UNIT 2 EVOLUTION OF INDUSTRIAL

RELATIONS AND CURRENT

DEVELOPMENTS
Objectives
Aftcr going tlirougli this unit, you should be able to:
o explain the historical perspective of industrial relatio~isin India;
o appreciate tlie impact of globalisation, technological changes, and other forces on
industrial relations;
o identify tlie issues and cliallenges confronting industrial relations in India.

Structure
2.1 Introduction
2.2 Industrial Relations in India
2.3 Government's Role
2.4 Current Developments
2.5 Indi~strialRelations Scenario
2.6 Issues and Clial leiiges
I
2.7 Summary
2.8 Self-Assessme~itQuestions
2.9 'Fu~-tlierReadings

2.1 INTRODUCTION
In order to understand tlie issues and problems associated with indi~strialrelations, it
is desirable to study its various evolutionary phases. Practically speaking, tlie growth
of industrial relations in India is in no way different from that of other parts oftlie
globe. 'rhevarious stages of industrial relations progressed fro111primitive stage to
factory or industrial capitalis~listage. The eliiergelice of tripartite consultative systetn
and voluntary and statutory approach to industrial relations, immensely contributed to
tlie growth of a particular system of industrial relations in our country. Also the fast
changing technological development, industrial production techniques, and ideological
values liave brought forth in tlie industrial world a unique type of employer-employee
relationship. For a proper theoretical perspective of industrial relations, it seems
essential to liave a historical review of industrial relations in India.

2.2 INDUSTRIAL RELATIONS IN INDIA

India was greatly advanced in tlie field of industry and comnierce in the past, as
evidenced from its ancient literature. In ancient times, tlie lligllest occupatioli in our
country was agriculture followed by trading. Manual services formed tlie tliird rung of
occupation. S~nall~ila~iufacturers in their cottages, ~nostlyon hereditary basis, carried
on a large number of occupations. Ancient scriptures and laws of our country laid
empliasis on tlie promotion and mainte~~ance of peaceful relations between capital and
labom. From tlie very early days, craftsmen and workers felt the necessity of being
i~nited.The i~tilityof i~nionshas been stated in Sz(kkr YajurvedaSunihita, "if men are Evolution of
Industrinl Relations and
united, nothing can deter tliem." Kai~tilyas'sArthn,~hn,stra gives a cornpreliensive Current Dcvelopnlents
picture of tlie organisation and functions oftlie social and political institutions of India
and a good description of i~nionsof eniployees, craftsmen orartisans. There were
we1I-organised gui Ids, which worked according to their own byelaws for tlie
~nanagementof tlie unions. Idowever, there were no organisations of workers during
the Mi~glialrule. Tlie labourers were entirely dependent on their masters and forced
worlc was talcen from them. tlistorical evidence fi~rtliershows tlie existe~lceof rilles of
conduct and prescribed procedure for tlie senle~nentof dispi~tesfor PI-omotingcordial
relations between tlie parties. Tlie working ~.elations,how eve^., in those days were
more or less of a personal cliaracter ancl are very rn~~cli
dislingl~isliablefrom tlie
present-day indi~strialrelations as have gradually developed wit11 the growth of Iarge-
scale industries.
A study of modern industrial relations in India can be made in three distinct phases.
The first phase can be considered to liave commenced from the middle of tlie
ninetee~itlicentury and ended by tlie end oftlie First World War. Tlie seconcl phase
comprises the period tlierexfter till the attainment of indepenclence in 1947, and tlie
thircl phase represents the post-independence era.
First Phase: During tlie first phase, tlie British Government in India was largely
interested in eni-.arcing penalties for breach of contract and in regulating the conditions
ofworlc with aview to minimising tlie competitive advantages ofindigenous
elnployers against tlie British employers. A series of legislative measures were
adopted during the latter half o.Ftlienineteenth centmy, which can be considered as tlie
beginning of industrial relations in India.
The close of tlie First World War gave a new twist to tlie labour l~olicy,as it created
certain social, economic and political conditions that raisecl new hopes among the
people for a new social order. There was intense labour unrest because workers'
earnings did not keep pace wit11 tlie rise in prices and wit11 their aspirations. The
constitutional develop~nelitsin India lecl to tlie election ofrepresentatives to the
Central and Provincial legislatures wlro tool<a leading role iii initiating social
legislation. Tlie establisli~nentof International Labour 01.ganisatio1i(ILO) in 1919
greatly influeliced tlie labour legislation and industrial relations policy in India. The
n sIndia, particularly the formation of All Inclia 'Trade
emergence of trade ~ ~ n i o in
Union Congress (AITUC) in 1920 was anotl~ersignificant event in tlie history oc
industrial relations in oi~rcountry.
Second Phase: Tlie policy after tlie First World War related to improvement in the
working conditio~isand pl-ovision of social security benefits. Du~singthe two clecades
following tlie war, a number of laws were enacted for the implementation of tlie above
policy. 'The Trade Dispi~tesAct, 1929 sought to provide a conciliation machinery to
bring about peaceIkI settlement of disputes. The Royal Commission on Labour (1929-
3 1) ~nadea co~nprehensivesurvey of labour proble~nsin India, particularly tlie
working conditions in tlie context of health, safety, and welfare oftlie workers and
made certain recomrneridations of far-reilcliing consequences.
The Second World War gave a new spurt in tlie labour field. The exigencies oftlie war
made it esselitial for the government to maintain an adequately co~ltentedlabour force
for ~naximisi~ig production. Tlie Government of India had, therefore, to step in arid
assilrne wide powers of controlling and regulating tlie conditio~isof work and well'are
of industrial workers. It embarked upon a two-fold action iri this regard, ~iarnely,
(i) statutory regulation of industrial relations tliroi~glithe Defence of Inclia rules and
the orders made thereunder; and (ii) bringing all tlie interests together at acolnrnon
forum for shaping labour policy.
Conceptu:tl P r m e w o r k of Tripartite consultative system was one ofthe most important developments in the
Employment Relations sphere of industrial relations in our country. Tripartite consultation epito~nisesthe
faith of India in the ILO's pl~ilosopl~y and objectives. The Royal C o ~ n ~ n i s s ion
o~l
Labour recommended the need for tripartite labour machinery on the pattern of 1LO as
early as 193 1. But the first step in this direction was taken only in the year 1942,
when the first tripartite labour conference was held at New Delhi under the
Chairmanship of Dr. B.R. Ambedkar. T l ~ conference
e consisted of two organisatims,
namely, the Indian Labour Conference (TLC) and the Standing Labour Committee
(SLC). I n the state sphere, State Labour Advisory Boards were also set LIPfor
consultation on labour ~natters.Gradually, tripartism developed into a fill]-fledged
system, a kind of parliament for labour and management.
The ob-jectivesset before the two tripartite bodies at the time oftheir inception in 1942
were: (a) promotion of ~~niforrnity in labour legislatioi~;(b) laying down of a
proced~~re for the settle~nentof industrial disputes; and (c) discussion of all matters of
All-India importance as between employers and employees.
The ILCISLC have itnmensely contributed in achievi~igthe objectives set before them.
They facilitated enactment of central legislation and enabled discussion 011all labour
matters of national importance. Different social, economic and administrative matters
concerning laboi~rpolicies and programmes were discussed in the various meetings of
ILC/SLC.
Third Phase: After independence, an Industrial Truce Resol~~tion was adopted in
1947 at a tripartite conference. The conference e~nphasisedthe need for respecting t l ~ e
m ~ l t ~ ~ a of
l i tinterests
y between labour and capital. It recommended to the parties the
method of mutual discussion of all proble~nscommon to both, and settle all disputes
without recourse to interruption in or slowing down of production.
T l ~ post-independence
e period of industrial relations policy aimed at the establishment
of peace in industry, and grant of a fair deal to workers. The government sought to
achieve these aims through appropriate labour legislation, labour ad~ninistration,and
industrial adjudication. State inte~ventionin industrial relations was justified on the
grouncl that it helped to check the growth of industrial unrest. However, it was noticed
that the spirit of litigation grew and delays attendant on legal processes gave rise to
widespread dissatisfaction. Hence, since 1958 a new approach was introd~~ced to
counteract the ~~nhealthy trends of litigation and delays in adjudication. Its emphasis
was based on the principles of industrial democracy, on prevention of ~ ~ n r eby s t tiniely
action at the appropriate stages, and giving of adequate attention to root causes of
industrial unrest.
While the groundwork of labour policy was prepared during the forties, a
superstructure on Lhis groundwork was built in the fifties. It is the Constitution of
India and the five-year plans, which largely helped in raising the superstructure. The
Preamble to the Constit~~tion and the chapter on Directive Principles of State Policy
enunciate the ele~nentsof labour policy. The successive five-year plans since 1951
clearly enunciated the clirectio~~s
of industrial relations policy. These entailed the
building up of industrial democracy in I<eepingwith the requirements of a socialisi
society, which sought to be established tl~rougha parliamentary for111of government.
A brief account ofthe industrial relations policy during five-year plans is given below:
I
The approach to labour proble~nsin the First Five-Year Plan (195 1-56) was based on
considerations which were related, on the one hand, "to the requirements of the well-
being of the working class", and on the other, "to its vital contribution to the economic 1

