in a lot of paperwork. Furthermore, the procedure is a lengthy process involving the time of the investigation party while they cover their investigation. The people are also affected.

They can often find themselves in the middle of the investigation, complying with the requirements of the investigative party. They could have been working during this time.

4. Protection against retaliation.
This is a double-edged sword. The complainant has the freedom to come forth with their problem because the rules protect them from retaliation from the company. However, the person can also misuse it to drench drenching the company in a lot of paperwork and affecting workflow.

4(a) On what ground would you advocate workers’ participation in management? How far has this been successful in India? (9+7=16)

-> Workers’ Participation in Management Before Independence:

The workers’ participation in management is not a novel and imported idea from outside. It can be dated as far back as 1920 when Mahatma Gandhi suggested participation of workers in management on the ground that workers contributed labour and brains while shareholders contributed money to the enterprise and that both should, therefore, share in its property.

He said that there should be a perfect relationship of friendship and cooperation among them. For the unions, he said that the aim should be to raise the moral and intellectual height of labour and, thus, by sheer merit, make labour master of the means of production instead of the slave that it is. It was at his instance that, in 1920, the workers and the employers in Ahmedabad Textile Industry agreed to settle their disputes by joint discussions and consultations.

Therefore, the Ahmedabad Agreement may be regarded as a mile­stone in the history of joint consultation i.e. participative management in India. Following this, some works committees were also set up in the Government Printing Presses and Railways. During the same period, such committees were also set up in the Tata Iron and Steel Company, Jamshedpur. Since then, there is no looking back in this direction.

While supporting the need for works committees, the Royal Commission on Labour suggested that, to promoting industrial harmony and to avoid misunderstanding and settle disputes, not only works committees be set up, but strong trade unions be developed and labour officers be appointed.

Along with the works committee, the Commission also suggested the establishment of a joint machin­ery to deal with the more general questions, and also to act as an advisory appellate body in respect of disputes which were confined to a single establishment. These recommendations of the Commis­sion bore fruits with the provision of formal statutory machinery under the Bombay Industrial Rela­tions Act, 1946 and the Industrial Disputes Act, 1947.

Workers’ Participation in Management After Independence:

In fact, the first major step in the direction of workers’ participation in management in India was the enactment of the Industrial Disputes Act, 1947 with the dual purpose of prevention and settle­ment of industrial disputes. The Industrial Policy Resolution, 1948 advocated WPM by suggesting that labour should be in all matters concerning industrial production. Article 43 A of the Constitution of India has provided for WPM in these words:

“The State shall take steps, by suitable legislation, or in any other way, to secure the participa­tion of workers in management of undertakings, establishments or other organisations engaged in an industry”.

The First Five-Year Plan and the successive plans emphasised the need for workers’ participation in management. For example, the Second Five-Year Plan’ stressed the need for WPM in the following words:

“It is necessary in this context that the worker should be made to feel that in his own way he is helping build a progressive state. The creation of industrial democracy, therefore, is a prerequisite for the establishment of a socialist society”.

The Government of India set up a ‘Study Group on Workers’ Participation in Management’, in 1956, consisting of representatives of the government, employers, and workers to examine the system of WPM in the UK, Sweden, France, Belgium, West Germany and Yugoslavia and make recommendations for the Indian case.

The Group submitted its report in May 1957 with the following recommendations:

1. WPM schemes should be introduced in selected undertakings on a voluntary basis.

2. A sub-committee consisting of representatives of workers, employers and government should be set up for considering the WPM in India.

The above recommendations, among other things, were accepted by 15th Indian Labour Confer­ence held in July 1957. The Conference appointed a 12 member sub-committee to look into further details of the scheme. The recommendations made by the sub-committee were discussed in a “Seminar on Labour-Management Co-operation” held in New Delhi on January 31 and February 1, 1958. It drew up a “Draft Model Agreement” between labour and management for the establishment of the Joint Management Councils (JMCs) which would have the following three sets of functions:

First, to fulfill its functions as an advisory body.

