Industrial Relation Management in India

1. IndustrialIndustrial
RelationRelation
Management inManagement in
INDIAINDIABy-----By-----
BRAJESH KUMAR PARASHARBRAJESH KUMAR PARASHAR
DEDicAtED to My loving SonDEDicAtED to My loving Son
“iSHAn ABHiSHEKA PARASHAR”“iSHAn ABHiSHEKA PARASHAR”
JWM / Ordnance FactoryJWM / Ordnance Factory
Bungalow No 151/E WASTLAND O.F. K.Bungalow No 151/E WASTLAND O.F. K.
JABALPUR (M-P).JABALPUR (M-P).
Contact No- 08989117527Contact No- 08989117527

2. INDUSTRIAL RELATIONINDUSTRIAL RELATION IRIR
IR is nothing butIR is nothing but
““all aspects of people at workall aspects of people at work””
oror
““thethe functional employment relationships offunctional employment relationships of
employee & employer at workemployee & employer at work””
The IRThe IR System provides theSystem provides the frameworkframework for thefor the
functional relationship between the Managementfunctional relationship between the Management
& Employees in any Industrial Society.& Employees in any Industrial Society.

3. IRsIRs are used to signify the collective relationshipsare used to signify the collective relationships
betweenbetween Management & WorkersManagement & Workers in Industrialin Industrial
Prospective. Usually, the term IRs is used to coverProspective. Usually, the term IRs is used to cover
such features of industrial life assuch features of industrial life as
 Trade Unionism (TU)Trade Unionism (TU)

Collective Bargaining (CB)Collective Bargaining (CB)
 Employee Participation in ManagementEmployee Participation in Management
 Discipline & Grievance HandlingDiscipline & Grievance Handling
 Industrial Disputes & Interpretation ofIndustrial Disputes & Interpretation of
Labor Laws & Rules and Code ofLabor Laws & Rules and Code of
Conduct.Conduct.

4. Actors of IR in INDIAActors of IR in INDIA
The management which defines the relationship among the EmployerThe management which defines the relationship among the Employer
(Employer Association), Employees (Trade union), and the Government(Employer Association), Employees (Trade union), and the Government
(State) is called Industrial Relation Management (IRM). Hence the main(State) is called Industrial Relation Management (IRM). Hence the main
actors of IR areactors of IR are
1.1. Employer/ Employer association/ ManagementEmployer/ Employer association/ Management
2.2. Employees/ Trade UnionEmployees/ Trade Union
3.3. Government/ StateGovernment/ State
The IRs is anThe IRs is an ARTART,, the art of living together for the purposes ofthe art of living together for the purposes of
PRODUCTIONPRODUCTION..

5. THE 3 MAIN ACTORS IN IR PROSPECTIVETHE 3 MAIN ACTORS IN IR PROSPECTIVE

6. Objectives of IRsObjectives of IRs
1.1. To maintain & develop good Employee-Employer RelationsTo maintain & develop good Employee-Employer Relations
2.2. To establish Industrial Democracy.To establish Industrial Democracy.
3.3. To maintain Industrial Discipline among EmployeesTo maintain Industrial Discipline among Employees
4.4. To maintain Industrial Peace.To maintain Industrial Peace.
5.5. To avoid Industrial Conflicts (as for as possible).To avoid Industrial Conflicts (as for as possible).
6.6. To safeguard the interests of Labor & Management.To safeguard the interests of Labor & Management.
7.7. To help the Economical Development of Nation.To help the Economical Development of Nation.
8.8. To help the Govt. in making Rules & Regulations (Laws).To help the Govt. in making Rules & Regulations (Laws).
9.9. To develop constructive attitudes between TU &To develop constructive attitudes between TU &
Management.Management.
10.10. To encourage CB as a means of Self-regulation.To encourage CB as a means of Self-regulation.

8. TU: it’s Meaning and Definition!TU: it’s Meaning and Definition!
 Trade unions are associations of workers and areTrade unions are associations of workers and are
formed with the intention of protecting the workersformed with the intention of protecting the workers
against exploitation of the employers and also toagainst exploitation of the employers and also to
improve the workers’ conditions. The industrialimprove the workers’ conditions. The industrial
revolution in England and in other countries andrevolution in England and in other countries and
the advent of the factory system of production arethe advent of the factory system of production are
greatly responsible for the emergence of tradegreatly responsible for the emergence of trade
unions.unions.
 IRs consist of all those areas of HRM that involve
relationships with employees – directly and/or
through collective agreements where TUs are
recognized.

9. A few definitions of TUA few definitions of TU
 TU is a “continuous association of wage earners for theTU is a “continuous association of wage earners for the
purpose of maintaining and improving the conditionspurpose of maintaining and improving the conditions
of their working lives.”—of their working lives.”—WebWeb
 ““A TU means an association of workers in one or moreA TU means an association of workers in one or more
occupation— an association carried on mainly, for theoccupation— an association carried on mainly, for the
purpose of protecting and advancing the members’purpose of protecting and advancing the members’
economic interests in connection with their daily work’.economic interests in connection with their daily work’.
——G.D.H. GoleG.D.H. Gole
 A TU is a continuous association of persons inA TU is a continuous association of persons in
industry, whether employers, employees or independentindustry, whether employers, employees or independent
workers—formed primarily for the purpose of theworkers—formed primarily for the purpose of the
pursuit of the interest of its members and of the tradepursuit of the interest of its members and of the trade
they represent.—they represent.—The Trade Union Act 1926The Trade Union Act 1926

10. OBJECTIVES OF TUOBJECTIVES OF TU
1.1. Wages & SalariesWages & Salaries
2.2. Working ConditionsWorking Conditions
3.3. DisciplineDiscipline
4.4. Personnel PoliciesPersonnel Policies
5.5. WelfareWelfare
6.6. Employee-Employer RelationsEmployee-Employer Relations
7.7. Negotiation MachineryNegotiation Machinery
8.8. Health & Safety MeasuresHealth & Safety Measures

11. AIMS OF TUAIMS OF TU
 TU aim to-
1. Secure fair wages for workers and improve their
opportunities for promotion and training.
2. Safeguard security of tenure and improve their conditions of
service.
3. Improve working and living conditions of workers.
4. Provide them educational, cultural and recreational facilities.
5. Facilitate technological advancement by broadening the
understanding of the workers.
6. Help them in improving levels of production, productivity,
discipline and high standard of living.
7. Promote individual and collective welfare and thus correlate
the workers' interests with that of their industry.

12. PRINCIPLES of TUPRINCIPLES of TU

13. Methods of TUsMethods of TUs

14. Brief History of TU in INDIABrief History of TU in INDIA
India is the abode of numerous acts and regulations for the benefit of the TUs
which bestow due powers to the working class. TUism has made its headway
owing to growth of industrialization. TUism asserts collectively the rights of
the workers. In industrially advanced countries trade unionism has made a
great impact on the social, political and economic life but in India TUism is
restricted to industrial areas and it is still in a stage of growth.
The earliest known TUs in India were the Bombay Millhand's Association
formed in 1890, the Amalgamated Society of railway servants of India and
Burma formed in 1897, Printers' Union formed in Calcutta in 1905, the
Bombay Postal Union which was formed in 1907, the Kamgar Hitwardhak
Sabha Bombay formed in 1910.
TU movement began in India after the end of Ist World War. After a decade
following the end of Ist World War the pressing need for the coordination of
the activities of the individual unions was recognised. Thus, the AITUC was
formed in 1920 on a National Basis, the Central Labour Board, Bombay and
the Bengal Trades Union Federation was formed in 1922. The All India
Railwaymen's Federation was formed in the same year and this was followed
by the creation of both Provincial and Central federations of unions of postal
and telegraph employees. The origin of the passing of a TUs Act in India was
the historic Buckingham Mill case of 1940 in which the Madras High Court
granted an interim injunction against the Strike Committee of the Madras
Labour Union forbidding them to induce certain workers to break their
contracts of employment by refusing to return to work.