stability and progress of t l ~ country."

e It considered the worker as "the principal
instrument in the fulfillment ofthe targets of the Plan and in the achievement of I

1
e c o ~ ~ o mprogress.
ic Further, the Plan stated that l~ar~nonious
relations between capital I
 and labour are essential for the realisation of the Plan in the industrial sector. The Plan Evolutioii of
emphasised that the "workers' right of association, organisation and collective Industrial Relations nnd
Current Developmellts
bargaining shoulcl be accepted without reservation as the fundamental basis ofthe
mutual relationsliip", and tlie trade unions "shoulcl be welco~nedand helped to
function as part and parcel of the industrial system".
Much of what had been said in regard to industrial relations in the First Plan was
reiterated in the Second Five-Year Plan (I 956-61). Tlie Second Plan considered a
strong trade union move~nentto be necessary both for safeguarding Llie interests of
labour and for realising tlie targets of production. Multiplicity of trade unions,
political rivalries, lack of resources, and disunity in the I-anltsof worlters were,
according to the Plan document, some ofthe major weaknesses in a number of
existing unions. Tlie importance of preventive measures For achieving industrial peace
was particularly stressed and greater e~npliasiswas placed on the avoidance of
disputes at all levels. It also e~nphasisedon tlie increased association of labour with
management.
The Third Five-Year Plan (196 1-66) expressed great hopcs in the voluntary approach
initiated cluring the Seconcl 1'lan period to give a more positive orientation to industrial
relations, based on moral rather than legal sanctions. Tlic Plan highlighted the need for
increasing application of the principle of voluntary arbitration in resolving differences
between worlters and employers and recommcndcd that the govern~nentshould take
tlie initiative in drawing L I ~panels
J of arbitrators on a regional and industry-wise basis.
Further, tlie Plan recommcndcd tliat the worlts committees should be strengthened and
made an active agency for the democratic ad~ninistrationof labour matters.
The Fourth Five-Year Plan ( 1 969-74) suggested no changes i n the system of
reg~~lating labour relations by legislative and voluntary arrangements started from
earlier plans. It devoted a good deal of attention to employment and training. It also
laid stress on strengthening labour adruinistration l'or better cnl'orccment of labour
laws, rcsearcli in labour laws, and expansion ol'training programnies Ibr labour
officers.
I
The Fifth Five-Year Plan (1 974-79) laid great emphasis on cmployment, both in rural
and urban sectors. After tlie promulgation of emergency in June 1975, the government
devised a new pattern of bipartite consultative process in an attempt to create a
I climate of healthy industrial relations, leading to increased production, by eschewing
lay-offs, retrenchments, closures, strikes and lockouts. Tlie new machinery sougllt to
f o r ~ n ~ ~ lpolicies
ate at tllc national, state, and industry levels for the speedy resolution
of ind~~strial confl icts and for pro~noti~ig industrial harmony. During the emergency,
tlie Government of India through a ~.esolutionadopted a scheme of worlters'
participation in industry at shop and plant levels on 3O1I1October, 1 975.
The iniportance of cooperative attitude on the part of e~ilployersand eiiiployees for the
maintenance of healthy industrial relatio~islias been empliasised in the Sixth Five-Year
Plan ( 1 980-85). According to tlie plan, strikes and lockouts should be ~.esorte'dto only
in the last stage. Effective arrangements should also be made for the settlement of
I inter-union clisp~~tes and to discourage unfair practices and irresponsible conduct.
While suggesting tlie growth of trade ~ ~ n i oonn s healthy lines, tlie Plan stressed on
I their social obligations and ~aolesin many areas of nation buildi~igactivities and in
improving the qi~alityof life of workers. Furtliermore, it cmphasised on necessary
changes in the existing laws on trade ~ ~ n i o nindustrial
s, relations and standing orders
for promoting I~annoniousindustrial relations.
Tlle t l ~ r ~of~ the
s t Seventh Five-Year Plan (1986-91) is on improvement it1 capacity
utilisation, efficiency and productivity. The Plan states that a sound policy oftackling
industrial sickness in fi~ture:has to be evolved wllicli while protecting tlie interests of
 C'onceptunl Framework of labour woura also ~ z l ~I It I: Waccount rtie ract that Government cannot bear the ]luge
Etnploytnent Relations burden of losses. There is considerable scope for improvement in industrial relations,
I
which would obviate the need for strikes and tlie justification for lockouts. In the
proper management of industrial relations tlie responsibility of ~ ~ n i oand
n s e~iiployees
lias to be identified and inter-union rivalry and intra-union divisions should be
avoided.
According to the Eighth Five-Year Plan (1992-97), labour participation in
management is a lnealis of bringitig about a state of industrial democracy. Ever since
independence, tlie government has been stressing tlie need to introduce workers'
participation in management and various sche~neswere notificcl from time to time.
However, the results have fallen far sliorl ofexpectations. Tlie need to bring forward a
suitable legislation for effective impleme~itationofthe schemehas been felt. Besides
legislation, proper education and training of workers ancl cooperation from both
employers and employees to overcollie proble~nsarising out of tlie existence of
multiplicity of trade u11ions and inter-union rivalry will go a long way in promoting
the system of participative management.
According to tIieNi11thFive-Year Plan (1997-2002), the planning process attempts to
create conditions for improvement in labour productivity and for provision of social
security to supplement the operations ofthe labour market. The resources have been
directed through tlie plan program ~ n etowards
s skill formation and developnient,
exchange of information on job opportu~iities,monitoring of working co~iditions,
creatior~of ind~istrialharmony, and insurance against disease and unemployment for
the workers and their faniilies. Tlie planning co~nmissionobserved that the situation of
surplus labour, coup led with the e~nploy~nent of most ofthe worlcers i n the
unorganised segments of tlie economy, lias given rise to unliealtliy social practices lilce
bonded labour, child labour, and adverse working conditions faced by the migrant
labour.

