MODULE 1: INDUSTRIAL
RELATIONS
When business was small, there was no problem.
When big and elaborate organisations developed, the
problem developed during the 19th century. During
early 20th century when gigantic industrial empires
and financial tycoons came into business followed by
technology of mass production, the labour
management became an important subject of study.
At this point of time, large number of people came to
work together under one roof in an organisation
Contd.
The Industrial evolution has passed through
these stages:
1. Primitive Stage
2. Agrarian Economy stage
3. Serfdom stage
4. Handicraft stage
5. Cottage or Putting-out stage
6. Factory of Industrial Capitalim Stage.
PRIMITIVE STAGE:
Necessities of life were simple and few. Included
hunting, fishing, collecting with the aid of crude
implements. Families worked side by side with no
specilisation, except physical difference between the
sexes on the dependence on tradition.
Production was just sufficient for consumption. There
was no savings, no accumulation of wealth and no
exchange of products. Authority was exercised within
the family by elderly members. Communication was
face to face as the group used to be a small unit.
AGRARIAN ECONOMY STAGE:
It developed during the middle ages and the
concept about the property got changed during
this period. In tribal society, property was
common and collective asset of the group, but
now it is identified as personal asset of the land-
lord. Thus, there developed two type of classes
– one with properties and the other property-
less workers. The workers were treated as
slaves. The relation between the two was that
of a master/servant or master/slave type.
AGRARIAN ECONOMY STAGE – Contd.
Slaves were required to do manual and other
works of their masters through out their lives.
They were not paid any wages. Food, old
clothes and a small place to live were provided
by the master to the slaves. Slaves had to live
under the absolute authority of his master till his
death. The masters had totally over-powered
the slaves in all matters. Government had no
authority to control the masters. Political
organisations in fact supported the authority of
the masters.
SERFDOM STAGE
It means, a labourer bound to an estate. It
started during the feudal society. Feudal society
comprised of Princes, Lords and the land owning
class which started during the middle ages. The
position of a serf was no better than a slave.
Serfs got only a pittance for their hard work and
a hut to live. Their duties included production of
fixed quantity of produce and military service to
the master. They were all regarded as
unfortunates, illiterates. They were subjected to
direction and domination.
HANDICRAFT STAGE
Due to the growth of cities and towns and trade and
commerce, the system of handicrafts developed. This
resulted in the decline of powers of the feudal lords who
were controlling the system. This was one of the best
systems for the working class since one could move
from the rank of workers/employees to that of
employers/masters. The workers with skill started
owning their own units, worked with their own tools with
the help of their family members. Often, it happened in
their own homes/shops and involved mostly hand tasks.
The products were sold directly to the customers and no
middle men were involved. Different works involved
different type of craftsmen. Some specialization was
also invented like shoe-making, blacksmith, carpentry,
pottery, cloth weaving etc.
HANDICRAFT STAGE – Contd.
The stage involved teaching of the art/craft to
some young men as apprentices. Such
apprentices were bound to work for the mater
craftsmen for specified time to learn the craft.
Apprentices were not paid wages. They were
provided only boarding and lodging facilities.
After successful completion of apprentice
training, they could settle independently. An
apprentice was regarded as a superior to that of
a labourer and inferior to the Master
HANDICRAFT STAGE – Contd
During this period, guilds were developed
which regulated economic and
employment conditions of the members.
It also regulated the quality of the
materials and the craftsmanship, prices
and wages of the workers. The guilds
started providing certain benefits to its
workers like death, disability and
unemployment benefits which are akin to
modern crafts union
COTTAGE OR PUTTING-OUT STAGE
The invent of steam and power and development of
economic system resulted in individuals becoming
employees in the new industrial units. Some others
undertook to buy raw-materials and supply them to
others. Some people started financing the craftsmen or
people who worked from their homes/shops. Some of
the people started acting as agents to collect the
finished goods and sold them for profit. This system
was called as Cottage or Putting-out system. Under this
system, the craftsmen were paid wages on piece-work
basis for the work done by him. The finished products
were delivered to the financier who had financed them.
FACTORY OR INDUSTRIAL CAPITALISM STAGE
The invent of technology, the experience gained
by the craftsmen and the passage of time made
the craftsmen to install his own machinery,
powered-tools and equipment and offered
employment in the newly built workshops or
factories. The cottage workers or slaves became
the factory workers. In these factories, large
numbers of workers started working under the
same roof. This made it possible to supervise
large number of workers more closely which was
not possible otherwise.
FACTORY OR INDUSTRIAL CAPITALISM STAGE
– Continued.
The invention of power driven machinery made these
factories more powerful. The human labour was
replaced with powered machines. This was called as
`Industrial Revolution’. Under this system, even women
and children were employed since the production
operation was simplified and reduced skills were
required. Under this system, working conditions became
highly deplorable. Housing became an acute problem.
The relationship between the employer and the
employees became more and more impersonal due to
vast expansion of the industry. The personal
relationship lost its touch.