15. Brief History of TU in INDIABrief History of TU in INDIA
TU leaders found that they were liable to prosecution and
imprisonment for bona fide union activities and it was felt that
some legislation for the protection of TU was necessary. In
March, 1921, Shri N. M. Joshi, then General Secretary of the All
India Trade Union Congress, successfully moved a resolution in
the Central Legislative Assembly recommending that
Government should introduce legislation for the registration and
protection of trade unions. Opposition from employers to the
adoption of such a measure was, however, so great that it was
not untill 1926 that the Indian TU Act was passed. For the
safeguard of the rights of the labour class, the Indian Trade
Unions Bill, 1925 was introduced in the Central Legislative
Assembly to provide for the registration of TUs and in certain
respects to define the law relating to registered TUs in Provinces
of India. The Indian Trade Unions Bill, 1925 having been passed
by the Legislature received its assent on 25th March, 1926. It
came into force on 1st June, 1927 as the Indian Trade Unions
Act, 1926 . By section 3 of the Indian Trade Unions
(Amendment) Act, 1964 the word "Indian" has been omitted
and now it is known as THE TRADE UNIONS ACT, 1926 .

16. Measures to Strengthen the TUMeasures to Strengthen the TU
Movement in IndiaMovement in India
The five measures to strengthen the TU movementThe five measures to strengthen the TU movement
in India are as follows:in India are as follows:
 1. Maintaining Unity1. Maintaining Unity
 2. Free from Political influence2. Free from Political influence
 3. Workers Education3. Workers Education
 4. Adequacy of Funds4. Adequacy of Funds
 5. Welfare Activities for Workers.5. Welfare Activities for Workers.

17. Some Measures that can StrengthenSome Measures that can Strengthen
the TU movement in Indiathe TU movement in India
1.1. Maintaining UnityMaintaining Unity
2.2. Free from Political influenceFree from Political influence
3.3. Workers EducationWorkers Education
4.4. Adequacy of FundsAdequacy of Funds
5.5. Welfare Activities for WorkersWelfare Activities for Workers

18. 6 Phases of TU Movement in India6 Phases of TU Movement in India

19. A. Pre-1918 PhaseA. Pre-1918 Phase
The setting up of textiles and jute mills and laying of the railways sinceThe setting up of textiles and jute mills and laying of the railways since
1850 payed the way for that emergence of industrial activity and, in turn,1850 payed the way for that emergence of industrial activity and, in turn,
labour movement in India. Some researchers have traced the origin oflabour movement in India. Some researchers have traced the origin of
labour movement in India dated back to 1860. However, most of thelabour movement in India dated back to 1860. However, most of the
writers on the subject trace the history of labour movement in Indiawriters on the subject trace the history of labour movement in India
since 1875.The first labour agitation, under the guidance and leadershipsince 1875.The first labour agitation, under the guidance and leadership
ofof Mr. S. S. BengaleeMr. S. S. Bengalee, a social reformist and philanthropist, started in, a social reformist and philanthropist, started in
Bombay in 1875 to protect against the appalling conditions of workersBombay in 1875 to protect against the appalling conditions of workers
in factories, especially those of women and children and appealed to thein factories, especially those of women and children and appealed to the
authorities to introduce legislation for the amelioration of their workingauthorities to introduce legislation for the amelioration of their working
conditions.conditions.
As a result, the first Factory Commission was appointed in Bombay inAs a result, the first Factory Commission was appointed in Bombay in
the year 1875 and the first Factories Act was passed in 1881.the year 1875 and the first Factories Act was passed in 1881. Mr. N. M.Mr. N. M.
LokhandeLokhande may be said to be the founder of organised labour movementmay be said to be the founder of organised labour movement
in India who founded the first trade union in the country, namely, thein India who founded the first trade union in the country, namely, the
Bombay Mill Hands Association (1890).This was followed by a series ofBombay Mill Hands Association (1890).This was followed by a series of
associations such as the Amalgamated Society of Railway Servants inassociations such as the Amalgamated Society of Railway Servants in
India (1897), The Printers’ Union of Calcutta (1905), The Madras andIndia (1897), The Printers’ Union of Calcutta (1905), The Madras and
Calcutta Postal Union (1907), and the Kamgar Hitwardhak SabhaCalcutta Postal Union (1907), and the Kamgar Hitwardhak Sabha
(1910). All these unions aimed at promoting welfare facilities for(1910). All these unions aimed at promoting welfare facilities for
workers and spreading literacy among them.workers and spreading literacy among them.

20. B. 1918-1924 PhaseB. 1918-1924 Phase
The phase 1918-1924 is considered as the era ofThe phase 1918-1924 is considered as the era of
formation of modem trade unionism in the country.formation of modem trade unionism in the country.
The trade union movement got momentum just afterThe trade union movement got momentum just after
the close of the World War I. The post­war economicthe close of the World War I. The post­war economic
and political conditions contributed to the newand political conditions contributed to the new
awakening of class consciousness among the workers.awakening of class consciousness among the workers.
This led to the formation of TUs in the truly modemThis led to the formation of TUs in the truly modem
sense of the term.sense of the term.
As a result, Ahmedabad Textile Labour AssociationAs a result, Ahmedabad Textile Labour Association
(1917), led by Shrimati Ansuyaben Sarabhai; the Madras(1917), led by Shrimati Ansuyaben Sarabhai; the Madras
Labour Union (1918) led byLabour Union (1918) led by B. P. Wadia,B. P. Wadia,IndianIndian
Seamen’s Union, Calcutta Clerk’s Union; and All IndiaSeamen’s Union, Calcutta Clerk’s Union; and All India
Postal and RMS Association were formed. This periodPostal and RMS Association were formed. This period
in the history of TU Movement has been described asin the history of TU Movement has been described as
thethe Early Trade Union Period.Early Trade Union Period.

21. C. 1925-1934 PhaseC. 1925-1934 Phase
With increasing hardships of workers, the signs of militant tendencies andWith increasing hardships of workers, the signs of militant tendencies and
revolutionary approach in trade unionism got expression into violent strikes sincerevolutionary approach in trade unionism got expression into violent strikes since
1924. The communists gained influence in L trade union movement during this1924. The communists gained influence in L trade union movement during this
period. They split the Trade Union Congress twice with their widening differencesperiod. They split the Trade Union Congress twice with their widening differences
with the left-wing unionists.with the left-wing unionists.
The moderate section under the leadership of Mr. N. M. Joshi and Mr. V. V. GiriThe moderate section under the leadership of Mr. N. M. Joshi and Mr. V. V. Giri
seceded from the Congress and set up a separate organization named the Nationalseceded from the Congress and set up a separate organization named the National
Trade Unions Federation (NTUF).Trade Unions Federation (NTUF).
Another split in AITUC took place in 1931 at its Calcutta session when the extremeAnother split in AITUC took place in 1931 at its Calcutta session when the extreme
left wing under the leadership of Messrs S. V. Deshpande and B T Randive brokeleft wing under the leadership of Messrs S. V. Deshpande and B T Randive broke
away and formed a separate organization, namely, the All India Red Trade Unionaway and formed a separate organization, namely, the All India Red Trade Union
Congress Two Years later, the National Federation of Labour was formed to facilitateCongress Two Years later, the National Federation of Labour was formed to facilitate
unity among all the left-wing organizations of labour. As a result, the AITUF andunity among all the left-wing organizations of labour. As a result, the AITUF and
NFL merged to form the National Trade Union Federation (NTUF).NFL merged to form the National Trade Union Federation (NTUF).
Another important feature of this period was the passing of two Acts, namely, theAnother important feature of this period was the passing of two Acts, namely, the
Trade Unions Act 1926Trade Unions Act 1926 and theand the Trade Disputes Act, 1929Trade Disputes Act, 1929 which also gave a fillipwhich also gave a fillip
to the growth of trade unionism in India. This phase of the Indian labour movementto the growth of trade unionism in India. This phase of the Indian labour movement
may be described asmay be described as The Period of Left Wing Trade UnionismThe Period of Left Wing Trade Unionism..