2.3 GOVERNMENT'S ROLE

The main issue in regard to thegovernment's role in industrial relationy 15tlie degree
of state intervention. In India, particularly after independence, the government lias
been playiug a co1iip1-ehensiveand dominant role in shaping tlie patter11,ofindustr.ial
relations. 111the mixed economy of our country, tlie state has e~iiergedas a big '

employer. Tlre government evolves through tripartite forums the nonns or standards,
which are in the nature of guidelines shaping employer-employee relatio~is.It accepts
the responsibility ofensuring co~ifor~nity to tliese norliis through the adniinistralive
and judicial mechanism. It enacts legislation on laboi~rand implements both the
substantive and procedural laws.
The industrial relations policy of tlie government forms part of tlie broader labour
policy. The tenets of this policy, as stated by tlieNational Commissioll on Labour, are:
(i) primacy to the maintenance of industrial pzace; (ii) encouragement for mutual
settlemetit of dispirtes through collective bargaining and vol~~ntary arbitration;
(iii) recognition oftlie workers' right to peaceful direct action, i.e., strike; and
(iv) tripartite consultation.
The state interve~itionprimarily aims at preserving industrial peace and lias, therefore,
focused attention on: (a) the avoidance of industrial disputes; and (b) tlie expeditious
settlement of i~~dustrialdisputes wlie~ithey do arise. The adjudication ant1 other
regulative aspects of the role ofthe gover~i~nent continue to form the core of industrial
relations in India.
 Evolr~tionof
2.4 CURRENT DEVELOPMENTS 111dustrinlRelations and
Current Developments
The current developments in tlie field of inclustrial relations are basically related to
structural changes, acquisitions and mergers, globalisation, liberalisation, and
technological changes.

