14-08-2012, 04:34 PM
EVOLUTION OF INDUSTRIAL RELATIONS AND CURRENT DEVELOPMENTS
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INTRODUCTION
In order to understand the issues and problems associated with industrial relations, it
is desirable to study its various evolutionary phases. Practically speaking, the growth
of industrial relations in India is in no way different from that of other parts of the
globe. The various stages of industrial relations progressed from primitive stage to
factory or industrial capitalism stage. The emergence of tripartite consultative system
and voluntary and statutory approach to industrial relations, immensely contributed to
the growth of a particular system of industrial relations in our country. Also the fast
changing technological development, industrial production techniques, and ideological
values have brought forth in the industrial world a unique type of employer-employee
relationship. For a proper theoretical perspective of industrial relations, it seems
essential to have a historical review of industrial relations in India.
INDUSTRIAL RELATIONS IN INDIA
India was greatly advanced in the field of industry and commerce in the past, as
evidenced from its ancient literature. In ancient times, the highest occupation in our
country was agriculture followed by trading. Manual services formed the third rung of
occupation. Small manufacturers in their cottages, mostly on hereditary basis, carried
on a large number of occupations. Ancient scriptures and laws of our country laid
emphasis on the promotion and maintenance of peaceful relations between capital and
labour. From the very early days, craftsmen and workers felt the necessity of being united. The utility of unions has been stated in Sukla Yajurveda Samhita, “if men are
united, nothing can deter them.” Kautilyas’s Arthashastra gives a comprehensive
picture of the organisation and functions of the social and political institutions of India
and a good description of unions of employees, craftsmen or artisans. There were
well-organised guilds, which worked according to their own byelaws for the
management of the unions. However, there were no organisations of workers during
the Mughal rule. The labourers were entirely dependent on their masters and forced
work was taken from them. Historical evidence further shows the existence of rules of
conduct and prescribed procedure for the settlement of disputes for promoting cordial
relations between the parties. The working relations, however, in those days were
more or less of a personal character and are very much distinguishable from the
present-day industrial relations as have gradually developed with the growth of largescale
industries.
GOVERNMENT’S ROLE
The main issue in regard to the government’s role in industrial relations is the degree
of state intervention. In India, particularly after independence, the government has
been playing a comprehensive and dominant role in shaping the pattern of industrial
relations. In the mixed economy of our country, the state has emerged as a big
employer. The government evolves through tripartite forums the norms or standards,
which are in the nature of guidelines shaping employer-employee relations. It accepts
the responsibility of ensuring conformity to these norms through the administrative
and judicial mechanism. It enacts legislation on labour and implements both the
substantive and procedural laws.
The industrial relations policy of the government forms part of the broader labour
policy. The tenets of this policy, as stated by the National Commission on Labour, are:
(i) primacy to the maintenance of industrial peace; (ii) encouragement for mutual
settlement of disputes through collective bargaining and voluntary arbitration;
(iii) recognition of the workers’ right to peaceful direct action, i.e., strike; and
(iv) tripartite consultation.
Mergers and Acquisitions
In merger, two or more existing companies go into liquidation and a new company is
formed to takeover their business. An acquisition arises when there is a purchase by
one company of the whole or part of the shares, or the whole or part of the assets, of
another company in consideration for payment in cash or by issue of shares or other
securities in the acquiring company or partly in one form and partly in the other. The
process of merger is the result of agreement and contract between the transferor and
transferee companies.
The concept of mergers and acquisitions is very much popular in the current economic
scenario. More so, it is a significantly popular concept after 1990s in India on the
birth of economic liberalisation and globalisation. The basic premises for mergers and
acquisitions are the consolidation process for survival of existing undertakings, and
large groups absorbing the small entities.
A series of personnel problems normally occur when one company acquires another.
People aspect is very important in the process of acquisition.
Globalisation
Globalisation can be conceptually explained as the process of economic or commercial
integration of a company or a country with the rest of the world. The magnitude of
such integration will determine the extent of globalisation accomplished by the
company or the country as the case may be. It is important to note that globalisation is
not an ‘event’ but a ‘process.’
Some segments of the labour force have suffered from the direct and indirect effects of
globalisation more than others. Increased trade and increased competition have led to
job losses in the advanced economies, probably not too many in aggregate terms but
concentrated in low-skilled labour intensive industries with high labour costs. In
addition, organisational changes such as contracting-out, and downsizing of
permanent staff have affected low-skilled workers more than high-skilled workers and
have contributed to widening wage disparities (ILO, 1997).