evolution of IR & TU

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PROJECT REPORT ON

INDUSTRIAL RELATIONS

BY

MAHESH S. WANI


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EVOLUTION OF INDUSTRIAL RELATION & TRADE UNION

Industrial relations are a multidisciplinary field that studies the employment relationship.Industrial relations are increasingly being called employment relations because of the importanceof non-industrial employment relationships. Many outsiders also equate industrial relations tolabour relations and believe that industrial relations only studies unionized employmentsituations, but this is an oversimplification.

Objectives of Industrial Relations

y T o enhance the economic status of workers.y T o reduce conflict of the organization.y T o make good relation with subordinates.y T o develop relation with other.y T o participate in decision making.y T o extent and maintain industrial democracy.


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The Origins and Evolution of the Field of Industrial Relations

T he term industrial relations often connote the study of relations between management andorganized labor. However, it originally described the entire range of labor issues. In T he Originsand Evolution of the Field of Industrial Relations, Bruce Kaufman argues that the redefinition ismore than a change in terminology, and he offers the reader an academic history of the industrialrelations field now more commonly known as human resources.

T he book meticulously outlines the evolution of industrial relations. Kaufman charts howindustrial relations began with optimistic goals at the start of the 20th century, grew through themiddle of the century, and declined as an academic enterprise in the 1980's.

Academics and practitioners at the turn of the century had great interest in promoting better relations between workers and management to reduce tensions and increase productivity infactories at a time of turbulence caused by labor unrest. Pursuing research into this area, which

became known as industrial relations, academics developed theories designed to moderate thesetensions by improving management practices and proposing labor legislation.

T he field's growth developed into two branches as some academics pursued an approach referredto in the book as "science building," while others more interested in practical problem solvingheaded in a different direction. T he interplay between these two positions on questions of personnel policy is a major theme in the book.

Industrial relations originally included the entire spectrum of labor and management issues andaddressed such topics from a neutral, third party perspective. Labor and management wereregarded as equal parties with a need to find common ground. Beginning as a subcategory withinindustrial relations, the development of personnel management theories signaled a schism in thefield by focusing on management issues. T he terms industrial relations and personnelmanagement were not interchangeable, but represented distinctly different perspectives that werereflected in how personnel managers and academics pursued their subjects. T he more updatedapproach of industrial relations is human resources, which was a development of personnelmanagement.

As the book follows developments through the middle of the 20th century, it describes how other academic fields such as sociology and psychology influenced industrial relations. Industrialrelations began to incorporate industrial psychology as it applied to labor problems from theperspective of human relations. At the same time, the Great Depression helped spawn New Deallabor legislation such as the National Labor Relations Act and Fair Labor Standards Act, whichwere critical developments that continue to have an impact on labor relations.

Kaufman defines the decade between 1948 and 1958 as the "golden age" of industrial relations.Unions experienced strong growth in membership and influence, and employer-employeerelations became the primary topic of debate in the field. Recognizing this development,


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P re-Independence India of evolution of industrial relations policies

T he State intervention in labour/industrial relations matter had its beginning when the BritishGovernment in India was constrained to protect its commercial interests in this country.

T he I.L.O. Publication observes, far from protecting the interest of labour, the earlier attempts toregulate labour consisted of enactments such as the Assam Labour Act, the Workmen's Breach of Contract Act, 1859,and the Employers' and Workmen's (Disputes) Act of 1860. T hese Actsaimed at protecting the social system against labour rather than protecting labour against thesocial system.

Deterioration of working conditions, because f greater development of industrial units; undulylow wages and consequent dissatisfaction among the working class; growing indiscipline of workers; stained relations between labour-management; the formation of ILO; the emergence of AIT UC (1920) and demands for higher wages, improved conditions of work and living-led to

serious industrial troubles and created labour problems of large dimensions. T he situationbecame unmanageable in Bombay and Bengal. Hence, committees were appointed to look intothe matter.

T he beginning of the industrial relations' dynamics can be traced back'. As one author puts it,to the inception of the Indian Labour Conference as far back as 1942, by Dr. B.R. Ambedkar,when the policy of bringing together the three parties, namely, the Government, Managementand Labour on a common platform as a consultative tripartite forum for all matters of labour policy and industrial relations was accepted.

When the Second World War broke out, the Government of India passed in Defense of IndiaRules and incorporated in them Section 81A, which : (i) banned strikes and lock-outs in anytrade with a view of ensuring continuous supplies for the requirements of the war, and (ii)provided for compulsory adjudication of industrial disputes.


