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Industry:

Sec.2 (j) of the Industrial Disputes Act, 1947 defines 'industry' as any business, trade, undertaking, manufacture, or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen”

 An industry exists only when there is relationship between employers and employees, the former is engaged in business, trade, undertaking, manufacture or calling of employers and the latter is engaged in the calling, service, employment, handicraft or industrial occupation and avocation.

Sec. 2(j) gives the definition of industry, which was elaborated upon by the Supreme Court in the Bangalore Water Supply and Sewerage Board v. R. Rajappa[i]. The term industry has been given a wide scope and the judgment overruled several earlier decisions. The court held-

1. Any activity will be industry if it fulfills the ‘triple test’, as under:

Systematic and organized activity

With the cooperation between Employers and employees

For the production and distribution of good and services whether or not capital has been invested for this activity.

2. It is immaterial whether or not there is profit motive or whether or not there is capital.

3. If the organization is a trade or business it does not cease to be one because of philanthropy animating the triple test, cannot be exempted from scope of definition of industry.

4. Dominant nature test – whether there is complex of activities, the test would be predominant nature of services and integrated nature of departments. All departments integrated with industry will also be industry.

5. The exceptions to industry are-

Casual activities (because they are not systematic).

Small clubs, co – operatives, research labs, gurukuls which have an essentially non employee character.

Single door lawyer taking help from clerk (because there is no organized labour).

Selfless charitable activities carried on through volunteers e.g. free legal or medical service.

Sovereign functions – strictly understood, i.e., maintenance of law and order, legislative functions and judicial function.

Charitable Institutions

These fall into three categories –

(a) Those that yield profit, but the profits are not siphoned off for altruistic purposes;

(b) Those that make no profit but hire the service of employees as in any other business, but the goods/ services which are the output, are made available at a low or no cost to the indigent poor; and

(c) Those that are oriented on a humane mission fulfilled by men who work, not because they are paid wages, but because they share the passion for the cause and derive job satisfaction.

The first two categories are industries, but not the third, on the assumption that they all involve co-operation between employers and employees.

Hospitals

In State of Bombay v. Hospital Mazdoor Sabha,[ii] the Supreme Court held the State is carrying on an ‘undertaking’ within Sec. 2(j) when it runs a group of hospitals for purpose of giving medical relief to the citizens and for helping to impart medical education. The court observed as follows:

An activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an ‘undertaking.

It is the character of the activity in question which attracts the provisions of Sec. 2 (j), who conducts the activity and whether it is conducted for profit or not, do not make a material difference.

Thus, activities that have no commercial implications, such as hospitals carried on with philanthropic motives would be covered by the expression ‘undertaking’. The mere fact that Government runs such activity is immaterial. In case an activity is industry if carried on by a private person, it would be so, even if carried on by the Government.

In Management of Safdarjung Hospital v. Kuldip Singh[iii], it was held that a place of treatment of patients run as a department of the government was not an industry because it was a part of the functions of the government. Charitable hospitals run by Government or even private associations cannot be included in the definition of industry because they have not embarked upon economic activities analogous to trade or business. If hospitals, nursing home or a dispensary is run as a business in a commercial way, there may be elements of industry.

In Dhanrajgiri Hospital v. Workmen[iv] , the main activity of the hospital was imparting of training in nursing and the beds in the hospital were meant for their practical training. It was held not to be an industry, as it was not carrying on any economic activity in the nature of trade or business.

In Bangalore Water Supply v A. Rajappa[v], the Supreme Court overruled Safdarjung Hospital and Dhanrajgiri Hospital cases, and approved the law laid down in Hospital Mazdoor Sabha case. It was held that hospital facilities are surely services and hence industries. The government departments while undertaking welfare activities cannot be said to be engaged in discharging sovereign functions and hence outside the ambit of Sec.2(j) of the Act.

Therefore, a charitable hospital run by a private trust, offering free services and employing a permanent staff is an industry as there is a systematic activity, a co – operation between employer and employees and rendering of services which satisfies human wants and wishes. Further, the services of employees are hired as in any other business.