FACTORY OR INDUSTRIAL CAPITALISM STAGE
– Continued
Employers started maintaining strict discipline during
workers. The workers were economically dependent on
the employer for their livelihood. The quality and
quantity of products were ensured and the employer
owned all the final products. The law of demand and
supply decided the wage structure. Once wages were
paid, the employer never bothered to enquire about the
welfare about the worker after the working hours. The
worker and his entire family had to suffer when there
was no work since there was no personal relationship
between them. The maximization of the profit was the
sole criteria for the employer under the factory system.
The expansion of industry and the growth of workers
was directly proportional to each other.
NEED, OBJECTIVE & PRINCIPLES OF LEGAL
ENVIRONMENT
1. The primary Need is to bring about good and healthy
relationship between the two partners – the labour and
the management.
2. Improving economic condition of workers.
3. To regulate and control production and industries by
the State.
[Link] of Industries or commencement of
PSUS where state itself becomes the employer.
5. Vesting the proprietorship of the industries in the
workers
OBJECTIVES:
1. To safeguard the interest of the labour as well as the
management by securing the highest level of mutual
understanding and good will between them.
2. To avoid industrial conflicts and develop harmonious
relationship thus enhancing performance.
3. To raise productivity to a higher level by reducing
labour turnover and absenteeism.
OBJECTIVES – Contd.
4. To establish and maintain industrial democracy by
involving labour partnership or workers participation not
only in sharing profits but also in managerial decisions
affecting each.
5. To bring down strikes, lockouts and ghaeroas by
providing better and reasonable wages and improved
conditions and fringe benefits to the workers.
6. To bring about government control over sick units
where production is required to be regulated in the
public interest.
OBJECTIVES – Contd.
7. All the above through Industrial Relations, by
adjusting the conflicting interests and protecting some
and restraining others and thereby evolving a healthy
social order.
The most important thing to be noted is that `Labour’ is
not an article or commodity of commerce. It is a living
being with brain and heart. It needs to be treated as a
human being first. Each person differs in mental and
emotional abilities, sentiments and traditions. Each
person requires a different treatment towards his/her
attitude at different levels in the hands of the employer.
OBJECTIVES – Contd.
Till recently, the human resources
management was taken for granted and
under managed. It was never given the
importance it deserved. Every problem
was looked at as a patch-up-job rather
than looking into the genesis of the
problem while solving it. No long term
solutions or strategies were evolved to
solve the problem.
OBJECTIVES – Contd
The only mode of resolution of industrial
conflict or industrial dispute was by the
machinery of the State through the Labour
Commissioner. It had its own advantages
and disadvantages. The labour
commissioner being an outsider, had little
knowledge about the intricacies of the
problems and the solutions offered were
impersonal in nature. The problems went
on recurring or increased.
OBJECTIVES – Contd
With the increase in the employment of
middle class comprising 45 to 50% of the
total population, it was extremely difficult
for the Labour Commissioners to handle
the situation. The government had to
play a major role. It had to take the
nation out of poverty and into an era of
progress. It was both an employer and a
law maker.
PRINCIPLES OF INDUSTRIAL RELATIONS POLICY:
The Code of Conduct, the Code of Discipline and
the Draft Code of Efficiency and Welfare were
the three main contributions to the industrial
policy. Several progressive policies were also
evolved by the Courts in the new movement
during the period. Recognition of workers, joint
management councils, workers education and
apprentice training were adopted. There was a
movement away from legalism to voluntarism.
IR IN POST INDEPENDENCE PERIOD:
After independence and in the interests of the
national economy, it was deemed necessary to
put an end to strikes and lockouts which
interrupted the production at all levels. A
tripartite conference was convened in 1947 and
the industrial Truce Resolution was adopted. In
that conference, importance was given
industrial peace. The Industrial Disputes Act was
passed in that year. The Minimum Wages Act,
The Factories Act and Employees State
Insurance Act were enacted in the year 1948.
IR IN POST INDEPENDENCE PERIOD –
Continued.
The Indian Labour Conference, a tripartite
body was constituted to look into the
labour problems. Upto 1970s, it met once
in a year and recommended measures to
be adopted regarding a particular issue.
The important factor in the post
independent era is the enactment of many
labour laws to protect the interest of both
the classes.
IR IN POST INDEPENDENCE PERIOD –
Continued
The political and international events
affected course of industrial relations in
India. Each government in power took a
particular view on a particular problem.
The recommendation of the National
Commission of Labour regarding the
bargaining agency by the recognized trade
union was implemented
IR IN POST INDEPENDENCE PERIOD –
Continued
The early 1970s witnessed considerable
industrial strife and loss of mandays and
production. The ILC never met from 1972 to
1976. During emergency in 1975, the National
Apex Body [NAB] was set up in place of ILC. It
consisted of 12 and 11 representatives
respectively from workers and employers. It
met six times during 1976 to review the
progress. After the emergency was lifted, the
Janata Government abolished NAB revived the
ILC once again.
IR IN POST INDEPENDENCE PERIOD –
Continued
At present, Industrial Relations is more
regulated by laws which are to be
complied with. During the late 1970s and
early 1980, the industrial relations in India
were characterized by violence. Several
Trade Union Leaders were murdered
which indicate poor labour-management
relations.