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RECENT TRENDS AND FUTURE P ROS P ECTS

Whether attributable to employer strategic choices or more fundamental environmental changesthat govern those choices, U.S. industrial relations have clearly undergone significant change inrecent years and are likely to experience further dramatic change in the years ahead. As alreadynoted, unionization has declined dramatically. With that decline, collective bargaining hasdiminished in importance as a mechanism for setting employment terms of U.S. workers; rates of increases in wages and benefits for unionized workers frequently lag behind those of their nonunion counterparts (although the union-nonunion wage differential is still estimated to befairly sizable, in the range of 10 to 20 percent with a higher differential for benefits); strikeactivity has set new record lows; and union political "clout" is seriously questioned. Many U.S.unions have undergone unprecedented soul-searching in their efforts to develop strategies torespond to these changes. Mergers between unions, new forms of membership and newmembership benefits, and new organizing, bargaining, and political strategies and tactics have

been proposed and implemented as part of union efforts to reverse their decline. In the 1994report The New American Workplace: A Labor Perspective compiled by the Committee on theEvolution of Work of the American Federation of Labor-Congress of Industrial Organizations(AFL-CIO) unions expressed a much more positive stance toward union-managementcooperation than is usually attributed to them. But in 1995, John Sweeney, then-president of theService Employees International Union, launched an almost unprecedented and successfulchallenge to the incumbent leadership of the AFL-CIO, stressing a renewed commitment toorganizing as a central theme. Since Sweeney's election as AFL-CIO president, the federationhas made substantial changes in staff, strategies, and tactics. T he AFL-CIO and some of itsaffiliates seem to have taken more aggressive approaches to organizing, bargaining, and politics

under Sweeney's leadership. As yet there has not been a dramatic turnaround in union organizingsuccess. In fairness to Sweeney, the contemporary decline of unionization has been in themaking for roughly 50 years, and expectations for a quick turnaround might be unrealistic. Inbargaining, a large-scale strike in 1997 by the T eamsters against the United Parcel Service washailed by some as indicating that labor still had clout, as the T eamsters were able to achievesome important gains. But attempts to play a larger role in the 1996 national elections achievedonly limited success, and appear to have spurred efforts by union opponents to limit unionpolitical activity.

Public policy makers have also considered other significant changes. Early in his first term,

President Bill Clinton appointed a Commission on the Future of Worker-Management Relations(headed by Dunlop and including many academics as well as union and managementrepresentatives) to offer recommendations for public policy changes. Some scholars argue thatthe present legal framework governing union formation and union-management relations in mostof the private sector (e.g., the National Labor Relations Act of 1935 or Wagner Act, as amendedby the Labor Management Relations Act or T aft-Hartley Act of 1947, and other legislation) mayhave been reasonably well-suited to the United States of the 1930s and 1940s, but that


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subsequent economic and social changes necessitate significant amendments or even a major overhaul. Among the issues the commission considered were whether current legal bans oncompany-dominated unions unduly intrude on legitimate employee participation programs innonunion firms; whether statutory protections of employee rights to join and form unions areadequate, and how to effectuate those rights in the face of intense employer opposition; andwhether public policy can promote a more cooperative and less adversarial relationship betweenemployers and employee organizations.

Some scholars (such as Bruce E. Kaufman and Morris M. Kleiner, editors of E mployeeRepresentation: Alternatives and Future Directions) assert that employee representation is amore fundamental issue than representation of employees by unions, noting that many nonunionfirms willingly establish some form of representation system, and that the public is moresupportive of this principle than of union representation. Coupling these observations with thecurrent low level of union representation (and perhaps with the conclusion that the decline of unions is irreversible), some have proposed that the United States should seriously consider establishing works councils similar to those in many European nations. Works councils arelegally mandated employee representation mechanisms independent of unions which require thatall employees (usually in establishments with a minimum number of employees, perhaps ten)elect representatives to the works council to confer with management and to ensure that workers'statutory rights are observed. Although they generally do not bargain over wages and benefits,works councils address many of the issues that U.S. unions have traditionally addressed,including layoffs, discipline systems, and workplace safety.

Even in a Democrat-controlled Congress, any major changes to labor relations law could facestiff opposition. After more business-friendly Republicans gained a slight majority in Congressin the 1994 elections, prospects for any significant changes in legislation appeared to evaporate.Relatively strong performance for the economy during most of the 1990s probably contributed toCongressional inaction as well.


