assignment of scir
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ASSIGNMENT
ON
INDUSTRIAL RELATIONS IN
WORLD IN FUTURE
Submitted by:
Rupika Goyal
Rishu Mangla
MBA(HR)-IV Sem
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Industrial Relations
The relationship between Employer and employee or trade unions is called Industrial
Relation. Harmonious relationship is necessary for both employers and employees to
safeguard the interests of the both the parties of the production. In order to maintain good
relationship with the employees, the main functions of every organization should avoid
any dispute with them or settle it as early as possible so as to ensure industrial peace and
higher productivity. Personnel management is mainly concerned with the human relation
in industry because the main theme of personnel management is to get the work done by
the human power and it fails in its objectives if good industrial relation is maintained. In
other words good Industrial Relation means industrial peace which is necessary for better and higher productions.
Definition:-
i. Industrial Relation is that part of management which is concerned with the manpower
of the enterprise – whether machine operator, skilled worker or manager. BETHEL,
SMITH & GROUP
ii. Industrial Relation is a relation between employer and employees, employees and
employees and employees and trade unions. - Industrial disputes Act,1947
iii. While moving from jungle of the definitions, here, Industrial Relation is viewed as the
“process by which people and their organizations interact at the place of work to
establish the terms and conditions of employment.”
The Industrial Relation relations also called as labor - management, employee-employers
relations.
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What all does it Includes?
Industrial Relation encompasses all such factors that influence behavior of people at
work. A few such important factors are details below:
1. Institution: It includes government, employers, trade unions, unions
federations or associations, government bodies, labor courts, tribunals and other
organizations which have direct or indirect impact on the industrial relations systems.
2. Characters : It aims to study the role of workers unions and employers’
federations officials, shop stewards, industrial relations officers/ manager,
mediator/conciliators / arbitrator, judges of labor court, tribunal etc.
3. Methods : Focus on collective bargaining, workers’ participation in the
Industrial Relation schemes, discipline procedure, grievance re-dressal machinery,
dispute settlements machinery working of closed shops, union reorganization,
organizations of protests through methods like revisions of existing rules, regulations,
policies, procedures, hearing of labor courts, tribunals etc.
4. Contents : Includes matter pertaining to employment conditions like pay, hours
of works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals
retirements etc., laws relating to such activities, regulations governing labor welfare,
social security, industrial relations, issues concerning with workers’ participation in
management, collective bargaining, etc.
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CURRENT TRENDS
Industrial Relations currently is undergoing dramatic changes. With the changes in
markets and economy, the purview of Industrial Relations is also changing.
These changes have been enumerated in the following headings:
1. Globalization of the world
Globalization is a complex phenomenon that has had far-reaching effects. Not
surprisingly, therefore, the term “globalization” has acquired many emotive connotations
and become a hotly contested issue in current political discourse.
Globalisation has enhanced the importance of work, wages and working conditions
around the world but made these more difficult to regulate at the national level.
‘Increasing globalisation and international trade have made consideration of labour
market regulations and conditions key parameters in investment decisions’.
Renewed interest in the degree to which IR systems are converging or diverging within
industries and between countries.
2. Decentralization
• No single trend but as companies spin off smaller units, workers are at risk of losing
power and voice unless they can draw on local power resources.
• With the shift in level of coordination and bargaining from national/sectoral to
enterprise/plant level, trade unions’ bargaining power is shrinking. There is a gradual
movement from parity to disparity.
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• Industry associations are declining as individual firms take on more importance, as
new firms that choose not to join associations come into an industry, as new
technologies create new industry segments or break up old ones, such as the growth
of the information technology sector that cuts across traditional industry lines, and as
firms outsource and fragment their operations, and as small firms proliferate.
3. Deregulation
Pro-labour Pro investor Policies
World over, when the State assumed a welfare role and adopted pro-labour policies, trade
unions have grown in strength and power. When the State is neutral, trade union
movement gets stagnant. When the State adopts pro-investor policies, trade unions are
declining in power and influence, if not in number. In these circumstances, unless trade
unions forge broader and wider alliances with the society – consumers and community
and various civil society institutions, including non-governmental institutions – they find
their power base dwindling.
4. Changes in labour market
Labour Market Flexibility
Even within the organized sector, an increasing number of jobs are approximating the
character of these in the unorganized sector as a result of the increasing labour market
flexibility in the wake of globalization. A comprehensive survey of about 1300 firms
scattered over 10 States and nine important manufacturing industry groups, shows that
between 1991 and 1998, employment increased at the rate 2.84 per cent per annum
(Deshpande et al, 2004). Non-manual employment increased at 5 per cent per annum
whereas manual employment increased at 2.29 per cent. This increase is in total
employment was brought by increasing the share of non-permanent employees and
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increase in manual employment by increasing the share of women workers. Smaller firms
grew faster than bigger firms. Firms, which increased sales, increased manual
employment as did those which employed contract workers. Employers who increased
fixed capital per worker reduced manual employment. Employers increased employment
but only of one or other category of non-regular flexible workers. It was found that as a
whole over the 7 years of liberalization (between 1991 and 1998) dualism in the labour
market did increase. The share of permanent manual workers declined from close to 68
per cent in 1991 to 64 per cent in 1998. Not only did the share of non-permanent increase
but the share of casual in non-permanent increased even faster. It is the big firms that
resorted to the greater use of non-permanent workers. Holding all other factors constant,
firms employing 50-99 workers and those employing 500 or more workers, increased the
share of non-permanent workers significantly between 1991 and 1998. Also, firms
employing 500 workers or more increased the share of temporary workers. Casual
employment did not show an association with size of employment. Women workers
were mostly employed in large firms. Firms employing 1000 workers or more accounted
for more than 75 per cent of all women workers. Firms, which employ a higher share of
non-permanent, also employ a higher share of women. Firms employing 50-99 workers
and 500 and over report an increase in the share of female workers. From the above, one
should not hasten to conclude that there is no rigidity in the Indian labour market.Irrespective of its impact on employment, a degree of excessive or unwarranted
protection to labour may lead to inflexibility in labour adjustment required for
restructuring of enterprises in the interest of competitive efficiency. In the wake of
liberalization, this problem has been brought center stage and there has been frequent
demand by the industry and foreign investors to have some kind of ‘exit’ policy – the
right of hiring and firing. In this respect the provisions of the I.D. Act which lay down
conditions and procedures for retrenchment of workers have been widely criticized. It is
contended that the provisions are so restrictive that reduction in workforce or closures are
extremely difficult even if the employer is agreeable to pay the compensation as required
under the law. This is because under the law prior permission of the government is
required to retrench workers or effect closures in the case of enterprises employing more
than 100 workers and such permissions in the past were generally not granted by the
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Central and the State Governments. Of late, the scenario has changed in the wake of
globalisation. The Labour Ministry of the Central Government and the Labour
Departments of the State Governments are regularly conducting the hearing of
applications for lay-off, retrenchment and closure by inviting representatives of the
workers and employers. After following the principles of natural justice, orders are
issued on the basis of merits of each case taking due note of the long-term viability and
competitiveness of the enterprise. This has resulted in granting permission in most of the
cases where applications have been made to the appropriate government. Accordingly,
the existence of Chapter VB in the I.D. Act cannot be blamed for all the ills faced by
industrialists. In spite of these obstacles, many enterprises were able to adjust their
workforce by rationalization and technological changes, but the process has been tardy.
Several routes have been found out – illegal closures by not paying electricity bills, etc.
All these have only added to the problem of labour – they are neither paid their wages
nor their due compensation. This has also resulted into significant industrial sickness as
well as the prevalence of redundancies leading to their loss of competitiveness. Although,
unions have generally resisted any legislative or executive move to make closure and
retrenchment easier, in recent years unions at the enterprise level have generally been
found to be accepting the inevitability of adjustments in the workforce in the face of
globalization and industrial restructuring.
5. Changes in trade unions
Declining trade union density
In the traditional strongholds of trade union membership – government and public sector
– the workforce is declining due to non-filling of vacancies and the introduction of
voluntary/early separation schemes. New employment opportunities are shrinking in
these sectors. In the private sector, particularly the service and the soft ware sectors, the
new, young and female workers are generally less eager to join the unions. Trade unions
are still to conceive and implement meaningful strategies to make unionism relevant and
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appealing to these new and diverse workgroups. It is mainly in the informal economy,
thanks to the initiatives that the government is willing to consider in the realm of social
security benefits, that there is a prospect of rise in trade union membership Here too,
trade unions are finding an adversary in someone who is otherwise considered an ally:
the non-governmental organizations operating under the guise of or as virtual trade
unions. The sickness, closure and non-viability of industries have forced the trade unions
to re-orient their role to ensure survival of the industry. The workers appear to be willing
to overlook their grievances as they are more concerned with retention of employment.
Hence, they are not reporting grievances to unions. The reduction in employment has led
to reduction in union membership making unions vulnerable. Issues such as survival of
industry, maintaining competitive edge and productivity dominate collective bargaining.
There appears to be a growing realization of the futility of a confrontationist attitude in
the unions. The threat of privatization and withdrawal of budgetary support looming
large over the Ordnance Factories Board, with its nearly 40 factories manufacturing
mainly defence equipment and ammunition, adopted strategies such as diversification of
production for civilian market, marketing these products in domestic and international
markets, stopping all recruitments, cutting over-time payment bills and going for I.S.O.
certification. The federations/unions operating in Ordnance Factories have not opposed
these strategies. More and more stress is given on R&D.
Collective bargaining
With the shift in level of coordination and bargaining from national/ sectoral to
enterprise/plant level, trade unions’ bargaining power is shrinking. Also, there is a
gradual movement from parity to disparity. Since 1992 to date, over 100 of the 240
central public sector corporations did not have wage revision because the government
announced that companies have to mobilize resources to pay for workers wages and thatthe government would no longer subsidize wage increases. Also, Instead of pressing for
higher wages and improved benefits, trade unions are pressing for maintenance of
existing benefits and protection and claims over non-payment of agreed wages and
benefits.
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6. Employer militancy
Worker militancy replaced by Employer
Militancy?
Economic reforms introduced in India in 1991 signify India’s quest for global economic
integration. If during the decade 1981-90, India lost 402.1 million man-days due to
industrial conflict, in the subsequent decade, 1991-2000, the number has come down to a
half: 210 million. This does not mean that the industrial relations situation has actually or
substantially improved.
Workers are reluctant to go on strike because of fear of job insecurity, concern about the
futility of strikes and recognition of the imperative need to consider the survival of
enterprise as a prerequisite for job and income security. Further, trade unions are hesitant
in giving a call for a strike because it may lead to loss of jobs or closure of the unit. What
is even more striking is that over 60 per cent of the man-days lost in the post-reform
period was due to lockouts and less than 40 per cent due to strikes. It must be added that
quite a few lockouts may have been preceded by strikes. One measure of trade unions
becoming more defensive than being on a more offensive and collision course with
employers is seen from the shift in their actions from strikes to litigation. Also, instead of
pressing for higher wages and improved benefits, trade unions are pressing for
maintenance of existing benefits and protection and claims over non-payment of agreed
wages and benefits.
7. Settlement Machinery
Other methods of dispute resolution
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The conciliators both at the central and at the State level have started appreciating the
impact of globalization on industrial relations and labour market institutions in the new
perspective and are very sympathetic to the needs of the employer who has to face
competition around the globe for their products. Accordingly, they have to make changes
in the product design which entail changes in the working conditions. The workers have
to retrain and improve their skills. Even, multi-skilling has become a necessity. Workers
who cannot adapt themselves to these new demands have to be given the option of going
home through voluntary retirement schemes. Accordingly, the conciliation machinery is
not compelling the employers to retain the existing work force under all circumstances.
Interest disputes resolution through arbitration and wage boards are moving into the
museum of history. The presiding officers in the arena of industrial adjudication have
become more sympathetic to the needs of the managements in the globalized world. The
appropriate Governments are generally permitting lay off, retrenchments and closures
even though, they were adamantly, declining the same in the 70s and 80s. Even the apex
court has become very strict about indiscipline and lethargy of the workers in the
industry. Instances have been quoted earlier in this study. As regards the changes in the
industrial relations machinery, it is felt that inspection of establishments cannot be done
away with. However, the process of inspection can be used to create awareness and to
educate the employers and workers with regard to benefits of timely and genuinecompliance. The role of inspector can also be modified so that he acts as a facilitator
helping employers in complying with the provisions of the laws. Selective and
purposeful inspections have to replace routine statistics oriented inspections. Similarly,
the conciliation officers need to be well aware of the new challenges posed by
globalization before the employers and employees and equip themselves with necessary
knowledge, attitude and skills to handle industrial disputes whose nature and dimensions
will be very different from industrial disputes hitherto handled.