22. D. 1935-1938 PhaseD. 1935-1938 Phase
The Indian National Congress was in power in sevenThe Indian National Congress was in power in seven
provinces in 1937. This injected unity in trade unions.provinces in 1937. This injected unity in trade unions.
As a result, the All India Red Trade Union CongressAs a result, the All India Red Trade Union Congress
itself with the AITUC in 1935. After three years initself with the AITUC in 1935. After three years in
1938, the National Trade Union Congress (NTUC) also1938, the National Trade Union Congress (NTUC) also
affiliated with the AITUC. Other factors thataffiliated with the AITUC. Other factors that
contributed to the revival of trade unions werecontributed to the revival of trade unions were
increasing awakening among the workers to their rightsincreasing awakening among the workers to their rights
and change in the managerial attitude towards tradeand change in the managerial attitude towards trade
unions.unions.
In 1938, one of the most developments took place wasIn 1938, one of the most developments took place was
the enactment of the Bombay Industrial Disputes Act,the enactment of the Bombay Industrial Disputes Act,
1938. An important provision of the Act, inter alia, to1938. An important provision of the Act, inter alia, to
accord compulsory recognition of unions by theaccord compulsory recognition of unions by the
employers gave a big fillip to the growth of tradeemployers gave a big fillip to the growth of trade
unionism in India.unionism in India.

23. E. 1939-1946 PhaseE. 1939-1946 Phase
The World War II also brought chaos in industrial front ofThe World War II also brought chaos in industrial front of
the country. Mass retrenchment witnessed during the post-the country. Mass retrenchment witnessed during the post-
World War II led to the problem of unemployment .ThisWorld War II led to the problem of unemployment .This
compelled workers to join unions to secure their jobs. Thiscompelled workers to join unions to secure their jobs. This
resulted in big spurt in the membership of registered TUsresulted in big spurt in the membership of registered TUs
from 667 in 1939-40 to 1087 in 1945-46.from 667 in 1939-40 to 1087 in 1945-46.
Somuchso workers in the registered TUs witnessed aSomuchso workers in the registered TUs witnessed a
phenomenal increase from 18,612 to 38,570 during the samephenomenal increase from 18,612 to 38,570 during the same
period. The AITUC again split in 1941 when Dr. Aftab Ali,period. The AITUC again split in 1941 when Dr. Aftab Ali,
President of the Seamen s Association, Calcutta disaffiliatedPresident of the Seamen s Association, Calcutta disaffiliated
his union from the Congress and formed a new organizationhis union from the Congress and formed a new organization
known as the “Indian Federation of Labour”.known as the “Indian Federation of Labour”.
The year 1946 was also marked by two importantThe year 1946 was also marked by two important
enactments, namely, the Industrial Employment (Standingenactments, namely, the Industrial Employment (Standing
Orders) Act, 1946 and the Bombay Industrial Relations Act,Orders) Act, 1946 and the Bombay Industrial Relations Act,
1946. Both the Acts, through their provisions, contributed to1946. Both the Acts, through their provisions, contributed to
strengthen the trade unionism in the country.strengthen the trade unionism in the country.

24. F. 1947 and SinceF. 1947 and Since
Proliferation of TUs in the pattern of proliferation of political partiesProliferation of TUs in the pattern of proliferation of political parties
has been a distinguishing feature in the trade union history of Indiahas been a distinguishing feature in the trade union history of India
during the post-Independence period. In May 1947, the Indian Nationalduring the post-Independence period. In May 1947, the Indian National
Trade Union Congress (INTUC) was formed by the nationalists andTrade Union Congress (INTUC) was formed by the nationalists and
moderates and was controlled by the Congress Party. Since by then, themoderates and was controlled by the Congress Party. Since by then, the
AITUC is controlled by the Communists.AITUC is controlled by the Communists.
The Congress socialists who stayed in AITUC at the time of theThe Congress socialists who stayed in AITUC at the time of the
formation of INTUC subsequently formed the Hind Mazdoor Sabhaformation of INTUC subsequently formed the Hind Mazdoor Sabha
(HMS) in 1948 under the banner of the Praja Socialist Party.(HMS) in 1948 under the banner of the Praja Socialist Party.
Subsequently, the HMS was split up with a group of socialist and formedSubsequently, the HMS was split up with a group of socialist and formed
a separate association, namely, “a separate association, namely, “Bhartiya Mazdoor SanghBhartiya Mazdoor Sangh” (BMS)” (BMS)
which is now an affiliate of the B JP. Years after, the communist partywhich is now an affiliate of the B JP. Years after, the communist party
split into various fractions forming thesplit into various fractions forming the United Trade Union CongressUnited Trade Union Congress
(UTUC) and the(UTUC) and the Center of Indian Trade UnionsCenter of Indian Trade Unions (CITU).(CITU).
Later again, a group disassociated itself from the UTUC and formedLater again, a group disassociated itself from the UTUC and formed
another UTUC—Lenin Sarani. Of late, with the emergence of regionalanother UTUC—Lenin Sarani. Of late, with the emergence of regional
parties since 1960, most of the regional parties have shown its inclinationparties since 1960, most of the regional parties have shown its inclination
to a trade union wing, thus, adding to the proliferation of trade unions into a trade union wing, thus, adding to the proliferation of trade unions in
the country. Thus, it is clear that the origin and growth of TUthe country. Thus, it is clear that the origin and growth of TU
Movement in India is riddled with fragmented politicization.Movement in India is riddled with fragmented politicization.

25. Obstacles Faced in the Progress of TU inObstacles Faced in the Progress of TU in
IndiaIndia
1.1. Majority of the Indian Labor is IlliterateMajority of the Indian Labor is Illiterate
2.2. Heterogeneous CharacterHeterogeneous Character
3.3. Low Economic StandardsLow Economic Standards
4.4. Migratory Nature of LaborsMigratory Nature of Labors
5.5. Mutual Strife/ ConflictMutual Strife/ Conflict
6.6. Incapable LeadershipIncapable Leadership
7.7. The Problem of UnemploymentThe Problem of Unemployment
8.8. Political InterferencePolitical Interference

26. NATURE OF IRsNATURE OF IRs

27. Features of IRFeatures of IR
The focus of IR is on the study of the attitudes,The focus of IR is on the study of the attitudes,
relationships, practices and procedures developed byrelationships, practices and procedures developed by
the contending parties to resolve or at least minimizethe contending parties to resolve or at least minimize
conflicts.conflicts.
. IRs also involve the study of conditions conducive to the. IRs also involve the study of conditions conducive to the
labor , management co-operation as well as thelabor , management co-operation as well as the
practices and procedures required to elicit the desiredpractices and procedures required to elicit the desired
co-operation from both the parties. IRs also study theco-operation from both the parties. IRs also study the
laws, rules, regulations, agreements, awards of court,laws, rules, regulations, agreements, awards of court,
customs and traditions, as well as policy framework laidcustoms and traditions, as well as policy framework laid
down by the government for eliciting co-operationdown by the government for eliciting co-operation
between labor and management.between labor and management.

28. Scope of IRsScope of IRs
1.1. Development of Healthy Labor-ManagementDevelopment of Healthy Labor-Management
RelationsRelations
2.2. Maintenance of Industrial PeaceMaintenance of Industrial Peace
3.3. Development of Industrial DemocracyDevelopment of Industrial Democracy
4.4. Collective Bargaining CBCollective Bargaining CB
5.5. Machinery for Resolving Industrial DisputesMachinery for Resolving Industrial Disputes
6.6. Labor Legislative PoliciesLabor Legislative Policies
7.7. Individual GrievancesIndividual Grievances
8.8. Role of Govt., Union & ManagementRole of Govt., Union & Management
9.9. IRs TrainingIRs Training

29. Contemporary issues in IRContemporary issues in IR
1.1. Low WagesLow Wages
2.2. Industrial Safety & HealthIndustrial Safety & Health
3.3. Industrial HousingIndustrial Housing
4.4. Employment of WomenEmployment of Women
5.5. Ignorance & IlliteracyIgnorance & Illiteracy
6.6. Incompatible labor lawsIncompatible labor laws

30. SIGNIFICANCE OF GOOD IRSIGNIFICANCE OF GOOD IR
1.1. Voice for Grievances of Employees.Voice for Grievances of Employees.
2.2. Improved Working Conditions at Workplace.Improved Working Conditions at Workplace.
3.3. Open Communication between Management & Workers.Open Communication between Management & Workers.
4.4. Shared D/M (Decision Making)Shared D/M (Decision Making)
5.5. Fair Wages & Social benefits to Workers.Fair Wages & Social benefits to Workers.
6.6. Higher morale & confidence in the ManagementHigher morale & confidence in the Management
7.7. Industrial PeaceIndustrial Peace
8.8. Higher PRODUCTIVITYHigher PRODUCTIVITY
9.9. FacilitatesFacilitates ++ive Change.ive Change.

