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DISPUTE RESOLUTION

& INDUSTRIAL
RELATIONS
Roll No. 54 142 (Section A)

AGENDA

IR An Overview
Dispute Resolution
Dispute Resolution Strategies
Parties Involved
Dispute Resolution Act
Recommendations

IR AN OVERVIEW

INDUSTRIAL RELATIONS: WHAT AND WHY?

The relationship between Employer and employee or trade


unions

Necessary for both employers and employees to safeguard


the interests of the both the parties of the production

Main functions of every organization is to avoid any dispute


or settle it as early as possible so as to ensure industrial
peace and higher productivity

Characterized by:

Presence of two parties, i.e. labor and management

Conflict and Co-operations

Also includes vital environment issues like technology of the


workplace,
countrys
socio-economic
and
political
environment, nations labor policy, attitude of trade unions
workers and employers.

DEFINITION

Industrial Relation is that part of management which is


concerned with the manpower of the enterprise whether
machine operator, skilled worker or manager

Industrial Relation is a relation between employer and


employees, employees and employees, employees and trade
unions. - Industrial dispute Act 1947

Process by which people and their organizations interact at the


place of work to establish the terms and conditions of
employment.

The Industrial Relation is also called as labor-management,


employee-employers relations

Labor
Relations
Employeremployees
relations

Developmen
t of true
industrial
Democracy.

Maintenanc
e of
industrial
peace and
avoidance
of industrial
strife

Main
aspects
of
Industri
al
Relation
s
Promotions
and
developmen
t of healthy
labormanagemen
ts relations

Community
or Public
relations

Group
relations

EFFECTS OF POOR INDUSTRIAL


RELATIONS
Poor Industrial Relation produces highly disquieting effects on the economic life of
the country.

Multiplier effects: Although the direct loss caused due to industrial conflict may
not be very great, the total loss caused due to its multipliers effect on the total
economy is always very great

Fall in normal tempo: Costs build up. Absenteeism and labor turnover increase.
Plants discipline breaks down and both the quality and quality of production suffer

Resistance of change : Dynamic industrial situation calls for change more or


less continuously. Methods have to be improved. Economics have to be
introduced. New products have to be designed, produced and put in the market.
Each of these tasks involves a whole chain of changes and this is resisted bitterly
if there are industrial conflict.

Frustration and social cost : Every man comes to the work place not only to
earn a living. He wants to satisfy his social and egoistic needs also. Poor Industrial
Relations take a heavy toll in terms of human frustration. They reduce cordiality
and aggravate social tension.

SUGGESTIONS TO IMPROVE INDUSTRIAL


RELATION
Management gets the union it deserves

Both management and unions should develop constructive attitudes towards


each other

There should be CLARITY of all basic policies and procedures relating to


Industrial Relation to everybody in the organization and to the union leader

The personnel manager must make certain that line people will understand and agree with
these policies
The personnel manager should remove any distrust by convincing the union of the companys
integrity and his own sincerity and honesty
Suspicious, rumors and doubts should all be put to rest

The personnel manager should not vie with the union to gain workers
confidence

Management should encourage right kind of union leadership

While it is not for the management to interfere with union activities, or choose the union
leadership, its action and attitude will go a long way towards developing the right kind of
union leadership

IMPORTANCE OF INDUSTRIAL RELATIONS

Uninterrupted production

Continuous employment for all from manager to workers

The resources are fully utilized, resulting in the maximum possible production

There is uninterrupted flow of income for all

Reduction in Industrial Disputes

Strikes, lockouts, go-slow tactics, gherao and grievances

High morale

Feeling in mind that the interest of employer and employees is one and the same, i.e.
to increase production

Every worker feels that he is a co-owner of the gains of industry

Complete unity of thought and action is the main achievement of industrial peace

IMPORTANCE OF INDUSTRIAL RELATIONS

Mental Revolution

Employee and employer should think themselves as partners of the industry

Role of workers in such a partnership should be recognized

Workers must recognize employers authority

New Programs

such as training facilities, labor welfare facilities etc. increases the efficiency
of workers resulting in higher and better production at lower costs.

