IIM LucknowER/IR

CONCEPTS & CONTOURS

Agenda

Different models and approaches to study IR, actors of IR; New trends and challenges in the field of IR.

Comparative Industrial Relations: Comparing dynamics of IR in selected countries.

Overview of IR in India:

Role Of Trade Unions-Rationale, Background, Current Status & Changing role of Trade Unions

Collective Bargaining and wage negotiations

Overview of IR in India: Role of State – IR machinery; current status, relevance and future prospects

Legal Framework: Understanding Indian Labour Laws -ID Act, TU Act, and Industrial Employment (Standing Order) Act

Dynamics of Labour-Management Relations: Concepts of Industrial democracy and workers participation in management

Grievance management and Discipline

Other Relevant issues in IR: Globalization and IR; Social Realities.

BROADBRUSH

Political Regimes

Totalitarian

-North Korea

-Political participation & opposition is nil

Authoritarian

-Limited forms of participation by certain groups like religious org,civicassociations egSouth Korea under Gen Park

Democratic

-Protects individual & group political rights

The 1st two can be termed as DictatorshipsSultanistic eg. Saudi Arabia..any guesses where are famed neighbour could be mapped??

20th century vs 21st century

WW 1

Interwar period

WW2

Cold War

Spread of Democracy

Automobile

Failed States

International terrorism

2 bn people continue to live under authoritarian regimes mostly in Africa,the Middle East,SouthAsia & East Asia

Automobile

Governance

A disparate world !

Landscape

Jim’O Neil

Lucas Paradox

G7 ,G 20.

Innovation landscape –geographical shift-so will financial flows, trade & migration

1.4 bn below poverty line(UN report)

EMERGING MARKET MULTINATIONALS

25% of the largest 500 companies in the world

Landscape…GTP… The changing order…VUCA ?

GTP

-Sovereignty, political influence & geopolitics

-Hegemonic to polycentric organization-FDI etc.

-New Demography-inverted age pyramids,>60

-Technology

-Inequality

What is the relevance?

Especially in an IR/ER session

Landscape( IR/ER)“Converging Divergences” thesis-Global convergence & local divergence in employment relations

Original/ Modern IR

K/L Power Balance

IR in the twentieth centuryProposition 1

AN ORIGINAL PARADIGM CENTRED ON THE EMPLOYMENT RELATIONSHIP

OIR

Employment Relationship

It included both union and non-union sectors and

personnel/human resource management and labour–

management relations.

It is a distinctly North American phenomenon, having

been born there in the immediate post-First World

War years. This paradigm went into eclipse in the

1930s and disappeared by the 1960s

A MODERN PARADIGM CENTRED ON UNIONS AND LABOUR–MANAGEMENT RELATIONS

More narrowly constructed paradigm centred on the

union sector and associated topics, such as collective

bargaining, labour–management relations and

national labour policy.

Modern industrial Relations (MIR) paradigm and it

originated more or less simultaneously in Britain,

Canada, the USA and elsewhere in the immediate

post-Second World War period.

Kaufman,2008

IR in the twentieth centuryProposition 2

As per the modern paradigm, it takes an overly narrow and union-centric perspective on the employment relationship.

It has been a significant factor behind the oft-noted threatened status of the IR field worldwide and its marked decline in a number of countries

Unfortunately for IR, over the last two to three decades, unions and the organized sector of most economies have significantly eroded, with no rebound in sight.

In the 1980s and 1990s, IR in nearly all countries felt substantial downward pressure

IR in the twentieth centuryProposition 3

Integrating human resource management (HRM) into the IR field is welcome –it was long overdue .

The IR field’s original impulse towards HRM in the 1980s–1990s was threatened, defensive and critical

Present Context:

The stance has shifted towards greater accommodation, acceptance and integration.

One could view this shift as a strategy of expediency born out of the IR field’s challenged survival prospects.

HRM was actually an integral, well-accepted partner in OIR

EXTANT POPULAR LITERTATURE-IR is viewed as….

Different Approaches of looking at IRUnitary Approach-(Managerially oriented in its inception)

Common purpose

No conflict of interest(K& L)

Strong Leadership from the team

Unitary in structure, purpose, single source of authority, cohesive set of participants.

