Introduction to Industrial Relations

Defining Labor Relations

This discipline covers the relationship of workers with the organization and with each other. Labor relations is concerned with anticipating, addressing and diffusing workplace issues that may interfere with an organizations business objectives, as also with resolving disputes between and among management and workers. It includes the processes of ensuring that relations with workers comply with applicable central and local laws and regulations and resolving workplace disputes.

JOURNEY : LABOR RELATIONS TO EMPLOYEE RELATIONS

Labor Relation in India has been shaped largely by principles and policies evolved through tripartite consultative machinery at the industry and the national levels. The Labor Relations system of India has its origin in the colonial past. The movement for independence, influenced the evolution of the Labor relations system in India

JOURNEY : LABOR RELATIONS TO EMPLOYEE RELATIONS

The Historical evolution of the Labor Relations system can be categorized under six phases:
The Protective Phase (1947-1956) The Consolidation Phase (1957-1965) The Conflict Ridden Interventionist Phase (1966-1976) The Directionless Phase (1977-1980) The Productivity efficiency, Quality-orientation phase (1981-1990) The Economic Growth Competitive Phase (1991-Onwards)

JOURNEY : LABOR RELATIONS TO EMPLOYEE RELATIONS The Current scenario points to a shift in the relative bargaining power in Labor relations, away from the workers to the employers. The current standing lays emphasis on term employee encompassing a larger section of working class than labor.

KEY DIMENSIONS OF TRADITIONAL IR AND EMPLOYEE RELATIONS

DIMENSION Psychological Contract Behavior References LABOR RELATIONS (I.R.) Compliance Norms, Customs, Practices Low trust, pluralist, Collective EMPLOYEE RELATIONS (SHRM) Commitment Values, Mission High Trust, Unitarist, Individual

Relations

Organizational Design

Formal Roles, Hierarchy, Division of labor, Managerial Control

Flexible roles, flat structure, teamwork and autonomy, self control

Approaches to IR
IR is related to Class conflict, Mutual-co operation
and Competing interests of various groups

There are mainly three approaches to IR

1. Unitary approach 2. Pluralistic Approach 3. Marxist Approach

Approaches to IR
Approaches to organisations

Unitary
Authoritarian Paternalism

Pluralistic
Co-operation Conflict Approaches to industrial relations

Marxist
Evolution Revolution

Input Conflict (differences)

Conversion Institutions and processes

Output Regulation (rules)

Human resource management Labour market

Systems

Social action

Wider approaches to industrial relations

Control of the labour process

Comparative

1. Unitary Approach
IR is grounded in mutual co-operation, individual treatment, team work and shared goals. Union co-operate with the mgt. & the mgt.s right to

manage is accepted because there is no we they feeling Assumption: Common interest & promotion of

harmony No strikes are there. Its a reactive IR strategy. They seek direct negotiations with employees.

2. Pluralistic Approach
It perceives:
Org. as a coalitions of competing interest. TU as legitimate representatives of employee interests. Stability in IR as the product of concessions and compromises between mgt. & unions.

Conflict between Mgt. and workers is understood as inevitable. Conflict is viewed as conducive for innovation and growth. Strong union is necessary.

3. Marxist Approach
Regard conflict as Pluralists Marxists see conflict as a product of the capitalist society. Conflict arises due to the division in the society between those who own resources and those who have only labor to offer. For Marxist all strikes are political. He regard state intervention via legislation & the creation of Industrial tribunals as supporting mgts interest rather than ensuring a balance between the competing groups.

Parties to IR
Employees Employers

Employee Associations

EmployerEmployee Relations

Employer Associations

Government

Courts & Tribunals

A few notable features pertaining to Industrial Relations are as under:

1. Industrial Relation do not emerge in vacuum they are born of employment relationship in an industrial setting. Without the existence of the two parties, i.e. labor and management, this relationship cannot exist. It is the industry, which provides the environment for industrial relations.

2. Industrial Relation are characterized by both conflict and co-operations. This is the basis of adverse relationship. So the focus of Industrial Relations in on the study of the attitudes, relationships, practices and procedure developed by the contending parties to resolve or at least minimize conflicts. 3. As the labor and management do not operate in isolations but are parts of large system, so the study of Industrial Relation also includes vital environment issues like technology of the workplace, countrys socio-economic and political environment, nations labor policy, attitude of trade unions workers and employers.

4. Industrial Relation also involve the study of conditions conductive to the labor, managements co-operations as well as the practices and procedures required to elicit the desired co-operation from both the parties. 5. Industrial Relations also study the laws, rules regulations agreements, awards of courts, customs and traditions, as well as policy framework laid down by the governments for eliciting co-operations between labor and management. Besides this, it makes an in-depth analysis of the interference patterns of the executive and judiciary in the regulations of labor managements relations.

In fact the concepts of Industrial Relations are very broad-based, drawing heavily from a variety of discipline like social sciences, humanities, behavioral sciences, laws etc.

Industrial Relation encompasses all such factors that influence behavior of people at work. A few such important factors are details below:
1. Institution: It includes government, employers, trade unions, unions federations or associations, government bodies, labor courts, tribunals and other organizations which have direct or indirect impact on the industrial relations systems. 2. Characters : It aims to study the role of workers unions and employers federations officials, shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of labor court, tribunal etc. 3. Methods : Focus on collective bargaining, workers participation in the Industrial Relation schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery working of closed shops, union reorganization, organizations of protests through methods like revisions of existing rules, regulations, policies, procedures, hearing of labor courts, tribunals etc. 4. Contents : Includes matter pertaining to employment conditions like pay, hours of works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc., laws relating to such activities, regulations governing labor welfare, social security, industrial relations, issues concerning with workers participation in management, collective bargaining, etc.

Objectives of Industrial Relation

A. To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production. B. To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. C. To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism. D. To establish and nurse the growth of an Industrial Democracy based on labor partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well.

E. To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits. F. To establish government control of such plants and units as are running at a loss or in which productions has to be regulated in the public interest. G. Improvements in the economic conditions of workers in the existing state of industrial managements and political government. H. Control exercised by the state over industrial undertaking with a view to regulating production and promoting harmonious industrial relations. I. Socializations or rationalization of industries by making the state itself a major employer J. Vesting of a proprietary interest of the workers in the industries in which they are employed.

Relevance of Labor Relations in the field of SHRM

In many industries (public or private) unionization is the norm. Managers and business owners in these industries have no choice but to be well versed on the laws that regulate the relationship with union employees. Competitors maybe unionized and settlements in those organizations may impact HR practices, programs and policies needed to remain competitive in recruiting and retaining productive employees.

Relevance of Labor Relations in the field of SHRM

Organized labor presents a number of key strategic challenges for management
When workers unionize, the power based within the organization is redistributed. The employers ability to mange workers at their discretion is severely curtailed. Unionization involves bringing in outside players whose support must be gained for any new or ongoing management initiative

Relevance of Labor Relations in the field of SHRM

Organized labor presents a number of key strategic challenges for management
Unionized work setting greatly impacts the organizations cost structure particularly payroll expenses.

EMPLOYEE RELATIONS STRATEGY

Like other business and HR strategies, those concerned with employee relations can, emerge in response to an evolving situation. (Mintzberg 1987) Employee relations strategy define the intentions of the organization about what needs to be changed in the ways in which organization manages its relationship with the employees and their trade unions. Eg: 1. Strategy- achieving competitive edge through innovation 2.Strategy- achieving competitive edge through cost reduction

BACKGROUND TO EMPLOYEE RELATIONS STRATEGIES

Four approaches to employee relations have been identified by the Industrial Relations Services(1993) Adversarial Traditional Partnership Power sharing

THE SHRM APPROACH TO EMPLOYEE RELATIONS

Build stable and cooperative relationships with the employees that minimize conflict. A drive for commitment through employee involvement and communication processes. An emphasis on mutuality in achieving the organizational goals through the development of the organizational cultures based on the shared values between management and the employees.

THE SHRM APPROACH TO EMPLOYEE RELATIONS

A shift from collective bargaining to individual contracts. Use of employee involvement teams such as Quality Circles. Continuous pressure on quality- TQM. Emphasis on teamwork. Harmonization of terms and conditions for all the employees.

STRATEGIC IMPACT OF THE LEGAL ENVIROMENT

The legal environment is a major consideration of strategic managers because of the potential exposure to liability, plant location concerns, productivity influences, and other impacts on cost structures. In future , strategic managers may need to become more proactive in the design of legislation so that the laudable social goals can be obtained simultaneously with organizational growth and efficiency.