31. EVOLUTION OF IRs IN INDIAEVOLUTION OF IRs IN INDIA

32. 11stst
Phase : The PROTECTIVE Phase ( 1947-1956)Phase : The PROTECTIVE Phase ( 1947-1956)
1.1. Import-Substitution Industrialization.Import-Substitution Industrialization.
2.2. The Industrial Disputes Act was passed in 1947, whichThe Industrial Disputes Act was passed in 1947, which
replaced the Trade Disputes Act of 1929. The ID Act providesreplaced the Trade Disputes Act of 1929. The ID Act provides
for settlement of industrial disputes through Conciliation &for settlement of industrial disputes through Conciliation &
Adjudication.Adjudication.
3.3. A conference called the Industrial Truce Resolution took placeA conference called the Industrial Truce Resolution took place
in 1947, and foresaw the establishment of the Minimumin 1947, and foresaw the establishment of the Minimum
Wages Act, Factories Act, and Employees State Insurance ActWages Act, Factories Act, and Employees State Insurance Act
in 1948.in 1948.
4.4. Economy Growth is very low about 2-3% per year.Economy Growth is very low about 2-3% per year.
5.5. Formation of large Employment-Intensive Public Enterprises.Formation of large Employment-Intensive Public Enterprises.
6.6. Largely Centralized Bargaining with static real wages.Largely Centralized Bargaining with static real wages.

33. 22ndnd
Phase : The CONSOLIDATION Phase ( 1956-1965)Phase : The CONSOLIDATION Phase ( 1956-1965)
1.1. The period between 1957 and 1965 can be regarded as anThe period between 1957 and 1965 can be regarded as an
attempt to move away from Legalism to Voluntarism which hadattempt to move away from Legalism to Voluntarism which had
dominated IRs in India. As a result, the Code of Discipline wasdominated IRs in India. As a result, the Code of Discipline was
introduced in 1958.introduced in 1958.
2.2. Unfortunately, the Code of Discipline has a limited success.Unfortunately, the Code of Discipline has a limited success.
Consequently, the Govt. has to rely on legislation to regulate IRs.Consequently, the Govt. has to rely on legislation to regulate IRs.
3.3. There should be no Lockout or Strike without NOTICE.There should be no Lockout or Strike without NOTICE.
4.4. No unilateral action should be taken in connection with anyNo unilateral action should be taken in connection with any
Industrial matter.Industrial matter.
5.5. Awards & Agreements should be speedily implemented.Awards & Agreements should be speedily implemented.

34. 33rdrd
Phase : Conflict Ridden Interventionist phasePhase : Conflict Ridden Interventionist phase
(1967-1980)(1967-1980)
1.1. Economic Stagnation.Economic Stagnation.
2.2. Considerable slowdown in employment growth andConsiderable slowdown in employment growth and
declining real wages.declining real wages.
3.3. Crisis in IRs System occurs, due to massive StrikesCrisis in IRs System occurs, due to massive Strikes
and Industrial Conflict.and Industrial Conflict.
4.4. So many Unions were arose during this period,So many Unions were arose during this period,
consequently employees strength was considerablyconsequently employees strength was considerably
decline.decline.
5.5. Govt. loosing its control over the IR System.Govt. loosing its control over the IR System.

35. 44thth
Phase: The Productivity- Efficiency- QualityPhase: The Productivity- Efficiency- Quality
Oriented Phase (1981-1991)Oriented Phase (1981-1991)
1.1. The Govt. has taken steps to further regulate Layoffs,The Govt. has taken steps to further regulate Layoffs,
Retrenchments and Closures through the ID Amendment ActRetrenchments and Closures through the ID Amendment Act
of 1982 & 1984.of 1982 & 1984.
2.2. Accordingly under the Act, any worker who has completed notAccordingly under the Act, any worker who has completed not
less than one year of continuous service is entitled to a min.less than one year of continuous service is entitled to a min.
amount of compensation for Retrenchment / Closer.amount of compensation for Retrenchment / Closer.
3.3. Rise of Independent Enterprise Unionism.Rise of Independent Enterprise Unionism.
4.4. In this period Labor Productivity increases considerably,In this period Labor Productivity increases considerably,
consequently economy grows at the rate of 5.7% per year.consequently economy grows at the rate of 5.7% per year.

36. 55thth
Phase: The Post-Reform Decade (1992-Till Now)Phase: The Post-Reform Decade (1992-Till Now)
1.1. This phase is an era of Globalization / Liberalization & MNCs.This phase is an era of Globalization / Liberalization & MNCs.
2.2. This Phase saw the Govt. adopt the World Bank -IMF structuralThis Phase saw the Govt. adopt the World Bank -IMF structural
adjustment plans this saw a lot of Liberalization in the economyadjustment plans this saw a lot of Liberalization in the economy
sector. This meant that Barging Power was Decentralized; this meantsector. This meant that Barging Power was Decentralized; this meant
that the Govt. influence on labor unions reduced up to thethat the Govt. influence on labor unions reduced up to the
considerable limit.considerable limit.
3.3. The positive aspect of this phase was that more employment wasThe positive aspect of this phase was that more employment was
created and the TUs increased it voice both on macro and microcreated and the TUs increased it voice both on macro and micro
level.level.
4.4. The CB Power of the TUs was experienced more in this phase.The CB Power of the TUs was experienced more in this phase.

38. COLLECTIVE BARGAININGCOLLECTIVE BARGAINING (CB)(CB)

39. What is CBWhat is CB
1.1. The term CB was first used by Economic TheoristThe term CB was first used by Economic Theorist SidneySidney
WebbWebb in 1891.in 1891.
2.2. ““ CB is a process of Discussion & Negotiation between twoCB is a process of Discussion & Negotiation between two
parties, one or both of whom is a Group of Persons acting inparties, one or both of whom is a Group of Persons acting in
contest……..More specifically it is the procedure by which ancontest……..More specifically it is the procedure by which an
Employer / Employers and a Group of Employees / TUEmployer / Employers and a Group of Employees / TU
Officials agree upon the conditions of Work”………………..Officials agree upon the conditions of Work”………………..
…………THE ENCYCLOPEDIA OF SOCIAL SCIENCETHE ENCYCLOPEDIA OF SOCIAL SCIENCE..
3.3. ““CB is an agreement between a single Employer / AssociationCB is an agreement between a single Employer / Association
of Employers on one hand and a Labor Union on other hand,of Employers on one hand and a Labor Union on other hand,
which regulates the Terms & Conditions of Employment”.which regulates the Terms & Conditions of Employment”.
-------TUDWIG TELLER.-------TUDWIG TELLER.
Conclusion:Conclusion: CB is the most effective way in which workersCB is the most effective way in which workers
influence theinfluence the DECISION MAKING PROCESSDECISION MAKING PROCESS..

40. Objectives of CBObjectives of CB
1.0 To provide an opportunity to the employees, to voice their1.0 To provide an opportunity to the employees, to voice their
problems on issues related to Employment.problems on issues related to Employment.
2.0 To resolve all conflicts & disputes in a mutually agreeable2.0 To resolve all conflicts & disputes in a mutually agreeable
manner.manner.
3.0 To facilitate reaching a solution that is acceptable to both the3.0 To facilitate reaching a solution that is acceptable to both the
parties involves.parties involves.
4.0 To Enhance the Productivity of the organization by preventing4.0 To Enhance the Productivity of the organization by preventing
hurdles like Lock-out, Band, Strikes, etc.hurdles like Lock-out, Band, Strikes, etc.
5.0 To develop a conductive atmosphere to foster good IRs.5.0 To develop a conductive atmosphere to foster good IRs.
6.0 To prevent any Disputes / Conflict in the future through6.0 To prevent any Disputes / Conflict in the future through
mutually agreed contracts.mutually agreed contracts.