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TRADE UNION

A trade union (British English) or labor union (American English) is an organization of workers that have banded together to achieve common goals such as better working conditions.T he trade union, through its leadership, bargains with the employer on behalf of union membersand negotiates labour contracts (collective bargaining) with employers. T his may include thenegotiation of wages, work rules, complaint procedures, rules governing hiring, firing andpromotion of workers, benefits, workplace safety and policies. T he agreements negotiated by theunion leaders are binding on the rank and file members and the employer and in some cases onother non-member workers.

Over the last three hundred years, many trade unions have developed into a number of forms,influenced by differing political objectives. Activities of trade unions vary, but may include:

y P rovision of benefits to members: Early trade unions, like Friendly Societies, often

provided a range of benefits to insure members against unemployment, ill health, old ageand funeral expenses. In many developed countries, these functions have been assumedby the state; however, the provision of professional training, legal advice andrepresentation for members is still an important benefit of trade union membership.

y Collective bargaining: Where trade unions are able to operate openly and are recognizedby employers, they may negotiate with employers over wages and working conditions.

y Industrial action: T rade unions may enforce strikes or resistance to lockouts infurtherance of particular goals.

y P olitical activity: T rade unions may promote legislation favorable to the interests of their members or workers as a whole. T o this end they may pursue campaigns, undertakelobbying, or financially support individual candidates or parties (such as the Labour Partyin Britain) for public office.


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H ISTORICAL EVOLUTION OF TRADE UNIONS IN INDIA Trade union as per Trade Union Act 1926 Any combination formed primarily for thepurpose of regulating the relations between workmen and employers or workmen and workmenor employers and employers or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of two or more trade unions.

From the above definition it is clear that T rade union is not just an association of the workmen of a factory or a trade or a business but also can be formed by officers and managers. T rade unionmovement in India was started and led by philanthropists and social organizations and not by theworkers.

Bombay Presidency - by servants of India society

Eastern India - by Brahmo Samaj

South India centered on Madras - by T heosophical Society

T rade union is a direct product of Industrialization and a very recent development. In India, thefoundation of modern industry was laid between 1850 and 1870. Prior to that trade was confinedto individuals and families like craftsmen and artisans. T hey had expertise and specialized skillswhich was inherited by their offsprings. After Industrial revolution, these people started losingtheir individual identities and had to join factories to earn their livelihood and compete with massproduction. T here was a psychological dislocation as they were losing their identities.

Indian trade union movement can be divided into three phases.

The first phase falls between 1850 and 1900 during which the inception of trade unions took place. During this period of the growth of Indian Capitalist enterprises, the working and livingconditions of the labour were poor and their working hours were long. Capitalists were onlyinterested in their productivity and profitability. In addition to long working hours, their wageswere low and general economic conditions were poor in industries. In order to regulate theworking hours and other service conditions of the Indian textile laborers, the Indian FactoriesAct was enacted in 1881. As a result, employment of child labour was prohibited. Mr. N MLokhande organized people like Rickshawalas etc., prepared a study report on their workingconditions and submitted it to the Factory Labour Commission. T he Indian Factory Act of 1881

was amended in 1891 due to his efforts. Guided by educated philanthropists and social workerslike Mr. Lokhande, the growth of trade union movement was slow in this phase. Many strikestook place in the two decades following 1880 in all industrial cities. T hese strikes taught workersto understand the power of united action even though there was no union in real terms. Smallassociations like Bombay Mill-Hands Association came up.


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The second phase of T he Indian trade union movement falls between 1900 and 1947. this phasewas characterized by the development of organized trade unions and political movements of theworking class. It also witnessed the emergence of militant trade unionism. T he First World War (1914-1918) and the Russian revolution of 1917 gave a new turn to the Indian trade unionmovement and organized efforts on part of the workers to form trade unions. In 1918, B P Wadiaorganized trade union movements with T extile mills in Madras. He served strike notice to themand workers appealed to Madras High Court because under Common Law, strike is a breach of law. In 1919, Mahatma Gandhi suggested to let individual struggle be a Mass movement. In1920, the First National T rade union organization ( T he All India T rade Union Congress(AI T UC)) was established. Many of the leaders of this organization were leaders of the nationalMovement. In 1926, T rade union law came up with the efforts of Mr. N N Joshi that becameoperative from 1927.

The third phase began with the emergence of independent India (in 1947), and the Governmentsought the cooperation of the unions for planned economic development. T he working classmovement was also politicized along the lines of political parties. For instance Indian nationaltrade Union Congress (IN T UC) is the trade union arm of the Congress Party. T he AI T UC is thetrade union arm of the Communist Party of India. Besides workers, white-collar employees,supervisors and managers are also organized by the trade unions, as for example in the Banking,Insurance and Petroleum industries.

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evolution of IR & TU