Structural Changes
The main aspects of the structural changes having an impact on tlie industrial
relations system in the country could be mentioned as:
i) Productio~ireorganisation or decentralised production making a thin organised
sector employment more thinner. The large-sized units sliiftecl to flatter structures
ancl opted for decentralised decision-making. Tllesc nits reorganised tlicir
prod~~ction by trimming their sizeand carrying out production in m~~ltiple units
or by externalising their production, i.e., concentrating on core activitics with
higher value addition, ancl subcontracting the other worl</productionto other
ancillary units. These measures of economic relbrms have distinctly aikcted tlie
industrial relations system in the country as i t lias li~i~ited
its institutions and
~racticesto tlie formal organised sector in the large-sized units. As such, the
system has come uncler pressure to acl.ji~stand adapt to tlie chal le~igesof growtli
ol'small and medium i~nitsand sliift its employment In favou~~ofunorganised
sector.
ii) Globalisation and technological changes proved disruptive for the system i n
terms ol'displacement oflnbour, i.e.,job losses, dcstabilising tlie wage structure,
and n sliift in skiII/occupation composition of labour.
iii) Ascendancy in managerial rights and tlie weakening of trade ~ ~ n i o gave
n s greater
flexibility to management in utilisation of labour and in handling industrial
conflict.

Mergers and Acquisitions

I n merger, two or more existing companies go into liquidation and a new company is
formed to talceovel.tIieir business. An acquisition arises when there is a purchase by
one company of the whole or part of the shares, 01. tlie wl~oleor part of tlie nsscts, of
another company in consideration for payment in cash or by issuc of shares or otlier
securities in tlie acquiring company or partly in one form and 11artly in the other, The
process of merger is the result of agreement and contract bet~veentlie transikro~.and
transferee companies.
The concept of mergers ancl accluisitio~isis very ~ni~cli
popular in the current economic
scenario. More so, it is a.significantly popnlar concept after 1990s in India on the
birth of econom ic liberalisation and globalisation. The basic premises for mergers and
acquisitions are the consolidation process for survival of existing ~~ndertakings,and
large groups absorbing tlie small entities.
A series of personnel problems normally occur when one company acquires another.
People aspect is very important in the process of acquisition.
TIie communications framework is the ~ilostimpol-tantfactor for smooth integration in
an acquisition. With effective co~nmu~iication, tlie acquiring company can develop a
climate of conficlence and, IiopeFi~Ily,eliminate much of tlie friction, which frequently
occurs. Goocl commi~~iicatio~i is an essential part of good human relations. The labour
relations considerations when one company acq~~ires another are t~~iion
relations
history, representatio~iof e~nployeesin unions, history ofwork stoppages, strikes and
lockouts, grievance settlement, collective bargaining and signing of ngree~ne~its and
settlements.
Conceptual Framework o f GlOba]isa(ion
Employment Relations
Globalisation can be conceptually explained as tlie process of economic or co~n~nercial
integration of a company or a country wit11 tlie rest of tlie world. Tlie ~nag~iitude
of
sucli integration will determine tlie extent of globalisation acco~nplishedby tlie
colnpaliy or the country as tlie case may be. It is important to note that globalisatio~lis
not an 'event' but a 'process.'
Some segments of the labour force have suffered froni the direct and indirect effects of
globalisation more tlian others. Increased trade and increased colnpetition have led to
job losses in tlie advanced econoniies, probably not too liiany in aggregate terms but
concentrated in low-skilled labour intensive industries with liigll labour costs. In
addition, organisational changes such as co~itracting-out,and downsizing of
per~iianentstaff liave affected Iow-skilled workers Inore tlian high-skilled workers and
have contributed to widening wage disparities (ILO, 1997).
I n tlie process of globalisatiorl tile power of trade unions, as measured by trade-union
density, lias declined almost everywhere around the world, in developed as well as in
developing countries. Evidently, some other factors have contributed to tlie evol~~tion
of trade ~lnion~nenibersliipsucli as the demise of state socialism in Central and
Eastern Europe, tlie process of economic restructuring, and the shift from
manufacturing to service e~nployment. Neve~.theless,globalisation as sucli lias an
impact on labour and labour relations, which lias contributed colisiderably to tlie
significa~itdecline oftrade-union density in general. Only some developing countries
have benefited from globalisation. In many countries, including the advanced
econo~nies,income inequality and poverty lias grow11considerably.

Technological Changcs
Tlie inter-relationship between tecli~iologicalcliange and industrial relations time ant1
again lias been the focus of attention of groups in society. Technology lias an impact
on labour management issues such as manpower, job security, and training
red~~ndancy. All tlie three parties in illdustrial relations are closely concerned with the
effects ofteclinology. Tecli~iologicalchange raises sensitive industrial relations issues,
especially where it involves work intensification, rationalisatio~~ or reductions in
employment. Industrial relations issues, especially relating to employment levels and
work organisatio~~, were seen as important in deciding upon new plant, ~naclii~~ery or
equipment. Technological change affects the work environment and alters the
relatio~ishipbetween tile elnployers and eniployees. It affects labour in two ways,
economic and social. The first category co~lsistsof redundancy, occupational
adjustment, allocation ofgains, and transfer and retraining problems. The second
category includes psychological factors such as resistance to change, job satisfaction,
and worker and u~iionrelations.

Privatisation
Privatisation is one of the major elements of structural adjust~nentprocess taking
place in different parts of the world. It involves co~nplexsocial and labour issues.
Apprehensions about privatisation concern potential loss of present and future jobs.
However, there is not enough evidence to suggest that privatisatio~~ per se destroys
jobs. Tlie trade unions are co~~cerned about privatisation due to fears about job loss
and potential adverse effects on tlie dynamics of trade uilions and their rights.
 Evolution of
2.5 INDUSTRIAL RELATIONS SCENARIO Industrial Relations and
Current Develol~ments
The Second National Commission on Labour 2002 lias made [lie following
observations about tlie industrial relations scenario in India:
1) It is increasingly noticed tliat trade i~nionsdo not normally give a call for strike
becaiise they are afraid tliat a strike may lead to tlie closure oftlie unit.
2) Service sector workers feel they liave become outsiders and are becoming
increasingly disinterested in tracle tunion activities.
3) l'liere is a tl-end to resolve ma-jordispi~testhrough negotiations at bipartite level.
Tlie nature of dispi~tesor demands is changing. Instead ofdernanding higher
wages, allowances or facilities, trade unions now demand job seci~rityand some
are even willing to accept wage cuts or wage freezes in return forjob protection.
Dispi~tesrelating to non-payment ofwages or separation benefits are on the rise.
4) 'L'lie attitilde of tlie Government, especially oftlie Central Government, towards
worlcers and employers seems to have i~ndergonea change. Now, permissions for
closure or retrenchment are more easily granted.
5) The conciliation machinery is more eager to consider problems ofemployers and
today consicler issi~eslike increase in productivity, cost reduction, financial
diffici~ltiesof'tlie employer, co~npetition,marlcet fluctuations, etc. They are also
not too serious in implementing the awards of labour courts awarded long back
alter protracted litigation against cmployers wherein reinstatement or
regulariszition of workers was required.
6) Tlie industrial relations machinery is not pursuing seriously the recovery
proceedings against employzrs who coi11dnot pay heavy dues of workers, if tlie
financial position ofthe employer is very bad.
7) 'fhe laboi~radji~dicationmachinery is more willing to entertain tlie conccrns of
industry.

2.6 ISSUES AND CHALLENGES

1 lie foremost issue lor the intlustrial relations system in India is tliat it has come iuider
?7

pressure to adapt to tlie new environment tliat lias emerged after the introduction of
stn~cturalchanges envisaged i~ndereconomic reforms.
Under the impact ot'restructuring process, the largc-sized firms are downsizing their
activities and shifting tlieir prod~~ctio~l
to other. smaller allied units. As such, tlie
employnient in tlie organised sector is slirinlting and the major share ofadditional
employment is being generatc 1 in the ~~norganisecl sector than in tlie orgaliised sector.
In a decentrnlised sector ol's~nallarrcl medii~msized units and tlie enterprises in tlie
services sectoldandhigh-tech segment there is a wide differential in wage
determination and benefits across tlie industries. Along with tlie wide dispersion of
wages and other beneI<ts,tlie other feature of 1:Iiisdecentraliseci sector is tlie
insecurity. Tlie trend is towarcls increasing casual isation of labour.
i~ne~i~ployrne~it/job
The restructuring process, prodi~ctionreorganisation, and technology changes1
upgradation liave made tlie problems of ~~nemployment of laboi~rmore widespread and
acute. Tlie tl-aclitional industrial relations systelll and its institutions and practices were
most suited to the tasks of protecting ancl promoting 111~interests ofworkers with
secure permanent employment. Tlie challenge for tlie industrial relations sistem lies in
whether tlie new system can provide for any alternative to the traditional system.
Conceptual Framework of Tlie focus of i~id~lstrial
relations has sliifted from the region/industry level to tlie
Employment Relntions
enterprise or even plant level.
111the new productiou context, tlie large-sized firms liave declined and s~iialland
~nedi~~m-sized firms liave increased. Most of these firms remain beyond the purview of
labour legislation and the organisations of labour in these scattered units are weak and
ineffective.

2.7 SUMMARY
Tlie study of modern industrial relations in India can be made in three distinct phases
- first pliase fro111tlie middle oftlie nirleteentli century to the First World War, tlie
second phase fro111the Second World War to tlie attainment of independence, and tlie
last pliase from post-independence era onwards. Tlie various five-year plans stressed
liarmoniot~sempluyer-employee relations for tlie eco~io~iiic development of tlie
country. Tlie economic reforms introduced under libcralisation, privatisation, and
globalisation liave exposed Indian ecolioiny to widespread and co~iipreliensivechanges
to meet tlie onslauglit ofcompetitive forces. The genesis of indnstrial relations in India
shows that the stale started with a 1aissez-f~ii.epolicy, rol lowed it up wit11 protective
labour legislation and paternal adlninistration, actively interfered in the field of
industrial relations treating it as a law and order problem, and subsequently, extended
its control overal~nosttlie entire labour field. While tlie basic contents of the
industrial relations policy lias practically remained unaltered throughout, tlie emphasis
ofcol~rselias changed from one aspect to tlie other, in tlie context of tlie contemporary
social, e c o ~ ~ oic~and
i i political factors.

2.8 SELF-ASSESSMENT QUESTIONS -

I) Give a historical review of industrial relatio~isin India.

2) Wliat are tlie factors responsible for tlie evolutio~iof 4ndian laboi~rpolicy?
3) Wliat are tlie recent developments in the field of industrial relations in India?

2.9 FURTHER READINGS

Gove14nmentof India, The Repurl of the Secoiid N~itionalCon~n~i,s~sion
on Lahottr
2002.
Marnoria, C.B., and Canalcar, S.B., Dynamics of Iildustriol Relatioi7s, I-limalaya
Publishing House, Mumbai, 2000.
 -

LTNTT 3 CONSTITUTIONAL AND LEGAL

FRAMEWO OF INDUSTRIAL
RELATIONS: CONVENTIONS, ID ACT,
TRADE UNION ACT
Objectives
After going tlirougli this unit, you should be able to:
e i~nderstandtlie role of Indian Co~istitutionin evolving labour policy;
e identify tlie impact of internal and external forces 011industrial relations; and
e faliiiliarise with tlie industrial relations related labour laws in India.

Structures
Introduction
Constit~~tional
Framework
Tlie Impact of ILO on Industrial Relations
Role of Law in Industrial Relations
The Trade Unions Act 1926
Tlie Tndi~strialEn~ployme~it
(Standing Orders) Act 1946
The Industrial Disputes Act 1947
Case
Sil~nmary
Self-Assessment Questio~is
Further Readings

3.1 INTRODUCTION
Tlie Constitution of India lias guaranteed some'fundamental riglits to the citizens and
lias also laid down certain directive principles of state policy for tlie achievement of a
social order based on justice, liberty, equality and fraternity. The Constitution amply
provides for tlie up1 ifttnent of labour by guaranteeing certain fundamental ~.iglitsto all.
Article 14 lays dow~ithat the State shall not deny to any person ecluality before the
law or tlie equal protection of laws. Traffic in liunian beings and forced labour, and
the ernploynient of children in factories or ~ n i ~ ior
e sother hazardous work is
prohibited. Tlie directive principles, though not enforceable by any court, are
nevertheless fitndamental in the governance of tlie country, and it shall be tlie duty of
tlie State to apply tliose principles in making laws fro111time to time. The Govern~nent
of India, tlierefore, enacted a series of legislntiolis to protect the working class from
exploitation and to bring about ilnprovement in theirworking and living conditions.
The goals set in our country by tlie Constitution have a bearing 011 industrial
legislatioti and adjudication.

3.2 CONSTITUTIONAL FRAMEWORK

Labour is in tlie concurrent list of the Constitution on which both tlie Centre as well as
the States have tlie power to make laws. Article 254 has been enacted to clarify tlie
position. Nor~nally,as laid down in Clause (I), in case of any repugnancy between the
Union and the State legislation, the legislation of the Union shall prevail.