Unit 4: Industrial relations
Human Resource Management notes · PTU syllabus (MBA 204-18)
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Unit summary
Industrial relations bring together government, unions and management. This unit covers their concerns in IR, dispute resolution machinery, collective bargaining — scope, issues, strategies and negotiation skills — participative management, grievance handling, discipline and counselling, HRIS and HR audit, and ethical issues in HRM.
After this unit you can
- Explain the concerns of government, unions and management and dispute resolution machinery
- Explain collective bargaining, negotiation skills and participative management
- Explain grievance handling, discipline and counselling
- Explain HRIS, HR audit and ethical issues in HRM
PTU syllabus topics
- Government/union/management concerns in IR
- dispute resolution machinery
- collective bargaining scope/issues/strategies/negotiation skills
- participative management
- grievance handling
- discipline and counseling
- HRIS and HR audit
- ethical issues in HRM
- 1Collective bargaining
- 2Conciliation
- 3Voluntary arbitration
- 4Adjudication
Labour court, industrial tribunal
Topic 1
Industrial relations and the concerns of its parties
Industrial relations (IR) are the relationships between management and workers and their organisations, and the role of the state in regulating them. Dale Yoder defines IR as "a whole field of relationships that exist because of the necessary collaboration of men and women in the employment processes of industry".
Employers and their associations
CII, FICCI, Employers' Federation of India
Workers and trade unions
INTUC, BMS, AITUC, CITU, HMS
Government
Labour laws, conciliation, tribunals
Context
Technology, market, power distribution
Ideology
Shared beliefs binding the system
Importance
- Industrial peace and uninterrupted production.
- Higher productivity and quality.
- Industrial democracy — workers' voice in decisions.
- Fewer strikes, lockouts and absenteeism.
- Better wages and welfare; reduced labour turnover.
- Economic growth and attraction of investment.
| Party | Main concerns |
|---|---|
| Government | Industrial peace, productivity and growth, fair labour standards, social security, attracting investment, enforcing labour codes |
| Trade unions | Wages and benefits, job security, working conditions, recognition and voice, protection against unfair practices |
| Management | Productivity and cost control, discipline, flexibility in staffing, technology adoption, harmonious relations |
Topic 2
Dispute resolution machinery
Preventive
Works committees, grievance redressal committees, standing orders, collective bargaining, workers' participation
Conciliation
Conciliation officers (now within the IR Code framework)
Voluntary arbitration
Parties refer dispute to a mutually chosen arbitrator
Adjudication
Industrial Tribunals and National Industrial Tribunal (IR Code); earlier labour courts and tribunals
- 1
Bipartite negotiation
- 2
Conciliation
Conciliation officer mediates; settlement binding
- 3
Failure report to government
- 4
Voluntary arbitration (if agreed)
- 5
Adjudication by Industrial Tribunal
Award binding; published and enforceable
- 6
Appeal
High Court / Supreme Court (writ)
Conciliation
Mediator helps parties reach their own agreement
Settlement binding if agreed
Voluntary arbitration
Arbitrator chosen by parties decides
Award binding
Adjudication
Tribunal appointed by law decides compulsorily
Award binding
- IR Code, 2020: Industrial Tribunals with a judicial member and an administrative member; National Industrial Tribunal for disputes of national importance; individual workers can approach the tribunal directly for discharge/dismissal disputes after 45 days of conciliation.
Topic 3
Collective bargaining: scope, issues and strategies
Collective bargaining is the process of negotiation between employers and organised workers (through unions) to determine terms and conditions of employment (ILO).
- Features: collective, bipartite, continuous, flexible, dynamic, a form of industrial democracy.
- Types (Chamberlain): conjunctive (distributive — fixing shares), cooperative (mutual dependence), integrative (problem-solving, win-win), concessionary (union gives up gains to save jobs), productivity bargaining (wages linked to productivity).
- Levels: plant level, industry level (banking — IBA and unions), national level.
Strong, representative union
Recognition of the union by management
Willingness to negotiate in good faith
Freedom of association
Mutual trust and respect
Problem-solving attitude
Supportive legal framework
Proper records and data
Negotiation skills
- Preparation (data on wages, productivity), knowing BATNA, setting target and resistance points, active listening, separating people from the problem, focusing on interests not positions, creating options for mutual gain (Fisher and Ury — principled negotiation), documenting agreements.
Topic 4
Participative management
Workers' participation in management is a system in which workers have a say in decision-making in the organisation.
- Objectives: industrial democracy, harmony, higher productivity, worker development, recognition of human dignity.
- Growth in India: Article 43A of the Constitution (42nd Amendment, 1976) — the State shall secure participation of workers in management; works committees (ID Act 1947); Joint Management Councils (1958); Shop councils and joint councils (1975 scheme); 1983 scheme; Participation of Workers in Management Bill (1990, not passed).
- Board representation
Worker-directors on the board
- Joint management councils
Consultation on policy matters
- Works committees and shop councils
Day-to-day issues
- Suggestion schemes and quality circles
Ideas and problem-solving
- Information sharing and consultation
Basic level
- Other forms: collective bargaining, workers' cooperatives, employee stock ownership (ESOPs), self-managed teams.
- Reasons for limited success in India: lack of trust, multiplicity of unions, management reluctance, illiteracy, lack of legal backing.
Topic 5
Grievance handling
- Negotiation is the give-and-take process of reaching agreement; skills — preparation, listening, BATNA, creative options, maintaining relationships.
- Collective settlements: bipartite settlements (signed by employer and union) and settlements arrived at in conciliation (binding on all workers under the Industrial Disputes Act/IR Code).
Grievance redressal procedure
- 1Step 1
Employee presents grievance to the immediate supervisor — reply within 48 hours
- 2Step 2
To the departmental head — reply within 3 days
- 3Step 3
Grievance committee (management and union representatives) — 7 days
- 4Step 4
Appeal to top management — 7 days
- 5Step 5
Voluntary arbitration
- IR Code, 2020: every establishment with 20 or more workers must have a Grievance Redressal Committee (up to 10 members, equal representation, a woman member); resolve within 30 days.
- Principles: prompt handling, fair and impartial, confidentiality, written records, follow-up.
Exam tip
Write the five-step procedure with time limits — it is a scoring point.
Topic 6
Discipline and counselling
- Discipline: orderly conduct as per rules; positive (constructive) discipline builds self-control; negative (punitive) discipline uses penalties.
- Hot-stove rule (McGregor): discipline should be immediate, consistent, impersonal and with advance warning.
- 1
Preliminary enquiry
- 2
Charge sheet
Specific allegations
- 3
Explanation from the employee
- 4
Domestic enquiry
Fair hearing, evidence, representation
- 5
Findings of the enquiry officer
- 6
Decision and punishment
Warning, censure, withholding increment, suspension, demotion, discharge, dismissal
- 7
Appeal and follow-up
- Counselling: helping employees with work or personal problems affecting performance — directive, non-directive and participative counselling; EAPs.
Topic 7
HRIS, HR audit and ethical issues
- HRIS (human resource information system): software to collect, store and analyse HR data — employee records, payroll, attendance, recruitment (ATS), performance, learning (LMS), analytics; examples — SAP SuccessFactors, Workday, Darwinbox, Zoho People.
- HR audit: systematic review of HR policies, practices and outcomes to check compliance and effectiveness — approaches: comparative, compliance, objectives-based, outside authority; covers recruitment, training, appraisal, pay, IR, legal compliance, HR records; ends with an audit report and action plan.
Fairness in hiring
Discrimination by gender, caste, religion, age, disability
Privacy
Employee data, monitoring, DPDP Act
Pay equity
Equal remuneration, gender pay gap
Workplace harassment
POSH Act, 2013 — Internal Committee
Health and safety
Duty of care
Layoffs
Fair, transparent processes
Whistle-blowing
Protection from retaliation
Exam tip
For "ethical issues in HRM", cite the POSH Act and the Code on Wages (equal pay) — specific laws earn marks.
Key terms
- Collective bargaining
- Negotiation between employers and unions on terms of employment
- Principled negotiation
- Negotiating on interests and mutual gains
- Hot-stove rule
- Principles of fair and immediate discipline
- HRIS
- System for managing HR data and processes
- HR audit
- Systematic evaluation of HR policies and practices
Quick revision
- IR parties and their concerns; conciliation, arbitration, adjudication.
- Collective bargaining types and negotiation skills (BATNA, interests).
- Participative management: works committees, JMCs, board representation.
- Grievance procedure; discipline (hot-stove rule, domestic enquiry); counselling.
- HRIS, HR audit, ethics (POSH, privacy, pay equity).
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What are the concerns of trade unions in IR?
- Q2.What is conciliation?
- Q3.What is principled negotiation?
- Q4.State McGregor's hot-stove rule.
- Q5.What is HRIS?
- Q6.What is an HR audit?
Long-answer questions
- Q1.Explain the industrial dispute resolution machinery in India.
- Q2.Explain collective bargaining and the negotiation skills required.
- Q3.Explain grievance handling, discipline and counselling.
- Q4.Explain HRIS, HR audit and ethical issues in HRM.
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