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INDUSTRIAL RELATIONS: Meaning and components


  • “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”.
  • “Relations” means “the relationships that exist within the industry between the employer and his workmen.”
  • Industrial relations are the relationships between employees and employers within organizational settings.
  • The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union.
  • Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
  • The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels.
  • Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and Trade unions, when it arises.

Meaning of Industrial Relations:

  • The simple meaning of the industrial relations is the ways in which business relate to and deal with workers, the government and the public.
  • The detail meaning of the industrial relation can be given as follows:

    • ”The dealings or relationship of a usually large business or industrial enterprise with its own workers, with labour in general, with government agencies or with public.”—Merrian Webster Dictionary
    • ”The term “industrial relation” refers to all types of relations that exists in an enterprises, the employer and employee.”———-Fillippos
    • “Industrial relation include individual relation and joint consultation between employees and people at the work, the place of work. Collective relations between employer and their organizations and the Unions and the part played by State in regulating those relations.”——-Richardron (Note: (Industrial relation means each employer has relation with their management. Joint consultation means negotiation of whole union)
    • Bearing in mind to the above meaning, we can say that industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Top 4 Major Components of Industrial Relation

1. Employees:

  • Among the participants to IR, employees are considered as the most affected one by the IR system prevalent in an organization. Employees with their various characteristics such as their commitment to the work and the organization, their educational and social background, their attitudes towards the management and so on affect and are affected by the system of IR.
  • Generally, employees perceive IR as a means to improve their conditions of employment, voice against any grievances, exchange views and ideas with management and participate in organizational decision making processes.
  • Employees participate in the IR system through their associations, or say, trade unions. Past evidences indicate that trade unions play a crucial role in making an IR system as effective or otherwise. Trade unions with their strong political and emotional overtones are looked upon as a tool to wrest concessions from employers.
  • Employees achieve following objectives:

    • To redress the bargaining advantage on one-on-one basis, i.e., individual worker vis-a-vis individual employer by way of joint or collective actions.
    • To secure better terms and conditions of employment for their members.
    • To obtain improved status for the worker in his/her work.
    • To increase democratic mode of decision-making at various levels

2. Employer:

  • Employer is the second party to IR. In the corporate organization, employer is represented by the management. Hence, management becomes responsible to various stakeholders in an organization including employees.
  • According to Cole, management has to see IR in terms of the following employee-employer relationship:

    • Creating and sustaining employee motivation.
    • Ensuring commitment from employees.
    • Achieving higher levels of efficiency.
    • Negotiating terms and conditions of employment with the representatives of employees.
    • Sharing decision making with employees.
    • Like employees’ associations, employers also form their associations at the local, industry and national levels. Examples of employers’ associations at all Nepal level are Chambers of Commerce’s and Industry (CCI), Federation of Nepalese Chambers of Commerce and Industry (FNCCI), etc.

The said employers organization is constituted for the following purposes:

  • Represent employers in collective bargaining at the national or industry level.

  • Develop machinery for avoiding disputes.

  • Provide feedback on employee relations.

  • Advise member organizations on the issues relating to IR.

3. Government:

  • The role of government in the matter of industrial relations has been changing along with changes in an industrial environment and management perspective. For example, till the century, the governments everywhere in the world adopted a policy of laissez-faire.
  • The IR matters were left to be settled by the employees and employers. But, towards the end of the 19 century, the attitude of the government in the changed conditions of conflicts between employees and employers, changed to some kind of intervention in the matter of IR.
  • In due course of realization, government intervention became a reality. As of day, government intervention has become widespread in HR matters. In India and Nepal government tries to regulate the relationship of employees and employers, and also keeps an eye on both groups to keep each in line. This relationship is enforced and maintained through labour courts, industrial tribunals, wage boards, investigating and enquiry committees, etc.

4. Consumer:
Ultimately, the user of the commodity or product is consumer. Services to the consumer should be good quality, not sub-standard quality; there should be reasonable price of goods for consumer, not high what they pay for that product. The consumer has the right that can challenge employer for the product in the Court.

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