Causes of Industrial Disputes

Everything you need to know about the causes of industrial disputes. Despite various efforts made and measures tak­en to maintain industrial peace, complete harmo­ny in industrial relations has nowhere been achieved.

It is not easy to identify a single factor as a cause of industrial conflicts as multifarious causes blended together result in industrial disputes.

The causes of industrial disputes are in­herent in human psychology and can never be com­pletely removed. So, all attempts are made to mitigate the causes of disputes.

Disputes or unrest had always been in the industrial world, they are existing and they will continue to exist but the ef­forts are always on to minimise the incidence of disputes and the causes thereof, so that industries may flourish in a congenial atmosphere. Industrial disputes have become the “concomitant of the present-day industrial sys­tem”

Some of the causes of industrial disputes are:-

1. Industrial Factors 2. Management Attitude towards Labour 3. Government Machinery 4. Economic Causes 5. Social Causes 6. Personal Causes 7. Management Practices 8. Trade Union Practices 9. Legal and Political Factors.

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Causes of Industrial Disputes

Causes of Industrial Disputes – Industrial Factors, Management Attitude towards Labour, Government Machinery and Other Causes

It is not easy to identify a single factor as a cause of industrial conflicts as multifarious causes blended together result in industrial disputes. Deep seated and more basic causes of disputes can be identified through in depth probe, though surface manifestations appear to be responsible for conflicts. The relative importance of these causes, when more than one present, is often very difficult to gauge.

According to Mukherjee, “the development of capitalistic enterprise, which means the control of the tools of production by small entrepreneur class has brought to the fore the acute problem of friction between management and labour throughout the world.”

Causes of industrial conflicts may be grouped into three categories, viz.:

1. Industrial factors;

2. Management’s attitude towards workers;

3. Government machinery

Cause # 1. Industrial Factors:

Under this category, some of the causes of a dispute may be:

(i) An industrial matter relating to employment, work, wages, hours of work, privileges, the rights and obligations of employees and employers, terms and conditions of employment including matters pertaining to-

(a) Dismissal or non-employment of any person;

(b) Registered agreement, settlement or award; and

(c) Demarcation of the functions of an employee.

(ii) An industrial dispute which connotes any difference which has been fairly defined as is of real substances; i.e., a matter in which both parties are directly and substantially interested; or which is a grievance on the part of a worker which the employer is in a position to redress; or which is such as the parties are capable of settling between themselves or referring it to a adjudication.

(iii) Disputes often arise because of unemployment, inflation, change in the attitude of employers and rivalry among unions.

Cause # 2. Management Attitude towards Labour:

(i) Management generally is not willing to talk over any dispute with their employees or their representatives or refer it to ‘arbitration’ even when trade unions want them to do so. This enrages the workers.

(ii) A management’s unwillingness to recognise a particular trade union and the dilatory tactics to which it resorts while verifying the representative character of any trade union have been a very fruitful source of industrial strikes.

(iii) Even when representative trade unions have been recognised by employers, they do not, in a number of cases, delegate enough authority to their officials to negotiate with their workers, even though the representatives of labour are willing to commit themselves to a particular settlement.

(iv) When, during negotiations for the settlement of a dispute, the representatives of employers unnecessarily and unjustifiably take the side of the management, tensions are created, which often lead to strikes, go-slow or lock-outs.

(v) The management’s insistence that they alone are responsible for recruitment, promotion, transfer, merit awards, etc., and that they need not consult their employees in regard to any of these matters, generally annoys the workers, who become non-cooperative and unhelpful and often resort to strikes.

(vi) The services and benefits offered by a management to its employees do promote harmonious employer-worker relations. But a large number of managements have not taken any steps to provide these benefits and services for their workers.

Cause # 3. Government Machinery:

(i) Though there is a plethora of enactments for promotion of harmonious relations, yet it is ineffective and unsatisfactory in most cases due to-

(a) Their irrelevancy in the context of the challenges of present industrial climate/culture, as many has not been convinced of their utility satisfactorily;

(b) Incapability of understanding and answering imperatives of development;

(c) Improper and inadequate implementation by many employers.

(ii) The Government’s conciliation machinery has settled a very negligible number of disputes because-

(a) Both employers and employees have very little confidence in it;

(b) Both have become litigation-minded;

(c) It is inadequate, for the number of disputes referred to it is very large and the personnel dealing with them is hopelessly inadequate, particularly because, in addition to labour disputes, it is called upon to see to it that labour laws are properly implemented; and

(d) The officers associated with conciliation proceedings have very little training in handling the problems or disputes which are referred to them.

Other Causes:

Among these the following may be included:

(i) Affiliation of the trade unions with a political party. Each political party, therefore, somehow, “engineers” strikes, gheraos and bandhs to demonstrate its political strength. Invariably, the political party which is in power favours that trade union organisation which is affiliated to it. 

(ii) Political instability, Centre-State relations, general responsibility or all fronts are reflected in industry resulting in industrial conflict.

(iii) Other potential factors, such rampant corruption in industry and public life, easy money, conspicuous consumption, permissive society, character crisis and general break-down in the national morale have brought in their train debasement of social values and social norms — all these can and have perpetuated all kinds of unrest, including industrial unrest.”

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Causes of Industrial Disputes

Despite various efforts made and measures tak­en to maintain industrial peace, complete harmo­ny in industrial relations has nowhere been achieved. The causes of industrial disputes are in­herent in human psychology and can never be com­pletely removed. So, all attempts are made to mitigate the causes of disputes.

Complete absence of industrial disputes can be a theoretical concept but not a practical proposition. Disputes or unrest had always been in the industrial world, they are existing and they will continue to exist but the ef­forts are always on to minimise the incidence of disputes and the causes thereof, so that industries may flourish in a congenial atmosphere.

As a mat­ter of fact, industrial disputes have become the “concomitant of the present-day industrial sys­tem”. Feeling of oneness between the employers and the workers is simply an ideal which is yet to be attained. In practice, neither the employers are treating the workers well nor are the workers working with zeal and co-operating with them.

As a result, strikes, lockouts, go-slow tactics etc., have become the rule of the day. Industrial unrest is generally regarded as “such a degree of dissatis­faction and personal dis-organisation as to cause se­rious deviations from normal, habitual pattern of conduct”. As a consequence of industrial disputes, individuals become so disturbed and frustrated that the patterns of behaviour usually accepted and uncritically followed appear unsatisfying.

In­dustrial unrest is not only individual but social in nature in so far as it is communicated from one in­dividual to another. Strikes and lockouts have come to stay almost permanently in the industrial set-up of the day. “They are symptoms of industri­al unrest in the same way that boils are symptoms of a disordered system” (S. H. Patterson).

Employee grievances give rise to industrial dis­putes. These grievances may be economic, social or personal in nature. However, the causes of dis­putes may be broadly classified into four groups – (a) wages, allowances and bonus, (b) personnel and retrenchment (c) leave and hours of work and (d) other causes.

Out of these reasons, the economic reasons are most important. It is generally for bet­ter economic benefits that disputes between the employer and the employees arise. The workers feel that they are being paid less than that to which they are entitled, whereas the employer feels that he is paying more than what is legitimately due to the workers.

This situation is a clear indication of mutual distrust which in spite of best efforts could not be removed, rather the in­cidence of mutual distrust has increased. It has been observed that the “root cause of the labour unrest can be traced directly to the failure of the Government in evolving a definite wage policy and in stabilising prices at a point which would maintain cost of living and employment at a par­ticular level”.

Another important cause is personnel and retrenchment. Workers go on strike due to dismissal, suspension, retrenchment and vic­timisation. The personnel problems involve indi­vidual and social wants of workers. The sense of insecurity among the workers leads to strikes. Due to this fact, there is “lack of an atmosphere of ap­proval, praise and recognition”. This unwanted factor of employee grievance is becoming more and more, important.

The terms of employment, such as leave and hours of work, may be the cause of disputes. The workers resort to strike to get the hours of work re­duced. Sometimes, disputes may arise because of not declaring holiday on some religious occasion. The refusal of leave by the employer may also lead to disputes. The workers may call for a strike to get the proper leave rules framed. The average percentage of disputes due to these reasons is not so significant.

There are several other reasons leading to dis­putes, no matter whether they are important or not. When the interests of the parties – the em­ployees and the employer – are exactly opposite, there may be thousand and one reasons for disputes and it is very difficult to name them.

Now-a- days, political considerations are playing signifi­cant role in industrial disputes. It happens as most of the labour leaders have political affiliations and they use their workers for political ends. There may also be reasons like police atrocities on workers, sympathy for workers’ struggles else­where etc. These other causes are very important and about one-fourth of total disputes takes place for these ‘other reasons’.

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Causes of Industrial Disputes – Economic Factors, Management Practices, Trade Union Practices, Legal and Political Factors

The causes of industrial disputes are many and varied and sometimes even trivial. Further, the perception about the causes of industrial disputes differs among different groups of people. While management attributes the causes to the uncooperative and negative approaches of trade unions and political interference, trade unions find causes in terms of high-handed and unfair labour practices adopted by the management. Politicians blame both management and trade unions according to their own convenience.

We find a long list of causes of industrial disputes and we have to categorize them into some groups so that suitable strategies are adopted for the prevention of disputes or their settlement. In USA, all issues leading to industrial disputes are grouped into two categories- disputes concerning interests and disputes concerning rights.

Disputes concerning interests relate to those issues which are raised by the workmen to create new or enhanced benefits such as general upward wage revision, increased benefits, etc.

Disputes concerning rights relate to those issues which are raised by the workmen to properly enforce, implement, or honour an already established rights or benefits. Various causes of industrial disputes may be grouped into four categories- economic factors, management practices, trade union practices, and legal and political factors.

Cause # 1. Economic Factors:

Economic factors in terms of direct compensation, incentive system, benefits, and investment for creating good working conditions are the major causes of industrial disputes.

i. Wages:

Most often, pressure from workers for upward revision of wages becomes the bone of contention between labour and management. This becomes the more crucial issue because of the wage differentials along industrial sectors, regional levels, and geographical levels. Workers in an industrial sector compare their earnings with fellow workers in other industrial sectors and any wage differential is treated as unfair.

Wage differentials prevailing at different plants of a company, generally, create much more disputes as compared to other differentials. For example, the basic reason of industrial dispute which led to violence and lock-out at Lucknow plant of Tata Motors has been the demand for parity of wages prevailing in other plants of the company.

ii. Incentives:

Besides wages, incentives also become issue of dispute between labour and management. Incentive system becomes source of disputes because of three reasons.

First, workers may perceive that incentives are not adequate in comparison to the company’s profit which is generated through their efforts.

Second, even if incentives may be considered adequate, there may be dispute over the issue of linking incentives and performance.

Third, there may be protest from workers and unions about how incentives are calculated. In fact, trade unions have not accepted the contention of the management that the profit of a company should be taken as stated in its annual reports. They disagree over the treatment of various expenses in the books of account.

iii. Benefits:

Various types of benefits, both statutory and voluntary, are provided by organizations to their employees. Such factors as leave with wages, medical benefits, pension and other fund benefits, facilities for subsidized services to employees and their dependents, etc. often, create dissatisfaction among workers and disputes between labour and management.

iv. Working Conditions:

Working conditions including physical facilities and physical work environment create tension in workers if they are not up to the prescribed standards. Many organizations do not care to provide even the prescribed minimum physical facilities such as light, ventilation, safety devices, pollution control devices, and physical facilities which a normal individual requires at the workplace.

In fact, at many places, the working conditions are so poor that these can be termed as inhuman. Along with these working conditions, work schedule, hours of work, shift system, etc. cause industrial disputes.

Cause # 2. Management Practices:

Various management practices relating to employees which are not in accordance with the legal requirements or which are discriminatory to employees are sources of disputes. Such practices may be in the form of unfair labour practices, ineffective supervision, and violation of acceptable norms prevailing in the industry.

i. Unfair Labour Practices:

There are many labour practices adopted by management which may lead to industrial disputes.

