Industrial Relations
Industrial relations is an art,
 Industrial relations has become one of the most delicate and
complex problems of modern industrial society.
 Industrial progress is impossible without cooperation of labors
and harmonious relationships. Therefore, it is in the interest of all
to create and maintain good relations between employees (labor)
and employers (management).
 The term ‘Industrial Relations’ comprises of two terms:
‘Industry’ and ‘Relations’.
-“Industry” refers to “any productive activity in which an
individual (or a group of individuals) is (are) engaged”.
- By “relations” we mean “the relationships that exist
within the industry between the employer and his
 The term industrial relations explains the relationship
between employees and management which stem directly
or indirectly from union-employer relationship.
In the broad sense, industrial relations cover all such relationships that a business enterprise
maintains with various sections of the society such as workers, state, customers and public
who come into its contact.
In the narrow sense, it refers to all types of relationships between employer and employees,
trade union and management, workers and union and between workers and workers. It also
includes all sorts of relationships at both formal and informal levels in the organization.
The term ‘industrial relations’ has been variously defined:
Industrial relations are viewed here as the “ process by which people and their
organization interact at the place of work to establish the terms and conditions of
J.T. Dunlop defines industrial relations as “the complex interrelations among
managers, workers and agencies of the governments”.
According to Dale Yoder “industrial relations is the process of management dealing
with one or more unions with a view to negotiate and subsequently administer collective
bargaining agreement or labour contract”.
Importance of Industrial Relations
•It establishes industrial democracy
•It contributes to economic growth
and development
•It ensures optimum use of scare resources
•It prompts enactment of sound labour legislation
•It improves morale of he work force
•It discourages unfair practices on
the part of both management and
It ensures uninterrupted production.
• It reduces the industrial disputes.
• It has brought a mental revolution.
• It helps in reducing wastages
Objectives of IR
 To safeguard the interest of labor and management by
securing the highest level of mutual understanding and
good-will among all those sections in the industry which
participate in the process of production.
 To avoid industrial conflict or strife and develop
harmonious relations, which are an essential factor in the
productivity of workers and the industrial progress of a
 To raise productivity to a higher level in an era of full
employment by lessening the tendency to high turnover and
 To establish and promote the growth of an industrial
democracy based on labor partnership in the sharing of
profits and of managerial decisions, so that ban individuals
personality may grow its full stature for the benefit of the
industry and of the country as well.
 To eliminate or minimize the number of strikes,
lockouts and gheraos by providing reasonable wages,
improved living and working conditions, said fringe
 To improve the economic conditions of workers in the
existing state of industrial managements and political
 Socialization of industries by making the state itself a
major employer
 Vesting of a proprietary interest of the workers in the
industries in which they are employed.
Present Status of IR
 Prior to 1991, the industrial relations system in India sought to
control conflicts and disputes through excessive labor legislations.
These labor laws were protective in nature and covered a wide
range of aspects of workplace industrial relations like laws on
health and safety of labors, layoffs and retrenchment policies,
industrial disputes and the like. The basic purpose of these laws
was to protect labors. However, these protectionist policies
created an atmosphere that led to increased inefficiency in firms,
over employment and inability to introduce efficacy. With the
coming of globalization, the 40 year old policy of protectionism
proved inadequate for Indian industry to remain competitive as the
lack of flexibility posed a serious threat to manufacturers because
they had to compete in the international market.
 With the advent of liberalization in1992, the industrial relations policy
began to change. Now, the policy was tilted towards employers.
Employers opted for workforce reduction, introduced policies of
voluntary retirement schemes and flexibility in workplace also
increased. Thus, globalization brought major changes in industrial
relations policy in India.The changes can be summarized as follows:
Collective bargaining in India has mostly been decentralized, but now
in sectors where it was not so, are also facing pressures to follow
Some industries are cutting employment to a significant extent to cope
with the domestic and foreign competition e.g. pharmaceuticals. On
the other hand, in other industries where the demand for employment
is increasing are experiencing employment growths.
In the expansionary economy there is a clear shortage of managers and
skilled labor.
 The number of local and enterprise level unions has increased and
there is a significant reduction in the influence of the unions.
Under pressure some unions and federations are putting up a united
front e.g. banking.
Another trend is that the employers have started to push for
internal unions i.e. no outside affiliation.
HR policies and forms of work are emerging that include, especially
in multi-national companies, multi-skills, variable compensation,
job rotation etc. These new policies are difficult to implement in
place of old practices as the institutional set up still needs to be
HRM is seen as a key component of business strategy.
Training and skill development is also receiving attention in a
number of industries, especially banking and information
Concepts and models of Industrial
The IR can be viewed from the various angles which may range from
the economic to social, political to legal and psychological and
1. Psychological Approach: The psychologists are of the view that
the problem of industrial relations are deeply rooted in the
perception and the attitude of focal participants.
1. Sociological Approach: Industry is a social world in miniature.
The management goals, workers’ attitudes, perception of change in
industry, are all, in turn, decided by broad social factors like the
culture of the institutions, customs, structural changes, statussymbols, rationality, acceptance or resistance to change, tolerance etc.
Industry is, thus inseparable from the society in which it functions.
3 Human Relations Approach: Among all the areas of management,
perhaps one of the most delicate and complex is concerned with
human resources management. Their handling is radically different
from that of physical, material and financial resources because these
are not inanimate or passive but are composed of pulsating human
beings having their own emotions, perception, attitude, personality.
Socio-Ethical Approach: Though not much widely accepted but
one of the often discussed approach to industrial relations is the socioethical approach. This approach holds that industrial besides having a
sociological base does have some ethical ramifications. As good
industrial relations can be only maintained when both the labour and
management realize their moral responsibility in contributing to the
said task through mutual cooperation and great understanding of each
other’s problems
5. Gandhian Approach: