Industrial relations and labour laws

357 Pages·2012·25.623 MB·English

by  Arun Monappa, Patturaja Selvaraj, Ranjeet Nambudiri

I R
NDUSTRIAL ELATIONS AND
L L
ABOUR AWS
S E
ECOND DITION
About the Authors
Arun Monappa is ex-professor, Indian Institute of Management, Ahmedabad. He received his M.A.
from Madras University and MSc from London School of Economics.
Professor Monappa has coordinated and taught courses in Human Resources Management and
Personnel Management to postgraduate students and to managers from the private and public sector.
He has worked for five years in the personnel departments of companies in India, Sweden and the USA.
He has been a consultant to several business organisations. He has published three books and numerous
papers in specialised journals.
He is author of Ethical Attitudes of Indian Managers (1971) and has co-authored Profile of Indian
Managers (1971) and Personnel Management 2/e (Tata McGraw-Hill, 1996).
Ranjeet Nambudiri is a Fellow of the Indian Institute of Management, Ahmedabad where he earned
his doctorate in Organizational Behavior. He is a faculty in the Organizational Behavior and Human
Resources Management group at the Indian Institute of Management, Indore. He has also worked for
over 10 years in the Indian corporate sector as a practicing manager with organisations like Amtrex
Hitachi Limited (now Hitachi Limited) and Genpact, after which he shifted to academia.
Dr. Nambudiri is a member of the Academy of Management and the Indian Academy of Management.
He has to his credit several publications in journals and conferences. His paper titled ‘Propensity to
trust and organization commitment: A study in the Indian pharmaceutical industry’ is published in The
International Journal of Human Resource Management. His papers were presented at the 24th ANZAM
conference at Adelaide, Indian Academy of Management conferences in Jamshedpur 2009 and Bangalore
2011, The Annual International Conference for Sustainable Development Research in New Delhi,
2008, The 3rd Workshop on Trust within and between organizations in Amsterdam, 2005 and 4th Asia
Academy of Management conference, Shanghai 2004. He has also written several case studies and his
cases titled ‘Performance Management and the National Institute of Management (CI campus) Parts A
& B’ are registered with the case portfolio of Ivey Publishing, Richard Ivey Business School, University
of Western Ontario. His research publications have appeared in Indian and international journals.
Dr. Nambudiri regularly engages sessions on conflict management, interpersonal effectiveness,
performance management, organizational culture and other HRM topics for a wide range of government
and private organizations. A few organizations for which he has conducted executive training include,
the Indian Administrative Services, the Border Security Force of India, Indian Revenue Services, Larsen
and Toubro, Thomas Cook India, Vodafone India, Oil and Natural Gas Corporation of India, National
Thermal Power Corporation of India, Sterlite Industries, Alstom Project India among several others.
Dr. Nambudiri is an avid teacher and researcher in the domain of Human Resource Management and
Organisational Behavior.
Patturaja Selvaraj is an Assistant Professor in Indian Institute of Management Indore. He completed
his Fellow Programme in Management from Indian Institute of Management, Ahmedabad. His thesis
explored the topic of executive compensation. He has worked for eight years in National Aerospace
Laboratories. He has published his research in national and international journals.
I R
NDUSTRIAL ELATIONS AND
L L
ABOUR AWS
S E
ECOND DITION
Arun Monappa
Ex-professor
Indian Institute of Management
Ahmedabad
Ranjeet Nambudiri
Assistant Professor
Indian Institute of Management
Indore
Patturaja Selvaraj
Assistant Professor
Indian Institute of Management
Indore
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Industrial Relations and Labour Laws, 2e
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Dedicated to
Deepa, Ameya and Jyotiraditya
- Ranjeet Nambudiri
Dedicated to
my Mentor and Guide Prof. Jerome Joseph, IIM Ahmedabad & my friend
Prof. Srinath Jagannathan, Tata Institute of Social Sciences, Mumbai
- Patturaja Selvaraj

