Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat
Chapter 5
INDUSTRIAL RELATIONS & COLLECTIVE BARGAINING
Topic to study
Introduction to Industrial Relations,
Trade unions - role, types, functions, problems,
Industrial dispute- concept, causes & machinery for settlement of disputes
Grievance, concepts, causes & grievance redressal machinery,
Discipline concept, aspect of discipline & disciplinary procedure,
Collective bargaining- concept, types, process, problems, essentials of effective collective bargaining
INDUSTRIAL RELATIONS – Meaning & Definition
Meaning:
Industry means any productive activity. It includes –
(a) Primary activities like agriculture, fisheries, plantation, forestry, horticulture, mining etc.
(b) Secondary activities like manufacturing, trade, transport, commerce, banking, etc.
Economically speaking, industry means the secondary sector where factors of production (land,
labour, capital and enterprise or four M’s – men, materials, money and machines) are used for
production.
‘Relations’ means ‘the relations that exist in the industry between the employer and his work-
force.
Definition:
According to V. Agnihotri, “The term industrial relations explains the relationship between
employees and management which stem directly or indirectly from union-employer relationship.”
TRADE UNIONS
Definition:
According to Lester, “A trade union is an association of employees designed to maintain or improve
the conditions of employment of its members.”
Meaning:
Trade unions OR Labour unions are organizations formed by workers that work for the
common interest of its members. They represent a group of workers and provide a link between
the management and workers.
They help workers in various issues like fairness of pay, good working environment, hours of
work and benefits.
Mobile - 9586075954
, Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat
TYPES / CLASSIFICATION OF TRADE UNIONS
The types and structure of trade unions differ from country to country. It also differs from industry to
industry within the same country. Trade Unions can be classified on the following basis;
I. CLASSIFICATION BASED ON PURPOSE:
The trade Unions may be classified on the basis of purpose of their formation. The types of
Unions as per purpose are;
1. Reformist Union:
These unions aim at preservation of the capitalist society and the maintenance of
employer-employee relationship and removing competitive system of production.
These types of unions do not want to change too much. They do not want to destroy the
current economic, political and social structure of the company.
They only try to modify these according to the desire and requirement of their members.
For example, they may wish to increase labour’s share in increased production or they may
want to improve the working conditions of labour.
Reformist unions can be further classified into following types;
a. Business Unions
Business unions are a form of labour cooperation in which employees enter successful
business relationships with employers. These unions make use of collective bargaining.
The aim of these unions is to secure economic advantages to their workers through
peaceful means.
b. Friendly Unions /Uplift unions
Friendly unions are ideal in nature, conservative and law binding. They believe in the
process of collective bargaining. They are not craft (trade) conscious but interest
conscious.
Mobile - 9586075954
, Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat
2. Revolutionary Unions:
These unions aim at destroying the present structure completely and replace it with new
and better order. They try to replace capitalistic industry with a socialistic or communistic
type of industry. The revolutionary unions are of four types;
i. Anarchist union: These types of unions destroy the existing system by revolutionary
ways.
ii. Political union: These unions aim at changing power through political action.
iii. Predatory union: These unions do not follow any ideology. They believe in using any
means without worrying about the ethical or legal factors.
iv. Dependent unions: The existence of this type of union is dependent on the other
unions or employees.
II. CLASSIFICATION BASED ON MEMBERSHIP STRUCTURE
1. Craft Unions / Occupation Unions:
If the workers of the same craft or category of the job form into a union, that union is called ‘craft
union’. These unions are called as – ‘horizontal unions’. The basic logic behind the formation of such
unions is that the workers belonging to the same craft do face similar problems.
Examples of such unions are Drivers’ Associations, Signalling Staff Union in Indian Railways, etc.
Strength: The main strength of craft unions lies in their strategic position; strong bargaining power;
compactness and cohesiveness of the group and ability to protect and promote the interests of the
members in an effective manner.
Weakness: Weaknesses of craft unions include the following – proneness to division in the ranks of
workers; vulnerability to being broken easily by the employer; difficulties in organising strong joint
action and greater probability of instability as a result of technological changes and blurring of craft
distinctions
2. General Unions:
If the workers of any industry, any region and of any job or occupation form into one union in order to
protect the overall interests of the workers, such unions are called general unions.
3. Industrial Unions:
If the workers of different categories form into a union, that union is called industrial union. These
unions are also called “vertical” unions. The logic behind the formation of these unions is that workers
of the same industry have the common bend and they are governed by same rules and regulations, and
are administered by same management.
Strength:
The points of strength of industrial unions are as follows – their ability to promote solidarity among
heterogeneous groups of workers; convenience in negotiations with the employer; greater adaptability
in the event of technological changes and greater measure of strength and effectiveness in collective
bargaining and industrial action.
Weakness:
The weaknesses of industrial unions include the following – difficulties in satisfying all groups of
members; more attention to the interests of the group providing bulk of membership; encouragement to
the formation of small-sized unions on account of ease in establishing a union with only a few
members, which results in multiplicity of unions and union rivalries.
Mobile - 9586075954
Chapter 5
INDUSTRIAL RELATIONS & COLLECTIVE BARGAINING
Topic to study
Introduction to Industrial Relations,
Trade unions - role, types, functions, problems,
Industrial dispute- concept, causes & machinery for settlement of disputes
Grievance, concepts, causes & grievance redressal machinery,
Discipline concept, aspect of discipline & disciplinary procedure,
Collective bargaining- concept, types, process, problems, essentials of effective collective bargaining
INDUSTRIAL RELATIONS – Meaning & Definition
Meaning:
Industry means any productive activity. It includes –
(a) Primary activities like agriculture, fisheries, plantation, forestry, horticulture, mining etc.
(b) Secondary activities like manufacturing, trade, transport, commerce, banking, etc.
Economically speaking, industry means the secondary sector where factors of production (land,
labour, capital and enterprise or four M’s – men, materials, money and machines) are used for
production.
‘Relations’ means ‘the relations that exist in the industry between the employer and his work-
force.
Definition:
According to V. Agnihotri, “The term industrial relations explains the relationship between
employees and management which stem directly or indirectly from union-employer relationship.”
TRADE UNIONS
Definition:
According to Lester, “A trade union is an association of employees designed to maintain or improve
the conditions of employment of its members.”
Meaning:
Trade unions OR Labour unions are organizations formed by workers that work for the
common interest of its members. They represent a group of workers and provide a link between
the management and workers.
They help workers in various issues like fairness of pay, good working environment, hours of
work and benefits.
Mobile - 9586075954
, Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat
TYPES / CLASSIFICATION OF TRADE UNIONS
The types and structure of trade unions differ from country to country. It also differs from industry to
industry within the same country. Trade Unions can be classified on the following basis;
I. CLASSIFICATION BASED ON PURPOSE:
The trade Unions may be classified on the basis of purpose of their formation. The types of
Unions as per purpose are;
1. Reformist Union:
These unions aim at preservation of the capitalist society and the maintenance of
employer-employee relationship and removing competitive system of production.
These types of unions do not want to change too much. They do not want to destroy the
current economic, political and social structure of the company.
They only try to modify these according to the desire and requirement of their members.
For example, they may wish to increase labour’s share in increased production or they may
want to improve the working conditions of labour.
Reformist unions can be further classified into following types;
a. Business Unions
Business unions are a form of labour cooperation in which employees enter successful
business relationships with employers. These unions make use of collective bargaining.
The aim of these unions is to secure economic advantages to their workers through
peaceful means.
b. Friendly Unions /Uplift unions
Friendly unions are ideal in nature, conservative and law binding. They believe in the
process of collective bargaining. They are not craft (trade) conscious but interest
conscious.
Mobile - 9586075954
, Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat
2. Revolutionary Unions:
These unions aim at destroying the present structure completely and replace it with new
and better order. They try to replace capitalistic industry with a socialistic or communistic
type of industry. The revolutionary unions are of four types;
i. Anarchist union: These types of unions destroy the existing system by revolutionary
ways.
ii. Political union: These unions aim at changing power through political action.
iii. Predatory union: These unions do not follow any ideology. They believe in using any
means without worrying about the ethical or legal factors.
iv. Dependent unions: The existence of this type of union is dependent on the other
unions or employees.
II. CLASSIFICATION BASED ON MEMBERSHIP STRUCTURE
1. Craft Unions / Occupation Unions:
If the workers of the same craft or category of the job form into a union, that union is called ‘craft
union’. These unions are called as – ‘horizontal unions’. The basic logic behind the formation of such
unions is that the workers belonging to the same craft do face similar problems.
Examples of such unions are Drivers’ Associations, Signalling Staff Union in Indian Railways, etc.
Strength: The main strength of craft unions lies in their strategic position; strong bargaining power;
compactness and cohesiveness of the group and ability to protect and promote the interests of the
members in an effective manner.
Weakness: Weaknesses of craft unions include the following – proneness to division in the ranks of
workers; vulnerability to being broken easily by the employer; difficulties in organising strong joint
action and greater probability of instability as a result of technological changes and blurring of craft
distinctions
2. General Unions:
If the workers of any industry, any region and of any job or occupation form into one union in order to
protect the overall interests of the workers, such unions are called general unions.
3. Industrial Unions:
If the workers of different categories form into a union, that union is called industrial union. These
unions are also called “vertical” unions. The logic behind the formation of these unions is that workers
of the same industry have the common bend and they are governed by same rules and regulations, and
are administered by same management.
Strength:
The points of strength of industrial unions are as follows – their ability to promote solidarity among
heterogeneous groups of workers; convenience in negotiations with the employer; greater adaptability
in the event of technological changes and greater measure of strength and effectiveness in collective
bargaining and industrial action.
Weakness:
The weaknesses of industrial unions include the following – difficulties in satisfying all groups of
members; more attention to the interests of the group providing bulk of membership; encouragement to
the formation of small-sized unions on account of ease in establishing a union with only a few
members, which results in multiplicity of unions and union rivalries.
Mobile - 9586075954