Reduced Wastage

Wastages of man, material and machines are reduced to the minimum and
thus national interest is protected

INDUSTRIAL RELATIONS VS HUMAN RELATIONS

Industrial Relations

Human Relations

between employer &


employee in an industry

Personal management policy


for developing sense of
belongingness in
employees/workers

Matters regulated by law or


collective agreement

Personal problems handled


based on morale & social
elements

Dealt with 3 levels:


Undertaking, industry &
national

Personal philosophy
approach

More wide and


comprehensive

A part of IR

SCOPE OF INDUSTRIAL RELATIONS WORK


The industrial relations director generally has several assistants who help him to perform his
functions effectively, and he usually reports directly to the president or chairman of the
board of directors of an organization.
1. Administration, including overall organization, supervision and co-ordination of industrial
relations policies and programmes.
2. Liaison with outside groups and personnel departments as well as with various cadres of
the management staff.
3. The drafting of regulations, rules, laws or orders and their construction and interpretation.
4. Position classification, including overall direction of job analysis, salary and wage
administration, wage survey and pay schedules.
5. Recruitment and employment of workers and other staff.
6. Employment testing, including intelligence tests, mechanical aptitude tests and
achievement tests.
7. Placement, including induction and assignment.
8. Training of apprentices, production workers, foremen and executives.

SCOPE OF INDUSTRIAL RELATIONS WORK


9. Employee counseling on all types of personnel problemseducational, vocational, health or behavior problems.
10. Medical and health services.
11. Safety services, including first aid training.
12. Group activities, including group health insurance, housing,
cafeterial programmes and social clubs.
13. Suggestion plans and their uses in labor, management and
production committees.
14. Employee relations, specially collective bargaining with
representatives and settling grievances.
15. Public relations.

Dispute resolution
Preventive measures should be taken to avoid disputes.
If and when they arise, however, every effort is required to settle
them as early as possible so that they do not lead to work
stoppage. The machinery for settlement of industrial disputes has
been provided under the Industrial Disputes Act, 1947.
The machinery comprises:
1.

Conciliation

2.

Arbitration

3.

Adjudication

COLLECTIVE BARGAINING

Good faith negotiations between


management and labour representatives
on work terms
Direct interaction without third party
involvement
Ideal method for dispute resolution

CONCILIATION/MEDIATION

Impartial third party helps the two parties to reach a mutually


acceptable settlement.
Conciliator assists the parties involved in their negotiations by
removing bottlenecks in communication between them.
He meets parties to exchange information, clarify issues, and settle
misunderstandings.
Conciliation machinery as provided under the Industrial Disputes Act
are:
Conciliation Officers: Appointed by govt., enjoys powers of civil court.
Examines all facts, then gives his judgment.
Board of Conciliation: Appointed by Govt. should the officer fail to
resolve dispute within 14 days. Ad hoc body comprising a chairman, 2
to 4 members nominated by the parties involved
Court of Inquiry: Expected to solve issues within 6 months
Inefficiency of Conciliation machinery attributed largely to the
inefficient conciliation officer (lack of education/experience), and lack
of interest and initiative from parties

ARBITRATION

Voluntary Arbitration legalised in 1956 after amendement to the


Industrial Disputes Act, 1947
VA refers to getting disputes settled through an independent
chosen by parties involved mutually and voluntarily
Decreases the lengthy legal proceedings and formalities
Arbitrator derives all his powers from the agreement between
involved parties
Causes for failure of VA:

Lack of arbitrators who command the confidence of the parties to the


disputes.

Law provides no appeal against the award given by arbitrator.

Easy availability of adjudication on the failure of negotiation or


conciliation.

The absence of a simplified procedure to be followed in VA.

ADJUDICATION

If conciliation doesnt work, there is a three tier adjudication system.

Process which involves intervention in the dispute by a third party


appointed by government with or without the parties consent.

The tiers are

labour courts: Disputes related to legality of owners orders, illegality of lockouts/strikes, discharge and dismissal of workmen and grant of relief to them.

Industrial Tribunals: Deals with issues like wages including the period and mode of
payment, hours of work and rest intervals, allowances, leave with wages, rules of
discipline

National tribunals disputes which involve the questions of national importance

Employers and unions use arbitration as a primary measure of resolving


disputes.

About 90-95% of disputes are referred to adjudication machinery annually.

The adjudication machinery is inefficient, more than 50-60 % cases are


decided in more than a year.

PARTIES INVOLVED

Three main parties are directly involved in industrial


relations:

1.
2.
3.

Employers
Employees and Trade Unions
Government

Employers:Employers possess certain rights vis--vis labors.


They have the right to hire and fire them. Management can
also affect workers interests by exercising their right to
relocate, close or merge the factory or to introduce
technological changes.