Major Strikes & Labour Unrest in India

OVERVIEW
India's largest passenger car company, accounting for over 45% of the domestic car market First company in India to mass-produce and sell more than a million cars Annually exports more than 50,000 cars Manufacturing facilities are located at two facilities Gurgaon and Manesar It offers 14 brands and over 150 variants ranging from peoples car Maruti 800 to the stylish hatchback Ritz

THE PROBLEM
Differences in salary pay Working condition Lack of proper negotiation

FALL IN DEMAND
Expected fall in demand during crucial festive season, when car sales touch the peak. The Manesar plant is the hub for the key 'Swift' model, which runs a huge backlog in the retail market. The bookings for the new Swift and waiting list of customers are very high. Delay in production affect the delivery of cars resulting in disappointment among customers.

LOSS IN OUTPUT
Estimated loss of more than 90 million dollar. On August 24, 1,230 cars were planned to be produced, but only 437 were assembled. Out of which, just 96 cars could pass quality check. Halt in production on the 5th September, around 4000 workers rallied till the highway to block it. Poor dispatch numbers with respect to meeting targets and quality control

CONT.
With only around 20-25 of 950workers agreed to sign the Good Conduct undertaking Production was stalled as the company barricaded various entrances to prohibit entry of those who refused to sign the 'good conduct bond'.

PROBLEM FROM WORKERS VIEW POINT

If the floor supervisor is rude and even slaps us, he is awarded with a promotion but in case a labourer dares to reply, he is issued a notice on grounds of disciplinary action," said Rajender Kumar, a technician

CONT.
Cockroaches and dead flies found in the food in the hurried lunch-break that workers earn in the canteen km from the working station. The tea was without tea leaves or sugar in the 7 minute break The company doctor give heavy doses of instant medicines even on minor complaint so that disruption of work could be prevented. One days wage cut of Rs.1500, two days Rs.2200, three days cut of Rs.78000 is implemented, so that almost the total months wage is cut. One second late into punching-card entry is a days wage cut, but they have to give full production for that day too. Forced to fill an undertaking form, which means that in case of any problem, workers cannot raise any objections against management.

WORKERS DEMAND
Workers demand to establish an independent union Maruti Suzuki Employees Union (MSEU)in the company. Currently, the company has one recognized union Maruti Udyog Kamgar Union which is dominated by workers at the Gurgaon plant

MANAGEMENT VIEW OF PROBLEM

Unhappy workers have found out a new way to disrupt ongoing work at the plant by creating serious defects in quality of the cars, so they would fail the compulsory vehicle inspection quality test.

Source: http://www.ndtv.com/

CONT.
Workers indulging in deliberate attempts to reduce output and are compromising customer interests Revenge for the June strike. Refused to sign good conduct form which aims at ensuring the production of good quality products. Employees are being charged with sabotage and causing quality problems in the cars produced.

CONT.
"In the last three days, a series of serious quality problems had been observed in the vehicles produced. For example, vehicle door was not properly clamped leading to doors falling during production, wiring harnesses were found cut in produced vehicle, dents were noticed on the body and critical components were not fitted on to vehicles. Such deliberate acts, if not detected during quality checks, would have led to serious implications and directly harmed customers," a senior company official said.

What ideas come into your mind after seeing this picture?
Uninteresting nature of work.. Political nature of unions.. Poor wages. Occupational instability. Poor behavioural climate

ACTION TAKEN AGAINST EMPLOYEES

Suspension of 10 workers Dismissal of five Discontinued the services of six trainees. Also suspended four workers for "instigating indiscipline" a week before Another four suspended in late July for manhandling supervisors. Charges of sabotage and causing quality problems in the cars produced. On 14th August; police force of 500 sent to occupy the factory to prevent violent activities

CONT.
The company terminated 11 workers and suspended 38 on August 29th and 30th on false charges demanding a good-conduct bond with the state police and administration, the media, and bouncers on its payroll as its willing pawns. The Maruti Suzuki Employees Union (MSEU) was demanded as an immediate measure, the withdrawal of the charge-sheet, termination, suspension of the 49 workers. The workers were sitting day-and-night at the factory gate, peeling off the layers of Maruti Suzukis way of life.

Facts
June 1) 13-days strike demanding the recognition of the MSEU at the Manesar plant 2) Production loss of 12,600 cars, valued at about Rs 630 crore.

July 1) Production stopped for a day at the same plant because of strike by some workers.

August 1) Reported 12.74 per cent fall in sales for August to 91,442 as compared to the sale of 1,04,791 units in the same month last year

September 7 1) Loss suffered is estimated at about 8,550 units, valued at about Rs 425 crore.

Source: Economic Times

Source: Economic Times

Confirmed by companys spokesperson

Production stopped at Manesar Third production halt in three months at Manesar. The company stopped operations for 10 working days in June The firm lost Rs 425 crore because of the strike.

According to Chairman R.C. Bhargava

Manesar labour problem is essentially a political issue and not a problem which involves any significant demand from the workers

Solution
Identify reasons of the conflict. 1. Establishment of separate union for Manesar Plant 2. Code of Conduct- Falling standards of manufacturing. 3. Basic sanitary enhancements demanded by the workforce.

Trade Union Establishment

Trade union would be established with prior conditions: 1. Members of the trade union to be nominated with consent of both workers and management. 2. The leader of this union would be appointed by the management.

Code Of Conduct And Sanitary Problems

ADOPT CHANGE PROCESS THEORY

Improved hygienic conditions at workplace reduces employees dissatisfactio n

Economy and the labour force in India

Two phases 1.The import substitution era postindependence(1947-1991)

2.The era of economic liberalization(1991-till date)

Before Liberalization and After Liberalization

State mediated and state sponsored development Protected domestic market Welfare state active in labour market Stable governing structure and policy regime
Market led and private enterprise dominated Competitive market Labour neutral and investment friendly state policies Crisis of governance and fear of political and economic instability

Key issues and critical challenges

Technology and job creation Skills development Labour commitment Work Culture Productivity and competitiveness

Air India
Protesting non-payment of their salary and allowances, a section of Air India pilots have decided to go on no-pay-no-work agitation from Friday 14January 2012 midnight. The pilots held a meeting in Delhi, Mumbai, Kolkata and Chennai and decided to go on the agitation from midnight tonight, said a pilot associated with the development. This is like work-to-rule, said another pilot who requested anonymity. The airline management can pay the oil companies when they refuse to sell them jet fuel. They can pay for car rental when the company asks for payment but they have no money to pay the employees for months", the pilot said. The pilots said they would be on agitation till the government pays our due allowances for five months, which is 80-85 per cent of our salary component.

Air India Continues.

After the cancellation of at least 44 Air India domestic flights from Delhi and over 50 nationwide on Saturday, domestic pilots of Air India called off their undeclared day-long strike on Saturday evening after the airline management agreed to pay them two months arrears of Productivity-linked incentives (PLIs) by January 20, an additional month of arrears of PLI by February 20 as well as clear all their PLI and other dues by March. This was the third pilot strike in Air India in less than three years, with the previous two strikes being in 2009 and 2011. But this time around, the strike ended very quickly. All dues of the pilots will be cleared by March subject to the clearance of Air Indias Financial Restructuring Plan by the government. Air India CMD Rohit Nandan secured the approval of recently-appointed civil aviation minister Ajit Singh and top officials of the civil aviation ministry to give the concerned assurances to the pilots.

Moser Baer
Strike has commenced at solar panel and CD-maker Moser Baer's Noida unit from October17 where workers are demanding a revision in wages and bonuses."Unfortunately, a very small group of approximately 150 associates from the packaging section of one of our optical disc plants, out of around 10,000 associates, have come up with unreasonable demands," Moser Baer India CEO (Blank Optical Media & Consumer Electronics) Bhaskar Sharma said. Workers at Moser Baer's Noida facility struck work last week demanding a revision in wages and bonuses. According to brokers, the company has not satisfactorily addressed the demands put forth by workers. "Most of these workers are manning the critical optical disc plant. The company may suffer losses, if the labour unrest continues," an institutional dealer said.

Dunlop India Ltd.

On Oct 18 2011, Dunlop India ltd.(DIL), declared suspension of work at its Sahaganj factory in West Bengal's Hooghly district, alleging law and order problem at the plant and non-cooperation from workers. Mainly because of the law and order problem at the plant, inability to remove goods and material from the factory and non-production. In this situation it is not possible to run the factory," a DIL spokesman said. State Labour Minister Purnendu Bose described the DIL move as 'undesirable' and said the management of the Pawan Ruia-owned company must make it clear whether it has the intention of running the factory. According to Bose, the DIL management had not responded to the government's invitation to come for meetings to find ways to solve the problems. "We have also sought a detailed report from the management on how it proposes to make the factory viable, but we are yet to receive it." Industry Minister Partha Chatterjee said his department would soon convene a meeting in a bid to solve the problem.

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