The process of globalisation has forced trade unions to be defensive and maintain a low
profile. Therefore, there is a need for the industrial relations machinery to be more
proactive and vigilant so that undercurrents of discontentment and grievances are
detected in time as unions may not report the grievance in changed environment.
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8. Role of regulatory bodies
Static Labour Policy but changed mindset of
the judiciary, legislature and the executive.
A remarkable feature of industrial relations in the wake of globalization is the gradualwithdrawal of the State in their traditional role of actively supporting the organized
labour. Though, Labour law reforms will be explained later in greater detail are not
taking place both the labour administration and adjudication machinery have been more
willing than before to entertain the concerns of industry. Some State governments –
notably Rajasthan, Andhra Pradesh, Maharashtra, Gujarat and Uttar Pradesh, for
instance, - have taken the initiative to make small changes in labour laws and a major
effort to drastically simplify the returns to be submitted by employers and ease the
pressure of labour inspections.
Also, Transnational Bodies like WTO, ILO and World Bank are growing in their
significance. Because of their increasing importance, employer bodies have also come
up, to ease lobbying and interactions with these bodies.
9. Technology and Knowledge
Management
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This is a century of knowledge management and technology. To my mind, better
understanding, negotiation in good faith, productivity related wage increase, fixed team
appointments, proactive approach of workers and unions, better work envoirnment and
work culture would be new dimensions of good IR in 21 st Century.
Before we further move forward, one has to remember that the coming time will mainly
centre around customer, cost, competition and care for MAN, Therefore, we may
anticipate what sort of spectrum may emerge in future for Indian industries in the
changing environment. We should remember that protected economy is the song of past
days and free economy with divergent forces has started making its feel at this stage. And
as consequence of it, certain things are likely to happen and let us glance at them.
Unemployment which is acute today will further be aggravated leading to a large
unskilled population who can not be employed in industries which may need more and
more qualified, skilled and technical hands. Automation, mechanization, robotization
etc., will greatly reduce demand for unskilled while creating short supply of trained and
experienced hands. MNCs and big business houses and corporate bodies will compete
acquiring the cream of the country while a large number will be flying out of the country
for better career opportunities abroad. Downsizing the industries and gradual reduction in
industrial employment even seen in the recent past can lead to grave unemployment problem and labour unrest adversely affecting industrial growth and economy of the
country. But worker profile will be different who will require all care and attention to
work in competitive and challenging environment.
10. Environmental factors
Various other Environmental factors are changing leading towards a changed IndustrialRelations Approach. These are:
• Free Economy with divergent forces
• World Political Events
• Global Trends- Recession/ Boom
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• Focus on Customer, Cost, Competition
• CSR, Ethics and Corporate Governance
FUTURE OF INDUSTRIAL RELATIONS
The Internationalisation Of Industrial Relations
• Globalisation has provided an opportunity to reassert the relevance of IR in relation
to the international division of labour and the impact of these changes on the nature
of work and organisations.
• Limitations on the ability of nation states to control flows of capital across their
borders has had implications for the regulation of work and employment, particularly
in multinational enterprises.
•
The growing significance of international organisations such as the ILO, WTO,World Bank etc in relation to the conditions under which work is performed.
• Renewed interest in the degree to which IR systems are converging or diverging
within industries and between countries.
Knowledge Management And Human
Capital
We are fastly travelling in 21st Century - A century of knowledge menagement and
technology. Today industrial relations theory can be better reflected as the networked,
knowledge based, economy. This is the overriding challenge all industrial relations actors
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and institutions face. Knowledge, information, and human capital could serve as both the
key sources of economic growth and competitive advantage and the new sources of
power that will allow workers and their families to prosper in the 21st century economy.
Both management and workers will use the tool of IT to strengthen their bargaining
power.
Also worker profile will be different who will require all care and attention to work in
competitive and challenging environment.
Internal Leadership
External leadership has largely been replaced in many developed and developing
countries with the advent of liberalised and enlightened outlook on the part of employers
and a sense of commitment and concern in the employees. This will brighten the
prospects of nurturing internal leadership among the employees. The frequent
confrontations resulting in agitations, stoppages of work and closures of Industrial
establishments will become a nightmare for all those who are concerned with
productivity improvements and organisational excellence.
Employee Synergy
The present dimensions of different cadres of employees as workers and managers will
gradually disminish. The growing awareness of roles and responsibilities and the
increasing levels of education will convert the less informed workers into knowledge
workers who in turn will comfortably compete with their more privileged superiors-the
Managers. The distinction thus will disappear, so traditional approach of maintaining IR
will not work. HR Manager has to be fully prepared, competent, transparent and logical
while dealing with workforce.
To my mind, better understanding, negotiation in good faith, productivity related wage
increase, fixed team appointments, proactive approach of workers and unions, better
work envoirnment and work culture would be new dimensions of good IR in 21 st
Century.
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Growth Of Non-Standard Workers
There is growth of various types of non-standard work arrangements and also changes in
the demographics of the labor force. Adapting industrial relations institutions to
accommodate the different types of non-standard work is a challenge facing unions and
labor policy regimes in all countries around the world. Making them a priority will open
up attractive alternatives for unions to reach women and to make gender equality at work
and at home a central issue on the agenda of unions in the future.
Some of the implications of the increased role of women in the workforce and the
growing role of part time work can be seen by comparing the responses of Japanese
(Rengo) and German (DGB) union federations. In both countries, the traditional view of
unions has been to focus on and promote full time, standard work and to see the growth
of part time work as a threat that might erode their work standards and job opportunities.
However, as more women move into the paid labor force and take up part time jobs, this
union position becomes untenable. In each country around the world, unions are trying to
come to grips with this phenomenon. Doing so first requires a strategic shift in policy
from one of opposing part time work to one of recognizing that flexibility in working
hours can provide opportunities for men and women if, as the German unions put it,
“worker sovereignty” or choice can be protected and the standards of part time work can
be regulated appropriately through a combination of legislation and collective
representation.
In both Japan and Germany these structural changes start with moving consideration of
these issues from the backwaters of “women’s departments” in union federations to
mainstream priorities. In Germany this movement was aided by the emphasis given these
issues in the European Community’s working time legislation.
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Towards a New Model of Unionisation
Traditional union organizing and service models are not working and not likely to work.
Unions are declining around the world The model sees unions as decoupling
membership from collective bargaining by offering individual memberships that continue
as workers move across employers and throughout their careers—a life long membership
concept. Unions would provide a range of services and benefits including job mobility
assistance and discounted prices for a variety of insurance, leisure activities, and other
services. Unions would rely heavily on the use of information and communications
technologies to interact with and serve their members. Collective bargaining would
continue to play an important role but not be the sole reason for joining a union or for
maintaining membership or a requirement for union organizing.
The key is to eliminate the free rider problem associated with collective bargaining—one
can get the benefits of unionization without joining the union and to make the benefits
and services provided substantial.
One of the research indicated that young activists generally share the same commitment
to social justice, fairness, and solidarity as their elder counterparts. Young activists may
be more accepting of partnerships with their employer but they clearly do not lack acommitment to traditional union values. They join unions more for internal reasons of
values, family background an ideology, less for defensive reasons or because of some
external event. Thus, the basis for building a new labor movement may still exist among
young workers and social activists. The key is to provide them with the opportunity to act
on their values.
Social Capital Unionism
In this type, the workers interact and build relationships with each other, share
information on and off the job, and build relationships in civil society to further enhance
the power of the union through its network relationships.
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Alternative Structures for Voice and
Representation
The recognition that unions are in decline has turned attention to the role of alternative
forms of representation, including works councils and other forms of voice, participation,
and representation. By comparing the effects of union membership and nonunion works
councils, it was found that unions outperform non union works councils on distributive
issues while non- union works councils do a better job on cooperative or integrative
issues. Non- union forms of representation are not complete substitutes for unionism.
Clearly, the labor organizations of the future cannot ignore workers’ needs for the
independence and sources of power to assert their interests effectively where theyconflict with employer interests. The challenge lies in being effective on both sets of
issues.
