Theories of Industrial Relations

According to Encyclopaedia Britannica, “The concept of industrial relations has been extended to denote the relations of the state with employers, workers and their organisations. The subject, therefore, includes individual relations and joint consultation between employers and work people at their work place; collective relations between employers and their organisations and trade unions and the part played by the state in regulating these relations.”

Before the evolution of the concept of “industrial relations”, two concepts, namely “personnel administration” or “personnel management” and “labour relations”, were widely prevalent in industrial organisations. The term “personnel administration” laid emphasis on management’s relationships with a focus on individual employees.

The main areas of its operation comprised the following – recruitment and selection, remuneration, working conditions, promotions and transfers, termination of service and welfare amenities at the place of work. The relationships between the management and organised “labour relations” represented by unions came under the arena of “labour relations”.

The main areas covered under “labour relations” comprised the following – union recognition, collective bargaining, labour contract, industrial disputes, work-stoppages, day- to-day relationships with union representatives and governmental intervention regulating such relationships. In many organisations, “industrial relations” combined the activities and coverage of both “personnel administration” and “labour relations.”

Whatever might have been the differences in organisational arrangements, all the terms have come into usage even to date. At present, “industrial relations” is considered synonymous to “labour relations”, implying the relationships of the management with the organised labour or unions combined with governmental measures in regard to the regulation of such relationships.

Thus, “industrial relations” may be conceived of as “employees/union(s)-employers(s)/management-government relationships in industrial employment.” Some of major areas under its coverage include the following – union recognition, day-to-day dealing with union representatives, collective bargaining and collective agreements, industrial disputes and strikes, grievance settlement and union’s participation in joint bodies.

Growth of Some Other Related Concepts:

In recent years, certain new concepts have emerged in regard to the relationships of management with employees, whether as individuals or with their organisations, and also in the approaches related to managing manpower; these are employee relations, employment relations and human resource management.

One of the main reasons behind the adoption of the term “employee relations” or “employment relations” has been increasing the importance of non-industrial employment relationships in many areas of economic activities.

As management-employees relationships have come to exist in several non-industrial employments such as business, trade and commerce, insurance and other service sectors, the use of the term “human resource management” combining in itself, the functions of “personnel administration” and “labour or industrial relations” appears to be more appropriate and comprehensive.

The term “employee relations”, which also comes within the arena of human resource management as in practice now, refers to the relationships of the management with individual employees.

The ILO has used the term “employment relationship” in a wider perspective, stating that it exists “when a person performs work or services under certain conditions in return for remuneration.” The ILO also adopted Employment Relationship Recommendation No. 198 in 2006, which inter alia provides guidelines pertaining to formulation and application of a national policy on the subject, determination of such a relationship and the establishment of an appropriate mechanism.

Whatever the differences in the pattern of organisational arrangements for managing work-­people, whether present or prospective, there is common acceptance of the assertion that “industrial relations” involve relationships between management and organised workforce along with the government agencies influencing such relationships.

Some of the important features pertaining to industrial relations may be listed thus:

1. Employment Relationship Essential:

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

2. Conflict and Cooperation Characterise Industrial Relations:

Industrial relations are characterised by both conflict and cooperation. This is the basis of adverse relationship. So the focus of industrial relations is on the study of the attitudes, relationships, practices and procedures developed by the contending parties to resolve or at least minimise conflicts.

3. The Scope of ‘Industrial Relations’ Fairly Large and Covers Lot of Ground:

As the labour and management do not operate in isolation but are part of a larger system, so the study of industrial relations also includes vital environmental issues like technology of the workplace, country’s socio-economic and political environment, nation’s labour policy, attitude of trade unions, workers and employers and impact of the new wave of global markets, global supply demand and economy.

4. Measures for Healthy Labour Management Cooperation Put to Close Examination:

Industrial relations also involve the study of conditions conducive to the labour, management cooperation as well as the practices and procedures required to elicit the desired cooperation from both the parties.

5. The Legalistic Part of Industrial Relations Need to be Examined Closely:

Industrial relations also study the laws, rules, regulations, agreements, awards of court, customs and traditions, as well as policy framework laid down by the government for eliciting cooperation between labour and management and defining rights obligation of both the parties. Besides this, it makes an in-depth analysis of the interference patterns of the executive and judiciary in the regulation of labour-management relations.

6. All Encompassing Examination of Multifarious Issues Affecting Labour- Management Relations:

The concept of industrial relations is very broad-based, drawing heavily from a variety of disciplines like social sciences, humanities, behavioural sciences, laws etc.

7. The National Commission on Labour:

According to NCL, industrial relations affect not merely the interests of the two participants— labour and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform. In fact, industrial relation encompasses all such factors that influence behaviour of people at work.

A few such important factors are below:

(i) Institutions:

They include government, employers, trade unions, union federations, employers’ federations or associations, government bodies, labour courts, tribunals and other organisations which have direct or indirect impact on the industrial relations system.

(ii) Characters:

It aims to study the role of workers, unions and employers’ federation officials, shop stewards, industrial relations officers / manager, mediator / conciliators / arbitrator, judges of labour court, tribunal, etc.

(iii) Methods:

Here, the focus is on collective bargaining, workers’ participation in the industrial relation schemes, discipline, procedure, grievance redressal machinery, dispute settlement machinery, working of closed shops, union recognition, organisation of protests through methods like strikes, gheraos, bandhs and lockouts, formulation and revision of existing rules, regulations, policies, procedures, decisions of labour courts, tribunals, etc. in defining the rights and obligations of the parties.

(iv) Contents:

They include matter pertaining to employment conditions like pay and other monetary non-monetary demands of the workers hours of work, leave with wages, health, and safety disciplinary actions, lay-off, dismissals, retirement etc., laws relating to such activities, legislation governing labour welfare, social security, industrial relations, issues concerned with workers’ participation in management, collective bargaining, sharing gains of productivity profits.

3 Important Approaches: Unitary Approach, Pluralistic Approach Marxist Approach

Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without labour management. So that, it is the interest of all to create and maintain good relations between employers and employees. Generally, industrial relations means the relationships between employers and employees in industrial organisations.

But, in the broad sense, the term industrial relations includes the relations between the various unions between the state and the unions as well as those between the employers and the government. Relations of all these associated in industry may be called industrial relations. It also involve the study of how people get on together at their work, what difficulties arise between them, how relations among them are regulated and what organisations are set up to protect different interest.

According to Encyclopaedia Britannica, “The concept of industrial relations has been extended to denote the relations of the state with employers, workers and their organizations. The subject, therefore, includes individual relations and joint consultations between employers and work people at their workplace, collective relations between employers and their organizations and trade unions and the part played by the state in regulating these relations.”

There are three approaches:

(i) Unitary Approach

(ii) Pluralistic approach

(iii) Marxist Approach.

1. Unitary:

Under this approach, mutual cooperation, team spirit and shared goals play a significant role. Any conflict is seen as a result of a temporary aberration resulting from poor management. Direct negotiation with workers is encouraged. This approach is criticised as a tool for seducing workers away from unionism/socialism. It is also criticised as manipulation and exploitation.

2. Pluralistic:

This approach perceives organisation as a coalition of competing interest between management and different groups, trade unions as legitimate representative of employee’s interests and stability in Industrial Relation as the product of concessions and compromises between management and workers. Unions, therefore balance the power between management and employees. Therefore, strong unions are desirable and necessary.

3. Marxist:

This approach also regards conflict between employers and employees inevitable. Marxists consider conflict as a product of the capitalistic society – the gap between “Haves and Have Not’s”. Trade Unions focus on improving the position of workers but workers’ participation in management, cooperative work culture etc., are not acceptable to the Marxists.