Second, to receive information on certain matters.

Third, to fulfill administrative responsibilities.

Besides, the Seminar on Labour Management Co-operation also took the size of the Councils, its office bearers, term of office, etc. Thus, the Joint Management Councils (JMCs) were set up in 1958.

Following the recommendations of the Administrative Reforms Commission, the Government of India accepted the inclusion of the representatives of workers on the Board of Directors of public sector undertakings. Following this, the Nationalised Banks (Management and Miscellaneous Provi­sions) Scheme 1970 also provided for the appointment of worker director to their Board. One director was from among employees (who are workmen) and another from among officers for tenure of 3 years.

Thus up to July 1975, there had been three forms of workers’ participation in management intro­duced in India: Works Committees, Joint Management Councils and Workers-Directors (public sec­tor) on Boards of Directors.

Under the Government of India’s 20-Point Economic Programmes, a new scheme of shops and plants councils was introduced in 1975 after the emergency was declared in June 1975. In the following year 1976, the Government of India amended the constitution to incorporate workers participation in management as one of the Directive Principles of State Policy.

In June 1977, the Government of India set up a high-powered Expert Committee on Companies and MRTP Acts under the Chairmanship of Rajinder Sachar with terms of reference to:

(i) Consider the provisions of the Companies Act and MRTP Act and

(ii) To suggest measures participation in management and share capital of companies can be brought about. The Sachar Com­mittee submitted its report in August 1978.

Meanwhile, the Janata Government also set up a “Committee Workers’ Participation Management and Equity” in September 1977 under the Chairmanship of Ravindra Varma the then Union Minister of Labour The Committee consisted of 18 members representing Central Organisations of trade unions and employers and some of the States and professional institutions of management.

The strength of Committee increased to 21 by nominating three additional members in January 1978. The terms of reference of the Committee were to consider, among other things, the need for a statutory scheme for workers’ participation in management. The Committee was also to study and recommend an outline of a comprehensive scheme of workers participation at different levels of management in industrial establishments and undertakings

The Committee submitted its report to the Government in March 1979. The report showed that the majority of the members favoured adoption of a three-tier system of participation, viz., at the shop, plant and corporate or board levels. However, the employer of private sector did not favour board or corporate level participation in management. It also recommended to enact legislation on workers participation in management covering all undertakings, be public or private, employing 500 or more workers.

The Government accepted the recommendations made by the 21-Member Committee on Workers’ Participation in Management and Equity. Based on a review of the working of the various schemes of workers’ participation in management and experiences so gamed the Government formulated and notified a new comprehensive scheme on a voluntary basis for ‘Workers’ Participation in Management’ on 30th December, 1983.

The salient features of the scheme were:

1. The scheme will be non-legislative.

2. It will apply to all central public sector enterprises, expect those specifically exempted.

3. It envisaged constitution of bipartite forums at shop and plant levels.

4. The mode of representation of workers representatives was to be determined by consulta­tion with the concerned unions.

5. A wide range of work related issues were brought within the ambit of the councils.

However, a host of constraints such as multiplicity of unions, inter-union rivalry, lack of proper knowledge on the part of workers about the scheme, etc., served as stumbling blocks in the successful working of the scheme.

Participation of workers in management bill 1990 (Bill No. XXVIII of 1990):

So far, all the schemes pertaining to the workers’ participation in management have been non-­statutory which failed to provide meaningful participation to workers in management.

To remedy the situation, the Government has, therefore, introduced a Bill in the Parliament on 25th May 1990 to provide for:

1. Meaningful three-tier participation of workers in management in all industrial establish­ments.

2. Formulation of scheme specifying criteria regarding nomination of representatives from workers.

3. The principle of secret ballot for determining the representation of workers on the shop floor and establishment level councils.

4. Rules for monitoring the scheme.

5. Deletion of Section 3 of the Industrial Dispute Act, 1947.

6. Rules for appointment of Inspector.

7. Imprisonment up to 2 years or a fine up to Rs. 20,000 or both for contravention of the provisions.

(b) What is the importance of 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 labor 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.

Importance of Collective Bargaining in Industrial Relations

Collective bargaining is an important element in industrial relations. Collective bargaining helps to make the relationship between employees and employers smooth. A strong bond between the employers and employees contribute to the successful working of the company.

When management people and employees communicate with each other for reaching an agreement it can be said as an outcome of collective bargaining. Most people think collective bargaining as the process in which union members of the employees talk with employers for getting benefits. However collective bargaining is the process through which conclusion is reached regarding wages of employees, working hour of employees and working conditions at the company.

Trade Unions have been regularly criticized for creating strife within workplace environment fighting workmen compensation as the concept of Collective Bargaining has been termed as a continuous strategic process in determining terms and conditions of employment where management and employees participate at a workplace to oversee establishing stable relationships and was primarily developed as an alternative to ad-hoc on the basis of an agreement with the employees related to managing discipline and employee claims.

Let’s break down the word ‘collective bargaining’, wherein the term ‘collective’ is owing to involvement of two parties [employer and employees], who take positions as ‘groups’ as opposed to individuals, while ‘bargaining’ involves negotiations prior to reaching an agreement and shall involve proposals and counter proposals when striking an offer or counter-offer.

Industrial relations is an essential component of labor administration and involves procedures, attitudes and behavior which underpins how employers, unions, employees interact with each other at workplace to affect the eventual outcomes and therefore remains a critical driver of organizational success, which when reviewed against numerous published research studies argues that ‘good industrial relations’ shall translate into delivering robust organizational performance, reduced absenteeism, increased efficiency, higher productivity and creates an environment of inno vation to motivate employees by generating employee loyalty and trust.

While in the event of an industrial conflict between employers and employees, shall demand collective consultation, negotiation and a framework that creates mutual respect and understanding in dealing with industrial issues such as strikes and lockouts. It is fair to state that a legal process would stimulate collective bargaining to bring in harmony, peace; discipline as stable industrial relations is the key to economic growth and social development of nations.

Globally managing human resources involves promoting a better understanding to acknowledge viewpoints, disagreements through dialogue, discussions and interactions, as collective bargaining is often used to build bridges by resolving minor or major differences with any outsider influence or interventions.

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.

5. Write brief notes on: (any two)

i) Role of Arbitration.

-> Arbitration is a method of dispute settlement using private entities known as “arbitral tribunals”.

Arbitral tribunals usually consist of either one or three arbitrators. The primary role of an arbitral tribunal is to apply the law and make a dispute decision by administering a so-called “arbitral award”.

In principle, arbitral awards are final and binding. They can only be challenged before a state court under exceptional circumstances. For example, it applies to cases where the parties never validly agreed on arbitration. Arbitral awards can be enforced in most countries worldwide.

Arbitration proceedings usually involve the following steps:

Any arbitration proceeding is based on a written agreement of the parties. They submit a given dispute to arbitration instead of the state courts, this becomes the “arbitration agreement”. Arbitration agreements can be found in the majority of commercial contracts, particularly in contracts relating to international transactions.

In terms of procedure, arbitration provides the arbitrators and the parties with significant freedom and flexibility. Parties may choose their arbitrators, the place of arbitration and / or the language of the proceedings. They may also agree on how to structure and how to time their proceedings. However, the parties freedom is still somewhat restricted. They may not deviate from the principles of fairness and equality, the right to be heard and the right to be represented by a lawyer.

Two types of arbitration are available; institutional and ad-hoc. In institutional arbitration, the institution assumes specific administrative functions, such as the servicing of briefs etc. The degree of involvement may vary from one institution to another, but the dispute itself will always be solely decided by the arbitral tribunal. In ad-hoc proceedings, these administrative functions are either assumed by the tribunal itself or delegated to third parties.