New Actors and the Emerging Dynamics
Changes in the environmental contexts in which work takes place and employment
relationships are formed are placing great pressures on employers, unions, and
government to adapt and update their practices and policies. These changes pose several
additional questions: Can the actors regain control over their destiny and over the destiny
or performance of their industrial relations systems in light of changes in these external
contexts? Are new actors and/or new structures emerging that require reconceptualizing
our theories of industrial relations?
So, we must expand the definition of the key “actors” in industrial relations systems to
include institutional forms that are emerging at two levels. At the community level NGOs
in developing countries and other civil society groups (women and family advocates,
ethnic groups, religious groups, labor market intermediaries such as temporary help and
placement agencies, etc.) are playing more active roles in labor markets and industrial
relations. At the international level, efforts to build institutions that are able to engage the
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key international agencies that set policies and allocate financial resources are just
beginning to emerge out of the conflicts over globalization that erupted in recent years.
Both of these need greater analysis and incorporation into our models of industrial
relations in the 21st century.
Also, Consumers and community have begun to assert themselves and take a significant
role and due to this the rights of workers/unions and managers/employers are taking a
back seat.
Also, the court rulings are borne by the realization that wider public good matters most in
preference to the narrow self interest of a minority.
Also, Social forces such as environmental groups, students, living wage advocates, and
NGOs are also growing and reasserting their role as a dynamic force for advancing
workers’ interests and labor standards.
Future role of trade unions in India:
Organizing the unorganized
The future role of the trade union movement is linked with a broader concern for
ensuring the social cohesion of working people in a large and diverse country. In this
final section, we examine union strategies in the private corporate sector, in public sector
enterprises, and in the informal sector. It is imperative for the trade union movement to
concentrate on organizing the unorganized, so as to create secure incomes and safe
working conditions for those with irregular and precarious jobs.
The private corporate sector
On average, private enterprises employ around 30 per cent of all formal sector workers in
India; in manufacturing and trade, this proportion is around 70 per cent, whereas in
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transport, electricity and construction the figure is less than 5 per cent. In successful
private companies enterprise-based trade unions (that may or may not be politically
affiliated) will have to accept that their pay is partly (if not largely) determined by
productivity. Rather than blind resistance to this kind of pay structure, a cooperative
strategy may pay greater dividends in terms of gain sharing at enterprise level. Unions
will have to u se their “collective voice” effectively in collective bargaining when
incentive structures are proposed and negotiated. While the independent unions will find
this strategy quite natural, those which are affiliated to the centralized federations may
find it difficult. In either case, the extent to which a union is willing to take a risk will
partly determine the composition of pay (performance-based “risk” pay and “steady”
pay).
While the majority of contracts in this sector are (and probably always will be)
negotiated at enterprise- or plant-level, unions in some organizations, possibly in the
multinationals, could concentrate on attaining firm-wide agreements in the face of
considerable management opposition. Firm-wide agreements will strengthen union power
at the corporate-level, and to achieve this, unions may have to trade off some plant-level
gains. An example of this situation is being played out at Bata India. Management
recognizes the enterprise unions in its various plants a cross the country, but the loosely
united All India Bata Employees Federation is not recognized. It appears thatmanagement is willing to talk to the federation if it agrees to restructuring plans at the
plant in Faridabad. If the federation agrees to these plans in exchange for management
recognition, this would clearly reduce union influence at the plant. In the older industries
in the private sector, where industry-wide bargaining is the dominant structure and where
inter-fir m differentiation has grown considerably since liberalization, unions and
employers are finding it difficult to reach industry-level agreements. Unions will
continue to face obstacles to industry-wide solidarity in this sector.
What have been the effects of economic liberalization on the connections between unions
and political parties, and what has this meant for the private corporate sector? To the
extent that most of the centralized trade unions continue to oppose the basic implications
of economic liberalization, there has been a surprising reconciliation of unions affiliated
to opposing political parties on a range of issues at both regional and national level.
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There has been a gap between the preoccupations of political parties and the macro-
objectives of trade unions since the reforms. This has created a dilemma for most of the
unions in this sector: while the loosening of ties with the parent body inevitably leads to
greater autonomy in decentralized decision-making, it also means a lessening of
centralized lobbying power. Market forces will increasingly dominate union strategies in
this sector.
