DISPUTE RESOLUTION & INDUSTRIAL RELATIONSRoll No. – 54 – 142 (Section A)

AGENDA IR – An Overview Dispute Resolution Dispute Resolution Strategies Parties Involved Dispute Resolution Act Recommendations

IR – AN OVERVIEW

INDUSTRIAL RELATIONS: WHAT AND WHY?

The relationship between Employer and employee or trade unions

Necessary for both employers and employees to safeguard the interests of the both the parties of the production

Main functions of every organization is to avoid any dispute or settle it as early as possible so as to ensure industrial peace and higher productivity

Characterized by: Presence of two parties, i.e. labor and management Conflict and Co-operations

Also includes vital environment issues like technology of the workplace, country’s socio-economic and political environment, nation’s labor policy, attitude of trade unions workers and employers.

DEFINITION Industrial Relation is that part of management which is

concerned with the manpower of the enterprise – whether machine operator, skilled worker or manager

Industrial Relation is a relation between employer and employees, employees and employees, employees and trade unions. - Industrial dispute Act 1947

“Process by which people and their organizations interact at the place of work to establish the terms and conditions of employment.”

The Industrial Relation is also called as labor-management, employee-employers relations

Main aspects

of Industri

al Relation

s

Labor Relations

Employer-employees relations

Group relations

Community or Public relations

Promotions and

development of healthy

labor-managements relations

Maintenance of

industrial peace and avoidance

of industrial strife

Development of true

industrial Democracy.

EFFECTS OF POOR INDUSTRIAL RELATIONSPoor Industrial Relation produces highly disquieting effects on the economic life of

the country.

Multiplier effects: Although the direct loss caused due to industrial conflict may not be very great, the total loss caused due to its multipliers effect on the total economy is always very great

Fall in normal tempo: Costs build up. Absenteeism and labor turnover increase. Plants discipline breaks down and both the quality and quality of production suffer

Resistance of change : Dynamic industrial situation calls for change more or less continuously. Methods have to be improved. Economics have to be introduced. New products have to be designed, produced and put in the market. Each of these tasks involves a whole chain of changes and this is resisted bitterly if there are industrial conflict.

Frustration and social cost : Every man comes to the work place not only to earn a living. He wants to satisfy his social and egoistic needs also. Poor Industrial Relations take a heavy toll in terms of human frustration. They reduce cordiality and aggravate social tension.

SUGGESTIONS TO IMPROVE INDUSTRIAL RELATION

Both management and unions should develop constructive attitudes towards each other

There should be CLARITY of all basic policies and procedures relating to Industrial Relation to everybody in the organization and to the union leader The personnel manager must make certain that line people will understand and agree with these

policies The personnel manager should remove any distrust by convincing the union of the company’s integrity

and his own sincerity and honesty Suspicious, rumors and doubts should all be put to rest

The personnel manager should not vie with the union to gain workers‘ confidence

Management should encourage right kind of union leadership While it is not for the management to interfere with union activities, or choose the union leadership,

its action and attitude will go a long way towards developing the right kind of union leadership

Management gets the union it deserves

IMPORTANCE OF INDUSTRIAL RELATIONS

Uninterrupted production Continuous employment for all from manager to workers The resources are fully utilized, resulting in the maximum possible production There is uninterrupted flow of income for all

Reduction in Industrial Disputes Strikes, lockouts, go-slow tactics, gherao and grievances

High morale Feeling in mind that the interest of employer and employees is one and the same, i.e.

to increase production Every worker feels that he is a co-owner of the gains of industry Complete unity of thought and action is the main achievement of industrial peace

IMPORTANCE OF INDUSTRIAL RELATIONS

Mental Revolution Employee and employer should think themselves as partners of the industry Role of workers in such a partnership should be recognized Workers must recognize employer’s authority

New Programs such as training facilities, labor welfare facilities etc. increases the

efficiency of workers resulting in higher and better production at lower costs.

Reduced Wastage Wastages of man, material and machines are reduced to the minimum and

thus national interest is protected

INDUSTRIAL RELATIONS VS HUMAN RELATIONS

Industrial Relations Human Relationsbetween employer & employee in an industry

Personal management policy for developing sense of belongingness in employees/workers

Matters regulated by law or collective agreement

Personal problems handled based on morale & social elements

Dealt with 3 levels: Undertaking, industry & national

Personal philosophy approach

More wide and comprehensive

A part of IR

SCOPE OF INDUSTRIAL RELATIONS WORK

The industrial relations director generally has several assistants who help him to perform his functions effectively, and he usually reports directly to the president or chairman of the board of directors of an organization.

1. Administration, including overall organization, supervision and co-ordination of industrial relations policies and programmes.

2. Liaison with outside groups and personnel departments as well as with various cadres of the management staff.

3. The drafting of regulations, rules, laws or orders and their construction and interpretation.

4. Position classification, including overall direction of job analysis, salary and wage administration, wage survey and pay schedules.

5. Recruitment and employment of workers and other staff.

6. Employment testing, including intelligence tests, mechanical aptitude tests and achievement tests.

7. Placement, including induction and assignment.

8. Training of apprentices, production workers, foremen and executives.

9. Employee counseling on all types of personnel problems-educational, vocational, health or behavior problems.

10. Medical and health services.

11. Safety services, including first aid training.

12. Group activities, including group health insurance, housing, cafeterial programmes and social clubs.

13. Suggestion plans and their uses in labor, management and production committees.

14. Employee relations, specially collective bargaining with representatives and settling grievances.

15. Public relations.

SCOPE OF INDUSTRIAL RELATIONS WORK

Preventive measures should be taken to avoid disputes. If and when they arise, however, every effort is required to settle them as early as possible so that they do not lead to work stoppage. The machinery for settlement of industrial disputes has been provided under the Industrial Disputes Act, 1947. The machinery comprises:1. Conciliation2. Arbitration3. Adjudication

Dispute resolution

COLLECTIVE BARGAINING Good faith negotiations between

management and labour representatives on work terms

Direct interaction without third party involvement

Ideal method for dispute resolution

CONCILIATION/MEDIATION Impartial third party helps the two parties to reach a mutually

acceptable settlement. Conciliator assists the parties involved in their negotiations by

removing bottlenecks in communication between them. He meets parties to exchange information, clarify issues, and settle

misunderstandings. Conciliation machinery as provided under the Industrial Disputes Act

are: Conciliation Officers: Appointed by govt., enjoys powers of civil court.

Examines all facts, then gives his judgment. Board of Conciliation: Appointed by Govt. should the officer fail to

resolve dispute within 14 days. Ad hoc body comprising a chairman, 2 to 4 members nominated by the parties involved

Court of Inquiry: Expected to solve issues within 6 months Inefficiency of Conciliation machinery attributed largely to the

inefficient conciliation officer (lack of education/experience), and lack of interest and initiative from parties

ARBITRATION Voluntary Arbitration legalised in 1956 after amendement to the

Industrial Disputes Act, 1947 VA refers to getting disputes settled through an independent

chosen by parties involved mutually and voluntarily Decreases the lengthy legal proceedings and formalities Arbitrator derives all his powers from the agreement between

involved parties Causes for failure of VA:

Lack of arbitrators who command the confidence of the parties to the disputes.

Law provides no appeal against the award given by arbitrator. Easy availability of adjudication on the failure of negotiation or

conciliation. The absence of a simplified procedure to be followed in VA.

ADJUDICATION If conciliation doesn’t work, there is a three tier adjudication system. Process which involves intervention in the dispute by a third party

appointed by government with or without the parties’ consent. The tiers are –

labour courts: Disputes related to legality of owners’ orders, illegality of lock-outs/strikes, discharge and dismissal of workmen and grant of relief to them.

Industrial Tribunals: Deals with issues like wages including the period and mode of payment, hours of work and rest intervals, allowances, leave with wages, rules of discipline

National tribunals – disputes which involve the questions of national importance Employers and unions use arbitration as a primary measure of resolving

disputes. About 90-95% of disputes are referred to adjudication machinery annually. The adjudication machinery is inefficient, more than 50-60 % cases are

decided in more than a year.

PARTIES INVOLVED Three main parties are directly involved in industrial

relations:

1. Employers 2. Employees and Trade Unions3. Government

Employers: Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.

PARTIES INVOLVED Employees and Trade Unions : Workers seek

to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. Workers generally unite to form unions against the management and get support from these unions. 

Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.

PARTIES INVOLVED

INDUSTRIAL DISPUTE ACT

INDUSTRIAL DISPUTE ACTAct No. 14 of 1947 - enacted on 1st April, 1947An Act to make provision for the investigation and settlement of industrial disputes, and for certain other purposesIndustry means any systematic activity carried on by co-operation between an employer and his workmen (direct or indirect) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes, whether or not any capital has been invested or such activity is carried on with a motive to make any profit or gainIt does not include:1. Any agricultural operation except if it is done in integrated manner2. Hospitals or dispensaries, 3. Educational, research, scientific or training institutions4. Organizations for charitable, social or philanthropic services etc.5. Khadi or village industries, any domestic service6. Departments of central government dealing with defense research,

space and atomic energy etc, and few others

INDUSTRIAL DISPUTE ACTIndustrial Dispute means any dispute or difference between a. employers and employers orb. employers and workmen, orc. workmen and workmen which is connected with the employment or non- employment or the terms of employment or with the conditions of labour, of any person;

Industrial establishment or undertaking means an establishment or undertaking in which any industry is carried on.

INDUSTRIAL DISPUTE ACTAUTHORITIES UNDER THE ACT1. Works Committee : a. Any industrial establishment in which one hundred or more

workmen are employedb. Representatives of workmen on the Committee shall not be less than

the number of representatives of the employerc. Representatives of the workmen shall be chosen in the prescribed

manner from among the workmen engaged in the establishment and in consultation with their trade union

2. Conciliation Officera. Appointed by government with the duty of mediating in and

promoting the settlement of industrial disputesb. May be appointed for a specified area or for specified industries in a

specified area or for one or more specified industries and either permanently or for a limited period

3. Boards of Conciliationa. Constituted by the appropriate governmentb. Consist of a chairman and two or four other members

INDUSTRIAL DISPUTE ACT4. Courts of Enquirya. Constituted by the appropriate governmentb. For inquiring into any matter appearing to be connected

with or relevant to an industrial dispute5. Labour Courtsa. The appropriate government may constitute one or more

labour courts for the adjudication of industrial disputes specified in the Second Schedule

b. A Labour Court shall consist of one person onlyc. He is, or has been, a Judge of a High Court or he has, for a

period of not less than three years, been a District Judge or an Additional District Judge, etc.

6. Tribunals and National Tribunalsa. For the adjudication of industrial disputes relating to any

matter, whether specified in the Second Schedule or the Third Schedule

b. A Tribunal shall consist of one person only

INDUSTRIAL DISPUTE ACTOther Provisions:

1. Notice for Change: For change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule

2. Setting up of Grievance Settlement Authorities and reference of certain individual disputes to such authorities : every industrial establishment in which fifty or more workmen are employed or have been employed on any day in the preceding twelve months

3. Reference of disputes to Boards, Courts or Tribunals: Decided by appropriate government

4. Voluntary reference of disputes to arbitration: The employer and the workmen agree to refer the dispute to arbitration before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal, by a written agreement refer the dispute to arbitration

INDUSTRIAL DISPUTE ACT

1. It lays down the Procedure, powers and duties of authorities2. Form of report or award and Publication of reports and awards3. Commencement of the award: An award (including an

arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication under section 17

4. Payment of full wages to workman pending proceedings in higher courts

5. Persons on whom settlements and awards are binding6. Period of operation of settlements and awards7. Commencement and conclusion of proceedings8. Certain matters to be kept confidential

INDUSTRIAL DISPUTE ACTSTRIKES AND LOCK-OUTS

Prohibition of strikes and lock-outs:

1. No person employed in a public utility service shall go on strike in breach of contract without giving to the employer notice of strike within six weeks before striking or within fourteen days of giving such notice

2. No employer carrying on any public utility service shall lock-out any of his workmen without giving them notice of lock-out as hereinafter provided, within six weeks before locking out or within fourteen days of giving such notice

Illegal strikes and lock-outs: 1. Commenced or declared in contravention of section 22 or section 23 or2. It is continued in contravention of an order made under subsection (3) of section 10

Prohibition of financial aid to illegal strikes and lock-outs

INDUSTRIAL DISPUTE ACTLAY-OFF AND RETRENCHMENT

1. Right of workmen laid-off for compensation2. Duty of an employer to maintain muster rolls of workmen3. Workmen not entitled to compensation in certain cases4. Conditions precedent to retrenchment of workmen- one month's

notice in writing indicating the reasons for retrenchment5. Compensation to workmen in case of transfer of undertakings6. Compensation to workmen in case of closing down of undertakings7. Procedure for retrenchment8. Re-employment of retrenched workmen9. Penalty for closure

INDUSTRIAL DISPUTE ACTUNFAIR LABOUR PRACTICES

1. Prohibition of unfair labour practice2. Penalty for committing unfair labour practices: punishable with

imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both

PENALTIES

3. Penalty for illegal strikes and lock-outs: imprisonment for 1 month, fine Rs. 50

4. Penalty for instigation, etc: imprisonment for 6 months, fine Rs. 1000

5. Penalty for giving financial aid to illegal strikes and lock-outs6. Penalty for breach of settlement or award7. Penalty for disclosing confidential information8. Penalty for closure without notice9. Penalty for other offences

INDUSTRIAL DISPUTE ACTMISCELLANEOUS

1. Offence by companies, etc2. Power to transfer certain proceedings3. Recovery of money due from an employer4. Cognizance of offences5. Protection of persons6. Representation of parties7. Power to remove difficulties8. Power to exempt9. Protection of action taken under the Act10.Power to make rules11.Delegation of powers12.Power to amend Schedules

RECOMMENDATIONS

RECOMMENDATIONS:PREVENTIONS OF INDUSTRIAL UNREST

Management Must Show Sensitivity Towards

• Cultural Issues• Health Issues• Compensation

Management may also

• Pre Screen Workers• Carry Out Background Checks

PREVENTION OF INDUSTRIAL UNREST• Preparing A Mechanism for redressal Of Grievances• Mechanism Of Interacting with the workers on a large scale• Ensuring that minor problems are resolved swiftly• Negotiations must be aimed at conflict resolution and prevention• Management must follow progressive HR policies.

STRATEGIES DURING INDUSTRIAL UNREST

Main Objective:• Protecting yourself.• Protecting your employees• Protection of your assets• Continuity of Business

Security Strategy:Hire a security agency or highly trained professionals which:• Blend seamlessly into your environment• Protect property by taking effective measure• Protect mobile assets like trucks and other movable

items• Helps in command and control of different operations• Helps in investigation and collection of evidence

STRATEGIES DURING INDUSTRIAL UNRESTOther Actions required:• Try to get involve in the dialogue – do not give up• Lookout for outside consultation• Start looking for alternatives w.r.t operations and workforce• Look for appropriate opportunity to make announcements• In every action try to be proactive not reactive• Build the contingency plans • Avoid situations which further fuel up the issues

STRATEGIES POST INDUSTRIAL UNREST

STRATEGIES POST INDUSTRIAL UNREST• Address the media - Take responsibility - State facts of the unrest - Engage the Social Media - Rebuild the company’s image - Focus on the bigger picturehttp://www.youtube.com/watch?v=9Rybzwx_8pM&feature=fvwrel

ADDRESS STAKEHOLDERS/EMPLOYEES• Handle misconduct and grievance matters• Render labour relations advice• Promote training regarding the same• Formulate, evaluate and monitor policy and procedures• Do research regarding labour relations matters• Represent the employer in collective bargaining forums• Facilitate and coordinate dispute resolution procedures of the

bargaining council• Implement and monitor the application of collective

arrangements

REVAMP THE HR POLICIES

• Develop and implement relevant policies and strategies

• Provide legal advice and direction on labour related issues

• Provide legal opinions on all labour related issues

• Provide training and development on labour related issues