41. Characteristics of CBCharacteristics of CB
1.0 CB is a1.0 CB is a GROUP PROCESS.GROUP PROCESS.
2.0 It is Flexible / Fluid & Mobile.2.0 It is Flexible / Fluid & Mobile.
3.0 CB is a Mutual3.0 CB is a Mutual GIVE & TAKEGIVE & TAKE, rather than “Take it or Leave, rather than “Take it or Leave
it”.it”.
4.0 CB is a year round Continuous Process.4.0 CB is a year round Continuous Process.
5.0 It is a5.0 It is a BIPARTITEBIPARTITE Process. There is no 3rd Party Intervention.Process. There is no 3rd Party Intervention.
6.0 CB is6.0 CB is INDUSTRIAL DEMOCRACYINDUSTRIAL DEMOCRACY at WORK.at WORK.
7.0 It is a7.0 It is a DYNAMICDYNAMIC Approach.Approach.
8.0 It is a series of checks & balances.8.0 It is a series of checks & balances.
9.0 It is a method for Developing an9.0 It is a method for Developing an INDUSTRIALINDUSTRIAL
JURISPRUDENCE.JURISPRUDENCE.
10.0 It is entirely an10.0 It is entirely an ARTART not a SCIENCE.not a SCIENCE.
11.0 CB is a “11.0 CB is a “WIN-WINWIN-WIN” Process.” Process.
12.0 CB is an12.0 CB is an INSTITUTIONALINSTITUTIONAL Process.Process.
13.0 CB is a Beauty of13.0 CB is a Beauty of DEMOCRACYDEMOCRACY..

42. TYPE OF CBTYPE OF CB

43. Main Functions of the CBMain Functions of the CB
1.0 To Fix the Prices of Labor Services.1.0 To Fix the Prices of Labor Services.
2.0 To Establish a System of Workers Rights in Industry which may2.0 To Establish a System of Workers Rights in Industry which may
be termed as Democratization of IRs Systems.be termed as Democratization of IRs Systems.
3.0 To set-up a machinery for the representation of employees in3.0 To set-up a machinery for the representation of employees in
D/M (Decision Making) & Affecting Process for their groupD/M (Decision Making) & Affecting Process for their group
interests.interests.
4.0 Basically through the CB, the Workers Union exert presser on4.0 Basically through the CB, the Workers Union exert presser on
Management. As such TU act as a Presser Group through theManagement. As such TU act as a Presser Group through the
weapons of CB.weapons of CB.
5.0 CB is a Rule-making & Goal-oriented Process.5.0 CB is a Rule-making & Goal-oriented Process.

44. Nature of CBNature of CB
The process of CB is calledThe process of CB is called BARGAININGBARGAINING because each side appliesbecause each side applies
Pressure on the other. The best known form of Pressure are Threats ofPressure on the other. The best known form of Pressure are Threats of
Strikes & Lockouts.Strikes & Lockouts.
CB is a process ofCB is a process of VOLUNTARYVOLUNTARY Agreement.Agreement.
CB is an extremely useful shorthand term for describing aCB is an extremely useful shorthand term for describing a
CONTINUOUS / INSTITUTIONAL / DYNAMICCONTINUOUS / INSTITUTIONAL / DYNAMIC Process for solvingProcess for solving
problems arising directly out of TU-Management Relationship.problems arising directly out of TU-Management Relationship.
CB is a Technique which seeks to Determine the Rates of Pay without theCB is a Technique which seeks to Determine the Rates of Pay without the
arbitrary control of Govt. For this reason CB is regarded as Democraticarbitrary control of Govt. For this reason CB is regarded as Democratic
means of achieving the compensation of Human Services.means of achieving the compensation of Human Services.
It is through CB that workers improve their position in theIt is through CB that workers improve their position in the LABOURLABOUR
MARKET.MARKET.
CBCB is anis an INSTITUTIONAL PROCESSINSTITUTIONAL PROCESS of Representation.of Representation.
In CB the Employer doesn’t deal directly with his Workers. He deals with anIn CB the Employer doesn’t deal directly with his Workers. He deals with an
Institution Authorized to represent the Workers for purpose ofInstitution Authorized to represent the Workers for purpose of
NEGOTIATING & ADMINISTERINGNEGOTIATING & ADMINISTERING the terms & conditions ofthe terms & conditions of
Employment.Employment.

45. Process of CBProcess of CB
The two major phases of CB are Negotiation Phase & ContractThe two major phases of CB are Negotiation Phase & Contract
Administration Phase.Administration Phase.
NEGOTIATIONNEGOTIATION is a process ofis a process of
(i) Advancing Proposals---(i) Advancing Proposals---
(ii)Discussing & Criticizing them------(ii)Discussing & Criticizing them------
(iii) Explaining & Exploring their meaning & effect---(iii) Explaining & Exploring their meaning & effect---
(iv) Seeking to secure their Acceptance (If Agreed)(iv) Seeking to secure their Acceptance (If Agreed)
(V) If NOT---Making Counter Proposals (Modifications)(V) If NOT---Making Counter Proposals (Modifications)
COUNTER ADMINISTRATIONCOUNTER ADMINISTRATION relates to putting forward the signedrelates to putting forward the signed
agreement into Effect. TU Officials & IRs Officers should Interpret theagreement into Effect. TU Officials & IRs Officers should Interpret the
items to all participants in the Organization.items to all participants in the Organization.
According toAccording to DUNLOP & HEALYDUNLOP & HEALY, CB Process involves three elements---, CB Process involves three elements---
1. Bargaining Demands 2. The Deadline / Threat of Strike or Lockout and1. Bargaining Demands 2. The Deadline / Threat of Strike or Lockout and
3. Changing Position & Reaching on an Agreement.3. Changing Position & Reaching on an Agreement.

46. Advantages of CBAdvantages of CB
1.0 CB is a good1.0 CB is a good Anti-cyclical MeasureAnti-cyclical Measure..
2.0 CB has been considered as an Extension of2.0 CB has been considered as an Extension of Democracy to theDemocracy to the
Work-Place.Work-Place.
3.0 CB Establishes a System of “3.0 CB Establishes a System of “Industrial JurisprudenceIndustrial Jurisprudence”.”.
The people who Experience the problems are in a betterThe people who Experience the problems are in a better
position than any one else to make the rules governing thoseposition than any one else to make the rules governing those
problems.problems.
4.0 CB is regarded as an Equitable System because it4.0 CB is regarded as an Equitable System because it EqualizesEqualizes
Power between Employers & Employees.Power between Employers & Employees.
5.0 The5.0 The Idea of Participatory DemocracyIdea of Participatory Democracy has been accepted by thehas been accepted by the
Employers as a Force for Social Stability. By Participating in theEmployers as a Force for Social Stability. By Participating in the
formulation of working rules and joining Political Organizations,formulation of working rules and joining Political Organizations,
workers gain a stake in the System.workers gain a stake in the System.

47. Disadvantages of CBDisadvantages of CB
CBCB generates many problems.generates many problems.
1.0 There is the1.0 There is the PROBLEM OF STRIKESPROBLEM OF STRIKES..
2.0 Limitation of CB is that since it is based on2.0 Limitation of CB is that since it is based on POWER &POWER &
CONFLICTCONFLICT it does the most for the people who need it least.it does the most for the people who need it least.
3.0 CB doesn’t contain Sufficient3.0 CB doesn’t contain Sufficient SAFEGUARD FOR THESAFEGUARD FOR THE
PUBLIC INTERESTPUBLIC INTEREST, which might be ignored by collusion, which might be ignored by collusion
between TUs & Employers to fix PRICES.between TUs & Employers to fix PRICES.
4.0 CB doesn’t prevent4.0 CB doesn’t prevent Industrial ConflictIndustrial Conflict but provides a forum forbut provides a forum for
discussion and a means for Systematic Social Change in thediscussion and a means for Systematic Social Change in the
Working Code Governing IRs.Working Code Governing IRs.

48. Seven Important Prerequisites for a Successful CBSeven Important Prerequisites for a Successful CB
1.1. The parties must attain a sufficient degree of organization. If the workers’The parties must attain a sufficient degree of organization. If the workers’
organization is weak, employers can say that it does not represent theorganization is weak, employers can say that it does not represent the
workers and will refuse to negotiate with it. Unless the workers are able toworkers and will refuse to negotiate with it. Unless the workers are able to
form strong and stable unions, collective bargaining will not be successful.form strong and stable unions, collective bargaining will not be successful.
2.2. Freedom of association is essential for CB. Where there is no freedom ofFreedom of association is essential for CB. Where there is no freedom of
association, there can be no CB. Freedom of association implies that theassociation, there can be no CB. Freedom of association implies that the
workers as well as the employers will have the right to form anworkers as well as the employers will have the right to form an
organization of their own to protect their interests.organization of their own to protect their interests.
3.3. There should be mutual recognition between both the groups. CB cannotThere should be mutual recognition between both the groups. CB cannot
begin if the employers do not recognize the workers’ organization. Thebegin if the employers do not recognize the workers’ organization. The
conflict of interests makes the two groups hostile to each other. They mustconflict of interests makes the two groups hostile to each other. They must
recognize each other and realize that adjustment and understanding isrecognize each other and realize that adjustment and understanding is
essential for the achievement of organizational goals.essential for the achievement of organizational goals.
4.4. There must exist a favorable political climate, essential for successful CB.There must exist a favorable political climate, essential for successful CB.
If the Govt. encourages CB as the best method of regulating conditions ofIf the Govt. encourages CB as the best method of regulating conditions of
employment, it will be successful. Where the governments restrict TUemployment, it will be successful. Where the governments restrict TU
activities, there can be no CB.activities, there can be no CB.

49. Seven Important Prerequisites for a Successful CBSeven Important Prerequisites for a Successful CB
5.5. Agreement must be observed by those to whom they apply. TheAgreement must be observed by those to whom they apply. The
workers’ organization must be strong enough to exercise itsworkers’ organization must be strong enough to exercise its
authority over its members. If the TU has no power over itsauthority over its members. If the TU has no power over its
members, CB will not be effectively implemented.members, CB will not be effectively implemented.
6.6. A give and take policy must prevail in the organization. TheA give and take policy must prevail in the organization. The
difference between two parties can be adjusted only bydifference between two parties can be adjusted only by
compromise so that an agreement can be reached. Neither sidecompromise so that an agreement can be reached. Neither side
should be too rigid on its demand.should be too rigid on its demand.
Their attitudes should be flexible and both sides should be readyTheir attitudes should be flexible and both sides should be ready
to give up some of its demands. TUs should not rigidly insistto give up some of its demands. TUs should not rigidly insist
upon unreasonable demands and should be ready to reduce itsupon unreasonable demands and should be ready to reduce its
demands to come to an agreement.demands to come to an agreement.
7. Sometimes unfair labor practices are resorted to by both the7. Sometimes unfair labor practices are resorted to by both the
employers and the TUs. These will restrict the development ofemployers and the TUs. These will restrict the development of
CB. Unfair labor practices should be avoided by both the sides,CB. Unfair labor practices should be avoided by both the sides,
as this will create an atmosphere of goodwill.as this will create an atmosphere of goodwill.

50. How to Develop Sound Industrial Relations ?How to Develop Sound Industrial Relations ?
1.1. Developing Trust between Labor and Management. there may be two most Developing Trust between Labor and Management. there may be two most
effective ways to create trust between the IR parties:effective ways to create trust between the IR parties:
1.1 To build competence in both laborers and managers, and1.1 To build competence in both laborers and managers, and
1.2 To develop and practice right human resource practices in the organization. In fact, it1.2 To develop and practice right human resource practices in the organization. In fact, it
is trust only that binds labor and management together.is trust only that binds labor and management together.
2. 2. Existence of Sound and Democratic TUs:Existence of Sound and Democratic TUs: One another prerequisite for a sound IROne another prerequisite for a sound IR
is the existence of sound and democratic trade unions to bargain with management. Itis the existence of sound and democratic trade unions to bargain with management. It
is the sound and democratic TU that can protect the employee’s interest in terms ofis the sound and democratic TU that can protect the employee’s interest in terms of
wages, benefits, working conditions, job security and so on. These make employeeswages, benefits, working conditions, job security and so on. These make employees
satisfied and satisfaction permits no alibis and grievance.satisfied and satisfaction permits no alibis and grievance.
3. Maintenance of Industrial Peace:3. Maintenance of Industrial Peace: Peace promotes prosperity and prosperity supportsPeace promotes prosperity and prosperity supports
happiness. In an industrial organization, peace can be established through several ways,happiness. In an industrial organization, peace can be established through several ways,
like establish machinery for the prevention and settlement of industrial disputes. Makelike establish machinery for the prevention and settlement of industrial disputes. Make
provisions for bipartite and tripartite committees for evolving personnel policies, codeprovisions for bipartite and tripartite committees for evolving personnel policies, code
of conduct, code of discipline, etc. Create implementation and evaluation committeesof conduct, code of discipline, etc. Create implementation and evaluation committees
for looking into CB Agreements, court orders and judgments and violations offor looking into CB Agreements, court orders and judgments and violations of
statutory provisions of the various laws.statutory provisions of the various laws.

51. How to Develop Sound Industrial Relations ?How to Develop Sound Industrial Relations ?
4. Continuous Feedback and Monitoring:4. Continuous Feedback and Monitoring:
Feedback serves as an input for improvement in all types of activities and soFeedback serves as an input for improvement in all types of activities and so
in IR as well. A properly devised feedback mechanism enables the HRin IR as well. A properly devised feedback mechanism enables the HR
Managers to spot the grey areas in IR system and, then, take proactive actionsManagers to spot the grey areas in IR system and, then, take proactive actions
to solve the problems before these assume alarming proportions. Nipping theto solve the problems before these assume alarming proportions. Nipping the
problems at the bud is better because, sometimes, a seemingly small problemproblems at the bud is better because, sometimes, a seemingly small problem
if not solved culminates to a complex and serious one later on.if not solved culminates to a complex and serious one later on.
5. Professional Approach:5. Professional Approach:
Understanding human behavior has ever been a complex phenomenon. AndUnderstanding human behavior has ever been a complex phenomenon. And
the same has become more so in case of modem knowledge workers. Thisthe same has become more so in case of modem knowledge workers. This
underlines the need for managing with employees/ IR by the persons havingunderlines the need for managing with employees/ IR by the persons having
professional competence and approach in the subject. These persons need toprofessional competence and approach in the subject. These persons need to
be well versed with whole gamut of employee/human behavior at work.be well versed with whole gamut of employee/human behavior at work.
In other words, these persons must know why employees behave as theyIn other words, these persons must know why employees behave as they
behave at work place. Besides, they should also have a problem -solvingbehave at work place. Besides, they should also have a problem -solving
approach to tackle with the employee problems in the organizations.approach to tackle with the employee problems in the organizations.

53. Workers Participation in Management (WPM)Workers Participation in Management (WPM)
Workers Participation is the most debated issues now-a-days.Workers Participation is the most debated issues now-a-days.
PARTICIPATIONPARTICIPATION mean an act ofmean an act of TAKING PARTTAKING PART. It may be. It may be
defined as Taking Part in a Sharing ofdefined as Taking Part in a Sharing of POWER & STATUSPOWER & STATUS
between Management & Workers. It also relates to a Style ofbetween Management & Workers. It also relates to a Style of
Management enabling Workers to Taking Part inManagement enabling Workers to Taking Part in D/M PD/M Processrocess
and Exert some influence over the Policy of the Organization.and Exert some influence over the Policy of the Organization.
WORKERS PARTICIPATIONWORKERS PARTICIPATION is an attempt to Bridge theis an attempt to Bridge the
Gap by Authorizing theGap by Authorizing the WORKERSWORKERS to Participate into Participate in
MANAGERIAL FUNCTIONSMANAGERIAL FUNCTIONS..
CB itself recognized as a form of WPM.CB itself recognized as a form of WPM.
According toAccording to ALLAN FLANDERSALLAN FLANDERS, CB is a Process of Power, CB is a Process of Power
Relationship. By this process Organized Labor penetrates intoRelationship. By this process Organized Labor penetrates into
areas which are regarded customarily as Management Functions.areas which are regarded customarily as Management Functions.

54. Definition of WPMDefinition of WPM
““The term Participation implies the Mental & Emotional Involvement of aThe term Participation implies the Mental & Emotional Involvement of a
person in a group situation which encourages him to contribute to Groupperson in a group situation which encourages him to contribute to Group
Goals & Share Responsibility in them.” —Goals & Share Responsibility in them.” —KIETH DAVISKIETH DAVIS
This definition envisages three important elements in participation.This definition envisages three important elements in participation.
(i)(i) It means mental and emotional involvement rather than mere physicalIt means mental and emotional involvement rather than mere physical
activity.activity.
(ii)(ii) Participation must motivate a person to contribute to a specific situation toParticipation must motivate a person to contribute to a specific situation to
invest his own resources, such as Initiative / Knowledge / creativity &invest his own resources, such as Initiative / Knowledge / creativity &
Ingenuity in the objectives of the organization.Ingenuity in the objectives of the organization.
(iii)(iii) It encourages people to share responsibility for a Decision or Activity.It encourages people to share responsibility for a Decision or Activity.
” ”Participation in Management gives the worker a sense of importance, prideParticipation in Management gives the worker a sense of importance, pride
and accomplishment; it gives him the freedom of opportunity for Self-and accomplishment; it gives him the freedom of opportunity for Self-
Expression; a Feeling of Belongingness with the place of work and a sense ofExpression; a Feeling of Belongingness with the place of work and a sense of
Workmanship & Creativity”. ---Workmanship & Creativity”. --- WALPOLEWALPOLE
““It implies a situation where workers representatives are, to some extent,It implies a situation where workers representatives are, to some extent,
involved in the process of management decision making, but where theinvolved in the process of management decision making, but where the
ultimate power is in the hands of the management”. ---ultimate power is in the hands of the management”. ---CLEGGCLEGG
It is a system of Communication & Consultation either formal or informal byIt is a system of Communication & Consultation either formal or informal by
which employees of an organization are kept informed about the affairs ofwhich employees of an organization are kept informed about the affairs of
the undertaking or through which they express their opinion and contributethe undertaking or through which they express their opinion and contribute
to management decisions.to management decisions.

55. Objectives of WPMObjectives of WPM
 To raise level of Motivation of Workers by Closer Involvement.To raise level of Motivation of Workers by Closer Involvement.
 To provide opportunity for Expression and to provide a sense of ImportanceTo provide opportunity for Expression and to provide a sense of Importance
to Workers.to Workers.
 Establish and encourage good communication system at all levelsEstablish and encourage good communication system at all levels
 To develop ties of understanding leading to better Effort & Harmony.To develop ties of understanding leading to better Effort & Harmony.
 Joint D/M ensures the there will be Min Industrial Conflict an EconomicJoint D/M ensures the there will be Min Industrial Conflict an Economic
Growth can be free form Distracting Strife.Growth can be free form Distracting Strife.
 To act on a device to Counter-Balance Powers of Managers.To act on a device to Counter-Balance Powers of Managers.
 To act on a Panacea for solving IR Problems.To act on a Panacea for solving IR Problems.
 To Help handle resistance to change.To Help handle resistance to change.
 To Promote Democratic Practice.To Promote Democratic Practice.
 To PromoteTo Promote CORDIALCORDIAL Relations.Relations.
In India the objective of the government in advocating for WPM, as stated inIn India the objective of the government in advocating for WPM, as stated in
thethe Industrial Policy Resolution 1956Industrial Policy Resolution 1956, is a part of its overall Endeavour to, is a part of its overall Endeavour to
create a Socialist Society, wherein the sharing of a part of the managerialcreate a Socialist Society, wherein the sharing of a part of the managerial
powers by workers is considered necessary.powers by workers is considered necessary.

56. Characteristics of WPMCharacteristics of WPM
1. Participation implies practices which increase the scope for1. Participation implies practices which increase the scope for
employees’ share of influence in D/M Process with theemployees’ share of influence in D/M Process with the
assumption of responsibility.assumption of responsibility.
2. Participation presupposes willing Acceptance of Responsibility2. Participation presupposes willing Acceptance of Responsibility
by Workers.by Workers.
3. WPM not as individuals but as a Group through their3. WPM not as individuals but as a Group through their
representatives.representatives.
4. WPM differs from CB in the sense that while the former is based4. WPM differs from CB in the sense that while the former is based
on mutual trust, information sharing and mutual problemon mutual trust, information sharing and mutual problem
solving; the latter is essentially based on Power Play, Pressuresolving; the latter is essentially based on Power Play, Pressure
Tactics, and Negotiations.Tactics, and Negotiations.
5. The basic rationale tor WPM is that workers invest their Labor5. The basic rationale tor WPM is that workers invest their Labor
and their fates to their place of work. Thus, they contribute toand their fates to their place of work. Thus, they contribute to
the outcomes of organization. Hence, they have a legitimate rightthe outcomes of organization. Hence, they have a legitimate right
to share in D/M activities of organization.to share in D/M activities of organization.

57. Forms of WPMForms of WPM
Different forms of WPM are as under-Different forms of WPM are as under-
1.0 CB: 1.0 CB: CB results in collective agreements which lay down certain rules and conditionsCB results in collective agreements which lay down certain rules and conditions
of service in an establishment. Such agreements are normally binding on the parties.of service in an establishment. Such agreements are normally binding on the parties.
Theoretically, CB is based on the principle of balance of power, but, in actualTheoretically, CB is based on the principle of balance of power, but, in actual
practice, each party tries to outbid the other and get maximum advantage by using, ifpractice, each party tries to outbid the other and get maximum advantage by using, if
necessary, threats and counter threats like; Strikes / Band / Lockouts and othernecessary, threats and counter threats like; Strikes / Band / Lockouts and other
direct actions.direct actions.
2.0 Works Councils:2.0 Works Councils: These are exclusive bodies of employees, assigned with differentThese are exclusive bodies of employees, assigned with different
functions in the management of an enterprise. In some countries, their role is limitedfunctions in the management of an enterprise. In some countries, their role is limited
only to receiving information about the enterprise. In Yugoslavia, these councilsonly to receiving information about the enterprise. In Yugoslavia, these councils
have wider D/M Powers in an enterprise like; Appointment, Promotion, Salaryhave wider D/M Powers in an enterprise like; Appointment, Promotion, Salary
Fixation and also major Investment Decisions.Fixation and also major Investment Decisions.
3.0 Joint Management Councils & Committees:3.0 Joint Management Councils & Committees: Mainly these bodies are ConsultativeMainly these bodies are Consultative
& Advisory, with D/M being left to the Top Management. As they are consultative& Advisory, with D/M being left to the Top Management. As they are consultative
and advisory, neither the managements nor the workers take them seriously.and advisory, neither the managements nor the workers take them seriously.
4.0 Board Representation:4.0 Board Representation: The role of a worker representative in the board of directorsThe role of a worker representative in the board of directors
is essentially one of negotiating the worker’s interest with the other members of theis essentially one of negotiating the worker’s interest with the other members of the
board. At times, this may result in tension and friction inside the board room. Theboard. At times, this may result in tension and friction inside the board room. The
effectiveness of workers’ representative at the board depend upon his ability toeffectiveness of workers’ representative at the board depend upon his ability to
participate in D/M, his knowledge of the company affairs, his educationalparticipate in D/M, his knowledge of the company affairs, his educational
background, his level of understanding and also on the number of workerbackground, his level of understanding and also on the number of worker
representatives in the Board.representatives in the Board.