PARTIES INVOLVED

Employees and Trade Unions :Workers seek


to improve the terms and conditions of their
employment. They exchange views with
management and voice their grievances. Workers
generally unite to form unions against the
management and get support from these unions.

Government:The central and state government


influences and regulates industrial relations
through laws, rules, agreements, awards of court
ad the like. It also includes third parties and labor
and tribunal courts.

PARTIES INVOLVED

INDUSTRIAL DISPUTE
ACT

INDUSTRIAL DISPUTE ACT


Act No. 14 of 1947 - enacted on 1st April, 1947
An Act to make provision for the investigation and settlement of
industrial disputes, and for certain other purposes
Industry means any systematic activity carried on by co-operation
between an employer and his workmen (direct or indirect) for the
production, supply or distribution of goods or services with a view to
satisfy human wants or wishes, whether or not any capital has been
invested or such activity is carried on with a motive to make any profit
or gain
It does not include:
1. Any agricultural operation except if it is done in integrated manner
2. Hospitals or dispensaries,
3. Educational, research, scientific or training institutions
4. Organizations for charitable, social or philanthropic services etc.
5. Khadi or village industries, any domestic service
6. Departments of central government dealing with defense research,
space and atomic energy etc, and few others

INDUSTRIAL DISPUTE ACT


Industrial Dispute means any dispute or difference between
a. employers and employers or
b. employers and workmen, or
c. workmen and workmen
which is connected with the employment or non- employment or the
terms of employment or with the conditions of labour, of any person;
Industrial establishment or undertaking means an establishment
or undertaking in which any industry is carried on.

INDUSTRIAL DISPUTE ACT


AUTHORITIES UNDER THE ACT
1. Works Committee :
a. Any industrial establishment in which one hundred or more
workmen are employed
b. Representatives of workmen on the Committee shall not be less than
the number of representatives of the employer
c. Representatives of the workmen shall be chosen in the prescribed
manner from among the workmen engaged in the establishment and
in consultation with their trade union
2. Conciliation Officer
a. Appointed by government with the duty of mediating in and
promoting the settlement of industrial disputes
b. May be appointed for a specified area or for specified industries in a
specified area or for one or more specified industries and either
permanently or for a limited period
3. Boards of Conciliation
a. Constituted by the appropriate government
b. Consist of a chairman and two or four other members

INDUSTRIAL DISPUTE ACT


4. Courts of Enquiry
a. Constituted by the appropriate government
b. For inquiring into any matter appearing to be connected
with or relevant to an industrial dispute
5. Labour Courts
a. The appropriate government may constitute one or more
labour courts for the adjudication of industrial disputes
specified in the Second Schedule
b. A Labour Court shall consist of one person only
c. He is, or has been, a Judge of a High Court or he has, for a
period of not less than three years, been a District Judge or an
Additional District Judge, etc.
6. Tribunals and National Tribunals
a. For the adjudication of industrial disputes relating to any
matter, whether specified in the Second Schedule or the
Third Schedule
b. A Tribunal shall consist of one person only

INDUSTRIAL DISPUTE ACT


Other Provisions:
1. Notice for Change: For change in the conditions of service
applicable to any workman in respect of any matter specified
in the Fourth Schedule
2. Setting up of Grievance Settlement Authorities and reference
of certain individual disputes to such authorities : every
industrial establishment in which fifty or more workmen are
employed or have been employed on any day in the preceding
twelve months
3. Reference of disputes to Boards, Courts or Tribunals:
Decided by appropriate government
4. Voluntary reference of disputes to arbitration: The
employer and the workmen agree to refer the dispute to
arbitration before the dispute has been referred under section
10 to a Labour Court or Tribunal or National Tribunal, by a written
agreement refer the dispute to arbitration

INDUSTRIAL DISPUTE ACT


1. It lays down the Procedure, powers and duties of authorities
2. Form of report or award and Publication of reports and awards
3. Commencement of the award: An award (including an
arbitration award) shall become enforceable on the expiry of
thirty days from the date of its publication under section 17
4. Payment of full wages to workman pending proceedings in higher
courts
5. Persons on whom settlements and awards are binding
6. Period of operation of settlements and awards
7. Commencement and conclusion of proceedings
8. Certain matters to be kept confidential

INDUSTRIAL DISPUTE ACT


STRIKES AND LOCK-OUTS
Prohibition of strikes and lock-outs:
1. No person employed in a public utility service shall go on strike in
breach of contract without giving to the employer notice of strike
within six weeks before striking or within fourteen days of giving
such notice
2. No employer carrying on any public utility service shall lock-out
any of his workmen without giving them notice of lock-out as
hereinafter provided, within six weeks before locking out or within
fourteen days of giving such notice
Illegal strikes and lock-outs:
1. Commenced or declared in contravention of section 22 or section
23 or
2. It is continued in contravention of an order made under subsection

INDUSTRIAL DISPUTE ACT


LAY-OFF AND RETRENCHMENT
1.
2.
3.
4.
5.
6.
7.
8.
9.