Hamburg is the seat of several well-known arbitration institutions, such as the German Maritime Arbitration Association (GMAA), the Court of Arbitration of the Hamburg Chamber of Commerce, the Chinese European Arbitration Centre (CEAC) and various commodity arbitration institutions. Hamburg is also frequently chosen as a place for arbitration by institutions based outside Hamburg, such as the German Institution of Arbitration (DIS) and the International Chamber of Commerce (ICC). The “Hamburg Friendly Arbitrage” is a special form of ad-hoc arbitration developed from local trade usages. These are published in Section 20 of the “Local Usage in the Commodity Trade in Hamburg” (Official Gazette No. 237 dated October 13, 1958). Hamburg based arbitrators have formed the Hamburg Arbitration Circle (HAC) as their association to organize lectures and to support the promotion of Hamburg as a place of arbitration.

Role of Arbitration:-

As arbitration becomes an increasingly attractive alternative way of resolving disputes compared to lengthy and often expensive court proceedings, arbitrators are ever more in demand and their roles increasingly important. Arbitration is often favored over formal litigation not only from a cost and time efficiency perspective, but also because it often offers more practical solutions, and as a process is structured specifically to facilitate resolution.

Thus the arbitrator’s role is a crucial one, and one that demands a unique combination of experience, knowledge and skill. It is increasingly common to find arbitration clauses in consumer and business contracts, and its prevalence only attests to its usefulness as a dispute resolution method.

ii) 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.

iv) Significance of Conciliation.

-> The terms Conciliation and Mediation are many times used as synonyms. Some are of the view that conciliation is a process that is pro-active form of mediation, where the third neutral party takes an even more active course in helping the parties in dispute to recognize the main causes of the dispute and makes suggestions for the path to be taken for the resolution of the dispute.

The procedure of conducting conciliation and the basic rules, regulations and standards are similar to that of mediation.

The 1996 Act is the first statute in India which talks about the process of Conciliation comprehensively. Part III of the said Act incorporates, with minor changes, the UNICITRAL Conciliation Rules, 1980.

The 1996 Act provides for the process for initiating the conciliation proceedings by way of invitation of one of the parties to dispute (Section 62) and submitting statements to conciliator regarding the general nature of the dispute and the important reasons for the dispute (Section 65). The conciliator carrying out the process is not bound by the Code or the Indian Evidence Act, 1872 (Section 66).

Significance of Conciliator:

Section 67 of the 1996 Act talks about the role of conciliator as under

· The conciliator must actively assist the parties in dispute in an independent and impartial way and make every possible to reach an amicable settlement between the parties.

· The conciliator is guided by principles of impartiality, objectivity, justice and fairness giving consideration to the previous relation between the parties.

· The conciliator may carry out the proceedings in a way as he considers to be appropriate according to the requirements of the case and the requests by the parties keeping in mind the goal of speedy settlement of the dispute.

· The conciliator may make proposals regarding settlement of disputes at any stage of the conciliation proceedings. It is not necessary that the proposal must be in writing.

One of the most important feature of Conciliation is confidentiality .Section 69 of the 1996 Act allows the conciliator to talk and discuss with each party separately whereas, Section 70 prohibits the conciliator from divulging to the other party any fact or information given to him by a party who gave the information with a specific condition that it be kept confidential.

Section 73 of 1996 Act asserts that the agreement of settlement signed by the parties in dispute shall be final and binding on the parties. According to Section 74 of the 1996 Act the settlement agreement has the same status as that of an arbitral award which therefore means that it has the status of a decree of a court of law.

A conciliation proceeding is successful only when both the parties sign the settlement agreement. Only such an agreement of settlement has the legal status of an arbitral award as mentioned under section 74 of the 1996 Act.