Read this essay to learn about Industrial Relations. After reading this essay to learn about:- 1. Introduction to Industrial Relations 2. Factors Affecting Industrial Relations 3. Major Parties 4. Measures.

Essay # 1. Introduction to Industrial Relations:

Industrial relations, also called employee relations, labour relations and personnel rela­tions, represent the relationship that exists between the employer and employees in an indus­trial undertaking. If these relations are strained, industrial disputes occur and industrial work suffers. The employers suffer losses, the workers do not get wages and there is shortage of goods and services for community.

Hence, it is in the interest of both the employers and employees as well as for the society in general that industrial relations should be cordial and harmonious.

Industrial relations, is the management aspect which deals with the manpower of the en­terprise. It is essential that Industrial Relations between the employees and employer remain cordial and peaceful. As enterprise can advance only if industrial relations are good. Industrial Relations are the relations between the employees and the management that grows during the employment.


For any industrial relation programme, following are the basic requirements:

(i) To have the support of top management.

(ii) To adopt proper practices.

(iii) To adopt and follow sound personnel policies.


Relationship between individual workers and manager(s) is called personnel relations.

Relations between labour unions and management are called labour relations.

The scope of industrial relations includes:

(i) Promotion and development of healthy labour-management relations.


(ii) Maintenance of industrial peace and avoidance of industrial unrest.

Industrial relations should be cordial as they help in achieving the following benefits:

(i) Industrial peace.

(ii) Encouragement in collective bargaining.


(iii) Fair benefits to workers.

(iv) Higher productivity.


(i) The term industrial relations explain the relationship between employees and management which stems directly or indirectly from union-employer relationship.

(ii) Industrial relations are broadly concerned with the bargaining between employers and trade unions on wages and other terms of employment.


(iii) Industrial relations are an integral aspect of social relations arising out of employer- employee interaction in modern industries.

(iv) Industrial relations are the composite result of the attitudes and approaches of em­ployers and employees to each other.

(v) According to the ILO, industrial relations deal with either the relationships between the state and employers’ and workers’ organisations or the relations between the occupational organisations themselves.

Essay # 2. Factors Affecting Industrial Relations:

Industrial relations are a set of functional interdependence involving historical, economic, social, psychological, demographic, technological, occupational, political, legal and other vari­ables needing an inter-disciplinary approach for their study.


Industrial relations are multi-dimensional in nature and depend upon following factors:

(i) Institutional Factors:

These include such items as state policy, labour laws, voluntary codes, collective agreements, social institutions like community, caste, joint family, creed, sys­tem of beliefs etc. attitudes to work, system of power status, nearness to the centres of power, motivation.

(ii) Economic Factors:

These include economic organisations such as socialist, capitalist, communist, individual ownership, company ownership and government ownership; and the power of labour and employers, and the sources of supply and demand in the labour market.

(iii) Technological Factors:

These factors include the techniques of production, modernisation and rationalisation, capital structure etc.


Sometimes, external factors, such as international relations, global conflicts, dominant socio­political ideologies, and the operations of international bodies also influence industrial rela­tions in a country.

Fundamental principles in governing industrial relations are:

(a) Good labour-management relations develop when employers and trade unions are able to deal their mutual problems freely, independently and responsibly.

(b) Trade unions and employers and their organisations are desirous of resolving their problems through collective bargaining.

(c) The workers’ and employers’ organisations should be desirous of associating with government agencies in considering the general, public, social and economic mea­sures affecting employers’ and workers’ relations.

Essay # 3. Objectives of Industrial Relations:

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


2. To avoid industrial conflicts and develop harmonious relations.

3. To raise productivity.

4. To establish and maintain industrial democracy based on labour partnership in sharing of gains as well as through participating in managerial decisions.

5. To bring down strikes, lockouts and gheraos by providing reasonable wages and fringe benefits to the workers, and improved living conditions.

Industrial Unrest:

Industrial unrest is the result of absence of cordial industrial relations. Strikes, lockouts, demonstrations, picketing, go-slow etc. are the usual consequences of industrial unrest. The relations between the employers and the employees are frequently clouded by a sense of exploi­tation, distrust, and discontent, which give rise to industrial conflicts or disputes.

Some of the symptoms of industrial unrest are high labour turnover, disciplinary problems, absenteeism, low morale, reduction of output etc. Industrial unrest may take either organised or unorganised form.

Industrial Peace:


Industrial peace is an ideal situation for industrial growth and is desirable to establish cordial labour-management relations. The responsibility of creating industrial peace rests with employers, employees and the government. Industrial peace is possible only when all these three parties take suitable steps for maintaining cordial industrial relations. Prompt steps must be taken to remove the causes for disturbing peace immediately when noticed.

Industrial peace means absence of industrial unrest or the existence of harmonious rela­tions between labour and management.

Essay # 4. Major Actors (Parties) in Industrial Relations:

Industrial relations are the complex of interrelations among workers, management and the government.

