Industrial Relations in India

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Human Resource Management
Assignment – I
Section: A

Dr. Malay Biswas

Indian Institute of Management Rohtak

Table of content

TopicPage number

1. Introduction3

2. History of Industrial Relations System in India4

3. Few cases of industrial disputes in MNCs
a. Honda, Haryana8
b. Mitsubishi Chemicals9

4. Analysis of the current situation and trends in India12

5. Conclusion16

6. Bibliography16

Here we start the discussion with the history of the evolution if trade unions and industrial relation laws in India. Then we focus towards the shift of balance from labour to capital. Then we examine two cases of recent industrial disputes. After that we move towards identifying the recent trends in terms of the strategies adopted by the multinationals and the resulting problems.

History of Industrial Relations System in India:
The colonial legacy and a centralized post-Independence economic development model have given rise to a system of industrial relations that is highly regulated and state centric. To ensure that the process of economic development is smooth, the state established itself as the chief mediator of capital-labour relations. State power over labour was achieved mainly through three acts: 1. Industrial Disputes Act 1947:

It provides institutional machinery and procedures to investigate and settle organizational disputes through negotiations adjudicated by Boards of Conciliation, Labour Courts, or Industrial Tribunals. The Act stipulates that Govt. permission must be sought closure of an establishment, layoff or retrenchment of workers. The Act also provides for the financial compensation of affected workers and defines what constitutes unfair labour practices on behalf of employers, unions and workers, including strikes and lockouts. 2. Indian Trade Union Act 1926

It sets out the parameters for the registration and organization of a union. The original Act stipulated that any seven people could register a trade union. Amendments to the Act in 2001 require a minimum of ten per cent of the labour force to register a new trade union, and that not more than one-third of the office bearers can be outsiders, and mandatory annual elections and auditing of union accounts. 3. The Contract Labour Act:

It regulates the use of contract labour. The contracting out of core business activities is not permitted under this act. Where the nature of the work is casual, sporadic or seasonal, the act permits outsourcing and allows workers to be employed on fixed term contracts. The Act applies to every establishment in which twenty or more people work. In addition to these three acts, the industrial landscape and the well-being of workers are shaped by thousands of state and federal laws. Both the Central and State governments are empowered to make laws for protection and welfare of workers and are responsible for monitoring and compliance. There is a well-established system of labour administration at both levels charged with enforcing labour laws. Between 1950-51 and 1960-61, the number of registered unions increased from 4623 to 11614 (Bhattacherjee, 2001). The oil shocks of 1973-78 hit the Indian economy hard amd growth targets became impossible to achieve. Inflation broke above ten percent, induatrial production and manufacturing stalled, employment growth slowed and labour markets tightened. Economic insecurity raised new problems for the union movements and industrial disputes became intense and numerous (Bhattacherjee, 1999).

While unions struggled to negotiate volatile economic condition, t is he Prime Minister Indira Gandhi called a National Emergency between 1975 and 1977. This had significant implications for industrial relations. Under the terms of the Emergency the right to strike was suspended, wages were frozen, annual bonuses reduced, and increments in the...
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