Right of workmen laid-off for compensation


Duty of an employer to maintain muster rolls of workmen
Workmen not entitled to compensation in certain cases
Conditions precedent to retrenchment of workmen- one month's
notice in writing indicating the reasons for retrenchment
Compensation to workmen in case of transfer of undertakings
Compensation to workmen in case of closing down of undertakings
Procedure for retrenchment
Re-employment of retrenched workmen
Penalty for closure

INDUSTRIAL DISPUTE ACT


UNFAIR LABOUR PRACTICES
1. Prohibition of unfair labour practice
2. Penalty for committing unfair labour practices: punishable with
imprisonment for a term which may extend to six months or
with fine which may extend to one thousand rupees or with both
PENALTIES
3. Penalty for illegal strikes and lock-outs: imprisonment for 1
month, fine Rs. 50
4. Penalty for instigation, etc: imprisonment for 6 months, fine Rs.
1000
5. Penalty for giving financial aid to illegal strikes and lock-outs
6. Penalty for breach of settlement or award
7. Penalty for disclosing confidential information
8. Penalty for closure without notice
9. Penalty for other offences

INDUSTRIAL DISPUTE ACT


MISCELLANEOUS
1. Offence by companies, etc
2. Power to transfer certain proceedings
3. Recovery of money due from an employer
4. Cognizance of offences
5. Protection of persons
6. Representation of parties
7. Power to remove difficulties
8. Power to exempt
9. Protection of action taken under the Act
10.Power to make rules
11.Delegation of powers
12.Power to amend Schedules

RECOMMENDATIONS

RECOMMENDATIONS:
PREVENTIONS OF INDUSTRIAL UNREST
Management Must Show Sensitivity Towards
Cultural Issues
Health Issues
Compensation

Management may also


Pre Screen Workers
Carry Out Background Checks

PREVENTION OF
INDUSTRIAL UNREST
Preparing A Mechanism for redressal Of Grievances
Mechanism Of Interacting with the workers on a
large scale
Ensuring that minor problems are resolved swiftly
Negotiations must be aimed at conflict resolution
and prevention
Management must follow progressive HR policies.

STRATEGIES DURING
INDUSTRIAL UNREST
Main Objective:

Protecting yourself.
Protecting your employees
Protection of your assets
Continuity of Business

Security Strategy:
Hire a security agency or highly trained professionals
which:
Blend seamlessly into your environment
Protect property by taking effective measure
Protect mobile assets like trucks and other movable
items
Helps in command and control of different operations
Helps in investigation and collection of evidence

STRATEGIES DURING
INDUSTRIAL UNREST
Other Actions required:

Try to get involve in the dialogue do not give up


Lookout for outside consultation
Start looking for alternatives w.r.t operations and workforce
Look for appropriate opportunity to make announcements
In every action try to be proactive not reactive
Build the contingency plans
Avoid situations which further fuel up the issues

STRATEGIES POST INDUSTRIAL UNREST

STRATEGIES POST INDUSTRIAL


UNREST
Address the media
- Take responsibility
- State facts of the unrest
- Engage the Social Media
- Rebuild the companys image
- Focus on the bigger picture
http://www.youtube.com/watch?v=9Rybzwx_8pM&feature=fvw
rel

ADDRESS
STAKEHOLDERS/EMPLOYEES
Handle misconduct and grievance matters
Render labour relations advice
Promote training regarding the same
Formulate, evaluate and monitor policy and procedures
Do research regarding labour relations matters
Represent the employer in collective bargaining forums
Facilitate and coordinate dispute resolution procedures of the
bargaining council
Implement and monitor the application of collective
arrangements

REVAMP THE HR POLICIES

Develop and implement relevant policies and


strategies
Provide legal advice and direction on labour
related issues
Provide legal opinions on all labour related
issues
Provide training and development on labour
related issues

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