The roles of these three in industrial relations are discussed hereunder:

(i) Workers and their Organisations:

The personal characteristics of workers, their cul­ture, educational background, skills, attitude towards work etc. play an important role in in­dustrial relations. Workers’ organisations, known as trade unions are political institutions. These are formed for safeguarding the economic and social interests of the workers. These trade unions put pressure on the management for the achievement of these objectives.

(ii) Management:

Management, being employers are a very important variable in indus­trial relations. Management try to regulate the behaviours of the workers for getting high pro­ductivity from them. Industrial unrest generally arises when management demands from the workers are very high and they offer low economic and other benefits.


In order to increase the bargaining power, employers in several industries have formed their associations. These asso­ciations put pressure on the trade unions and the Government. These also serve as a forum to regulate the industrial relations.

(iii) Government:

Government exerts an important influence on industrial relations through regulating wages, bonus and working conditions through various laws relating to labour. The Government keeps an eye on both the trade unions and employers’ organisations to regulate their behaviours in the interest of the nation.

Essay # 5. Measures for Making Good Industrial Relations:

A. Labour-Policy:

Directive principles of labour policy of government is equal pay for equal work, provision for just and human conditions of work, and a living wage to all worker. In early years of industrialisation, labour policy was pre-occupied namely with the organised sectors of the labour source. Growing attention is now being paid to the interest of the workers in unorganised sec­tor.

Following are the important efforts made by the Govt. for making good industrial relations:

1. By Legislations:

Following important legislations affecting labour were made:


i. Minimum Wages Act, 1948

ii. Payment of Wages Act, 1936

iii. Payment of Bonus Act, 1965

iv. Industrial Disputes Act, 1947

v. Workmen’s Compensation Act, 1923

vi. Employees State Insurance Act, 1948


vii. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

viii. Payment of Gratuity Act, 1972

ix. Factories Act, 1948.

2. Other Welfare Measures:

(a) Work Committees:

These are set up in industrial establishment employing 100 or more workers, and comprise equal number of representatives of employers and workmen and aim at promoting measures for securing and preserving amity and good relations.

(b) Workers Participation in Management:

Govt. introduced a voluntary scheme in 1965 for workers participation in management in manufacturing and mining industries em­ploying 500 or more workers. In 1977, another scheme for workers participation in commercial and service organisations, employing 100 or more persons, was also introduced for public sector.

(c) Workers Education:

The Central Board for Workers Education was set up in 1958 for organising educational programmes, which includes the integrated education about the coun­try, their industry, the philosophy and management of trade unions, industrial relations, com­munal harmony, ways and means for improving quality of their lives and their upliftment, sense of their duties and social responsibilities while making them aware of their rights.

(d) Social Security:

A feeling of social security is introduced by means of following legisla­tions:

(i) Workmen’s Compensation Act was passed in 1923 providing for the payment of compensation to the workmen and their families in case of industrial accidents, and of certain occupational diseases arising out of and in the course of employment and resulting in death or disablement whether temporary or permanent.

(ii) The Maternity Benefit Act 1961 regulates the employment of workmen before and after the child birth and provides for maternity and other benefits.

(iii) Employees State Insurance Act 1948 provides for medical care in kind and cash, employment injury, and pension for dependents on the death of a worker because of injury.

(iv) Employees Provident Funds and Miscellaneous Provisions Act 1952, made available the retirement benefits to the employees.

(v) Gratuity Act 1972, entitles the employees the payment of gratuity at the rate of 15 days wages for each completed year of service.

(vi) Factories Act 1948 provides various facilities for the workers regarding conditions welfare, and safety.

B. Workers’ Grievances:

Individual employees, many times, have some or the other complaints, called grievances, against the working rules or decisions in an organisation. It is necessary that there should be some system to remove these grievances, otherwise the employees will have a feeling that management does not look into their problems and difficulties, which is very harmful for attain­ing good industrial relations.

As distrust and dissatisfaction in the minds of employees will result in inefficiency and lack of coordination. A grievance redressal system is, therefore, essen­tial to remove the feeling of discontentment or dissatisfaction.

A good grievance redressal procedure is one which is:

(i) Adequate and effective,

(ii) Simple to understand and operate,

(iii) Prompt, and

(iv) Permit to appeal.

C. Suggestion System:

Use of suggestion system is most successful bridges between plant improvement efforts and good industrial relations. Suggestion systems tape the tremendous store of ideas for the perfor­mance improvement, which otherwise lying in the minds of the employees.

Most employees feel satisfied by volunteering their ideas but they feel reluctant. Therefore, it is necessary to set up a suitable suggestion system so that employees can give way to their feelings, ideas and valu­able suggestions. Most companies give awards for valuable and useful suggestions.

This not only enables management to receive ideas for improving the efficiency, but reduces the complaints and enhances the morale of the employees.