Those are:

(a) Interference or threat of use of coercion in exercising the rights of workers to organize trade union activities according to the legal provisions.

(b) To force the workers to join a particular trade union or refraining from joining a trade union.

(c) To discharge or dismiss workmen by way of victimization, discrimination, or any other subjective ground.

(d) To assign a work to individual workers for which they have not been hired and trained.

(e) To put workers on temporary basis for unduly long period so as to deprive them from benefits available to permanent workers.

(f) To harass workers to accept any responsibility which does not come within the purview of their activities.

ii. Ineffective Supervision:

Workers deal directly with front-line supervisors in the course of their day-to-day job performance. If these supervisors are not effective and well-behaved, they treat the workers inhumanely by adopting the age-old master-servant relationships.

If the working climate of the organization is quite authoritarian, the workers may not be able to voice their grievances which suggest that everything is good on industrial relations front but the situation may become explosive as the days pass leading to acute industrial dispute.

iii. Violation of Acceptable Norms:

There may be many situations in which management violates acceptable norms in practice though such norms exist on the papers in the organization. Various such norms may be in the form of Code of Discipline, grievance procedure, agreements entered into between labour and management, discrimination in giving promotion and providing training, etc.

Cause # 3. Trade Union Practices:

Besides the management practices, there are many trade union practices which lead to emergence of industrial disputes. Such practices may be grouped into two categories- union rivalry and non-cooperative approach.

i. Union Rivalry:

There is problem of multiplicity of trade unions in India. In many organizations, more than one union exists; in some cases more than four. In such a case, each union claims to further the cause of workers so as to attract them to its fold.

The result is that any settlement arrived at between management and a union is opposed by other unions irrespective of the most favourable conditions for the workers in the given situation. Such a rivalry among unions leads to violence and other similar problems and the disputes become natural outcomes.

ii. Non-Cooperative Approach:

Many trade unions and their leaders proceed on the assumption that ‘what they do is right and what management does is wrong’. Such a tendency on the part of trade unions makes them to adopt non-cooperative approach and they oppose all settlements. For example, Ramaswamy has observed that “CITU follows a pristine model of trade unionism drawn from the theory of class conflict. The communists love to fight, but hate to win. Victory for them appears to be defeat. The general secretary of CITU had an answer to the accusation that they never signed a settlement- ‘When we start discussion, we know what is a fair settlement. Others may be willing to accept unfair terms, but we cannot. We are also opposed to long-term settlements. Our position is that no settlement should be for more than three years’. In point of fact, the communists have managed to maintain their lily- white image by refusing to sign any settlement for fifteen long years.”

Cause # 4. Legal and Political Factors:

There are many legal and political factors which unnecessarily interfere in the industrial relations system of an organization or in industry as a whole. These factors may be grouped into two categories- multiplicity of labour laws and political interference in industrial relations system.

i. Multiplicity of Labour Laws:

Labour laws in any country are enacted to create better industrial relations. However, existence of multiple labour laws creates more confusions and litigations in the guise of their being comprehensive. In India, there are two types of problems in this respect. First, there are many legal Acts and guidelines, totaling 108, to regulate industrial relations.

The inherent contradictions among these laws exist. Industrial relations departments of many organizations as well as trade unions remain busy to identify the legal lacuna to use this in their favour.

Second, most of the labour laws have been enacted long back and many of them even before the independence. Constitution of India, adopted in 1950, has had many amendments but the labour laws have remained untouched. Some attempts for amending various Acts were made in the past but the attempts could not proceed beyond the preparation of relevant bills.

Since the time, various labour laws have been enacted, the scenario has changed, attitudes of both labour and management have changed, and international human resource management practices have changed. In the changed scenario, these labour laws have outlived their utility to a very great extent; they have become source of industrial disputes.

ii. Political Interference:

Political interference in the industrial relations system also contributes in the emergence of industrial disputes. Political interference is through the politicization of trade union activities or direct interference of political parties and their workers. With the degrading of political system, emergence of mushrooming growth of political parties, and lack of values often put pressure on management or trade unions to involve in activities which are not conducive to good industrial relations and lead to industrial disputes.

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