Industrial Relations – Issues & Challenges In India

Published in Human Resources Articles category by MBA Skool Team, Last Updated: November 10, 2012

J.G.Holland has rightly said, “The secret of many a man’s success in the world resides in his insight into the moods of men and his tact in dealing with them.” These lines seem to be apt in the Manesar incident where the General Manager (HR) Mr. Awanish Kumar became the victim. Although Mr. Awanish died, but there were around 100 executives who were injured in this “black dot” incident. If asked what is the root cause for this incident. The answer will be failure in conflict management. One thing should be clear in mind of every IR managers that, it is quite easy to deal with the educated and intellectual people when compared to the less educated labour class. Let us see the role of IR mangers.

Role of IR manager

IR being collectivist and pluralist in its outlook is fully responsible for maintaining a healthy relationship between individual workers, employees and plays a critical role in settlement of various disputes within an organization. Unlike an HR manager, an IR manager plays the role of directive leaders and ensures that all the rules and regulations of the employer are strictly followed.

According to Lester, "Industrial relations involve attempts at arriving at solutions between the conflicting objectives and values; between the profit motive and social gain; between discipline and freedom; between authority and industrial democracy; between bargaining and co-operation and between conflicting interests of the individual, the group and the community.”

Role of IR manager in any establishment

What are the challenges in India

Suppose a fatal happened in any factory and the worker is contract labour. Now the contractor ran away as soon as this incident occurred, as an IR manager what would you do? You will find there is no provision for compensation by employer for death of contact labour inside factory premises in Contract Labour (Regulation and Abolition) act 1970. Still you have to do something. So an IR manager has to be prepared for these type of scenarios .Let us explore some challenges in brief.

  • Labour is a subject in the concurrent list of the Indian Constitution where both centre and state can amend and frame the labour laws. As a result, labour law varies from state to state and thus it becomes difficult for IR managers to follow the laws strictly.
  • In this cut throat competition, dependence on contract labours is increasing at phenomenal rate. There are not that many amendments in Contract Labour (Regulation and Abolition) act 1970, which could really cover all the dynamism of Contract Labour issues. As a result, IR managers are found with albatross around their neck.
  • The roles of the unions are defined, but their responsibilities are not mentioned.
  • A ‘protected workman’ is defined, but there are no such provisions for factory managers.
  • Productivity & Flexibility are not mentioned anywhere in ID Act 1948, so it becomes difficult to retrench any worker or take any steps against him even though he is not working as per expectations.
  • Formation of trade union is a fundamental right in India.
  • There is a lot of misconceptions regarding ‘collective bargaining’ issue if it is fundamental right or not.
  • Difference in wages of the regular employees and contract labours is a major issue of concern and is one of the main causes for several disputes because many times it has been seen that there is no difference in nature of the job between regular employee and contract labour.

So, in race of earning profit many organizations have introduced the concept of contract labour in practice , which is the most critical issue as far as the applicability of labour laws are concerned. Many cases(contract labour issues) either it is B.H.E.L Workers Association ,Hardwar v Union of India (AIR 1985 SC409) or Gammon India Limited v Union of India (AIR 1967 SC691), one can find the difference in opinions regarding implementation of labour laws. Every judgement has its own opinion towards the applicability of labour laws. Not only contract labour issues, an IR manager have to be very cautious while dealing with issues regarding trade unions, collective bargaining, compensations and different issues in factory.

How to face these challenges

For sustainable growth, organizations have forgotten the essence of employment relationship and allowed the business to be driven by their dreamy thought of "PROFIT AT ANY COST.” They knowingly or unknowingly are involved in the practice of exploitation of the ‘social resources’. It has resulted into the peril of indifference among the workers.
This is no denying the fact that the Manesar incident has not only damaged the image of Maruti Udyog but also damaged the social image of incredible India and specially Gurgaon. So, let us see how can we manage these issues.

1. To deal with Trade Unions, Contractors, labours , IR managers should minimize the use of jargons and they should try to communicate in simple language and if possible try to communicate in local language to avoid any confusion.

2. Review different labour laws, civil laws and consult with the company’s legal representative to assure if the company is in compliance with all of these regulations.

3 .Always try to listen closely to the employee’s concern. It is not always necessary
to give judgement or suggestions and to enforce certain policies, which are not in law.

4. Sometimes to settle down dispute, An IR manager can take the decision on the basis of their intuition.

5. Job rotation policy or transfer of the workers are the another way to settle down the dispute among the workers or employees.

6. They should not try to check the workmen to form unions or groups, which may lead to aggression among them.

So, it can be easily understood that the IR issues are very critical and it depends upon managers to make it simple.

This article has been authored by Achintya from XIMB.

Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

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