Systems Approach:The Dunlop ModelAn industrial relation system is regarded as comprising :

◦ Certain actors

◦ Certain contexts

◦ An ideology, which binds industrial relations systems together

◦ Processes-Bargaining, Conciliation ,Arbitration ,Adjudication & Legislation

◦ Creation of rules –common denominator of ideologies

Criticisms

◦ Human aspects

◦ Focuses more on the structural aspects/Processes leading to conflict are left out

◦ Analytical approach

The Conflict ApproachPluralism: existence of more than one ruling principle; negotiation, compromise and concession.

-Politics pluralism-Industrial Relations Pluralism

Post Capitalism: Capitalist and wage earners. Changed a lot.

-Open Society

-Politics/Social/Economic power is dispersed.

-Possibilities of compromise is there based on the interaction between different stakeholders

-Collective bargaining was used as a medium

Trusteeship ApproachMahatma Gandhi was the main proponent with truth, non-violence and non-possession asideologies.

Responsibilities are mutual.

Conflict is inevitable but labour and capital must learn to co-exist for mutual benefit, and for thecommunity at large.

Time to ponder !

Indian Labour laws47 major pieces of CL & 100 SL was intended to carry out the Constitutional vision of a welfare state as laid out in the Directive Principles of the state policy

Indian Labour laws

Laws relating to working conditions

Wages and monetary benefits

Industrial relations

Social Security

Miscellaneous labour laws

Ref: Saini,2013

Collective BargainingNegotiations

Between organizations of workers and employers

Subject matter is working conditions, terms of employment, relationship between employers and employees.

Fixing up the price of labour services

Establishing a system of industrial jurisprudence

Providing a machinery for the representation of individual and groupinterests.

Trade Unions Act

7 workers can join together to form a trade union

From 2001, 10% of the workforce or 100, whichever is less – is the number required to form the trade union

Registration

Trade Unions ActRecognition

Neither registration nor recognition is mandatory

15 years – minimum age to become a member of trade union

Objectives of Trade UnionTo regulate the relations

Between employers

Among workmen or

Between employers and workmen

Union SecurityClosed Shop : The company can hire only union members

Union Shop: The company can hire nonunion people, but they must join the union after a prescribed period of time and pay dues.

Agency Shop: Employees who do not belong to the union still must pay union dues on the assumption that the union’s efforts benefit all the workers.

Open Shop: It is up to the workers whether or not they join the union – those who do not, do not pay dues

Trade Unions Act

18 years – minimum age to contest elections for a position in trade union

Outsiders can also be part of trade union executives.

Legal strike – no criminal proceedings, no disciplinary proceedings.

Central Trade UnionVerified membership of five lakhs

Spread over at least 4 states and four industries

Central Trade Unions in IndiaAll India Central Council of Trade Unions (Communist Party of India (Marxist-Leninist) Liberation)

All India Trade Union Congress (Communist Party of India)

All India United Trade Union Centre (Socialist Unity Centre of India (Communist))

Bharatiya Mazdoor Sangh (Rashtriya Swayamsevak Sangh)

Indian National Trade Union Congress (Indian National Congress)

Central Trade Unions in India

New Trade Union Initiative (Independent from political parties, but left)

Centre of Indian Trade Unions (Communist Party of India (Marxist))

Hind Mazdoor Sabha (socialists)

Labour Progressive Federation (Dravida Munnetra Kazhagam)

SEWA

Trade Union Coordination Committee (All India Forward Bloc)

United Trade Union Congress (Revolutionary Socialist Party)

Industrial Conflict..is it here to stay??

Main actors in an industry:

Owners, managers & workers

Union leaders & managers

Union leaders & workers

Union leaders & Management

Ultimate manifestation of a conflict will result in ?

Measures of conflict resolution

Statutory ( ID Act,1947) eg. labour courts, industrial tribunals

Non Statutory ( Code of Discipline, Collective bargaining, etc.)

Government sponsored ( Labour administration machinery)

India’s IR law is enshrined in three pieces of legislation

Industrial Disputes Act 1947 (IDA)

Trade Unions Act 1926 (TUA), and

Industrial Employment (Standing Orders) Act 1946 (IESOA).

Industrial Disputes Act,1947Roots of IDA

It has its roots in the Rule 81 -A of Defence of India Rules that was promulgated by the British Indian Government in 1942 to control industrial unrest in the country, as the British were focusing themselves on fighting the Second World War and could not afford to have a rising curve of industrial disputes.

Act envisages a

-conciliation

-adjudication

-arbitration ,model of industrial disputes resolution

IDA

Enacted to promote industrial peace & harmony by providing

appropriate machinery for amicable settlement of disputes

Investigation & Settlement of disputes

Prevention of illegal strikes & lockouts

Provision of relief in matters of lay-off and retrenchment

IDA –Relevant authoritiesWorks committees

Conciliation officers ( could be permanent or for a limited period of time)

Board of conciliation

Court of enquiry

Arbitration(voluntary)

Labour courts

Industrial tribunals

National tribunals

Industrial DisputesThere must be a dispute or a difference

between employers and employers

between employers and workmen

between workmen and workmen.

Industrial Disputes

It should be connected to employment or non-employment or

terms of employment or with the conditions of labour

A relationship between the employer and the workman should

exist and it should be the result of the contract and the workman

actually employed.

DisputesDisputes of Rights (application or interpretation of existingagreement)

Disputes of Interest (terms and conditions of employment)

Causes of Disputes

Economic

Political

Personnel

Indiscipline

Management

Absence of grievance redress machinery

Government machinery

Forms of Industrial Action

Strikes

Lockouts

Industrial Disputes Act - StrikesNo person employed in a public-utility service shall go on strike in breach of contract:

Without giving to the employer notice of strike, as hereinafter provided, within six

weeks before striking.

Within 14 days of giving such notice

Before the expiry of the date of strike specified in any such notice

Before the pendency of any conciliation proceedings before a conciliation officer

and seven days after the conclusion of such proceedings.

Industrial Disputes Act – LockoutNo employer carrying on any public utility service shall lockout any of his workmen:

Without giving them notice of lockout, as hereinafter provided, within six weeks before

striking.

Within 14 days of giving such notice

Before the expiry of the date of lockout specified in any such notice

Before the pendency of any conciliation proceedings before a conciliation officer and seven

days after the conclusion of such proceedings.

Industrial Disputes Act

The employer must inform the appropriate authority within 5 days from the date of receipt of notice.

No lockout or strike during pendency of conciliation proceeding and seven days after conclusion of such proceedings;

Different Forms of StrikeEconomic Strikes – more facilities and wages

General Strikes – unions and industry

Stay-in-Strike – tool down or pen down

Slow down Strike – rate of output is reduced

Management’s Actions To Counter StrikesEmployers Association

Lockout

Termination of Service

Lay-offFailure, refusal or the inability of an employer

Shortage of coal/power/raw materials

Accumulation of stocks

Breakdown of machinery

Natural Calamity

Lay-offAn application by employer

Enquiry

Permission – deemed – 60 days

Order shall remain in force for one year

RetrenchmentTermination of service by an employer, of a workman for any reason whatsoever other than:

As punishment inflicted by way of disciplinary action

Retirement on reaching superannuation

Voluntary retirement

Non-renewal of contract

Continued ill health

Retrenchment of WorkmenOne month’s notice to the workman indicating the reasons forretrenchment and the period of notice.

15 days average pay for every completed year of continuousservice or any part thereof in excess of six months.

Notice to the appropriate government

Closure of UndertakingSixty day notice to be given of intention to close down any undertaking.

Exceptions: Accident in the undertaking or death of the employer.

Average pay for three months

Unfair Labour PracticesTo threaten lockout, if union is recognized

To threaten workmen with discharge or dismissal, if they join trade union.

Granting wage increase

Taking active interest in organizing a trade union of his workmen.

Unfair Labour Practices - PenaltiesImprisonment up to six months or Fine up to Rs.1000/- or both

Penalty for illegal strikes and lockouts: one month imprisonment or Fine up to Rs.50 or both

Rs.1000/- or one month imprisonment or both.

Conciliation The conciliator brings the rival parties together for discussion and assists them in finding out asolution to their problem.

Conciliation may be voluntary or compulsory

Board of conciliation

Duties of Conciliation OfficerThe conciliation officer to send a report of proceedings to the government or within such extended time as may be allowed

Memorandum of settlement and binding on all parties

Failure report

SettlementThe settlement shall be binding:

◦ For the period agreed upon by the parties

◦ Where no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed.

Board of Conciliation Outside chairman and two to four other members nominated by the parties to the dispute.

Two months.

Criticism of conciliationDelays

Parties do not attend the meeting.

Most conciliation officer lacks training and competence in conciliation work.

Treated as preliminary step leading to adjudication through the Labour Courts or Tribunals.

ArbitrationCompulsory Arbitration

Voluntary Arbitration

AdjudicationMandatory settlement of a dispute by Labour Courts, or Industrial Tribunal or National Tribunalunder the ID Act.

Labour Court:

◦ Standing Order◦ Withdrawal of any statutory concession◦ Strike or lockout –

Industrial TribunalWage including the period of payment

Hours of work and rest intervals

Compensatory and other allowances

Bonus, Provident Fund, Profit Sharing and Gratuity

Rules of indiscipline

Rationalization

Retrenchment of workmen and the closure of an establishment

Shift working other than in accordance with the Standing Orders.

Who is a workmen?All employees other than supervisors and managers (even if they draw more than Rs.10,000/-)

Supervisors who draw less than Rs.10,000/- are also considered as workmen under Industrial Disputes Act.

FACTORIES ACT

Factory Legislation in Great Britain Rapid growth of industrial towns and factories

Insanitary and crowded living and working condition

The object of Factories Acts was ‘to protect the health of employees from injury by overwork,unwholesome or dangerous conditions of labour, and especially the younger and weakeremployees’ (J J Clark, 1946).

Factory Legislation in IndiaThe first cotton textile factory was set up in Bombay in 1854.

Employment of women and children, excessive hours of work and insanitary working condition.

Competition with textile mills in Lancashire

Factories Act, 1881Manufacturing establishments using mechanical power and employing 100 or more persons for4 months in a year.

Regulation of child labour.

Employment of children below 7 years was prohibited and the maximum hours of work for thosebetween 7 and 12 were fixed at 9 hours a day.

Indian Factories Act, 1891Factory included manufacturing undertaking employing 50 persons or more

Employment of children below the age of 9 was prohibited – 7 hours of work.

Prohibition of night work for women and children – 11 hours of work

Indian Factories Act, 1911 Unprecedented boom in cotton textile industry in 1904-05.

Maximum of 12 and 6 hours of work for adults and children.

In other factories, daily hours of work for women and children remained 11 and 7.

Indian Factories (Amendment) Act, 1922All individual undertakings using mechanical power and employing 20 or more person.

11 hours a day and 60 hours in a week.

Children below 12 were prohibited. – 6 hours per day (12-15).

Factories Act, 1934Distinction between seasonal and non-seasonal factories (less than 180 days in a year).

Perennial (54 and 10)

Seasonal (60 and 11)

A new category of employees created – Adolescents (15 and 17).

Weekly holiday on Sunday – Not to work more than 10 days continuously.

Factories Act, 1948The Factories Act, 1937 was taken as a useful guide in drafting the bill.

Factory: any premises◦ Ten or more workers – manufacturing process with the aid of power

◦ Twenty or more workers – without power

Who is a worker?A “worker” means

◦ Directly or by or through any agency

◦ With or Without the knowledge of the Principal Employer

◦ (s)he may be employed with or without remuneration

◦ A worker can be employed in

◦ Manufacturing process

◦ In cleaning some parts of machinery or premises used for the manufacturing

◦ In some other kind of work incidental or connected with the manufacturing process

Procedure for applying for new license Permission from Chief Inspector of factories regarding construction

Plan approval by chief inspector of factories/ certificate of stability

Application for license along with fee, evidence for power,

When the license can be cancelledWhen a factory is totally closed

When the machinery installed are shifted and manufacturing activity ceases.

If the number of employees reduces

Records to be maintainedMuster Roll

Register of leave with wages

Register of accidents, major accidents and dangerous occurrences

Register of lime washing and painting

Inspection book

Register of adult workers

Wages Register

Hours of work, Intervals for Rest and Spread overNot to exceed 9 in a day and 48 in a week.

No worker to work more than 5 hours

A rest interval of half an hour

Spread over – not more than 10.5 hours

Other provisionsSafety officer - one thousand or more employees

Notice of certain diseases

In case of hazardous process, safety committee

Overtime wagesMore than 9 hours or 48 hours in any week is entitled to wages at the rates of twice his ordinary wages in respect of overtime.

Working hours for children – note more than four and a half hours in any day

The total working hours in a week including overtime hours should not exceed sixty and the total overtime hours in a quarter should not exceed 50

Industrial Employment (Standing Orders) ActProtection of labour by providing uniform and stable conditions of service

Definition of conditions of employment, standing orders/service rules and to make them knownto workmen employed by them

Applicability All industrial establishments employing 100 or more workmen

The central and state governments may extend it to establishments with less than 100 workmen

Minor Penalties Censure

Withholding of his promotion

Recovery from his/her pay

Withholding of increments of pay

Major Penalties Reduction to a lower stage in the time-scale of pay for a specified period.

Compulsory Retirement

Removal from service

Dismissal from service

Procedure for imposing penalties Disciplinary Authority

Charge Sheet

◦ Substance of the imputation of misconduct

◦ A statement of the imputations of misconduct

◦ A statement of all relevant facts

◦ A list of documents by which, and a list of witness by whom, the articles of charge are proposed to be sustained.

Procedure for imposing penaltiesInquiry Authority

Presenting officer

Defence Assistant

Preliminary Inquiry

Inspection of documents

Procedure for imposing penalties

Examination

Cross-examination

Re-examination

Exparte Inquiry

CCS (Conduct) RulesEvery Government Servant shall at all times –

◦ Maintain absolute integrity

◦ Maintain devotion to duty

◦ Do nothing which is unbecoming of a government servant

No Government servant shall

◦ In performance of his official duties, act in a discourteous manner

◦ In his official dealings with the public or otherwise adopt dilatory tactics or willfully cause delays in disposal of work assigned to him.

When Suspension can be resorted to When a disciplinary proceeding against him is contemplated or pending

When a case against him in respect of any criminal offence is under investigation, inquiry or trial

When he has engaged himself in activities prejudicial to the interest of the security of the state

Deemed SuspensionIf he is detained in custody, whether on a criminal charge or otherwise for a period exceeding forty-eight hours.

In the event of a conviction for an offence, he is sentenced to a term of imprisonment exceeding forty-eight hours.

Standing Orders

Standing Orders means the rules of conduct for workmen employed in industrial establishmentsrelating to matters such as workmen, working hours, holidays, attendance, leave, termination ofemployment, suspension or dismissal, misconduct

Provisions

The employer has to prepare a draft of the standing orders and submit it to theCertifying Officer if the employer desires certified standing orders for the particularrequirements of the establishment

The Certifying Officer shall call the employer and the workmen and/or their union tohear their comments and objections

Provisions After considering their comments he shall make necessary changes in the draft

Employers and workmen can appeal within 30 days against the orders of the certifyingofficer to the appellate authority.

Once the standing orders are certified, they have the force of law

Provisions The certified standing orders can be modified, if necessary, but not before the expiry of 6months of their coming into operation or from the date of last modification.

The employer should prominently display the text of the certified standing orders near the mainentrance of the establishment and in all departments

Notices

The period and hours of work for all classes of workers in each shift shall be exhibited on notice boards maintained at or near the main entrance of the establishment and at the time keeper’s office

Notices specifying the days observed by the establishment as holidays

Notices specifying the rates or wages payable to all classes of workmen and for all classes of work

Notice of discontinuing or of restarting of a shift work shall be continuously displayed on a notice board

Model Standing Orders

Holidays with pay will be allowed as provided in Factories Act, 1948 and other holidays in accordance with law, contract, custom and usage

On the receipt of a leave application, the concerned officer shall issue orders on the application within a week of its submission or two days prior to the commencement of the leave applied for, whichever is earlier

Model Standing Orders

A workman may be granted casual leave of absence with or without pay not exceeding 10 days in the aggregate in a calendar year

Such leave shall not be for more than three days at a time except in case of sickness

Such leave is intended to meet special circumstances which cannot be foreseen

Any wages due to the workman but not paid on the usual pay day on account of their being unclaimed shall be paid by the employer on an unclaimed wage pay day in each week which shall be notified on the notice boards

All workmen will be paid wages on a working day before the expiry of the seventh or the tenth day after the last day of the wage period

Model Standing Orders

A workman may be suspended for a period not exceeding four days at a time, or dismissed without notice or any compensation in lieu of notice if he is found to be guilty of misconduct

Acts of Misconduct

Wilful insubordination or disobedience, whether alone or in combination with others to any lawful and reasonable order of a superior

Theft, fraud or dishonesty in connection with the employer’s business or property

Wilful damage to, or loss of, employer’s goods or property

Taking or giving bribes or any illegal gratification

Acts of Misconduct

Habitual absence without leave or absence without leave for more than 10 days

Habitual late attendance

Habitual breach of any law applicable to the establishment

Riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline

Habitual negligence or neglect of work

Frequent repetition of any act or omission for which a fine may be imposed to a maximum of 2 per cent of the wages in a month

Striking work or inciting others to strike work in contravention of the provisions any law

Sexual Harassment

Physical contact and advances

A demand or request for sexual favours

Sexually coloured remarks

Showing pornography

Any other unwelcome physical, verbal or non verbal conduct of sexual nature

The Complaints Committee to inquire into the complaints of sexual harassment shall contain a chairperson who is a woman and two members representing non governmental organisations

The Complaints Committee shall make and submit every year an annual report, to the appropriate government, of the complaints and action taken

Model Standing Orders

Where a disciplinary proceeding against a workman is contemplated or is pending or where criminal proceedings against him in any respect of any offence are under investigation or trial, then the workman may be suspended

A workman who is placed under suspension shall be paid subsistence allowance

In the enquiry, the workman shall be entitled to appear in person or to be represented by an office bearer of a trade union of which he is a member

The proceedings of the inquiry shall be completed within a period of three months and extended for reasons recorded in writing

Penalty may be in the form of dismissal, suspension, fine, stoppage of annual increment or reduction in rank

When an order of dismissal is passed, workman shall be deemed to have been absent from duty during the period of suspension

Model Standing Orders

Where an order imposing fine or stoppage of annual increment or reduction in rank is passed, the workman shall be deemed to have been on duty during the period of suspension

If the workman has been found to be not guilty he shall be deemed to have been on duty during the period of suspension

The payment of subsistence allowance shall be subject to the workman concerned not taking up any employment during the period of suspension

In awarding punishment the authority imposing the punishment shall take into account the gravity of misconduct, the previous record, other extenuating or aggravating circumstances

A copy of the order will be given to the workman concerned

Model Standing Orders

A workman may appeal within 21 days to the appellate authority

The employer shall specify the appellate authority

The appellate authority shall pass an order within fifteen days of its receipt and communicate the same to the workman in writing

All complaints arising out of employment including those relating to unfair treatment or wrongful exaction on the part of the employer or his agent, shall be submitted to the manager specified

Every employee is entitled to receive a certificate during the time of dismissal, discharge or retirement

Model Standing Orders

The employer of the establishment shall personally be held responsible for the proper and faithful observance of the standing order

Every workman shall indicate his exact date of birth to the employer at the time of entering service of the establishment

The employer shall in accordance with the terms and conditions stipulated in the letter of appointment, confirm the eligible workman and issue a letter of confirmation to him

The age of retirement or superannuation of a workman shall be as may be agreed upon between the employer and the workman

A workman may be transferred according to exigencies of work from one shop or department to another or from one station to another or from one establishment to another under the same employer

Model Standing Orders

Where a workman meets with an accident in the course of arising out of employment, the employer shall, at the employer’s expense, make satisfactory arrangements for immediate and necessary medical aid to the injured workman and shall arrange for his further treatment

No workman shall take any papers, books, drawings, photographs, instruments, apparatus, documents or any other property of an industrial establishment out of the work premises except with the written permission of his immediate superior

A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer