Introduction to Industrial Relations

Industrial relation means the relationship between employers and employees in course of employment in industrial organisations. However, the concept of Industrial Relations has a broader meaning. In a broad sense, the term Industrial Relations includes the relationship between the various unions, between the state and the unions as well as those between the various employers and the government. Relations of all those associated in an industry may be called Industrial Relations.

According to International Labour Organisation, Industrial relations comprise relationships between the state on one hand and the employers and employees organisation on the other, and the relationship among the occupational organisations themselves.

According to J.T. Dunlop, Industrial relations are the complex interrelations among managers, workers and agencies of the government

Features of Industrial Relations: Industrial relations are outcomes of employment relationships in an industrial enterprise. These relations cannot exist without the two parties namely employers and employees.

Industrial relations system creates rules and regulations to maintain harmonious relations.

The government intervenes to shape the industrial relations through laws, rules, agreements, terms, charters etc.

Several parties are involved in the Industrial relations system. The main parties are employers and their associations, employees and their unions and the government. These three parties interact within economic and social environment to shape the Industrial relations structure.

Industrial relations are a dynamic and developing concept, not a static one. They undergo changes with changing structure and scenario of the industry as and when change occurs.

Industrial relations include both individual relations and collective relationships.

Objectives of Industrial Relations: To maintain industrial democracy based on participation of labour in the management and gains of industry.

To raise productivity by reducing tendency of high labour turnover and absenteeism.

To ensure workers participation in management of the company by giving them a fair say in decision-making and framing policies.

To establish a proper channel of communication.

To increase the morale and discipline of the employees.

To safeguard the interests of the labour as well as management by securing the highest level of mutual understanding and goodwill between all sections in an industry.

To avoid all forms of industrial conflicts so as to ensure industrial peace by providing better living and working standards for the workers.

To bring about government control over such industrial units which are running at a loss for protecting the livelihood of the employees.

Importance of Industrial Relations:1. Uninterrupted Production: The most important benefit of industrial benefits is that it ensures continuity of production. This means continuous employment for all involved right from managers to workers. There is uninterrupted flow of income for all. Smooth running of industries is important for manufacturers, if their products are perishable goods and to consumers if the goods are for mass consumption (essential commodities, food grains etc.). Good industrial relations bring industrial peace which in turn tends to increase production.

2. Reduction in Industrial disputes: Good Industrial relations reduce Industrial disputes. Strikes, grievances and lockouts are some of the reflections of Industrial unrest. Industrial peace helps in promoting co-operation and increasing production. Thus good Industrial relations help in establishing Industrial democracy, discipline and a conducive workplace environment.

3. High morale: Good Industrial relations improve the morale of the employees and motivate the worker workers to work more and better.

4. Reduced wastage: Good Industrial relations are maintained on the basis of co-operation and recognition of each other. It helps to reduce wastage of material, manpower and costs.

5. Contributes to economic growth and development.

Causes of poor Industrial Relations:1. Economic causes: Often poor wages and poor working conditions are the main causes for unhealthy relations between management and labour. Unauthorised deductions from wages, lack of fringe benefits, absence of promotion opportunities, faulty incentive schemes are other economic causes. Other causes for Industrial conflicts are inadequate infrastructure, worn-out plant and machinery, poor layout, unsatisfactory maintenance etc.

2. Organisational causes: Faulty communications system, unfair practices, non-recognition of trade unions and labour laws are also some other causes of poor relations in industry.

3. Social causes: Uninteresting nature of work is the main social cause of poor Industrial relations. Dissatisfaction with job and personal life culminates into Industrial conflicts.

4. Psychological causes: Lack of job security, non-recognition of merit and performance, poor interpersonal relations are the psychological reasons for unsatisfactory employer-employee relations.

5. Political causes: Multiple unions, inter-union rivalry weaken the trade unions. Defective trade unions system prevailing in the country has been one of the most responsible causes for Industrial disputes in the country.

Suggestions to improve Industrial Relations:1. Sound personnel policies: Policies and procedures concerning the compensation, transfer and promotion, etc. of employees should be fair and transparent. All policies and rules relating to Industrial relations should be fair and transparent to everybody in the enterprise and to the union leaders.

2. Participative management: Employees should associate workers and unions in the formulation and implementation of HR policies and practices.

3. Responsible unions: A strong trade union is an asset to the employer. Trade unions should adopt a responsible rather than political approach to industrial relations.

4. Employee welfare: Employers should recognise the need for the welfare of workers. They must ensure reasonable wages, satisfactory working conditions, and other necessary facilities for labour. Management should have a genuine concern for the welfare and betterment of the working class.

5. Grievance procedure: A well-established and properly administered system committed to the timely and satisfactory redressal of employees grievances can be very helpful in improving Industrial relations. A suggestion scheme will help to satisfy the creative urge of the workers.

6. Constructive attitude: Both management and trade unions should adopt positive attitude towards each other. Management must recognise unions as the spokesmen of the workers grievances and as custodians of their interests. The employer should accept workers as equal partners in a joint endeavour for good Industrial relations.

7. Creating a proper communication channel to avoid grievances and misunderstandings among employees8. Education and training imparted to the employeesDIFFERENT APPROACHES OF INDUSTRIAL RELATIONSThe Marxist ApproachThe class conflict analysis of industrial relations derives its impetus from Marxist social thinking and interpretation. Marxism is essentially a method of social enquiry into the power relationships of society and a way of interpreting social reality. The application of Marxian theory as it relates to industrial relations derives indirectly from later Marxist scholars rather than directly from the works of Marx himself. Industrial relations, according to Marxists, are in the first instance, market-relations. To Marxists, industrial relations are essentially politicized and part of the class struggle. For Marxists industrial and employee relations can only be understood as part of a broader analysis of capitalist society in particular the social relations of production and the dynamics of capital accumulation. As Marx himself put it, the mode of production in material life determines the general character of the social, political and spiritual process of life. The Marxist approach is primarily oriented towards the historical development of the power relationship between capital and labour. It is also characterised by the struggle of these classes to consolidate and strengthen their respective positions with a view to exerting greater influence on each other. In this approach, industrial relations is equated with a power-struggle. The price payable for labour is determined by a confrontation between conflicting interests. The capitalist ownership of the enterprise endeavours to purchase labour at the lowest possible price in order to maximise their profits. The lower the price paid by the owner of the means of production for the labour he employs, the greater is his profit. The Marxist analysis of industrial relations, however, is not a comprehensive approach as it only takes into account the relations between capital and labour. It is rather, a general theory of society and of social change, which has implications for the analysis of industrial relations within what Marxists would describe as capitalist societies.

The Pluralist ApproachPluralism is a major theory in labour-management relations, which has many powerful advocates. The focus is on the resolution of conflict rather than its generation, or, in the words of the pluralist, on the institutions of job regulation. Kerr is one of the important exponents of pluralism. According to him, the social environment is an important factor in industrial conflicts. The isolated masses of workers are more strike-prone as compared to dispersed groups. When industrial jobs become more pleasant and employees get more integrated into the wider society, strikes will become less frequent. Ross and Hartmans cross national comparison of strikes postulates the declining incidents of strikes as societies industrialise and develop appropriate institutional framework. They claim that there has been a decline in strike activity all over the world in spite of an increase in union membership. The theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a dramatic resurgence of industrial conflicts. However, the recent theories of pluralism emanate from British scholars, and in particular from Flanders and Fox. According to Flanders, conflict is inherent in the industrial system. He highlighted the need for a formal system of collective bargaining as a method of conflict resolution. Fox distinguishes between two distinct aspects of relationship between workers and management. The first is the market relationship, which concerns with the terms and conditions on which labour is hired. This relationship is essentially economic in character and based on contracts executed between the parties. The second aspect relates to the managements dealing with labour, the nature of their interaction, negotiations between the union and management, distribution of power in the organisation, and participation of the union in joint decision-making. The major critics of the pluralist approach are the Marxists according to whom exploitation and slavery will continue unabated in the institutional structure of pluralism. The only difference is that in such a social structure, the worker will be deemed to be a better-paid wage slave.

Webers Social Action ApproachThe social action approach of Weber has laid considerable importance to the question of control in the context of increasing rationalisation and bureaucratisation. Closely related to Webers concern related to control in organisations was his concern with power of control and dispersal. Thus a trade union in the Webers scheme of things has both economic purposes as well as the goal of involvement in political and power struggles. Some of the major orientations in the Weberian approach have been to analyse the impact of techno-economic and politico-organisational changes on trade union structure and processes, to analyse the subjective interpretation of workers approaches to trade unionism and finally to analyse the power of various components of the industrial relations environment government, employers, trade unions and political parties. Thus the Weberian approach gives the theoretical and operational importance to control as well as to the power struggle to control work organisations a power struggle in which all the actors in the industrial relations drama are caught up.

The Human Relations ApproachIn the words of Keith Davies, human relations are the integration of people into a work situation that motivates them to work together productively, cooperatively and with economic, psychological and social satisfactions. According to him, the goals of human relations are: (a) to get people to produce, (b) to cooperate through mutuality of interest, and (c) to gain satisfaction from their relationships. The human relations school founded by Elton Mayo and later propagated by Roethlisberger, Whitehead, W.F. Whyte, and Homans offers a coherent view of the nature of industrial conflict and harmony. The human relations approach highlights certain policies and techniques to improve employee morale, efficiency and job satisfaction. It encourages the small work group to exercise considerable control over its environment and in the process helps to remove a major irritant in labour-management relations. But there was reaction against the excessive claims of this school of thought in the sixties. Some of its views were criticised by Marxists, pluralists, and others on the ground that it encouraged dependency and discouraged individual development, and ignored the importance of technology and culture in industry. Taking a balanced view, however, it must be admitted that the human relations school has thrown a lot of light on certain aspects such as communication, management development, acceptance of workplace as a social system, group dynamics, and participation in management.

The Gandhian ApproachGandhiji can be called one of the greatest labour leaders of modern India. His approach to labour problems was completely new and refreshingly human. He held definite views regarding fixation and regulation of wages, organisation and functions of trade unions, necessity and desirability of collective bargaining, use and abuse of strikes, labour indiscipline, workers participation in management, conditions of work and living, and duties of workers. The Ahmedabad Textile Labour Association, a unique and successful experiment in Gandhian trade unionism, implemented many of his ideas. Gandhiji had immense faith in the goodness of man and he believed that many of the evils of the modern world have been brought about by wrong systems and not by wrong individuals. He insisted on recognising each individual worker as a human being. He believed in non-violent communism, going so far as to say that if communism comes without any violence, it would be welcome. Gandhiji laid down certain conditions for a successful strike. These are: (a) the cause of the strike must be just and there should be no strike without a grievance; (b) there should be no violence; and (c) non-strikers or blacklegs should never be molested. He was not against strikes but pleaded that they should be the last weapon in the armory of industrial workers and hence should not be resorted to unless all peaceful and constitutional methods of negotiations, conciliation and arbitration are exhausted. His concept of trusteeship is a significant contribution in the sphere of industrial relations. According to him, employers should not regard themselves as sole owners of mills and factories of which they may be the legal owners. They should regard themselves only as trustees, or co-owners. He also appealed to the workers to behave as trustees, not to regard the mill and machinery as belonging to the exploiting agents but to regard them as their own, protect them and put to the best use they can. In short, the theory of trusteeship is based on the view that all forms of property and human accomplishments are gifts of nature and as such, they belong not to any one individual but to society. Thus, the trusteeship system is totally different from other contemporary labour relations systems. It aimed at achieving economic equality and the material advancement of the have-nots in a capitalist society by non-violent means. Gandhiji realised that relations between labour and management can either be a powerful stimulus to economic and social progress or an important factor in economic and social stagnation. According to him, industrial peace was an essential condition not only for the growth and development of the industry itself, but also in a great measure, for the improvement in the conditions of work and wages. At the same time, he not only endorsed the workers right to adopt the method of collective bargaining but also actively supported it. He advocated voluntary arbitration and mutual settlement of disputes. He also pleaded for perfect understanding between capital and labour, mutual respect, recognition of equality, and strong labour organisation as the essential factors for happy and constructive industrial relations. For him, means and ends are equally important.

Human Resource Management ApproachThe term, human resource management (HRM) has become increasingly used in the literature of personnel/industrial relations. The term has been applied to a diverse range of management strategies and, indeed, sometimes used simply as a more modern, and therefore more acceptable, term for personnel or industrial relations management. Some of the components of HRM are: (i) human resource organisation; (ii) human resource planning; (iii) human resource systems; (iv) human resource development; (v) human resource relationships; (vi) human resource utilisation; (vii) human resource accounting; and (viii) human resource audit. This approach emphasises individualism and the direct relationship between management and its employees. Quite clearly, therefore, it questions the collective regulation basis of traditional industrial relations.

PERSPECTIVES ON INDUSTRIAL RELATIONS

The important perspectives on Industrial Relations are;

1. Unitary Perspective: In unitarism, the organization is perceived as an integrated and harmonious system, viewed as one happy family. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as unnecessary and conflict is perceived as disruptive.

From employee point of view, unitary approach means that:

Working practices should be flexible. Individuals should be business process improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required.

If a union is recognized, its role is that of a further means of communication between groups of staff and the company.

The emphasis is on good relationships and sound terms and conditions of employment.

Employee participation in workplace decisions is enabled. This helps in empowering individuals in their roles and emphasizes team work, innovation, creativity, discretion in problem-solving, quality and improvement groups etc.

Employees should feel that the skills and expertise of managers supports their endeavors.

From employer point of view, unitary approach means that:

Staffing policies should try to unify effort, inspire and motivate employees.

The organizations wider objectives should be properly communicated and discussed with staff.

Reward systems should be so designed as to foster to secure loyalty and commitment.

Line managers should take ownership of their team/staffing responsibilities.

Staff-management conflicts from the perspective of the unitary framework are seen as arising from lack of information, inadequate presentation of managements policies.

The personal objectives of every individual employed in the business should be discussed with them and integrated with the organizations needs

2. Pluralistic-Perspective : In pluralism the organization is perceived as being made up of powerful and divergent sub-groups management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change. Realistic managers should accept conflict to occur. There is a greater propensity for conflict rather than harmony. They should anticipate and resolve this by securing agreed procedures for settling disputes.

The implications of this approach include:

The firm should have industrial relations and personnel specialists who advise managers and provide specialist services in respect of staffing and matters relating to union consultation and negotiation.

Independent external arbitrators should be used to assist in the resolution of disputes.

Union recognition should be encouraged and union representatives given scope to carry out their representative duties

Comprehensive collective agreements should be negotiated with unions

3. Marxist Perspective: This view of industrial relations is a by product of a theory of capitalist society and social change. Marx argued that:

Weakness and contradiction inherent in the capitalist system would result in revolution and the ascendancy of socialism over capitalism.

Capitalism would foster monopolies.

Wages (costs to the capitalist) would be minimized to a subsistence level.

Capitalists and workers would compete/be in contention to win ground and establish their constant win-lose struggles would be evident.

This perspective focuses on the fundamental division of interest between capital and labor, and sees workplace relations against this background. It is concerned with the structure and nature of society and assumes that the conflict in employment relationship is reflective of the structure of the society. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital.

DETERMINING FACTORS OF INDUSTRIAL RELATIONS

The relationship between Employer and employee or trade unions is called Industrial Relation. Harmonious relationship is necessary for both employers and employees to safeguard the interests of the both the parties of the production. In order to maintain good relationship with the employees, the main functions of every organization should avoid any dispute with them or settle it as early as possible so as to ensure industrial peace and higher productivity.

Good industrial relations depend on a great variety of factors. Some of the more obvious ones are listed below:

1. History of industrial relations No enterprise can escape its good and bad history of industrial relations. A good history is marked by harmonious relationship between management and workers. A bad history by contrast is characterized by militant strikes and lockouts. Both types of history have a tendency to perpetuate themselves. Once militancy is established as a mode of operations there is a tendency for militancy to continue. Or once harmonious relationship is established there is a tendency for harmony to continue.

2. Economic satisfaction of workers Psychologists recognize that human needs have a certain priority. Need number one is the basic survival need. Much of men conducted are dominated by this need. Man works because he wants to survive. This is all the more for underdeveloped countries where workers are still living under subsistence conditions. Hence economic satisfaction of workers is another important prerequisite for good industrial relations.

3. Social and Psychological satisfaction Identifying the social and psychological urges of workers is a very important steps in the direction of building good industrial relations. A man does not live by bread alone. He has several other needs besides his physical needs which should also be given due attention by the employer. An organization is a joint venture involving a climate of human and social relationships wherein each participant feels that he is fulfilling his needs and contributing to the needs of others. This supportive climate requires economic rewards as well as social and psychological rewards such as workers participation in management, job enrichment, suggestion schemes, re-dressal of grievances etc.

4. Off-the-Job Conditions An employer employs a whole person rather than certain separate characteristics. A persons traits are all part of one system making up a whole man. His home life is not separable from his work life and his emotional condition is not separate from his physical condition. Hence for good industrial relations it is not enough that the workers factory life alone should be taken care of his off-the-job conditions should also be improved to make the industrial relations better.

5. Enlightened Trade Unions The most important condition necessary for good industrial relations is a strong and enlightened labor movement which may help to promote the status of labor without harming the interests of management, Unions should talk of employee contribution and responsibility. Unions should exhort workers to produce more, persuade management to pay more, mobilize public opinion on vital labor issues and help Government to enact progressive labor laws.

6. Negotiating skills and attitudes of management and workers Both management and workers representation in the area of industrial relations come from a great variety of backgrounds in terms of training, education, experience and attitudes. These varying backgrounds play a major role in shaping the character of industrial relations. Generally speaking, well-trained and experienced negotiators who are motivated by a desire for industrial peace create a bargaining atmosphere conducive to the writing of a just and equitable collective agreement. On the other hand, ignorant, inexperienced and ill-trained persons fail because they do not recognize that collective bargaining is a difficult human activity which deals as much in the emotions of people as in their economic interests. It requires careful preparation and top notch executive competence. It is not usually accomplished by some easy trick or gimmick. Parties must have trust and confidence in each other. They must possess empathy, i.e. they should be able to perceive a problem from the opposite angle with an open mind. They should put themselves in the shoes of the other party and then diagnose the problem. Other factors which help to create mutual trust are respect for the law and breadth of the vision. Both parties should show full respect for legal and voluntary obligations and should avoid the tendency to make a mountain of a mole hill.

7. Public policy and legislation When Government, regulates employee relations, it becomes a third major force determining industrial relations the first two being the employer and the union. Human behavior is then further complicated as all three forces interact in a single employee relation situation. Nonetheless, government in all countries intervenes in management union relationship by enforcing labor laws and by insisting that the goals of whole society shall take precedence over those of either of the parties. Government intervention helps in three different ways 1) it helps in catching and solving problems before they become serious. Almost every one agrees that it is better to prevent fires them to try stopping them after they start; 2) It provides a formalized means to the workers and employers to give emotional release to their dissatisfaction; and 3) It acts as a check and balance upon arbitrary and capricious management action.

8. Better education - With rising skills and education workers expectations in respect of rewards increase. It is a common knowledge that the industrial worker in India is generally illiterate and is misled by outside trade union leaders who have their own axe to grind. Better workers education can be a solution to this problem. This alone can provide worker with a proper sense of responsibility, which they owe to the organization in particular, and to the community in general.

9. Nature of industry In those industries where the costs constitute a major proportion of the total cast, lowering down the labor costs become important when the product is not a necessity and therefore, there is a little possibility to pass additional costs on to consumer. Such periods, level of employment and wages rise in decline in employment and wages. This makes workers unhappy and destroys good industrial relations.

REQUIREMENTS OF A SUCCESSFUL INDUSTRIAL RELATION PROGRAMME

Todays professional industrial relations director, or by whatever title he is designated, no longer views his job as personalizing management, or that of a social worker in a factory, or a union buster, he looks upon his department as an adjunct to management supervision at all levels; he keeps other executives informed about new discoveries, programme trends and needs. At the same time, he provides efficient service in the operation of several centralized services. A successful industrial relations programme reflects the personnel viewpoint, which is influenced by three main considerations:

Individual thinking

Policy awareness and

Expected group reaction

Individualized thinking makes if imperative for the administrator to consider the entire situation in which the affected individual is placed. Policy awareness underscores the idea of the consistency of treatment and the precedent value of any decision which a management takes; while expected group reaction balances what we know of human nature in groups against an individuals situation in the light of the policy that has been formulated and implemented. In all these different circumstances, reality demands that all the three aspects of the personnel viewpoint should be considered at once in terms of the past, the present and the future. This viewpoint is held at all the levels of management from the top to the bottom, from the top executives and staff to the line and supervisory personnel.

The basic requirements on which a successful industrial relations programme is based are :

Top Management Support: Since industrial relations is a functional staff service, it must necessarily derive its authority from the line organization. This is ensured by providing that the industrial relations director should report to a top line authority to the president, chairman or vice president of an organization.

Sound Personnel Policies: These constitute the business philosophy of an organization and guide it in arriving at its human relations decisions. The purpose of such policies is to decide, before any emergency arises, what shall be done about the large number of problems which crop up every day during the working of an organization. Policies can be successful only when they are followed at all the level of an enterprise, from top to bottom.

Adequate Practices should be developed by professionals: In the field to assist in the implementation of the policies of an organization. A system of procedures is essential if intention is to be properly translated into action. The procedures and practices of an industrial relations department are the tool of management which enables a supervisor to keep ahead of his job that of the time-keeper, rate adjuster, grievance reporter and merit rater.

Detailed Supervisory Training : To ensure the organizational policies and practices are properly implemented and carried into effect by the industrial relations staff, job supervisors should be trained thoroughly, so that they may convey to the employees the significance of those policies and practices. They should, moreover, be trained in leadership and in communications.

Follow-up of Results: A constant review of an industrial relations programme is essential, so that existing practices may be properly evaluated and a check may be exercised on certain undesirable tendencies, should they manifest themselves. A follow up of turnover, absenteeism, departmental morale, employee grievances and suggestion; wage administration, etc. should be supplemented by continuous research to ensure that the policies that have been pursued are best fitted to company needs and employee satisfaction. Hints of problem areas may be found in exit interviews, in trade union demands and in management meetings, as well as in formal social sciences research.

An industrial relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation.

A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.

INTRODUCTION TO INDUSTRIAL DISPUTES,ITS PREVENTION AND SETTLEMENTIndustrial disputes are organised protests against existing terms of employment or conditions of work. According to the Industrial Dispute Act, 1947, an Industrial dispute means

Any dispute or difference between employer and employer or between employer and workmen or between workmen and workmen, which is connected with the employment or non-employment or terms of employment or with the conditions of labour of any person

In practice, Industrial dispute mainly refers to the strife between employers and their employees. An Industrial dispute is not a personal dispute of any one person. It generally affects a large number of workers community having common interests.

Prevention of Industrial Disputes:The consequences of an Industrial dispute will be harmful to the owners of industries, workers, economy and the nation as a whole, which results in loss of productivity, profits, market share and even closure of the plant. Hence, Industrial disputes need to be averted by all means.

Prevention of Industrial disputes is a pro-active approach in which an organisation undertakes various actions through which the occurrence of Industrial disputes is prevented. Like the old saying goes, prevention is better then cure.

1. Model Standing Orders: Standing orders define and regulate terms and conditions of employment and bring about uniformity in them. They also specify the duties and responsibilities of both employers and employees thereby regulating standards of their behaviour. Therefore, standing orders can be a good basis for maintaining harmonious relations between employees and employers.

Under Industrial Dispute Act, 1947, every factory employing 100 workers or more is required to frame standing orders in consultation with the workers. These orders must be certified and displayed properly by the employer for the information of the workers.

2. Code of Industrial discipline: The code of Industrial discipline defines duties and responsibilities of employers and workers. The objectives of the code are:

To secure settlement of disputes by negotiation, conciliation and voluntary arbitration.

To eliminate all forms of coercion, intimidation and violence.

To maintain discipline in the industry.

To avoid work stoppage.

To promote constructive co-operation between the parties concerned at all levels.

3. Works Committee: Every industrial undertaking employing 100 or more workers is under an obligation to set up a works committee consisting equal number of representatives of employer and employees. The main purpose of such committees is to promote industrial relations. According to Indian Labour Conference work committees are concerned with:-

Administration of welfare & fine funds.

Educational and recreational activities.

Safety and accident prevention

Occupational diseases and protective equipment.

Conditions of work such as ventilation, lightening, temperature & sanitation including latrines and urinals.

Amenities such as drinking water canteen, dining rooms, medical & health services.

The following items are excluded from the preview of the work committees.

Wages and allowances

Profit sharing and bonus

Programs of planning and development

Retirement benefits

PF and gratuity

Housing and transport schemes

Incentive schemes

Retirement and layoff

4. Joint Management Councils: Just to make a start in labour participation in management, the govt: suggested in its Industrial Resolution 1956 to set up joint management councils. It consists of equal numbers of workers and employers (minimum 6 & maximum 12) decisions of the JMC should be unanimous and should be implemented without any delay. JMC members should be given proper training. JMC should look after 3 main areas:-

1. information sharing

2. consultative

3. administrative

Representation of workers to the JMCs should be based on the nomination by the representation.

Objectives

Satisfy the psychological needs of workers

Improve the welfare measures

Increase workers efficiency

Improve the relation and association between workers, managers and promoters.

JMC deals with matters like:-

Employee welfare

Apprenticeship scheme

5. Suggestion Schemes:6. Joint Councils: Joint Councils are set up for the whole unit and deals with matters relating optimum production and efficiency and the fixation of productivity norms for man and machine for the as a whole. in every industrial unit employing 500 and more workers there should be a Joint Council for the whole unit.

Features

Members of the council must be actually engaged in the unit.

The chief executive of the unit will be the chairman of the council and vice chairman will be nominated by worker members.

Term of the council will be two years.

JC shall meet at once in a quarter.

Decision of the council will be based on consensus and not on voting.

Functions

Optimum use of raw materials and quality of finished products

Optimum production, efficiency and function of productivity norms of man and machine as a whole.

Preparation of schedules of working hours and of holidays.

Adequate facilitates for training.

Rewards for valuable and creative suggestions received from workers.

7. Collective Bargaining: Collective Bargaining is a process in which the representatives of the employer and of the employees meet and attempt to negotiate a contract governing the employer-employee-union relationships. Collective Bargaining involves discussion and negotiation between two groups as to the terms and conditions of employment.

8. Labour welfare officer: The factories Act, 1948 provides for the appointment of a labour welfare officer in every factory employing 500 or more workers. The officer looks after all facilities in the factory provided for the health, safety and welfare of workers. He maintains liaison with both the employer and the workers, thereby serving as a communication link and contributing towards healthy industrial relations through proper administration of standing orders, grievance procedure etc.

9. Tripartite bodies: Several tripartite bodies have been constituted at central, national and state levels. The India labour conference, standing labour committees, Wage Boards and Industries Committees operate at the central level. At the state level, State Labour Advisory Boards have been set up. All these bodies play an important role in reaching agreements on various labour-related issues. The recommendations given by these bodies are however advisory in nature and not statutory.

Machinery for settlement of Industrial Disputes:1. Conciliation: Conciliation refers to the process by which representatives of employees and employers are brought together before a third party with a view to discuss, reconcile their differences and arrive at an agreement through mutual consent. The third party acts as a facilitator in this process. Conciliation is a type of state intervention in settling the Industrial Disputes. The Industrial Disputes Act empowers the Central & State governments to appoint conciliation officers and a Board of Conciliation as and when the situation demands.

Conciliation Officer: The appropriate government may, by notification in the official gazette, appoint such number of persons as it thinks fit to be the conciliation officer. The duties of a conciliation officer are:

a) To hold conciliation proceedings with a view to arrive at amicable settlement between the parties concerned.

b) To investigate the dispute in order to bring about the settlement between the parties concerned.

c) To send a report and memorandum of settlement to the appropriate government.

d) To send a report to the government stating forth the steps taken by him in case no settlement has been reached at.

The conciliation officer however has no power to force a settlement. He can only persuade and assist the parties to reach an agreement. The Industrial Disputes Act prohibits strikes and lockouts during that time when the conciliation proceedings are in progress.

2. Arbitration: A process in which a neutral third party listens to the disputing parties, gathers information about the dispute, and then takes a decision which is binding on both the parties. The conciliator simply assists the parties to come to a settlement, whereas the arbitrator listens to both the parties and then gives his judgement.

Advantages of Arbitration: It is established by the parties themselves and therefore both parties have good faith in the arbitration process.

The process in informal and flexible in nature.

It is based on mutual consent of the parties and therefore helps in building healthy Industrial Relations.

Disadvantages: Delay often occurs in settlement of disputes.

Arbitration is an expensive procedure and the expenses are to be shared by the labour and the management.

Judgement can become arbitrary when the arbitrator is incompetent or biased.

There are two types of arbitration:

Voluntary Arbitration: In voluntary arbitration the arbitrator is appointed by both the parties through mutual consent and the arbitrator acts only when the dispute is referred to him.

Compulsory Arbitration: Implies that the parties are required to refer the dispute to the arbitrator whether they like him or not. Usually, when the parties fail to arrive at a settlement voluntarily, or when there is some other strong reason, the appropriate government can force the parties to refer the dispute to an arbitrator.

4. Adjudication: Adjudication is the ultimate legal remedy for settlement of Industrial Dispute. Adjudication means intervention of a legal authority appointed by the government to make a settlement which is binding on both the parties. In other words adjudication means a mandatory settlement of an Industrial dispute by a labour court or a tribunal. For the purpose of adjudication, the Industrial Disputes Act provides a 3-tier machinery:

Labour court Industrial Tribunal National Tribunala) Labour Court: The appropriate government may, by notification in the official gazette constitute one or more labour courts for adjudication of Industrial disputes relating to any matters specified in the second schedule of Industrial Disputes Act. They are:

Dismissal or discharge or grant of relief to workmen wrongfully dismissed.

Illegality or otherwise of a strike or lockout.

Withdrawal of any customary concession or privileges.

Where an Industrial dispute has been referred to a labour court for adjudication, it shall hold its proceedings expeditiously and shall, within the period specified in the order referring such a dispute, submit its report to the appropriate government.

b) Industrial Tribunal: The appropriate government may, by notification in the official gazette, constitute one or more Industrial Tribunals for the adjudication of Industrial disputes relating to the following matters:

Wages

Compensatory and other allowances

Hours of work and rest intervals

Leave with wages and holidays

Bonus, profit-sharing, PF etc.

Rules of discipline

Retrenchment of workmen

Working shifts other than in accordance with standing orders

It is the duty of the Industrial Tribunal to hold its proceedings expeditiously and to submit its report to the appropriate government within the specified time.

c) National Tribunal: The central government may, by notification in the official gazette, constitute one or more National Tribunals for the adjudication of Industrial Disputes in

Matters of National importance

Matters which are of a nature such that industries in more than one state are likely to be interested in, or are affected by the outcome of the dispute.

It is the duty of the National Tribunal to hold its proceedings expeditiously and to submit its report to the central government within the stipulated time.

PREVENTION OF MONEY LAUNDERING ACT

Introduction:-Money laundering involves disguising financial assets so that they can be used without detection of the illegal activity that let to its production. Through the process of money laundering a person converts illegal money into a legal entity. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be held guilty of the offence of money laundering.

The Schedule to the Prevention of Money Laundering Act (henceforth, PMLA), 2002, lists some of the offences under the following Legislations: Offences under the India Penal Code (part A) eg. Waging or attempting to wage war, or abetting waging of war against the Government of India, Conspiring to commit offences punishable by s.121 against the state

1. Offences under the Narcotic Drugs and Psychotropic Substances Act, 1985- eg. Contravention in relation to opium poppy and opium.2. Offences under India Penal Code (part B) eg. Murder, kidnapping for ransom, counterfeiting currency notes or bank notes.3. Offences under the Arms Act, 1959- eg. Knowingly purchasing arms from unlicensed person not entitled to purchase the same.4. Offences under the Wildlife (Protection) Act, 1972- eg. Contravention of provisions of s.48 relating to purchase of animals etc by license.5. Offence under the Immoral Traffic (Prevention) Act, 1956- eg. Seducing or soliciting for purpose of prostitution.6. Offences under the Prevention of Corruption Act, 1988- eg. Taking gratification for exercise of personal influence, with public servant

The innumerate under therefore stated Acts generate huge sums. The launderer converts these sums into untainted money by investing them into shares or banks and thereby converts the essential character of the money.

Genesis:-The UN General Assembly, in its Special Session (1999), came up with a political declaration that required the Member-States to adopt money laundering legislation and programme. Moreover with the changed economic scenario and the dynamic process of liberalization laws like Foreign Exchange Management Bill in place of earlier FERA was felt to be much static and harsh. As is said in Latin Summum Jus Suma Injuria (too much legislation, too much of regulations create problems for a man) hence it was felt that a new law was required to curtail the powers of launderers. Accordingly on the Recommendations of the Standing Committee on Finance on 4th March, 1999 the Bill was presented in the Lok Sabha and the Act was incorporated and enacted on 17th January, 2003.

Significance:-The PMLA was a very peculiar legislation. The Civil Procedure Code, 1908 and the Criminal Procedure Code, 1973 were clubbed together. Moreover, the Act had hit the source of illegal money itself.

Enactment:-With the PMLA coming into force, banks, financial institutions and financial intermediaries will have to mandatorily report to Government all suspicious transactions and those over Rs.10 Lakh. As per the provisions of the Act, every banking company, financial institution and intermediary needs to maintain a record of all transactions, the nature and value of which is being prescribed in the rules. Financial institutions, including chit funds, cooperative banks and intermediaries like stock brokers, share transfer agents, underwriters and investment advisers were to be registered with SEBI. The Financial Intelligence Unit (FIU-IND) was set up as a multi-disciplinary unit for establishing links between suspicious or unusual financial transactions and criminal activities.

Legislations in consonance with PMLA:-1. Banking Regulation Act, 1949.2. Chit Funds Act, 1982.3. Deposit Insurance and Credit Guarantee Corporation Act, 19614. NABARD Act, 1981.5. National Housing Bank Act, 1987.6. Reserve Bank of India Act,1934.7. Securities and Exchange Board of India act,1992.

International support system:-It stands highly imperative to exchange information at an international level in order to make the enforcement of a law efficient. FIUs therefore have the ability to exchange financial information that stands helpful to follow the financial trail in respect to investigation and enforcement of law in activities related to terrorism and uncovering financial assets.

FATF: - The Financial Action Task Force (FATF) is an inter-governmental body which sets standards, and develops and promotes policies to combat money laundering and terrorist financing. The Force has provided forty Recommendations and Nine Special Recommendations that provide a complete set of counter measures against money laundering. These Recommendations have been recognized, endorsed and adopted by many international bodies as the international standards for combating Money Laundering.

Egmont Group: - The Egmont Group serves as an international network fostering improved communication and interaction among FIUs. Egmont Group is named after the venue in Brussels where the first such meeting of FIU was held in June, 1995. The goal of the Group is to provide a platform for FIUs around the world to improve support to their respective governments in the fight against money laundering terrorist financing and other financial crimes.

Asia/Pacific Group: - The Asia/Pacific Group on money laundering (APG) was officially established as an autonomous regional anti-money laundering body in February, 1997 at the Fourth Asia/Pacific Money Laundering Symposium in Bangkok, Thailand. The purpose of APG is to facilitate the adoption, implementation and enforcement of internationally accepted anti-money laundering and anti terrorist financing standards set out in the recommendations of the FATF. The APG undertakes studies of methods and trends of money laundering and the financing of terrorism in Asia/Pacific region. It is a voluntary and co-operation international body established by agreement among its members and is autonomous.

Why amend the Anti-Money Laundering Act:-

In the recent years there has been a sudden upsurge in organized crimes and terrorist activities. Like any other activity even these anti-social activities need financial support. This financial support is provided through illegal money which is laundered in economy of a country. Money laundering has recently gained urgency of attention due to its links with terrorist activities. RBI, SEBI and IRDA are under the purview of PMLA. It allows search and seizure of suspected properties by officials and stipulates punishment of minimum three years imprisonment for the Guilty.

Money laundering can be checked by monitoring illegal forex transactions, real estate, gems and jewellery and high value purchases. In India, however, PMLA regulates only banking companies, financial institutions and intermediaries to maintain records, furnish information and verify identity of the customers. It does not deal with tapping of information within the ambit of informal economy as in case of forex transactions, because lot of dealing in this avenue is done through informal channels. The PMLA makes it illegal to enter into a transaction related to funds derived from criminal activities as also to possess or transfer such funds.

Financial institutions and intermediaries registered with SEBI are required to furnish to the income-tax authorities, details of all transactions also need to be furnished. However, this task of furnishing information and maintaining records is indeed a titanic one. Infrasoft Technologies Ltd. has launched OMNI Enterprise, anti-money laundering software that offers reporting and query capabilities. This software is widely used by banks in UK.

In 2000, black money was estimated to account for more than 40% of Indians GDP (approximately $150 billion). The IMF estimates the global volume of money laundering to be somewhere between $600 billion to $1.8 trillion a year. With such statistics, in India, there are absolutely no estimates regarding spending on anti money laundering measures by banks and financial institutions. Whereas, in USA, the collective spending by banking, insurance and fund management companies on anti money laundering measures is estimates to be $ 10.9 billion between 2003 and 2005.

With PMLA in force it is very crucial for the Banks to find AML software to check, identify and report suspicious transactions regularly. Failure to comply with this demand would result in losing business and fighting legal battles. Despite of all the afore stated problems, Infrasoft OMNI AML software has found no takers. The major part of the blame for not making use of the software is , however, shelved on the shoulders of strict and static RBI Rules.

It should be realized that PMLA is not a one-time legislation. The Act was amended to resolve the technicalities. India has only made amendments in respect to 11 out of 20 categories prescribed by FATF. This clearly means that amendments are required to be made in other categories as well particularly enclosing within its scope- terrorism financing, smuggling, piracy etc.- to cope with the International Standards. Without which the India banks would get paralyzed in developed nations.

Apart from the banking and other financial institutions and intermediaries the Act also extends upon the working of International Payment gateways such as Visa and Master card along with money transfer providers. However, it is strongly felt that PMLA should incorporate within its ambit the casinos, because a huge amount of money, in form of informal transactions, is being operated upon through such places.

Conclusion:-The menace of money laundering is highly diabolical in nature. It hits not only at the root of a countrys financial structure but also kills its social structure by financing anti-social activities. It is as a matter of great grief that despite of having innumerable enactments and legislation, India is still under the vigilance of the Interpol because of her relaxed attitude towards the threat posed by money laundering. Hence, it is extremely important to catch hold of the growing threat of money laundering by legislating and implementing amendments in he present law of Anti- money Laundering.

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