Preface to the Second Edition
In the competitive and globalised business environment the study of Industrial Relations has gained
more importance and prominence. The relationship between major stakeholders i.e. government,
employer, employees and trade unions has moved from confl ict avoidance to collaboration. There is a
paradigm shift in the role of the government in the liberalised economy. The government has adapted to
structural adjustment programme initiated by multilateral organisations such as the World Bank and the
International Monetary Fund. This has affected the employment relationship in terms of the emerging
trends of liberalisation, globalisation and deregulation. The employment relationship has shown trends
of moving away from collectivist industrial relationship paradigm to individualist HRM paradigm. This
has affected the labour movement and its responses to expansion in the informal economy and increasing
contractulisation of work. Today’s time therefore offers important opportunities and challenges for
different Industrial Relations stakeholders.
This revised edition has been completely updated and includes details about changes in the legal
framework of IR, status of trade unions, impact of the knowledge economy, and strategic dimensions of
IR, among other issues. The book emphasizes the strategic nature of industrial relations and positions the
IR function as a proactive measure of employee engagement rather than as a reactive confl ict handling
role. Some chapter end caselets have been included to reinforce the concepts addressed in the texts. In
Chapter 1 specifi c issues about changed labour management relations have been addressed including a
section on the impact of liberalisation. The revised edition includes a completely new chapter wherein
concepts, structure and functions of IR are discussed. Chapter 4 details the changes in the trade union
scenario in India and also provides information on the Trade Unions (Amendment) Act 2011. In Chapter
5 the status of employer federations has been discussed with some contemporary illustrations. Chapters
6 and 7 are signifi cant in the IR domain as they pertain to wages, negotiation and collective bargaining.
Sweeping changes have taken place in the wage legislations in India over the years and these two
chapters adequately update the reader with the relevant changes. Issues related to employee grievances
and management of discipline have been highlighted in Chapters 8 and 9 and updated data on industrial
confl ict has been presented in Chapter 10. Chapter 11 relates to the critical issue of labour welfare
and social security. Several changes have taken place in India over the years including revisions in the
legislative framework. The revised edition provides in depth coverage of these changes. More and more
companies are encouraging worker participation in management through works committees and councils.
Chapter 12 discusses the developments in this direction. Issues related to technology are discussed in the
subsequent chapter and the text dwells on the role of trade unions in the Information Technology (IT)
industry. In conclusion, the fi nal chapter of the book discusses the strategic role of IR and proposes that
IR practices can have an immediate and direct impact on achievement of business objectives. The book
also provides a detailed write-up on the 2nd National Commission on Labour report that was submitted
in 2002 with a view to update the reader with the recommendations of the commission.
An attempt has been made to provide updated statistics and data. However, there are certain areas
where gaps continue to exist and latest data remains unavailable. In these situations we have tried
to highlight critical issues such that the reader is encouraged to examine broader perspectives and
managerial implications. It is hoped that this revised edition provides the reader better appreciation of
the interplay between key stakeholders, viz., the employers, employees, government and trade unions
in the current globalised business scenario.
Ranjeet Nambudiri
Patturaja Selvaraj

Preface to the First Edition
This book on industrial relations is basically meant for students and practitioners, concerned as it is
with the several factors and issues that go to make up an industrial relations system. The focus is on
Indian industrial relations.
My objective was to provide a broader outlook of the industrial relation function. The topics covered
and the treatment of the more traditional subjects is different. The focus has been on the ‘developmental’
aspects rather than on the more traditional ‘control’ aspects of the function. Whereas the developmental
aspect deals with long-term solutions and the various inputs that go into it, the control aspect is more
oriented to a ‘here and now’ situation to take care of the problems quickly.
Another objective of the book is to provide the reader with a framework for analysis of industrial
relations problems. Such a framework would include the several variables that one needs to take into
account for a proper diagnostic analysis, particularly at the enterprise level. This would enable the reader
to get a broad overview and a good ‘feel’ of the several related factors that should be considered for an
in industrial relations in India and, to a certain extent, has thwarted the growth of bi-partite relations
The book is not intended to be legally oriented, nor is it a documentation of the various government
acts on labour legislation. The focus is on the managerial perspective - a perspective that is needed to
understand the industrial relations issues, and generate alternatives for decision making, e.g. the pros
and cons of a grievance procedure or those of workers participation in management.
put down my analysis. This book is divided into sixteen chapters and two appendices. Each chapter,
besides providing a conceptual background, deals with problems and issues in the Indian context, and
suggests remedies wherever possible. The issues discussed relate to the current concerns, raised either
through research publications or through reports of various government committees.
The labour statistics that have been used to supplement and illustrate concepts are woefully outdated.
This is a limitation one has to live with, given the delay in publication by the several agencies involved.
However, this should not detract one from understanding the trends and issues involved as the data is
meant to be only an illustrative supplement to them.
Arun Monappa