Public sector enterprises
On average, the public sector employs around 70 per cent of all formal sector workers in
India; in transport, mining, construction, electricity and services this proportion is high
(>80 per cent), but it is considerably lower in agriculture (40 per cent), manufacturing
(<40 per cent), and trade (<35 per cent) (Datta Chaudhuri, 1996). In non-viable public
sector enterprises that are ready for closure, most of which are in the East, the situation
continues to be very grim. Workers have not been paid for several months and the
endless talk of revival now sounds hollow. The closure of these firms seems to be the
only solution and unions can do no more than see that lay-offs are implemented fairly
and as generously as possible. In several state-owned enterprises and organizations
unions have accepted that privatization is the only way of saving the unit, and that
informed negotiation is required. As a result of increased competition from both domestic
and international producers, the output of public enterprises and services has improved
substantially. Nowhere is this more true than in the state-run airlines. But unions in the
public sector, especially those in services such as medicine, education, the police and
municipal workers, can substantially increase their credibility by agreeing to enforceable
accountability procedures. This would mean internal monitoring, which the unions are
reluctant to accept.Although the government has indicated a preference for decentralization, the centralized
bargaining structures have not yet been dismantled. Unions could campaign for a
restructured central system that allows for greater local autonomy and minimizes
bureaucratic inflexibilities. For the public sector to deliver long-run productivity
improvements in the post-liberalization period,
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unions will have to partly align their objectives with those of the end-user the average
voter/consumer who has become an important voice in the labour relations system.
The informal sector
In terms of union density, India fares rather badly compared to other large developing
countries. According to the ILO World Labour Report 1997-98, union membership as a
percentage of nonagricultural labour dropped from 6.6 per cent in 1985 to 5.5 per cent in
1995 (the corresponding figure in 1995 for Argentina was 23.4 per cent, Brazil 32.1 per
cent and Mexico 31 per cent). Union membership as a percentage of formal sector
workers in India declined from 26.5 per cent to 22.8 per cent between 1985 and 1995 (the
corresponding figures in 1995 were Argentina 65.6 per cent, Brazil 66 per cent, Mexico
72.9 per cent). If the figures are derived only from registered unions that submit returns,
it is possible that they may somewhat underestimate union density in India. According to
the above source, less than 2 per cent of workers in the formal and informal sectors in
India are covered by collective bargaining agreements. Clearly, a large proportion of
workers (certainly those in the formal sector) fall within the ambit of labour legislation,
even though they are not covered by a collective agreement. Nevertheless, it is apparent
that considerable organization of workers remains to be undertaken in the Indian
economy. If one were to assume that the formal sector corresponds with the unionized
sector (in reality, the unionized sector is a subset of the formal sector ), then the
following figures give an idea of the extent to which unions in future can organize
workers in the various sectors. In total, less than 10 per cent of all workers a re in the
formal sector. The proportion of workers in this sector by industry groups is: mining and
quarrying (56.9 per cent), manufacturing (19 per cent), construction (17.5 per cent), trade
(2.1 per cent), transport (38.7 per cent), and services (38.7 per cent). Clearly, there isenormous potential for organizing workers in construction, manufacturing and trade. In
addition, detailed surveys in several industries have found that the existing unions do not
sufficiently represent the interests of casual and temporary workers. Finally, according to
National Sample Survey Organization data, there is a “high incidence of women’s
involvement in unorganized sector activities, ranging anywhere between 20 to 25 per
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cent of total employment in urban areas and anywhere between 30 to 40 per cent of total
employment in rural area s figures which far outweigh women’s recorded involvement in
productive activities from Census sources” In sharp contrast to the formal sector, “the
unorganized sector has little by way of protective legislation or union representation”
Conclusions
• IR needs to retain its long-established focus on bargaining and other forms of
interaction between the established social partners and the state but it should also
embrace new actors and issues central to the world of work.
• IR should combine micro-level perspectives on workplace issues, individuals and
groups at work with broader macro-level issues concerning the economy, society andinstitutions.
• IR should strengthen its long-held concerns with the balance between efficiency and
equity but seek to emphasize the need for integration between these often competing
interests.
• Finally, IR needs to take an international and comparative perspective without
diminishing the importance of the regional and local dimensions of work and
employment relations.