Chapte R: Evolution of Industrial Relations in India

PART- I
CH-2 Evolution of Industrial Relations in India
CHAPTE
R
2
Evolution of
Industrial Relations in India
Copyright © 2008, B D Singh
2– 1 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

PART- I
Industrial Relations in India Prior to British Raj

India was predominantly a pastoral and agrarian economy during ancient and
medieval times. Trade and business were few and far between. Manual services
formed the third rung of organisational occupation. A large number of
occupations were carried on by small manufacturers in their cottages, mostly on
hereditary basis. Slavery and serfdom were common. The Employer-Employee
relations were those of master and slave and, later on, of those of master and
servant. Ancient scriptures and laws of our country laid emphasis on the
promotion and maintenance of peaceful relations between capital and labour.
From very early times, craftsmen and workers felt the necessity of being united.
The commercial character of the East India Company did not change the
conditions of workers. After the abolition of the monopoly of the East India
company in 1883, the British Industrialists and merchants were able to develop
some industries (Cotton, Jute, Railways, Plantation, Coal-mines etc.) and trade
in India. Cont….

PART- I
Industrial Relations during Colonial period

Industrial relations is a by-product of Industrial Revolution and it owes its origin
from excessive exploitation of workers by the owners of industries. The
relationship was that of two unequals-the powerful employers and powerless
workers.
Many events happened which accelerated the pace of industrial relations during
the period:-
 The success of Russian Revolution in 1917
 Establishment of ILO (1919) and the influence of its conventions and
recommendations
 Establishment of AITUC in 1920
 Emergence of Left wing on the Indian political horizon in 1924
 The Indian Trade Union Act of 1926
 The Trade Dispute Act, 1929
 Formation of Royal Commission on labour, 1929-31, which made a
comprehensive study of Indian Labour problem regarding health, safety and
welfare of workers and made recommendations of far-reaching
consequences Cont….

PART- I
Industrial Relations in post-independence ERA

Following forces were operating at the time of Independence.
 We inherited industrial relations legacies from our colonial masters with
colonial mindset, colonial habits and colonial culture.
 Coincidentally, our freedom struggle coincided with the struggle by the
working class for better industrial relations. In course of these struggles, our
top leaders made promises and pledges to workers. Therefore, after
Independence, our leaders had to fulfil those "promises" and the "pledges"
made to the workers during freedom struggle.
 Most of our leaders were influenced by Fabian Socialist and Marxist /
Communist philosophies and after independence they were to be put in
practice.
Our industrial relations were deeply influenced by all the above forces. These
philosophies got reflected in our Constitution - (1) The Preamble of the
Constitution (2) The Fundamental Rights (3) The Directive Principles of State
Policies. Cont….

PART- I
Industrial Relations in Post-Globalisation period from 1991 till date

The requirements and imperatives of global competitiveness are of international
standards in quantity, quality, cost-effectiveness and customers' concerns. This,
in turn, requires introduction of state-of-art of technology, followed by innovation,
creativity and strategic alignment of divergent resources to create performing
climate. Such a performing climate requires a dynamic and synergetic employee
relationship.
The traditional IR was made to "fight the fire" or "douse the fire". It was reactive,
negative, passive, ad hoc and legalistic.
The tradition of industrial relations is under tremendous pressure, because it
was made to cater to the requirements of a controlled, protected and regulated
market and was unable to address the new imperatives of a competitive, global
market.
Traditional institutions of IR are losing their importance and relevance. Trade
unions are marginalised and kept outside the mainstream of business. Cont….

PART- I
EMERGING BUSINESS SCENARIO
In the Post-Industrial Society, technological revolution has created a situation

where space, distance and time have lost their relevance. National boundaries
have completely withered away. The world has really become a global village.
This has facilitated the movement of business across the borders. Therefore,
global entrepreneurs, better known as MNCs and TNCs, have come up with
multi-locational and multi-cultural characteristics. The business skyline is
completely changing by continuous mergers and acquisitions across the globe.
Global competitiveness is the only rule of the global business game where only
the fittest can survive.
Cont….

PART- I
In this situation, it was not possible for India to remain isolated and insulated
from the global charges. Hence, India embarked on a New Economic Policy
(1991). Some of the features of this Policy were as under:-
 Core sectors have been opened for Private Sectors.
 Multinationals are allowed to invest in India in non-strategic sectors - Inflow
of FDIs.
 Banking and Insurance Sectors are opened to investment by foreign FIIs.
 Restrictions and regulations on Industrial licencing and inspections were
relaxed.
 India, being member of W.T.O., I.M.F., and W.B. - declared as its policy to
follow their guidelines. Quantitative restrictions on imports/exports are
being reduced.
 Core conventions (forced labour, child labour, etc.) of ILO started
influencing our trade and business.
 Disinvestments of PSUs (both Central and State) have become a reality.
Cont…. Copyright © 2008, B D Singh

PART- I
CHANGING DIMENSIONS OF INDUSTRIAL RELATIONS IN INDIA

Emerging business scenario has brought in new market imperatives. The
traditional IR system is under unprecedented pressure because it is not geared
to meet this. A market determined profile of Industrial Relations is required to
meet the challenges of the market. Therefore, traditional IR is giving way to
emerging employee relations. Some of the features of this phenomenon are
given below:-
 The institution of trade union is getting weak. Employers are going for
unitarism and non-unionism. In IT & ITES, there are hardly any TUs.
 The institution of collective bargaining is being decentralised and being
replaced by unit bargaining, individual bargaining and commercial
bargaining / collaborative bargaining.
 Disinvestment / Privatisation and VRS are almost accepted facts of
Industrial Relations.
 Changing Pattern of Compensation /Rewards Management -
Fixed/Assured Time Rate Wages are replaced by variable/performance- based
wages. Cont…. Copyright © 2008, B D Singh

PART- I
Court about Contract Labour in Steel Authority's case (2001) and the Tamil
Nadu Government case on strike (2003) sent clear messages to the unions that
they mean business.
 There is a proposal for Labour Law simplification/codification
 There is a trend to make employer-friendly conciliation
 There has been ease in labour inspection
 There has been use of Section 10 (3) of IDA, declaring strikes illegal
 Strict enforcement of Unfair Labour Practices
 Use of Police for diluting labour struggle
 Re-engineering and Rationalisation of work - Job mobility, Redeployment,
Job Rotation, Shedding surplus manpower
 Competencies management and skill formation - multi-skilling and career
development
 Employee involvement, participation and communication
 Trade Union participation
 Enterprise-based unions
 Responsive Trade Unionism and Diluting political ideology Copyright © 2008, B D Singh

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PART- I

CH-2 Evolution of Industrial Relations in India

Copyright © 2008, B D Singh

2– 1 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

Industrial Relations in India Prior to British Raj

2– 2 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

Industrial Relations during Colonial period

2– 3 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

Industrial Relations in post-independence ERA

2– 4 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

Industrial Relations in Post-Globalisation period from 1991 till date

2– 5 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

EMERGING BUSINESS SCENARIO

In the Post-Industrial Society, technological revolution has created a situation

2– 6 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

2– 7 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

CHANGING DIMENSIONS OF INDUSTRIAL RELATIONS IN INDIA

2– 8 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

2– 9 Industrial Relations and Labour Laws B D Singh EXCEL BOOKS

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