58. Forms of WPMForms of WPM
5.0 Workers Ownership of Enterprise: 5.0 Workers Ownership of Enterprise: Social Self-ManagementSocial Self-Management
in Yugoslavia is an example of complete control of managementin Yugoslavia is an example of complete control of management
by workers through an elected board and workers council. Evenby workers through an elected board and workers council. Even
in such a system, there exist two distinct Managerial & Operativein such a system, there exist two distinct Managerial & Operative
functions with different sets of persons to perform them.functions with different sets of persons to perform them.
Though workers have the option to influence all the decisionsThough workers have the option to influence all the decisions
taken at the top level, in actual practice, the Board and the Toptaken at the top level, in actual practice, the Board and the Top
Management team assume a fairly independent role in takingManagement team assume a fairly independent role in taking
major Policy Decisions for the Enterprises.major Policy Decisions for the Enterprises.
6.0 Quality Circles QCs6.0 Quality Circles QCs :: QC is a small group of employees in the
same work-area or doing a similar type of work who voluntarily
meet regularly for about an hour every week to identify, analyse
and resolve work-related problems, leading to improvement in
their total performance, and enrichment of their work life.

59. Forms of WPMForms of WPM
Underlying the QC concept is the assumption that the causes of quality or productivity
problems are unknown to workers and to management. It is also assumed that shop
floor workers have hands on knowledge, are creative and can be trained to use this
natural creativity in job problem solving. QCs, however, are a people building, rather
than a people using, approach.

60. Forms of WPMForms of WPM
7.0 Kaizen7.0 Kaizen : Kaizen, also known as Continuous Improvement, is an approach to work: Kaizen, also known as Continuous Improvement, is an approach to work
that systematically seeks to achieve small, incremental changes in processes in order tothat systematically seeks to achieve small, incremental changes in processes in order to
improve efficiency and quality.improve efficiency and quality.
Kaizen can be roughly translated from Japanese to mean “Kaizen can be roughly translated from Japanese to mean “GOOD CHANGEGOOD CHANGE." The." The
philosophy behind Kaizen is often credited tophilosophy behind Kaizen is often credited to Dr. W. Edwards Deming. Dr.Dr. W. Edwards Deming. Dr.
DemmingDemming was invited by Japanese industrial leaders and engineers to help rebuildwas invited by Japanese industrial leaders and engineers to help rebuild
Japan after World War II.Japan after World War II.
Kaizen means improvement, continuous improvement involving everyone in the
organization from top management, to Managers then to Supervisors, and to Workers.
Kaizen is a Japanese philosophy for process improvement that can be traced to the
meaning of the Japanese words ‘Kai’ and ‘Zen’, which translate roughly into ‘to
break apart and investigate’ and ‘to improve upon the existing situation’
Improvements through Kaizen have a process focus. Kaizen generates
process-oriented thinking, is people-oriented, and is directed at people's
efforts. Rather than identifying employees as the problem, Kaizen emphasizes
that the process is the target and employees can provide improvements by
understanding how their jobs fit into the process and changing it.

61. Kaizen’s Ten-Step ProcessKaizen’s Ten-Step Process
The process improvement methodology can be molded from The process improvement methodology can be molded from Kaizen’s Ten StepsKaizen’s Ten Steps,,
includingincluding Six SigmaSix Sigma,, Plan Do Check Act (PCDAPlan Do Check Act (PCDA)) CYCLECYCLE, or even, or even SelectSelect
Clarify Organize Run Evaluate (SCOREClarify Organize Run Evaluate (SCORE). This flexibility gives the Kaizen an). This flexibility gives the Kaizen an
ability to be used throughout your organization by any experienced facilitator. Theseability to be used throughout your organization by any experienced facilitator. These
Ten Steps are the process map through which the event is kept on track andTen Steps are the process map through which the event is kept on track and
participants remain engaged. See the steps below to compare the otherparticipants remain engaged. See the steps below to compare the other
Methodologies to the Kaizen Process.Methodologies to the Kaizen Process.
1. Define the problem1. Define the problem
2. Document the current situation2. Document the current situation
3. Visualize the ideal situation3. Visualize the ideal situation
4. Define measurement targets4. Define measurement targets
5. Brainstorm solutions to the problem5. Brainstorm solutions to the problem
6. Develop Kaizen plan6. Develop Kaizen plan
7. Implement plan7. Implement plan
8. Measure, record and compare results to targets8. Measure, record and compare results to targets
9. Prepare summary documents9. Prepare summary documents
10. Create short term action plan, on-going standards and sustaining plan10. Create short term action plan, on-going standards and sustaining plan

62. Levels of WPMLevels of WPM
 Informative ParticipationInformative Participation:: This refers to Management’sThis refers to Management’s
Information Sharing with Workers on such items those areInformation Sharing with Workers on such items those are
concerned with workers. Balance Sheet, Production, Economicconcerned with workers. Balance Sheet, Production, Economic
Conditions of the Plant etc., are the examples of such items. It isConditions of the Plant etc., are the examples of such items. It is
important to note that here workers have no right of closeimportant to note that here workers have no right of close
scrutiny of the information provided and management has itsscrutiny of the information provided and management has its
prerogative to make decisions on issues concerned with workers.prerogative to make decisions on issues concerned with workers.
 Consultative ParticipationConsultative Participation:: In this type of participation,In this type of participation,
workers are consulted in those matters which relate to them.workers are consulted in those matters which relate to them.
Here, the role of workers is restricted to give theirHere, the role of workers is restricted to give their VIEWSVIEWS only.only.
However the acceptance and non-acceptance of these viewsHowever the acceptance and non-acceptance of these views
depends on Management. Nonetheless, it provides andepends on Management. Nonetheless, it provides an
opportunity to the workers to express their views on mattersopportunity to the workers to express their views on matters
involving their interest.involving their interest.

63. Levels of WPMLevels of WPM
 Associative Participation:Associative Participation: Here, the role of theHere, the role of the Workers’Workers’
Council ( WC )Council ( WC )is not just advisory unlike consultativeis not just advisory unlike consultative
participation. In a way, this is an advanced and improved form ofparticipation. In a way, this is an advanced and improved form of
Consultative Participation. Now, the management is under aConsultative Participation. Now, the management is under a
moral obligation to acknowledge, accept and implement themoral obligation to acknowledge, accept and implement the
Unanimous Decision of the WC.Unanimous Decision of the WC.
 Administrative Participation:Administrative Participation: In the administrativeIn the administrative
participation, decisions already taken are Implemented by theparticipation, decisions already taken are Implemented by the
Workers. Compared to the former three levels of participation,Workers. Compared to the former three levels of participation,
the degree of sharing authority and responsibility by the workersthe degree of sharing authority and responsibility by the workers
is definitely more in this participation.is definitely more in this participation.
 Decisive Participation:Decisive Participation: Here, the decisions are taken Jointly byHere, the decisions are taken Jointly by
the Management and the Workers of an Organization. In fact,the Management and the Workers of an Organization. In fact,
this is the ultimate level of WPM.this is the ultimate level of WPM.

64. Necessary Conditions for Make the WPM EffectiveNecessary Conditions for Make the WPM Effective
or Successfulor Successful
1. The objectives of WPM should be closely set by the parties1. The objectives of WPM should be closely set by the parties
concerned.concerned.
2. There should be a democratic, strong and representative union of2. There should be a democratic, strong and representative union of
workers to participate in management on behalf of workers.workers to participate in management on behalf of workers.
3 There should be a sincere feeling of participative management at all3 There should be a sincere feeling of participative management at all
levels. Rigidity in terms of hierarchical participation distorts thelevels. Rigidity in terms of hierarchical participation distorts the
atmosphere for participative management.atmosphere for participative management.
4. There should be continuous communication and consultation4. There should be continuous communication and consultation
between the workers and management in matters affecting theirbetween the workers and management in matters affecting their
functioning.functioning.
5. The Workers and Management should develop positive approach and5. The Workers and Management should develop positive approach and
favorable attitude to Participative Management. Conducting Trainingfavorable attitude to Participative Management. Conducting Training
and Orientation Progranmmes for the parties concerned can helpand Orientation Progranmmes for the parties concerned can help
create a conducive, environment for successful application of WPM.create a conducive, environment for successful application of WPM.