hrm report group 1 section e

Industrial Relations: Concepts and Contours

Models, Approaches to study IR; Actors of IR; Trends and Challenges in the field of IR

Papers reviewed and submitted by Group-1 of Section E | Human Resources Management

Harsh (ABM09029)| Rachit (PGP28227) | Bharti (PGP28239)

Sruti (PGP28249) | Ibon (PGP28260) | Ravi (PGP28270) | Sachin (PGP28398)

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Group -1 | Section: E | Human Resources Management

Paper 1

Translating Competing Models of Industrial Relations: Local Bargaining versus Global Rules in the

Swedish Clean Clothes Campaign

This paper argues that the industrial relations landscape is currently undergoing change with regard to

its actors and arenas. The traditional national relations system is now being accompanied by emergent

transnational system. Based on a study of Swedish garment retailers and Swedish Clean Clothes

Campaign, different actors’ attempts have been analyzed to define and engraft firms in the new

transnational system of industrial relations. It has been argued that the studied actors’ attempts to

embed could be considered a competition between a “Rules Model” and a “Bargaining Model” of

transnational IR. The study essentially indicates that the former model currently dominates the latter.

Introduction: Issues relating to IR and workers’ rights have been traditionally managed through

collective bargaining and industrial agreements between firms and unions, with intervention from

governments across various countries. The three key actors in the field are firms, unions and

governments. This paper argues that the arenas in which IR functions are becoming more and more

transnational, causing a shift of power from national governments to transnational corporations (TNCs).

Also, the workers’ rights are attaining greater importance in the NGOs’ agendas, introducing a new

‘actor’ into the IR and workers’ rights arena.

A changing industrial relations landscape: The current changes in the IR landscape can be summed up

in three main trends: (i) Rise in off shoring of production to developing countries by TNCs, and the

changed role of national governments, (ii) Unions’ challenges with respect to developing countries and a

new political and economic doctrine, and iii) the increased focus of NGOs on corporations. Based on

above trends, the emergence of the new IR system can be described as a process of dis-embedment and

re-embedment of a network of social relationships. With the off shoring of operations, TNCs leave

European and societies in which they were previously embedded, to be re-embedded into Asian

societies. There has been criticism relating to the re-embedment of TNCs owing to the inadequacy of the

national IR systems in Asia. Hence, NGOs and unions focus on dis-embedding TNCs from Asia and re-

embedding them into the transnational IR systems. The process of such change has been described by

studying IR in the Swedish garment industry.

IR in Swedish Garment Industry: Post the criticism from Western unions and NGOs as described above

and numerous media scandals, TNCs such as Levi’s, GAP, Nike, and Reebok started to acknowledge an

extended sense of responsibility for workers’ rights at their suppliers’ factories. The Swedish garment

retailers remained un-criticized prior to 1996. In 1996, the Swedish NGO, Fair Trade Center (FTC),

contacted the Dutch Clean Clothes Campaign and to initiate a Swedish Clean Clothes Campaign (SCCC),

to pressure Swedish garment retailers to extend the irresponsibility for workers’ rights at their suppliers’

factories. With support from other NGOs and unions, the campaign kick started. The idea was that

consumers would pressure the retailers into extending their CSRs to include operations of their foreign

suppliers. By the end of 1997, the Swedish garment manufacturers gave in and codes of conduct and a

monitoring system were to be formulated to be in the good books of consumers. In 2002, the suggested

codes and monitoring system were rejected by the unions. This led to a conflict between the unions and

FTC and other NGOs that tried to create an independent monitoring system. Such a conflict meant the

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collapse of Dress Code and the regression to the 1995 state of affairs. Since this collapse, the garment

industry has lacked a unified policy regarding responsibility for workers’ rights.

Competing Models of IR:

The Rules Model: This negotiation process was aimed at creating and implementing an alternative re-

embedding based on a transnational system. It was proposed by FTC and was related to two trends-

first, the CSR movement and second, the general rules and audit based society. This proposal could be

firstly viewed as the translation of the audit ideal into the CSR movement, second, from the general CSR

movement into IR by international actors, and third from the international setting into the Swedish

setting. The codified rules were defined by global actors such as the UN. So there was little need to

include local organizations in implementation of these rules in the local IR setting.

The Bargaining Model: This model is representative of the traditional national tripartite IR system

involving negotiations and collective bargaining between firms and unions with the state as a passive

actor. Since the process is based on bargaining, workers’ rights were defined through negotiations

instead of them being defined a priori. It is considered to be socially embedded as trust is developed

within networks and interpersonal relations and not in codified rules like it was in the “Rules Model”.

This model comes into play in the unions’ argumentation for leaving the Dress Code project (2002). The

idea was to shift from the national to a global setting with respect to the bargaining mandate.

Conclusion: With the emergence of transnational IR system, two conflicting models have been proposed

by the involved actors-the “rules model” promoted by TNCs and NGOs and the “bargaining model”

promoted by unions. Currently, the rules by NGOs and TNCs are dominating the transnational system,

but the global elements of bargaining are rising in terms of influence. Both approaches imply a shift

from the Nordic form of civicness focusing on social dialogue to a model focusing on preserving and

defending minimum requirements and codified rules. The alternate integrative approach of localizing

bargaining at TNC level calls for change in both unions and NGO strategies, lest the rule-based

transnational system should continue to gain importance.

Paper 2

Theoretical Approaches to Employment and Industrial Relations: A Comparison of Subsisting

Orthodoxies

This paper attempts to compare the five most influential theoretical frameworks of employment and

industrial relations and to throw light on the similarities and differences in the theoretical formulations.

It also examines a critical review of the theories and highlights the major themes inherent in the

theories. A theoretical approach has been adopted to achieve this.

Theoretical and Conceptual Framework: Traditionally, employment and industrial relations include the

study of the rules that govern employment and the methods in which such rules are modified,

interpreted and executed. Following are the various theories associated with employment and industrial

relations:

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(i) Unitary Theory- This theory points towards a single or unified authority and loyalty

structure. There is implicit emphasis on shared values, shared goals and common destiny.

The unitary theory hints at authoritarianism and paternalism. It is pro- management biased

and emphasizes consensus and industrial peace.

(ii) Conflict Theory- It has a pluralistic frame of reference and views the organisation as a

coalition of sections with different values, interests and objectives. Thus, employees’ values

and aspirations are always in conflict with those of management. This theory argues that

conflicts are inevitable and are resolved through collective bargaining.

(iii) Systems Theory- This theory is derived from the functionalist perspectives of social system.

These functions are (a) teleological, where one asks about the ends something serves; (b)

Mathematical, where one refers to the co-variation of a set of variables e.g. y=f (x); and (c)

Configurational, where one speaks of the interdependence of a set of elements within a

system, and of the contribution each makes to the whole. The systems approach to

industrial relations is configurational.

Models of Industrial Relations system: There are three sets of independent variables in an IR systems,

the actors (hierarchy of managers, workers and government agencies), the contexts (technological

traits, power distributions and budgetary/market constraints) and the ideology of the system, while the

rules represent the dependent variable or the output of the IR system. Dunlop assumes that the

ideology of IRs system must be one or the same among the actors. The dynamic model of the systemic

paradigm, open system analysis and the oxford school are further elaboration of the Dunlopian model.

The dynamic model of the systemic paradigm of industrial relations expressed the IR system algebraically

as: r = f (a, t, e, s, i); where, r = the rules of the industrial relations system; a = the actors; t = the

technical context of the work place; e = economic or the market/budgetary constraint; s = the power

context and the status of the parties; i = the ideology of the system.

Conclusion: Industrial relations practice has gained immensely from these theoretical frameworks.

Despite continued criticism on various grounds, they have contributed to this area substantially. There

are common areas as well as grounds of difference between the various theories. However, a general

theory on industrial relations is yet to emerge.

Paper 3

The Strategic Choice Model and Industrial Relations in Japan

This paper aims to understand Japanese industrial relations. The basic framework of strategic choice

model has been illustrated, after which the historical background of Japanese industrial relations and

the transformation of corporate strategies, HR practices and labour relations have been studied using

the given framework. It is finally concluded that this model that originated in the US can be applied to

Japan as well.

Introduction: The strategic choice model explains the transformation of IR in the US, focuses on the

dynamic processes among the key actors of IR as well as environmental factors. Further, it promotes

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cross fertilization of research between IR, organizational behaviour and human resource management.

With the fundamental structure of Japanese IR having changed before the bubble economy, few studies

explained such transformation using the strategic approach model.

The Strategic Choice Model: This model was developed when the IR scene in the US was undergoing

rapid change and the conventional static models at that time were not capable of explaining the

changing situations. This model was made more dynamic by developing the concept of strategy and the

involvement of senior management in the formulation of policies. It starts with the consideration of

external environmental forces affecting employment relationships. Such environment causes

organizations to make changes in their competitive business strategies. Thus IR processes are

determined by the evolving interaction of environmental pressures and organizational responses; and

labour or product market changes do not have direct or independent effect.

The framework divides the activities of management into three tiers: 1) a top tier of strategic decision

making; 2) a middle tier of collective bargaining or personnel policy making and 3) a workplace level

bottom tier affecting individual workers, supervisors, unions etc. on a daily basis. The framework

identifies interdependencies among activities at different tiers and explains conflicts and

inconsistencies, besides considering effects of strategic decisions on different actors of IR.

Application of the model to Japanese Industrial Relations: The foundation of postwar Japanese IR was

established by the high economic growth period. Then, the structural reforms in Japanese IR took place

in the low economic growth period. This trend has continued to the present, despite the acceleration of

transformation process by various environmental changes.

The corporate strategies in the high growth period were linked to HR practices and labour relations by

large Japanese firms. The presence of stable labour force, collaborative labour-management relationship

caused the corporate strategies in Japanese firms to succeed. The deregulation of many domestic

industries, change in proportion of white collar and blue collar workers leading to rise in labour costs

and the collapse of bubble economy reinstated the need for corporate restructuring. During post growth

era, Japanese firms continued to emphasize on growth and market share, but could not cope up with

the appreciating yen. So the firms started cutting costs, emphasized on direct investments and strategic

alliances and followed policies like performance based pay and promotion systems to foster innovation

and protect employment. The major changes are focused on the revision to seniority system instead of

lifetime employment.

Conclusion: Despite differences in historical background, the strategic choice model fits into the

transforming Japanese industrial relations better than previous theories. This model suggests that the

future directions of Japanese IR are derived from dynamic interactions between management, labour

and government and their strategic choices are restricted by historical and environmental factors in

Japan.

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Paper 4

The core principle and fundamental theorem of industrial relations

This paper talks about the original paradigm of industrial relations. It had three basic faces: the concept

of science-building, the concept of problem-solving, and ethical and ideological perspectives. The

fundamental principle behind these faces is rejection of the orthodox model of a competitive labour

market. It also rejects the proposition that labour is a commodity. The fundamental principle of

industrial relations states that a free market capitalist economic system cannot survive and efficiently

perform without the practices and institutions of industrial relations that align with human principles,

make it stable, professional, democratic and eventually balance the employment relationship.

Introduction

The prospects of industrial relations appear dire. A better possibility is that the union movement (or

some collective worker voice) stages resurgence, bringing with it renewed interest in all the traditional

aspects of industrial relations, such as strikes, wage negotiations, bargaining structures, and labour laws.

The original paradigm includes trade unions and labour-management relations but also contains a

number of other equally important subjects related to work and employment. Although the original

industrial relations paradigm was centered on the concept of employment relationship, it still stood

apart from a unitary construct in terms of research and practice. Rather, the subject of industrial

relations was partly an intellectual project, partly an applied subject of problem-solving and labour

reforms, and partly a moral and ideological commitment.

Science building

It is the first face of industrial relations. It is largely academic and intellectual endeavor aimed at

expanding the frontiers of knowledge. The tools are theory and research methods, such as abstract

models and mathematics, and the goal is to derive useful generalizations and insights about the

employment relationship.

Problem solving

The second face of early industrial relations is problem-solving – the application of knowledge and

expertise to solving practical problems in the work world.

Ethics and ideology

The third face is defined in terms of values and ideological positions with respect to work performance,

employment relationship and solution of labour problems. It has multiple propositions, one of which is

that labour is embodied in human beings and hence should not be treated as a commodity.

That is, labour – unlike capital, land and other inputs – is inseparable from the person supplying it and

the conditions and outcomes of work experienced by human beings thus carry a much higher moral

significance.

The basic principle of industrial relations stresses on two concepts:

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• Rejection of the orthodox competitive demand/supply of labour market model

• Labour is not a commodity

The drawbacks associated with the orthodox concept is that the free markets will raise insecurity, lead

to inequality, fail to automatically eliminate unemployment, create sub-standard working conditions, fail

to give workers a voice and protection against discrimination, and contribute to a variety of social

injustice. The purpose of the industrial relations is to make the market system and capitalism better. It

seeks to stabilize, democratize, professionalize, and balance the market system through expanded and

reformed institutions. It should give it a direction and purpose.

Conclusion

The field of industrial relations has suffered a significant decline. Over time industrial relations has

increasingly become associated with a relatively narrow set of subjects related to trade unions and

collective bargaining, and the labour law and policy regimes that regulate them. The message of this

article is that one strategy available to cope with this problem is to go back to the broader conception of

industrial relations contained in the original paradigm. To say that industrial relations cover the broad

subject of the employment relationship is not enough, however. The field also has to bring to the

analysis of the employment relationship a unified, productive intellectual and normative framework in

order to give the field coherence and value-added.

Paper 5

Industrial Relations as a Social System

The paper starts with a criticism of John Dunlop’s systems theory of industrial relations. The

fundamental argument of the article is that some of the weaknesses of Dunlop’s approach can be

overcome by a systems theoretical conceptualisation of industrial relations. It discusses five types of

social systems that Luhmann’s theory offers to characterise industrial relations as a social system: a set

of interaction systems, organisation systems, conflict system, immune system and a function system.

The paper proposes to adopt a view of industrial relations as a fully-fledged function system operating

within the world society. In the last part it sets out the major characteristics of such an autopoietic

industrial relations system.

In summary it can be stated that Dunlop's systems theory remains at a classificatory level. This is

probably related to the lack of understanding of the theory of structural functionalism, which he himself

admitted6. Indeed, his systems theoretical understanding has hardly exhausted the potential of Parsons'

systems theory to conceptualise industrial relations systems (see also Wood et al. 1975 and Singh 1976).

Furthermore central areas of industrial relations like collective bargaining, arbitration, grievance

handling, negotiations between worker representatives and management, and political exchanges at

national level are either neglected or poorly treated in the study. Although rule making in industrial

relations is central in Dunlop's discussion his study reveals a lack of interest in considering the real

processes of the creation and application of rules through procedures.

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Industrial relations systems tend to develop their performance relations with the political and the legal

system into intersystemic exchange relations. These exchange relations are often tripartite in nature

with the two industrial actors interacting with state officials. If recurrent meetings of the three parties

take place on a regular basis, such institution is commonly referred to as a corporatist arrangement.

However, the intersystemic relations between the industrial relations system and its surrounding

neighbour systems can only flourish when the industrial relations system is secure in its own autonomy

and autopoiesis. Corporatist arrangements can only benefit the industrial relations system if it is strong

enough to resist direct determination and can use corporatist arrangements for internal creation of

structures. And the political and legal systems benefit only from participation in corporatist

arrangements as long as the industrial relations system can offer performances, which are useful for

their internal communications. The political and the legal system will only maintain their, it is more likely

that the globalisation of the labour movement takes place at home. Indeed, increased recognition of the

local through global exposure already supports labour movements in their endeavours. Achievements at

the workplace and in collective negotiations can rapidly be disseminated in the global world.

Furthermore the global challenge to workplace industrial relations releases new energies to defend and

even strengthen existing institutional regimes (Bélanger/Edwards/Haiven 1994). It is one of the main

strengths of the autopoietic perspective to be able to understand that industrial relations of advanced

national economies, in conjunction with a reflexive type of labour law (see Rogowski/Wilthagen 1994),

become mediating forces which protect their achievements through endorsement of their global role

(see Wilthagen 1998). Insofar as collective bargaining at sectoral and company level and national labour

law systems are able to accept the global challenge through reflecting their global position, these

confident local, regional and national industrial relations will constitute important premises of the world

society.

Paper 6

End users -Actors in the Industrial Relations System

John T. Dunlop described industrial relation system as consists of three actors: unions, employers and

the state. Historically, scholars and practitioners of Industrial Relations followed the same definition.

Over the past few years, the call to expand upon the notion of actors in the industrial relations

environment has become more and more widespread, but no one has yet suggested how this

integration might be implemented. The main objective of this paper is to propose an analytical model of

the actor and to explore how the latter could be applied in the case of public urban transit users. Over

the years, the scholars have failed to specify what they mean by term ‘actors’. The conceptualization is

necessary if various theoretical approaches are to be transferable to dissimilar IR systems, and in order

to examine the evolution of IR system in developing countries. The classical paradigm used ‘systemic

model’ emphasizes constraints imposed on humans by the social structure. The model is more flexible

by having dynamism via the interplay between the environment and the strategic choices made by the

actors. An actor in IR environment can be defined as an individual, a group, or an institution that has the

capability, through its action, to directly influence the industrial relation process, including the capability

to influence the casual powers deployed by other actors in the IR system. The analysis of actors can be

divided into two parts: their role in service relationship, and their and desire and capability to associate

with the other end users. An actor’s influence can make itself felt among two dimensions: an

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instrumental dimension and an outcome dimension. While examining the public transit system, the role

of end user is considered as co-producer, co-supervisor and co-designer of the product. The influence of

end user groups on the transformation of the legal environment regulating the industrial relations

system and subsequently the use of this legal environment is particularly evident with respect to two

bodies: essential service regulations and the legal framework regarding class action suits. The action of

end users is identifiable and is persistent. Finally, it can confidently be asserted that public transit

systems are influential actors in the IR relations.

Paper 7

The Citizen-Consumer as Industrial Relations Actor: New Ways of working and the End-user in Social

Care

As the socio-economic and political circumstances changes, the definition of end users needs to be

extended beyond Dunlop’s (1958) three main actors —management and their representatives,

employees and their representatives, and the state. This article explores the role of the citizen-

consumer as an actor in public service industrial relations. Based on research into the New Types of

Worker program in social care, the article considers how new work roles engage end-users as citizen-

consumers in work relations and their consequences for stakeholders. Research on the projects in the N

To W program provided an opportunity to consider issues related to workforce reform, particularly how

such reform might enhance the role of the end-user in work relations and service delivery. The article

addresses these issues in four main parts. The first sets out the public policy context for the reform of

public services, drawing attention to the weight placed on the end-user in service delivery, and explores

the treatment of the end-user in industrial relations and other research literatures. The second outlines

the research approach adopted within the context of the N To W program. It was a program that

supported the development of new work roles sensitive to the needs and circumstances of the end-

user, fostering person-centered services and providing users with ‘choice’, ‘voice’ and ‘independence’.

Covering the whole of the social care sector, the N To W program presented a chance to consider the

influence of user group on customer engagement in work organization. The third part presents the

findings, with the fourth discussing them. The research findings on the development of work

organization under the SfC N To W program suggest a distinctive dynamic underpinning the engagement

of the end-user as an industrial relations actor. The analysis of the pilot projects under the first phase of

this program suggests that the end-user in social care has become a key actor, particularly, in work

relations; an actor, however, whose role has been indirectly stimulated, is contingent and sometimes

problematic. Second, it is clear that organizational systems and context have an important influence on

end-user engagement. Finally, the article suggests the need to explore the realities behind some of the

public service reform rhetoric that relates to service users. The end-user will remain a key factor in

public service industrial relations for the foreseeable future.

Paper 8

New Actors in Industrial Relations

Famously, John Dunlop declared that an ‘industrial relations system’ comprised three sets of actors: (1)

a hierarchy of managers and their representatives in supervision, (2) a hierarchy of workers (non-

managerial) and any agents, and (3) specialized governmental agencies (and specialized private agencies

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created by the first two actors) concerned with workers, enterprises, and their relationships’. This

narrow definition of the field as the study of union–management relations continues to exert influence

today, despite editorial statements suggesting otherwise. It is increasingly subject to challenge,

however, and arguably is untenable given the decline of the labor movement and collective bargaining

in countries where industrial relations has been institutionalized as a separate field of study. One

response has been to tilt the subject towards the study of HRM and in the USA, in particular,

management strategies of labor use have moved to the forefront of research. A second response is to

retain the concern with institutional actors and a plurality of interests, enshrined in Dunlop’s initial

formulation, but to update it for today’s economy. A number of specific motivations lay behind issuing

the call for papers. One was to explore the role of new institutions of worker representation. As unions

have declined there has been a growth of interest in campaigning, advocacy, advisory and service-

providing institutions that discharge some of the functions of unions, often for a particular segment of

the workforce or an identity group. A second motivation was to examine the role of institutions that

shape employer behavior. In the HRM literature there is an implicit model of the firm as a strategic

actor, monitoring its environment and rationally selecting strategies of labor use to suit. This contrasts

with the model developed in institutionalist literature, which emphasizes the shaping of firm behavior

by the institutional configuration of a particular business system or variety of capitalism. Following the

institutionalist lead can point us to research on two types of actor. The first are ‘specialized private

agencies’, to use Dunlop’s term, created by employers themselves and which have been surprisingly

neglected by IR researchers. The second are state institutions, which include not only systems of

employment law and conflict resolution, long studied by IR researchers, but also the wider set of

institutions that govern the economy and thereby shape labor management. There are other ‘new

actors’ that warrant study. In an important contribution, it has argued that end-users (client and

consumer organizations) often constitute actors within industrial relations, to the extent that they exert

a continuous and significant influence over the form of the employment relationship and the behavior of

workers, employers and state institutions.

Paper 9

The State as Corporate Actor in Industrial Relations Systems

Employers, labour, union and government are the three actors in a modern industrial relations system.

One of the actor union is declining in most of the countries. There have been many studies conducted in

this regard and this paper presents insights of various researches. Sandra Jones proposes a model that

focuses on building relationships based on trust and network ties at the community, national, and global

levels of economic and social activity to create cohesiveness among the actors. Masako Yuki and Kazuyo

Yamada bring out that unions give more promotion to full time standard work and treat part time work

as the threat. They also point out the various type of non standard temporary work arrangements and

how unions adversely affect them. L.M. Buchner raises the age-old question of how to hold corporations

more accountable for meeting their responsibilities to employees, communities and societies. They urge

for focus on corporate social responsibility. These papers also show that industry associations are

declining as individual firms take on more importance and as new firms that choose not to join

associations come into an industry. The paper also presents various new and innovative models of

labour unions. According to Rosalind and Soon Beng Chew a new model of union can materialized in

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which union membership can be decoupled from collective bargaining by offering individual

memberships that continue even when workers move across employers and throughout their careers

that is a lifelong membership concept. Though collective bargaining would continue to be an integral

part, it would not be the sole reason for joining a union or for maintaining membership or a requirement

for union organizing. Lise Lotte Hanson discusses the growing importance of women for future union

growth.

The author of the paper says the definition of "actors" can be expanded in two ways: First at the

community level NGOs and other civil society groups are playing more active role in labour market and

industrial relations. Second, at the international level, efforts to build institutions that are able to

engage the key international agencies that set policies and allocate financial resources are just beginning

to emerge out. He also emphasizes that employer organizations need to change. At the same time union

should identify new ways to improve their popularity. It can be done by recruiting and retaining union

members which are young and have a long career ahead. Unions should develop new capacities to build

coalitions and leverage the presence of alternative worker advocacy groups to achieve their objectives

in a more networked and fluid economy. For being an important player in the information and capital

driven economy, union need to find the best way to utilize the information and human skills in an

efficient manner. In a more networked economy, the employer institutions or associations that facilitate

and coordinate the firm's network linkages should be on the rise. Though transforming traditional

employer associations whose main objective is collective bargaining to ones who can play coordinating

roles is a herculean task. However, it still remains to be seen that whether existing organizations can

make this transition or the new ones will emerge. Paper doesn't talk about another key factor-

government.

The papers present here how the new actors in industrial relations are changing. They have presented

some of the innovations that are responsible for these changes. Given the challenges of our time, we

need to continue to expand our vision of the changes in industrial relations actors and institutions that

are needed. They should explore the effects of those on the fore bearers innovation.

Paper10

The emergence of a new industrial relations actor—the role of the Citizens’ Advice Bureaux

The paper tells about the latest trend of workers approaching new institutions instead of trade unions

for their employment related issues. Author presents a new actor "Citizen's Advice Bureaux" and how it

is increasingly participating in the industrial relations process.

The Citizens’ Advice Bureau (CAB) is the world’s largest independent advice-giving charity organisation

providing free, impartial and confidential information and advice. Bureaux use paid community lawyers

or specialist supporting volunteers as the advisers. Clients from a wide range of occupational

backgrounds, working in both large and small firms predominantly non-union approach bureaux. The

main reason for growing popularity of CAB is declining membership of trade unions. Besides, there are

other reasons like their ineffectiveness and non representativeness in solving issues. Most of the clients

of CAB are from small firms, reason being the absence trade unions and formal grievance and

disciplinary procedures in these firms.

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The three broad categories of employment issues that are reported to CAB are redundancy, dismissals

and unilateral variations of terms and conditions of employment. The strategy adopted by advisers for

dealing with an issue is to encourage client to take on the ownership of the problem. The advisers

believe in empowering their clients and act only in the background provided they feel that client has the

ability and the issue is not complex. This help in educating clients and developing their understanding of

happenings around them so that they can leverage the experience gained to deal with any similar

problems that they encounter in the workplace in the future. However, one weakness of this approach is

it fails to recognize the inherent imbalance of power between client and employer and overestimates

the ability of clients to deal with the issues in such conditions. Also CAB is powerless when negotiating

with employers. Recourse to the law and reliance on the court system are the main sanctions that

bureaux have at their disposal.

Increasingly bureaux are taking on the functions generally associated with trade unions. They are even

representing their clients in the industrial tribunals. To influence the public policy and debate on

employment issues, CAB is actively taking the role of a campaigning. Though, the intention of CAB is not

to replace trade unions rather assist them in taking up the employee issues to efficiently solve the

problems. So, if a client is a union member or a non member working in a union environment, the initial

approach would be to encourage them to contact the local union representative. If the union was

unwilling to take up the client’s case or the client did not want to involve the union then the bureaux

would intervene and take the matter forward.

Given these recent developments it has become imperative that greater attention is given to institutions

like CAB to play an active role in industrial relations and encourage their participation in resolving

employment issues. At the same time better co-ordination between CAB and trade unions can benefit

both organisations. Union can support CAB by providing access to employment lawyers, representation

and information on industrial relations within a particular sector. Similarly, CAB can help union in

conducting recruitment drives by directing non-members towards appropriate trade unions and provide

them opportunity to improve their popularity and acceptability by campaigning on a wider range of

issues above those related to the workplace.

Paper 11

Precarious Work in India: Trends and Emerging Issues

The paper talks about the situation of workers from informal sector or workers from formal sector with

short term contracts. The author sheds light on the rigidity of labour laws in these sectors which has

resulted in rise of precarious employment. However, the paper also points out that increase in contract

labours in the formal sector is causing industrial expansion in spite of any major labour reforms.

In the early years of independence India pursued policies of self reliance and import substitution and

large scale industrialisation with the expectation of economic growth and poverty alleviation. However,

the performance of the economy was poor in these years which prompted India to move on the path of

liberalization to make the growth pro poor. Although reforms and growth have seen important and

associated social changes, the movement of populations to urban areas has been relatively slow and

hence the condition of the workers has not improved substantially.

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Throughout the article the term "Precarious work" has been used. “Precarious work” refers to

nonstandard employment relationships with high degrees of uncertainty, insecurity, and instability in

economic activities. Precarious workers include workers hired on contract or informal basis. Precarious

work results from the practices aimed at reducing costs, limiting permanent workforce, risks and

uncertainty towards workers. Large portion of informal sector is marred by shortage of capital which

force them to rely on subcontracting arrangements to sustain their business. The informal sector is huge

in India and thus the number of precarious workforce is also high. Looking at the enormousness of

informality and precariousness, the Indian government has initiated limited employment guarantee and

social security acts like MNREGA and NMSSA for informal workers.

The attempt of the author is to demonstrate the size and precariousness of work during the process of

liberalization in India. Although, the working conditions of the owners in the informal sector is not much

different from the workers, which means they are also engaged in precarious work. Increase in

population over the years have resulted in burgeoning of labour workforce. The economic reforms

initiated in 1990s have played an important role in development of industrial and services sectors

equipped with capital intensive technologies. Therefore the absorption rate of workers in the formal

sector has been low. So, the workers have no option but to go to informal sector for their livelihood.

Undirected trade union activities and rigid labour laws have also resulted in expansion of precarious

work.

The issue of improvement of the conditions of informal and casual workers has become extremely

important for policy makers, especially after the decline of trade union activism and expansion of

informal sector in recent years. In midst of demand for more flexibility in the labour market the

government has started the process of formalization of the informal sector in the Indian economy.

Paper 12

Emerging Trends in Industrial Relations and Human Resource Management in Indian Industry

This paper talks about the industrial relations in India just after economic reforms. The author says that

the practice of industrial relations was meant 'to attack the status quo' in industry i.e. a conflict between

employers and workers against the wrong doings of the employers. As a result, industrial relations in

enterprises were mostly thought of in negative and reactive manner and not in a positive and a

proactive manner.

In the early years, and to some extent now, employers or managements in India were weary of dealing

industrial relations problems with the Trade Unions, who tried to protect the interests of the workers,

sometimes even at the cost of the interests of the company. The practice of Industrial Relations in India

now also encompasses some of the positive practices though in a few companies. Industrial relations in

such companies are, therefore, being increasingly practiced in a proactive manner, dealing with

situations of industrial conflict as well as areas related to Human Resource Development like

recruitment and manpower planning, training and development, communication, performance

appraisal, delegation and employee-involvement.

The author assesses the implications of NEP (New Economic Policy) with regards to the three actors of

the Industrial Relations System - state, management and trade unions.

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State:

Till 1991 the state in India had regulated industrial relations through the following measures, among

many others:

• Industrial Relations Acts (ID Act 1947, the Factories Act 1948, the Trade Union Act 1926).

• Pro-labor stance and policies.

• Encouragement of trade unions.

• Setting up of the bipartite and tripartite machinery for the settlement of industrial disputes.

• Restrictions on retrenchment and closures (though the clauses state that the company may

apply for closure and retrenchment. However, this was not allowed in practice, by and large).

• Ban on strikes and lockouts.

• Promoting an equitable system through minimum wages and welfare of workers.

The paper goes on to say that, with NEP, the state's role has to be reoriented to achieve the following

with respect to industrial relations:

• Speeding up the announcement of the new Industrial Relations Bill for bringing changes in the

Trade Union Act 1926 and the ID Act 1947, in line with the changing needs of industry.

• Bringing a balance in the policies and, therefore, moving away from the bias in favour of either

the management or the labor.

• Increasing autonomy to the enterprises in their functioning. Promotion of bipartisanism

• Reorienting the State's industrial relations machinery to serve the guidelines of the market

economy.

• Stricter enforcement of the various clauses of the Acts governing industrial relations.

• Involvement of trade unions and management in the process of change.

• De-politicization of unions. Speeding up the process of re-deployment and re-training of

workers.

Management:

The author contrasts the Management Today as professional management is being practiced by a large

number of companies as compared to the family run enterprises in which the managements' function

was being performed by the handpicked men.

The obvious expectation from a professionally run enterprise is that it will follow a different set of

policies, the contours of which they have learnt from the management schools. They are expected to

P a g e | 14


behave differently as leaders, follow practices of delegation, openness, career development, employee

involvement, etc. These policies, in turn, are expected to act in a positive mould.

However, the empirical evidence, which is coming out as far as the practices of these professional

managers are concerned, does not support the proactive way in which the management policies should

be moving in a large number of industrial companies.

In pursuance of the growth plans, one organization also made an attempt to introduce objective and

scientific policies of organizational and personnel development. These related to performance appraisal,

grievance handling, communication and information sharing, delegation, career planning and

development, training and worker participation or employee-involvement. The main finding in this

respect was that in most of the cases, the concepts were not understood but applied and, therefore,

with confusing and limited outcomes.

As a consequence of the new economic policies more and more companies have begun to upgrade the

HRD function. This department of HRD now compares with others like marketing, finance, etc. The HRD

function is also becoming strategically important area of corporate governance, which indicates that the

HRD policies are now being integrated into the overall policies of the organization.

Some of the specific implications and tasks of the management to maintain cordial industrial relations as

well as to survive and excel in the new economic environment are as follows:

• Growth to be achieved and sustained with human resource development policies and practices.

Introducing career growth and promotional avenues.

• Systematic and on-going programmes of enhancing the skill levels of the workers, along with the

managers.

• Reorganization of work (job rotation and job enrichment).

• Bringing about rationalization of workforce, through internal transfers and resorting to

employee reductions, though not as a first choice.

• Reducing social and hierarchical stratification.

• Involvement of unions, no union busting animus or playing one union against the other.

• Development of mutual trust between unions and management.

• Holding opinion surveys to get the perception of the employees and apply mid-course

corrections, if required.

Conclusion:

The author assessed the positive and negative impacts on all the three actor of IR as a result of New

Economic Policy.

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Paper13

Adapting Industrial Relations to Serve Knowledge-based Economies

This paper discusses about what adaptations will be required of industrial relations policies, institutions,

practices, and research to support the transition from an industrial to a knowledge-driven economy?

How can we make this transition in a way that benefits all workers, families, and societies in the context

of a globalized economy?

These are the two greatest challenges facing our profession today. Industrial relations as a field of study

and practice emerged in response to the need for new policies and institutions to support the emerging

industrial economies of the 20th century. Without an active and progressive industrial relations policy,

workers found themselves without the bargaining power or the institutions needed to achieve a fair

share of the gains generated as economies shift resources from farming to manufacturing and services.

• Power is ever present in models of employment relationships and therefore our institutions must be

designed in ways that address power imbalances where they occur.

• The market, government, and private institutions need to be viewed as complementary instruments

for achieving the objectives we hold for labor markets and employment relationships. These should not

be viewed as alternatives, competing or contending forces. Instead, government policies and private

institutions need to work with evolving supply and demand features of labor, product, and financial

markets.

Education and Life-long Learning

A knowledge economy requires a high quality and universal educational system from early childhood

through college and vocational schools and extended into life-long learning opportunities for working

adults. Moreover, the nature of education has to be adapted from the rigid specialization of subjects

and knowledge and memorization of facts that fit the requirements of an industry.

Adapting the pedagogy used in education in primary and university programs may, however, be a

challenge, given traditional approaches education in Korea and other parts of Asia. One way of speeding

this process is by continuing to expand the large array of joint programs between Asian and Western

universities that have sprung up in the past decade.

The lesson learned from the international benchmark vocational educational system, i.e., the German

system, is that the key to a productive vocational education system is having strong employer

participation in its design, updating of curriculum, and placement of graduates. Greater involvement of

the employers in specific regions might help to solve this problem.

HRM

Broad diffusion of these types of HRM innovations can support the transition to a knowledge-based

economy. The question is how widely and at what pace the transformation in practices is occurring. In

the US this approach is competing with another strategy, namely the outsourcing and off-shoring of

manufacturing and increasingly of knowledge intensive service work to lower cost countries.

P a g e | 16


The lack of more decentralized industry or firm-level consultative institutions may, however, continue to

limit the sustainability of national efforts. Developing more firm and industry-level initiatives, perhaps

focused on key workforce and competitive issues such as training and life-long learning, diffusion of

knowledge-based work systems, or other topics might serve as a useful foundation on which national

tripartite discussions can build.

Migration To and From Asian Countries

One issue that is becoming an increasingly important topic in our field is the role of labor migration. This

is especially so in Asia. With increased economic growth, out migration from Asia has increased

tremendously over the past few decades. Statistics of total outflows grossly underestimate actual flows.

The fact that there has been an explosive growth in illegal and irregular migration and that in Asia

particularly, migration is an increasingly feminized phenomenon, presents challenges for national

governments, international bodies, unions and employers to deal witha globally stratified labor market.

Thus migration in Asia is very much a development and a labor market issue.

On the other hand, labor markets for skilled professionals are increasingly becoming globalized. There is

enough evidence to suggest that current aspects of the phenomenon are significantly different from

those of earlier generations of skilled migration. Higher education curricula are increasing converging

across countries, and facilitate mobility of professionals; cross-national recruitment is at once more

common and increasingly proactive; and there are emerging transnational occupational networks that

increase flows of information among ethnic professionals. These trends certainly challenge the

traditional conception of the phenomenon of skilled migration as a ‘braindrain’ having a negative impact

on development of the sending country. In addition, the mobility of skilled professionals is intricately

linked with the global outsourcing of work from industrialized countries to developing countries.

However, the exact relationship and micro-mechanisms involved in the relationship between skilled

migration and economic development, as well as that between skilled migration and global outsourcing,

are not yet adequately understood.

Paper 14

Changing Power Dynamics in the Emerging Industrial Relations Scenario

The crux of industrial relations lies in the work and employment relationship. In practice industrial

relations in the past were characterized by mistrust, conflict, and bargaining between the parties; it has

been more confrontational than cooperative in nature. The snowball effect of change due to the

evolution of a market economy has forced the actors to deviate from the traditional approach and adopt

a new approach to industrial relations, in which both sides are treated as strategic business partners.

Trade unions are struggling to prove their worth; they have not been able to protect the interests of

their members nor identify themselves as social partners in the business. Gone are the days of

confrontation at the bargaining table, since today, the parties are sitting in the same sinking boat and

the very survival of the organization is at stake. Labor laws have also become obsolete when it comes to

protecting the workers and running the business successfully in the open, competitive, free market

economy.

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The evolution of industrial relations can be divided into four phases: the pre-independence era, the

early independence era, the pre-liberalization era and the post-liberalization era. The actors in industrial

relations and their roles in these different eras are shown in the below table.

Industrial Disputes

Industrial disputes are considered to be a significant indicator of industrial relations. India loses more

man-days every year, as a result of strikes and lockouts, than almost any other country. But the number

of workers involved in strikes and lockouts is comparatively lower which proves that unions are weak.

This supports the basic premise that industrial pluralism is lost. Due to the weakening of union power

and large-scale privatization, the number of strikes has recently gone down.

Workers Participation in Decision

Making

Liberalization has forced the

management to adopt the labour-

saving strategies, already

mentioned. Now workers, as

important stakeholders in the

business, have a right to know

about the forces which compel the

management to adopt such

strategies. The workers are entitled

to question whether adequate

steps have been taken by the

management to save their jobs

before they are asked to leave

through lay-offs, retrenchments,

Voluntary Retirement Schemes (VRS)and closures.

Labor Laws

Currently, chapter V- B of the Industrial Disputes Act permits layoffs and retrenchment in undertakings

employing 100 or more workmen only with prior permission from the labor commissioner. There is a

constant effort on the part of employers to have this chapter deleted from the Act, so as to give more

power to managements to layoff and retrench employees. Atleast the minimum number of workmen

should be raised to 300 before permission is required to lay off, and retrench or close down. The success

of any exit policy adopted by the government will depend on dealing with chapter V-B; and logically no

restructuring plan will succeed without the amendment of this chapter. The Finance Minister has

recently announced that the number of workers needs to be, not less than 10before permission is

required to layoff and retrench.

This has greatly increased the number of units permitted to layoff, retrench and even close down.

Chapter V-A can also be amended to raise the amount of compensation to be paid for retrenchment,

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and closure. All cases, which come under the purview of the Board for Industrial and Financial

Reconstruction (BIFR), are placed outside the scope of the I.D. Act. The ID Act covers only non-sick

industries.

Trade Unions

Trade unions have to come out of their traditional image and concentrate more upon those areas, which

are outside the purview of bargaining. Positive actions such as activating the grievance redressal system,

continuous dialogue with management, worker participation in management and community

involvement programme scan help them find a new role. Unions and workers have a right to question

changes in technology, work processes, and job design.

The distinction between manager and worker is diminishing, owing to increasing decentralization of

authority. The middle management level, which was acting as a bridge between managers and workers,

collecting information and feeding it to the higher management, is also disappearing because of the

rapid growth of information technology. Hence management must restrain its constant efforts to bypass

the union; rather it should use the unions as change agents, which will help the company survive in the

market.

CONCLUSION

Trade union power has diminished, but the role of unions in protecting the workers' interests should not

be undermined. It is a difficult task for the management to reach individual employees without the

union. Union leaders must also realize the fact that a union is effective only in a successful organization.

Political affiliation has earned a bad image for unions and deviated them from their goal. This is why the

number of plant based independent unions is increasing, and they focus rather on plant level issues. The

state so far has not taken any important step to evolve a mechanism, which can facilitate business

success in a market economy along with protecting the interests of the working class. Setting up a

commission (the Second National Commission on Labor) will not solve the problem, unless its

recommendations are accepted and proper implementation machinery is provided.

Paper 15

Trends and challenges of IR

Introduction

The concept of human capital is broad faceted but the fundamental aspect has to do with skills and

knowledge accumulated through training, experience and education. A significant share of growth of

economies is attributable to the rise in educational levels of the workforce. The economic value of

knowledge is considerable greater in the current world of globalization, deregulation and digitization.

Growth of knowledge economy and globalization are the two key forces that are shaping the global

economic agenda today. The shift is towards a knowledge based and technology intensive structure.

There is a burgeoning demand for skilled labours globally in current times. Growth relates directly to the

number of graduates of tertiary education. Their economic value to the society is evident from the

positive economic payoff to the individuals. A positive correlation exists between stocks of human

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capital and economic development, and that becomes stronger at higher levels of education. The

influence of general and technical education on per capita income appears to be positive with the later

one being more powerful.

Global outsourcing business

One of the striking features of the growth story of India has been the dynamism of the service sector

and this growth trajectory has been termed “services-led” industrialization. The pattern of service sector

growth has been skewed towards skill intensive services. The rapidly growing knowledge intensive

sector driven by Information Technology (IT) and IT enabled services (ITES) requires highly educated and

skilled manpower to exploit the vast opportunities offered by this services growth and in post reforms

period the service sector accounted for 73.2% of additional employment generated. The outsourcing

phenomenon is generally referred to as a practice of subcontracting of business processes to an outside

supplier, often to foreign companies, with the primary aim of reducing operating, administrative, and

transaction costs. Outsourcing can help diminish the effects of demographic trends in countries where

the ratio of the working population to the total is expected to decline, and median age is expected to

rise. Most of the global spending is attributed to outsourcing and off shoring decisions by companies in

the OECD countries.

Weaknesses

India’s share in global off shoring is estimated to be 60 per cent. To maintain India’s current global

share, the country will need 2.3 million professionals by 2010but there are critical labor shortages in

many segments. As the volume and complexity of outsourcing work increases, the gap between demand

and supply of suitable and employable workforce is set to widen. This shortage is due to lack of

suitability of workforce.

Conclusion

OECD countries are expected to face decline in labor force as their population Ages. At the same time,

India is expected to experience declining age-dependency ratios till 2035. The declining proportion of

workforce in many developed countries is expected to result in greater dependence on developing

countries with young, surplus, highly educated and skilled workforce, fluent in English. India stands at a

crucial standpoint where population dynamics has the potential to catapult it onto a trajectory of high

growth. Rapid ageing of the population in the OECD countries provides India with a significant

demographic opportunity, which it must utilize to augment its growth rate. Ageing countries will try to

make up for decline in workforce through rise in productivity, re-designating retirement age and some

other measures. However, some activities can be expected to shift to countries with more labor force

participation such as India. At the same time, the knowledge intensity of the world economy is

increasing and the emerging innovation and technology regime implies greater emphasis on R&D,

presently at low levels in India. Thus, elevating expenditure on higher education as a percentage of GDP

is critical to India’s future growth trajectory. It is important for India to capitalize on the head start it

enjoys and expand its human capital further by improving the depth and quality of its talent-pool. The

analysis suggests the complex inter-relationship between global and Indian demographic trends on one

hand, and off shoring activities due to strong and deep Indian human capital on the other hand.

hrm report group 1 section e

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