Industrial Relations Management

Industrial Relations Management

This course contains the basics of Industrial Relations Management

Course introduction
Interview Questions
Pragnya Meter Exam

Industrial Relations Management


An organization whose membership consists of workers and union leaders, united to protect and promote their common interests.
The principal purposes of a labor union are to

  1. Negotiate wages and working conditions terms,
  2. regulate relations between workers (its members) and the employer,
  3. Take collective action to enforce the terms of collective,
  4. Raise new demands on behalf of its members, and
  5. Help settle their grievances. A trade union may be:
  1. A company union that represents interests of only one company and may not have any connection with other unions. Also called house union,a company union is often a bogus one and generally illegal.
  2. A general union that represents workers from several companies in the same industry. Also called industrial union.
  3. A craft union that represents skilled workers in a particular field such as carpentry or welding.

A trade union is an organization of employees formed on a continuous basis for the purpose of securing diverse range of benefits. It is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives.

The Trade Union Act 1926 defines a trade union as a combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive condition on the conduct of any trade or business, and includes any federation of two or more trade unions.

This definition is very exhaustive as it includes associations of both the workers and employers and the federations of their associations. Here, the relationships that have been talked about are both temporary and permanent. This means it applies to temporary workers (or contractual employees) as well.


Trade unions are voluntary associations formed for the pursuit of protecting the common interests of its members and also promote welfare.They protect the economic, political and social interests of their members.

Features of trade unions:

  1. It is an association either of employers or employees or of independent workers. They may consist of :
    • Employers’ association (eg. Employer’s Federation of India,Indian paper mill association, etc.)
    • General labor unions
    • Friendly societies
    • Unions of intellectual labor (e.g. All India Teachers Association)
  2. It is formed on a continuous basis. It is a permanent body and not a casual or temporary one. They persist throughout the year.
  3. It is formed to protect and promote all kinds of interests –economic, political and social-of its members. The dominant interest with which a union is concerned is, however, economic.
  4. It achieves its objectives through collective action and group effort. Negotiations and collective bargaining are the tools for accomplishing objectives.
  5. Trade unions have shown remarkable progress since their inception; moreover, the character of trade unions has also been changing. In spite of only focusing on the economic benefits of workers,the trade unions are also working towards raising the status of labors as a part of industry.

Need for Trade Union

  • Trades unions are essential for the protection of workers in the world of work. The individual is weak and easily exploited where there are no unions around; I have witnessed some of the horrendous practices employers get up to when there is no union protection for workers.
  • Unions are necessary where this sort of abuse is prevalent; needless to say there was no union at this plant which has since closed down.

Nature and Scope of a Trade Union

The employer’s association or professional bodies were not included in any of the above definitions. The employee’s unions are different from that of the employers or professional bodies. The employee’s unions are primarily concerned with the terms and conditions of employment of their members. The employer’s associations on the other hand are concerned among other things with influencing the terms of purchase of services in favor of their members. Hence, the two should not be placed in one category.

The associations of professional members also differ fundamentally from employees unions. Professional associations include self employed as well as the employees where as trade unions consist only of the people who are employed by others. In India the term Trade Union refers besides employee’s organizations to employers association also. Similarly in Britain,even the associations of professional people such as Artists Federation of Musicians Unions are also recognized as Trade Unions. Thus trade unions are a major component of the modern industrial relation system. A trade union of workers is an organization formed by workers to protect their interests. I.e.improve their working conditions etc. All trade unions have objectives or goals to achieve, which are contained in their constitution and each has its own strategy to reach those goals.

Trade Unions are now considered a sub-system which seeks to serve the specific sub-groups interest and also considers itself a part of the organization, in terms of the latter’s viability and contribution to the growth of the community of which it is a part.


Their purpose is to protect and improve people's pay and conditions of employment. They also campaign for laws and policies which will benefit working people.

Trade unions exist because an individual worker has very little power to influence decisions that are made about his or her job. By joining together with other workers, there is more chance of having a voice and influence.

Labor unions are formed to protect the interests of workers, financially and otherwise. They bargain and negotiate with employers on the behalf of employees, in hopes of improving the latter's wages and working conditions. America's first union was formed in 1794 by Pennsylvanian shoemakers. A trade union exists, in theory, to provide better working conditions for its members. They do this by using the collective power of all members to sit on a more equal playing field with employers. In this way they can demand higher wages, shorter working days,better working conditions, more on-the-job training, etc.

Workers organize themselves in the form of a union to achieve the following goals:

  1. a) To improve the economic lot of employees by securing for them better wages.
  2. To secure better working conditions for the workers.
  3. To secure bonus for the employees from the profit of the concern.
  4. To resist schemes of the management which reduce employment, e.g. rationalization and automation.
  5. To secure welfare of employees through group schemes which give benefit to every employee?
  6. To protect the interests of employees by taking active participation in the management.
  7. To secure social welfare of the employees.
  8. To secure organizational stability, growth, and leadership

Historical Evolution of Trade Unions in India

Trade union as per Trade Union Act 1926 “Any combination formed primarily for the purpose of regulating the relations between workmen and employers or workmen and work manor employers and employers or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of two or more trade unions.”

From the above definition it is clear that Trade union is not just an association of the workmen of a factory or a trade or a business but also can be formed by officers and managers.
Trade union movement in India was started and led by philanthropists and social organizations and not by the workers.Bombay Presidency - by servants of India society Eastern India - by Brahma Samaj South India centered around Madras - by Theosophical Society

Trade union is a direct product of Industrialization and a very recent development. In India, the foundation of modern industry was laid between 1850 and 1870. Prior to that trade was confined to individuals and families like craftsmen and artisans. They had expertise and specialized skills which was inherited by their off springs. After Industrial revolution,these people started losing their individual identities and had to join factories to earn their livelihood and compete with mass production. There was a psychological dislocation as they were losing their identities.Indian trade union movement can be divided into three phases.

The first phase falls between 1850 and 1900 during which the inception of trade unions took place. During this period of the growth of Indian Capitalist enterprises, the working and living conditions of the labor were poor and their working hours were long. Capitalists were only interested in their productivity and profitability. In addition to long working hours, their wages were low and general economic conditions were poor in industries. In order to regulate the working hours and other service conditions of the Indian textile labourers,the Indian Factories Act was enacted in 1881. As a result, employment of child labor was prohibited. Mr. N M Lokhande organized people like Rickshaw walas etc., prepared a study report on their working conditions and submitted it to the Factory Labor Commission. The Indian Factory Act of 1881was amended in 1891 due to his efforts. Guided by educated philanthropists and social workers like Mr. Lokhande, the growth of trade union movement was slow in this phase. Many strikes took place in the two decades following 1880 in all industrial cities.These strikes taught workers to understand the power of united action even though there was no union in real terms. Small associations like Bombay Mill-Hands Association came up.

The second phase of The Indian trade union movement falls between 1900 and 1947. This phase was characterized by the development of organized trade unions and political movements of the working class. It also witnessed the emergence of militant trade unionism. The First World War (1914-1918) and the Russian revolution of 1917 gave a new turn to the Indian trade union movement and organized efforts on part of the workers to form trade unions. In 1918, B P Wadia organized trade union movements with Textile mills in Madras. He served strike notice to them and workers appealed to Madras High Court because under ‘Common Law’, strike is a breach of law. In 1919, Mahatma Gandhi suggested to let individual struggle be a Mass movement. In 1920, the First National Trade union organization(The All ndia Trade Union Congress (AITUC)) was established. Many of the leaders of this organization were leaders of the national Movement. In 1926, Trade union law came up with the efforts of Mr. N N Joshi that became operative from 1927.

The third phase began with the emergence of independent India (in 1947),and the Governments ought the cooperation of the unions for planned economic development. The working class movement was also politicized along the lines of political parties. For instance Indian national trade Union Congress (INTUC) is the trade union arm of the Congress Party. The AITUC is the trade union arm of the Communist Party of India. Besides workers, white-collar employees,supervisors and managers are also organized by the trade unions, as for example in the Banking, Insurance and Petroleum industries.

Craft and General Union

Craft union: The earliest form of trade union, one whose membership is restricted to a particular category of skilled or craft workers, for instance, printers, carpenters and so on. Membership of craft unions is usually restricted to those who have completed the recognized qualification for the craft or skill in question, frequently an apprenticeship. Being closed unions (see below), craft unions may be quite small: for example, the National Union of Sheet Metal Workers of Ireland has 720 members as of January 1992, and the Cork Operative Butchers' Society 149 members at the same date

General union: A trade union which has no form of restriction on categories of worker who may join. There are no limits on the industrial or occupational area of recruitment. As such, general unions are open unions (see below), and tend to be fairly large. The largest general union in Ireland, the Services, Industrial, Professional and Technical Union (SIPTU), has 190,500 members in the Republic of Ireland as of December 1992 and amounts to 43 per cent. of the Republic's total ICTU affiliated trade union membership. As some trade unions move away from their original areas of recruitment,so they may become more like general unions; for example, the British-based union EETPU (now amalgamated with the engineering union AEU to become AEEU) which was originally a craft union, has now moved into a number of other sectors and recruited many semiskilled workers, thus having become closer to a general union than a craft union. Similarly, the retail and distributive union IDATU has widened its areas of recruitment.

Union Shop: When the union acts as supplier of labor, once an employee is employed then he has to join the union. Here the union makes employment conditional on union membership.

Check Off: The check-off system is a practice where the management collects an employee’s union dues, as a wage deduction and gives a lump sum amount to the union. This is a facility that ensures totality of collection of union dues with no excuse for employees to a resist from paying for one reason or the other as it could happen in a voluntary system. Such a facility is provided only to a recognized union.

Distinction between Workers:

Based on the level and status of the employee for membership of the unions a distinction is being made. All shop floor workers are termed blue collar workers and all clerical or office staff, who does not work on the shop floor,are termed white collar workers. White collar workers are different from the blue collar workers on socio economic background, education, manner of speech, social customs and ideology. They are being paid monthly and enjoy longer holidays and various privileges as compared to blue collar workers. Nature of work clearly and significantly differentiates one from the other. In recent times white-collar unionism is expanding. Through the methods of agitation and litigation, white collar workers achieve the goals like better pay scales, more fringe benefits, internal promotion etc. A large membership, sound finance and internal leadership are a few strong points.

Trade Union Growth

In India the trade union remains as adhoc bodies or strike committees but as features of the industrial society. The various factors like political, economic historical and industrial have all helped the unions to get a legal status and represent the workers. However, the unions are handmaids of political parties. They joined with one or the other political parties as more adjuncts of the parties,instead of partnership based on equality and independence as in England. The Trade union rivalries also have become chapter in free India. Most of the viable unions are split into new unions having sympathies with political parties have permeated unions operating in different levels. But they have been able influence public policy, labor and industrial legislation. They have played an important role in involving suitable machinery for joint consultation in negotiate various issues between labour and management. Comparing other countries India has large number of trade unions for a single country.

Union Leadership

One of the most crucial factors in this sphere is the leadership that is provided. The leadership provides the direction and goals for a particular union. The leader’s task is to make the union effective, by improving the terms and conditions of employment of the worker and also by being concerned with the viability of the enterprise. The trade union organization based as it is, in many cases on individuals or the national federations and their ideologies, has not been able to evolve a professional cadre of leadership at the grass roots to the desired extent. In fact, quite often, a single union executive leader is responsible for running a large number of unions. “A survey of trade union leadership in Bombay in 1960 showed that one leader was president of 17 unions and secretary of two more.

Functions of a trade union

Functions of Trade Unions in the India

Trade unions perform a number of functions in order to achieve the objectives. These functions can be broadly classified into three categories.

  1. Militant functions
  2. Fraternal functions

Militant Functions

One set of activities performed by trade unions leads to the betterment of position of members in relation to their employment.

The aim of such activities is to ensure adequate wages secure better conditions of work and employment get better treatment from employers, etc. When the unions fail to accomplish these aims by the method of collective bargaining and negotiations, they adopt an approach and put up a fight with the management in the form of go-slow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are known as militant or fighting functions. Thus, the militant functions of trade unions can be summed up as:

  • achieve higher wages and better working conditions
  • To raise the status of workers as a part of industry
  • To protect labors against victimization and injustice

Fraternal Functions

Another set of activities performed by trade unions aims at rendering help to its members in times of need, and improving their efficiency. Trade unions try to foster a spirit of cooperation and promote friendly industrial relations and diffuse education and culture among their members. They take up welfare measures for improving the morale of workers and generate self confidence among them. They also arrange for legal assistance to its members, if necessary. Besides, these, they undertake many welfare measures for their members, e.g., school for the education of children, library, reading-rooms, in-door and out-door games, and other recreational facilities. Some trade unions even undertake publication of some magazine or journal. These activities, which may be called fraternal functions, depend on the availability of funds, which the unions raise by subscription from members and donations from outsiders, and also on their competent and enlightened leadership. Thus, the fraternal functions of trade unions can be summed up as:

  • To take up welfare measures for improving the morale of workers.
  • To generate self confidence among workers.
  • To encourage sincerity and discipline among workers.
  • To provide opportunities for promotion and growth.

To protect women workers against discrimination

Functions of Trade Unions in the USSR

An act regulating the organizational structure of Soviet trade unions, the competence of trade union bodies, and the rights and duties of trade union members. The current regulations were approved by the Thirteenth Congress of Trade Unions on Nov. 1, 1963; amendments were dded at the Fourteenth (1968), Fifteenth (1972), and Sixteenth (1977) Congresses of Trade Unions of the USSR.

The basic tasks of trade unions, as indicated in the Regulations, include a responsibility to protect the legal interests of workers and all toilers and to improve living and working conditions. Trade unions must also keep close watch to ensure that labor legislation and the rules and norms of labor protection and industrial safety are observed.

The regulations state that membership in a trade union shall be open to anyone working in a production association (combine), at a scientific industrial association, at an enterprise, on a kolkhoz, or in an institution or organization, as well as to any student in a higher educational institution, specialized secondary educational institution, or vocational-technical school. The regulations provide for the right of a trade union member to vote, to be elected to any trade union organization and to comment freely at meetings on all questions of trade union work. The regulations obligate trade union members to work honestly and conscientiously and to observe strictly state and labor discipline.

The regulations assert that the trade unions of the USSR shall enjoy the right of legislative initiative through their all-Union and republic bodies and that the trade unions shall be structured on the basis of democratic centralism and organized according to industry. The regulations define the structure and functions of trade union bodies. The basic unit of the trade union is the primary trade union organization, which unites union members working in a particular organization or studying in a particular educational institution providing that there are no fewer than five trade union members. The highest decision-making body of the primary organization is the general meeting of the members of the trade union.

In order to conduct the current business of a primary trade union organization with more than 15 members, a local factory committee is elected; those primary organizations with fewer than 15 members elect a trade union organizer and deputy trade union organizer for a term of one year. The highest trade union body in the USSR is the Congress of Trade Unions of the USSR, which convenes every five years; in the intervals between sessions, the All-Union Central Council of Trade Unions is the highest body.

The primary trade union organizations of a branch of the economy within a republic, krai, oblast, raion, or city are directly guided by the corresponding republic, krai, oblast, raion, or city committee of the branch trade union. The highest bodies of branch trade unions are the unions’ congresses and the central committees elected by the congresses. Inter union bodies—republic, krai, or oblast trade union councils—are created to guide the work of local trade union bodies.

Functions of Trade Unions in the Republic of China
The major social functions of the Chinese trade unions are as follows:

  1. To protect the legitimate interests and democratic rights of the workers and staff members
  2. to mobilize and organize the workers and staff members to take part in the construction and reform and accomplish the tasks in the economic and social development
  3. to represent and organize the workers and staff members to take part in the administration of the State and social affairs and to participate in the democratic management of enterprises
  4. to educate the workers and staff members to constantly improve their ideological and moral qualities and raise their scientific and cultural levels.

The basic duty of the Chinese trade unions is to protect the legitimate rights and Interests of the workers and staff members. In the course of developing the socialist market economy, the Chinese trade unions, in accordance with the regulations of the State’s Labour law and other relevant laws, actively safeguard workers’ political rights, their right to work and their material and cultural interests; participate in coordinating labor relations and regulating social contradictions and make efforts to promote the economic development and a long-term social stability of the country.

Functions of Trade Unions in the USA

The British TUC Report Post-War Reconstruction distinguished three mainsets of objectives namely:

  1. Maintaining and improving wages, hours and conditions of work, and also what wages can buy; and increasing the size of the real national income and the share of it which should accrue to the working people.
  2. Providing and improving opportunities for the advancement of the workers to obtain “full employment” is an aim which trade unions have always pursued:
  3. Extending the influence of the working class over the policy and purposes of industry and arranging for their participation in management

Flandes and Cleggre have laid down the main objective of a trade union as under:

  1. Defining or improving the wages and conditions of work;
  2. Raising the status of the worker as a citizen of industry and of society; and
  3. Extending the area of social control of the nation’s economic life and participating in that control;

Structure of Trade Unions in India

In India, the structure of trade union consists of three levels: plant/shop or local, the state and the centre. It is generally from the central level that the ideology of the important central federations of labour in India percolates down to the state and local levels. Every national or central federation of labour in India has state branches, state committees or state councils, from where its organization works down to the local level.

There are two types of organizations to which the trade unions in India are affiliated:

  1. National Federations, and
  2. The Federations of Unions

Here a brief discussion of this trade union form is given.

  1. National Federations:

    The National Federations have all the trade unions in a given industry as their affiliated members. Every trade union, irrespective of the industry to which it belongs, can join a general national federation. Such federations are the apex of trade union policies a national character. The central union organizations are national federations of labour based on different political ideologies. Because of their political leanings, the affiliated trade unions in the field of labour relations follow either a militant policy or a policy of cooperation with the employers and the government, or a policy of continuous strife and litigation. The trade union leadership to these national organizations is generally provided by the politicians. Such leaders are found leading a dozen or more unions in a particular state.
    The national/central federations are empowered to decide the question of jurisdiction of the various local and national unions.

    A majority of these federations allow their affiliates to bargain independently with their respective employers. The federations only act as coordinating authorities for different unions under their control. They also select delegates to represent workmen in international conferences organized by the International Labour Organisation or the International Confederation of Free Trade Unions. The all-India federation of trade unions has a regular structure.

    For example:

    The INTUC consists of a central organization, affiliated unions, industrial federation, regional branches and councils functioning under the direct control or supervision of the central organization, the assembly of delegates, the general council and the working committees.

    The INTUC functions through its affiliated unions, delegates, assembly, general council (including office-bearers), the working committees of the general council and the Pradesh bodies.

    The UTUC consists of the general body (.delegates’ assembly) general council, and the working committee of general council.

    The Hind Mazdoor Sabha (HMS) works through the general council, the working committee and affiliated organization.

  2. Federations of Unions:

    These are combinations of various unions for the purpose of gaining strength and solidarity. They can resort to concerted action, when the need for such action arises, without losing their individuality. Such federations may be local, regional, state, national and international. There are a few organizations which are local in character, such as the Bharatiya Kamgar Sena, the Labour Progressive Federation, Chennai, the National Front of Indian Trade Unions and the coordinating Committee of Free Trade Unions.

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