Legal Firm

In National Union of Commercial Employees v. M.R. Meher,[vi] it was held that a solicitor’s firm is not an industry, although specifically considered, it is organized as an industrial concern. The court held that a person following a liberal profession does not carry on his profession in any intelligible sense with the active co-operation of his employees, and the principal/sole capital which he brings into his profession is his special and peculiar intellectual and educational equipment. Subsidiary work which is purely incidental type and which is intended to assist the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor. There is, no doubt, a kind of co-operation between the solicitor and his employees, but that co-operation has no direct or immediate relation to the advice or service which the solicitor renders to his client.

However this was overruled by Bangalore Water Supply case [vii], wherein it was held that in view of the infrastructure of the offices of professional persons, the contribution to the success of the institution comes not merely from the professional or specialist but from all those whose excellence in their respective spheres makes for total proficiency.

Thus functional cooperation between employer and employees is essential for the total quality of service. But in the categories of such and allied professions when such co-operation is missing they are not industries.

A legal consultant firm employing two law graduates stenographer and a peon is an industry.

Industrial Relations:

Industrial relations is a multidisciplinary field that studies the employment relationship. Industrial relations is increasingly being called employment relations or employee relations because of the importance of non-industrial employment relationships; this move is sometimes seen as further broadening of the human resource management trend. Indeed, some authors now define human resource management as synonymous with employee relations. Other authors see employee relations as dealing only with non-unionized workers, whereas labor relations is seen as dealing with unionized workers. Industrial relations studies examine various employment situations, not just ones with a unionized workforce. However, according to Bruce E. Kaufman "To a large degree, most scholars regard trade unionism, collective bargaining and labor-management relations, and the national labor policy and labor law within which they are embedded, as the core subjects of the field."

Initiated in the United States at end of the 19th century, it took off as a field in conjunction with the New Deal. However, it is generally a separate field of study only in English-speaking countries, having no direct equivalent in continental Europe.In recent times, industrial relations has been in decline as a field, in correlation with the decline in importance of trade unions, and also with the increasing preference of business schools for the human resource management paradigm.

IR in India:

IR is dynamic in nature. The nature of IR can be seen as an outcome of complex set of transactions among the major players such as the employers, the employees, the trade union, and the state in a given socio-economic context. In a sense, change in the nature of IR has become sine quo non with change in the socio-economic context of a country.

Keeping this fact in view, IR in India is presented under the following two sections:

1. IR during Pre- Independence

2. IR during Post-Independence

Pre-Independence:

The structure of the colonial economy, the labour policies of colonial government, the ideological composition of the political leadership, the dynamics of political struggle for independence, all these shaped the colonial model of industrial relations in pre-independent India”. Then even union movement was an important part of the independence movement.

However, the colonial dynamics of the union movement along with the aggressiveness of alien capital, the ambivalence of the native capital and the experience of the outside political leadership frustrated the process of building up of industrial relations institutions. Other factors like the ideology of Gandhian class harmony, late entry of leftists and the bourgeois character of congress also weakened the class approach to the Indian society and industrial conflict”.

Till the Second World War, the attitude of the colonial government toward industrial relations was a passive regulator only Because, it could provide, that too only after due pressure, the —um of protective and regulative legal framework for industrial relations Trade Union Act 1926 (TL A) Trade Disputes Act 1929 (TDA). It was the economic emergence of the Second World War that altered the colonial government’s attitude on industrial relations.

The state intervention began in the form of introduction of several war time measures, viz. the Defense of India Rules (Rule 81- A), National Service (Technical Personnel) Ordinance, and the Essential Service (Maintenance) Ordinance As such in a marked contrast to its earlier stance, the colonial government imposed extensive and pervasive controls on industrial relations by the closing years of its era-. Statutory regulation of industrial relations was on plank of its labour policy. The joint consultative institutions were established primarily to arrive at uniform and agreeable labour policy.

The salient features of the colonial model of IR can be summarized as close association between political and trade union movement, dominance of ‘outsiders’ in the union movement, state intervention and federal and tripartite consultations.

The eve of Independence witnessed several instances that served as threshold plank for IR during post Independence era. The prominent instances to mention are passing of Indian Trade Unions (Amendment) Act, 1947, Industrial Employment (Standing Orders) Act 1946, Bombay Industrial Relations Act, 1946, and Industrial Disputes Act, 1947 and split in AITUC and formation of INTUC.

Post-Independence:

Though Independent India got an opportunity to restructure the industrial relations system the colonial model of IR remained in practice for sometimes due to various reasons like the social, political and economic implications of partition, social tension, continuing industrial unrest, communist insurgency, conflict, and competition in the trade union movement. In the process of consultation and confrontation, gradually the structure of the industrial relations system (IRS) evolved.

State intervention in the IRS was a part of the interventionist approach to the management of industrial economy. Several considerations like unequal distribution of power in the labour market, neutrality of the state, incompatibility of free collective bargaining institution with economic planning etc. provided moral justification for retaining state intervention in the IRS. State intervention in the IRS is logical also when the state holds large stakes in the industrial sector of the economy.

However state intervention does not mean suppression of trade unions and collective bargaining institution. In fact, state intervention and collective bargaining were considered as complementary to each other. Gradually, various tripartite and bipartite institutions were introduced to supplement the state intervention in the IRS.

The tripartite process was considered as an important instrument of involving participation of pressure groups in the state managed system. Non formal ways were evolved to do what the formal system did not legistate, for one reason or other.

The political and economic forces in the mid 1960s aggravated industrial conflict and rendered non-formal system ineffective. In the process of reviewing the system, National Commission on Labour (NCL) was appointed in 1966.

Now the focus of restructuring shifted from political to intellectual. However, yet another opportunity was lost when there was an impasse on the NCL recommendations in 1972. The Janta Government in 1978 made, of course, a half-hearted attempt to reform industrial relations. Unfortunately, the attempt met with strong opposition from all unions. The BMS, for example, termed it as “a piece of anti-labour, authoritarian and dangerous legislation””.

Several committees were appointed to suggest measures for reforming die IRS. In the process, tripartism was revived in 1980s. Government passed the Trade unions and the Industrial Disputes (Amendment) Bill, 1988. But, it also proved yet another legislative disaster. The bill was severely criticised by the left parties. It was even viewed by some as a deliberate attempt to destroy “autonomous; organised or militant trade union movement”.

In consequence, the tripartite deliberations held at the ILC in 1990 decided three measures to reform IR in India:

(i) To constitute a bipartite committee of employers and unions to formulate proposals for a comprehensive legislation;

(ii) To withdraw the Trade Union and the Industrial Disputes (Amendment) Bill, 1988

(iii) To consider the possibility of formulating a bill on workers’ participation in management, 1990. In the 33rd session of ILC, another bipartite committee was constituted to recommend changes in the TU and ID Acts. The government introduced a Bill on Workers, Participation in Management in Parliament in 1990

Thus, the striking feature of the history of IR in India has been that it is dynamic in nature. Particularly since 1991 i.e., the inauguration of liberalization process, die IR in India is marked by new challenges like emergence of a new breed of employees (popularly termed as ‘knowledge workers’), failure of trade union leadership, economic impact, and employers’ insufficient response”.

Economic liberalisation in India

The economic liberalisation in India refers to the economic liberalisation, initiated in 1991, of the country's economic policies, with the goal of making the economy more market-oriented and expanding the role of private and foreign investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalisation has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. Its opponents have blamed it for increased poverty, inequality and economic degradation. The overall direction of liberalisation has since remained the same, irrespective of the ruling party, although no party has yet solved a variety of politically difficult issues, such as liberalising labour laws and reducing agricultural subsidies.[1] There exists a lively debate in India as to what made the economic reforms sustainable.[2]

Indian government coalitions have been advised to continue liberalisation. Before 2015 India grew at slower pace than China which has been liberalising its economy since 1978.[3] But in year 2015 India outpaced China in terms of GDP growth rate.[4] The McKinsey Quarterly states that removing main obstacles "would free India's economy to grow as fast as China's, at 10% a year".[5]

There has been significant debate, however, around liberalisation as an inclusive economic growth strategy. Since 1992, income inequality has deepened in India with consumption among the poorest staying stable while the wealthiest generate consumption growth.[6] As India's gross domestic product (GDP) growth rate became lowest in 2012–13 over a decade, growing merely at 5.1%,[7] more criticism of India's economic reforms surfaced, as it apparently failed to address employment growth, nutritional values in terms of food intake in calories, and also exports growth – and thereby leading to a worsening level of current account deficit compared to the prior to the reform period.[8] But then in FY 2013–14 the growth rebounded to 6.9% and then in 2014–15 it rose to 7.3% as a result of the reforms put by the New Government which led to the economy becoming healthy again and the current account deficit coming in control. Growth reached 7.5% in the Jan-Mar quarter of 2015 before slowing to 7.0% in Apr–Jun quarter.

Pre-Liberalisation policies:

Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to Fabian socialism. Policy tended towards protectionism, with a strong emphasis on import substitution, industrialisation under state monitoring, state intervention at the micro level in all businesses especially in labour and financial markets, a large public sector, business regulation, and central planning.[9] Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalised in the mid-1950s.[10] Elaborate licences, regulations and the accompanying red tape, commonly referred to as Licence Raj, were required to set up business in India between 1947 and 1990.[11]

Before the process of reform began in 1991, the government attempted to close the Indian economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. India also operated a system of central planning for the economy, in which firms required licences to invest and develop. The labyrinthine bureaucracy often led to absurd restrictions—up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used. The government also prevented firms from laying off workers or closing factories. The central pillar of the policy was import substitution, the belief that India needed to rely on internal markets for development, not international trade—a belief generated by a mixture of socialism and the experience of colonial exploitation. Planning and the state, rather than markets, would determine how much investment was needed in which sectors.

Prevailing situation during 1980s

The low annual growth rate of the economy of India before 1980, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%. At the same time, Pakistan grew by 5%, Indonesia by 9%, Thailand by 9%, South Korea by 10% and Taiwan by 12%.

Only four or five licences would be given for steel, electrical power and communications. Licence owners built up huge powerful empires.

A huge private sector emerged. State-owned enterprises made large losses.

Income Tax Department and Customs Department became inefficient in checking tax evasion.

Infrastructure investment was poor because of the public sector monopoly.

Licence Raj established the "irresponsible, self-perpetuating bureaucracy that still exists throughout much of the country"and corruption flourished under this system.

The fruits of liberalisation reached their peak in 2006, when India recorded its highest GDP growth rate of 9.6%. With this, India became the second fastest growing major economy in the world, next only to China.The growth rate has slowed significantly in the first half of 2012. An Organisation for Economic Co-operation and Development (OECD) report states that the average growth rate 7.5% will double the average income in a decade, and more reforms would speed up the pace. The economy then rebounded to 7.3% growth in 2014–15.

International Trade and the World Economy:

Integration into the world economy has proven a powerful means for countries to promote economic growth, development, and poverty reduction. Over the past 20 years, the growth of world trade has averaged 6 percent per year, twice as fast as world output. But trade has been an engine of growth for much longer. Since 1947, when the General Agreement on Tariffs and Trade (GATT) was created, the world trading system has benefited from eight rounds of multilateral trade liberalization, as well as from unilateral and regional liberalization. Indeed, the last of these eight rounds (the so-called "Uruguay Round" completed in 1994) led to the establishment of the World Trade Organization to help administer the growing body of multilateral trade agreements.

The resulting integration of the world economy has raised living standards around the world. Most developing countries have shared in this prosperity; in some, incomes have risen dramatically. As a group, developing countries have become much more important in world trade—they now account for one-third of world trade, up from about a quarter in the early 1970s. Many developing countries have substantially increased their exports of manufactures and services relative to traditional commodity exports: manufactures have risen to 80 percent of developing country exports. Moreover, trade between developing countries has grown rapidly, with 40 percent of their exports now going to other developing countries.

However, the progress of integration has been uneven in recent decades. Progress has been very impressive for a number of developing countries in Asia and, to a lesser extent, in Latin America. These countries have become successful because they chose to participate in global trade, helping them to attract the bulk of foreign direct investment in developing countries. This is true of China and India since they embraced trade liberalization and other market-oriented reforms, and also of higher-income countries in Asia—like Korea and Singapore—that were themselves poor up to the 1970s.

But progress has been less rapid for many other countries, particularly in Africa and the Middle East. The poorest countries have seen their share of world trade decline substantially, and without lowering their own barriers to trade, they risk further marginalization. About 75 developing and transition economies, including virtually all of the least developed countries, fit this description. In contrast to the successful integrators, they depend disproportionately on production and exports of traditional commodities. The reasons for their marginalization are complex, including deep-seated structural problems, weak policy frameworks and institutions, and protection at home and abroad.

The Benefits of Trade Liberalization

Policies that make an economy open to trade and investment with the rest of the world are needed for sustained economic growth. The evidence on this is clear. No country in recent decades has achieved economic success, in terms of substantial increases in living standards for its people, without being open to the rest of the world. In contrast, trade opening (along with opening to foreign direct investment) has been an important element in the economic success of East Asia, where the average import tariff has fallen from 30 percent to 10 percent over the past 20 years.

Opening up their economies to the global economy has been essential in enabling many developing countries to develop competitive advantages in the manufacture of certain products. In these countries, defined by the World Bank as the "new globalizers," the number of people in absolute poverty declined by over 120 million (14 percent) between 1993 and 1998.1

There is considerable evidence that more outward-oriented countries tend consistently to grow faster than ones that are inward-looking.2 Indeed, one finding is that the benefits of trade liberalization can exceed the costs by more than a factor of 10.3 Countries that have opened their economies in recent years, including India, Vietnam, and Uganda, have experienced faster growth and more poverty reduction.4 On average, those developing countries that lowered tariffs sharply in the 1980s grew more quickly in the 1990s than those that did not.5

Freeing trade frequently benefits the poor especially. Developing countries can ill-afford the large implicit subsidies, often channeled to narrow privileged interests, that trade protection provides. Moreover, the increased growth that results from freer trade itself tends to increase the incomes of the poor in roughly the same proportion as those of the population as a whole.6 New jobs are created for unskilled workers, raising them into the middle class. Overall, inequality among countries has been on the decline since 1990, reflecting more rapid economic growth in developing countries, in part the result of trade liberalization.7

The potential gains from eliminating remaining trade barriers are considerable. Estimates of the gains from eliminating all barriers to merchandise trade range from US$250 billion to US$680 billion per year. About two-thirds of these gains would accrue to industrial countries. But the amount accruing to developing countries would still be more than twice the level of aid they currently receive. Moreover, developing countries would gain more from global trade liberalization as a percentage of their GDP than industrial countries, because their economies are more highly protected and because they face higher barriers.

Although there are benefits from improved access to other countries' markets, countries benefit most from liberalizing their own markets. The main benefits for industrial countries would come from the liberalization of their agricultural markets. Developing countries would gain about equally from liberalization of manufacturing and agriculture. The group of low-income countries, however, would gain most from agricultural liberalization in industrial countries because of the greater relative importance of agriculture in their economies.

The Need for Further Liberalization of International Trade

These considerations point to the need to liberalize trade further. Although protection has declined substantially over the past three decades, it remains significant in both industrial and developing countries, particularly in areas such as agriculture products or labor-intensive manufactures and services (e.g., construction) where developing countries have comparative advantage.

Industrial countries maintain high protection in agriculture through an array of very high tariffs, including tariff peaks (tariffs above 15 percent), tariff escalation (tariffs that increase with the level of processing), and restrictive tariff quotas (limits on the amount that can be imported at a lower tariff rate). Average tariff protection in agriculture is about nine times higher than in manufacturing. In addition, agricultural subsidies in industrial countries, which are equivalent to 2/3 of Africa's total GDP, undermine developing countries' agricultural sectors and exports by depressing world prices and pre-empting markets. For example, the European Commission is spending 2.7 billion euro per year making sugar profitable for European farmers at the same time that it is shutting out low-cost imports of tropical sugar.

In industrial countries, protection of manufacturing is generally low, but it remains high on many labor-intensive products produced by developing countries. For example, the United States, which has an average import tariff of only 5 percent, has tariff peaks on almost 300 individual products. These are largely on textiles and clothing, which account for 90 percent of the $1 billion annually in U.S. imports from the poorest countries—a figure that is held down by import quotas as well as tariffs. Other labor-intensive manufactures are also disproportionately subject to tariff peaks and tariff escalation, which inhibit the diversification of exports toward higher value-added products.

Many developing countries themselves have high tariffs. On average, their tariffs on the industrial products they import are three to four times as high as those of industrial countries, and they exhibit the same characteristics of tariff peaks and escalation. Tariffs on agriculture are even higher (18 percent) than those on industrial products.8

Nontraditional measures to impede trade are harder to quantify and assess, but they are becoming more significant as traditional tariff protection and such barriers as import quotas decline. Antidumping measures are on the rise in both industrial and developing countries, but are faced disproportionately by developing countries. Regulations requiring imports to conform to technical and sanitary standards comprise another important hurdle. They impose costs on exporters that can exceed the benefits to consumers. European Union regulations on aflotoxins, for example, are costing Africa $1.3 billion in exports of cereals, dried fruits, and nuts per European life saved.9 Is this an appropriate balance of costs and benefits?

For a variety of reasons, preferential access schemes for poorer countries have not proven very effective at increasing market access for these countries. Such schemes often exclude, or provide less generous benefits for, the highly protected products of most interest to exporters in the poorest countries. They are often complex, nontransparent, and subject to various exemptions and conditions (including noneconomic ones) that limit benefits or terminate them once significant market access is achieved.

Further liberalization—by both industrial and developing countries—will be needed to realize trade's potential as a driving force for economic growth and development. Greater efforts by industrial countries, and the international community more broadly, are called for to remove the trade barriers facing developing countries, particularly the poorest countries. Although quotas under the so-called Multifiber Agreement are due to be phased out by 2005, speedier liberalization of textiles and clothing and of agriculture is particularly important. Similarly, the elimination of tariff peaks and escalation in agriculture and manufacturing also needs to be pursued. In turn, developing countries would strengthen their own economies (and their trading partners') if they made a sustained effort to reduce their own trade barriers further.

Enhanced market access for the poorest developing countries would provide them with the means to harness trade for development and poverty reduction. Offering the poorest countries duty- and quota-free access to world markets would greatly benefit these countries at little cost to the rest of the world. The recent market-opening initiatives of the EU and some other countries are important steps in this regard.10 To be completely effective, such access should be made permanent, extended to all goods, and accompanied by simple, transparent rules of origin. This would give the poorest countries the confidence to persist with difficult domestic reforms and ensure effective use of debt relief and aid flows.

Reaping the Benefits

The failure to start a new round of multilateral trade negotiations at the WTO conference in Seattle in 1999 was a setback for the international trading system. Such broad-based multilateral negotiations are particularly important because they provide an opportunity for countries to gain visible benefits for their exporters from market opening by others. This prospect provides an added incentive for countries to open their own markets, and to overcome opposition from the entrenched interests benefiting from protection. In this way, the packages of trade liberalization measures that result for these negotiations are assured of benefiting all of the participating countries.

A new round of negotiations would raise global growth prospects and strengthen the international trading system. The IMF considers a successful trade round to be an important step toward meeting the goal of making globalization work for the benefit of all.

Review Of Literature

In previous years, there has been a tendency to understand and interpret the problems of industrial relations in different environments and as a consequence various regional/area studies have emerged. A lot of studies have been done on the different aspects of Industrial relation at national and international level. A few studies have been taken for review:

Khurana (1972) analyzed the industrial relations in the private and the public sectors in India. The author makes a comparative study of the industrial relations in the two sectors on the basis of the criteria of industrial conflict, performance of the tripartite forums, implementation of the Code of Discipline, and several antecedent variables that have an important bearing on industrial relations. This study found that industrial relations in both the sectors have progressively deteriorated during 1962-1968, and that the public sector registered a better performance on the criterion of industrial conflict

Singh (1983): Examined the pattern of Industrial Relationships in Maharashtra and analyses the inevitability and universal. This study found that the pay allowances and Personnel Reasons are the dominant cause due to which strikes have been taking place.

Islam (1983) his study attempts to define industrial relations in greater depth and details in Bangladesh. It focused on the role of industrial relations in promoting or negating the overall economic growth of a country. 

Gani (1990) examined the industrial relation in Jammu and Kashmir. The study found that the wages and allowances was the major causes behind the industrial disputes in the state. This study concludes that, both the direct and third party dispute settlement measures have, by and large, not been successful in the state. 

Saha and Pan (1994) discussed the determinants of industrial disputes (both strikes and lock-outs) by developing an econometric model using disputes data for 19 industries over seven years from 1980 to 1986. It is found that in more unionised industries, man days lost from disputes are likely to be less compared to less unionised industries. In contrast, industries with larger average factory size will have greater man days lost. Employees' monthly earnings seem to be a weak variable having ambiguous and almost insignificant effects on man days lost.

Liberalisation and Globalisation:

The  term ‘Industrial Relations’ refers to an organized relationship between two organized parties representing employers and employees, regarding matters of collective interest. With the growth of professional  management, the industrial relations scene is represented   by the representatives of employers and representatives of the employees. IR  is a social concept because it deals with social relationships in different walks of life. It grows and flourishes or stagnates and decays in accordance with the economic social and political conditions prevailing in a society and the laws made by the State to regulate them. It is also influenced by the growth of science and technology. IR aim to facilitate production and productivity, to safeguard the rights and interests of both labour and management by enlisting their co-operation, to achieve a sound harmonious  and mutually  beneficial labour management relations, to avoid unhealthy atmosphere in the industry.

           Human Resource Management is viewed as a vehicle for nurturing the culture of higher productivity and industrial growth. The developed countries are also encouraging employers to enhance productivity by adopting HRM philosophy, which is becoming a key national concerned. In India HRM is developing fast for many reasons. Multi National Corporations (MNCs) are resorting to modern  human resource practices, and information technology. The pre-liberalisation  period in India (1947-1991) witnessed an economic policy which was inward  looking, regulated monopolistic and non-competitive. The movement   liberalization  started in India since July 1991 the country was thrown into a global system.

              Liberalisations aimed at freeing industry, business and trade from the clutches  of control, decontrolling macro economy of the country and its economic institutions and changing the structural infirmities. Liberalizations include liberalizing  industry, business and trade both domestic and foreign. Economic reforms are broader in scope. They include reforms of fiscal and monetary policies besides liberalization of industry, business and trade.  Liberalisation  of industrial policy, include delicensing  of industries and removal of restrictions on foreign investment, relaxation of Foreign Exchange Regulation Act (FERA)  and Monopolies and Restrictive Trade Practices Act (MRTP), curtailment  of the role of public sector and  application of commercial principles  to the public sector industries. Liberalization of trade policy includes liberalization  of imports, linking of  imports to exports and lowering of tariffs, introduction of new exchange rate system, encouragement  of exports and foreign investment.   

          India is still grappling with its experiments in liberalization. The developed countries  were growing through rapid changes which would continue to impact the management of human resource in India. The information technology in the new millennium created a whole new realm of virtual reality, which has changed many paradigms  of how business is conducted globally. An inevitable outcome of changes has been redundancy of jobs, consequently down sizing  of organizations is taking place, closely  linked to this are sensitive issues like Voluntary Retirement Scheme, National Renewal Fund and Exit Policy which needed to be handled with utmost care.         The liberalization programme has compelled Indian companies to look at themselves a fresh broader issues  like corporate restructuring human resource  policies and practices, employment generation, exit / entry policy, privatization, productivity, training and re-training and HRD are thus reevaluated in current context.

         Globalisation    has radically  changed the world. Many traditional socio-economic conceptions and practices have been turned up site down. After globalisation communalism has been faded away  in the world except in China and Cuba. At present  China  is also  changing, keeping in view its future in industrial growth and business. In sum countries IR issues are being redefined because  of changes in trade unions, collective bargaining, and modern human resource.

         The industrial relations system may not take much deviation but the actors of industrial relations may be required to play a more  co-ordinated  role in order to strengthen the competitive abilities  of the organization. Government would play the role of a facilitator, trade union plays a balanced role of satisfying the demands of managements too, management fulfils its role tending towards individual needs rather than generalising  them. Thus, the emphasis may shift from industrial relations to human relations. Economic liberalization and globalisation have their impact on all segments of economic activities including personnel management and industrial relations. They demand high skilled and committed personnel and provide the scope for high quality of worklife. Though,  they result in unemployment to less skilled personnel in short run, continuous development of human resources along with setting up of a number of new industries would provide better employment  opportunities. The salary and benefits  administration would tend towards the market factors.  

             

           The 10th  world congress of the International Industrial Relations  Association which devoted a full session to a discussion on democracy, development and industrial relations (Towers 1996).  There is a  growing recognition was a basic human  rights and freedoms including freedom of association and collective bargaining. Several studies indicate that IR institutions  are taking contrasting  forms ( Egorov, 1996: Bamber and Peschanski, 1996; Venkata Ratnam,1991). Some of these studies point to the increased  role of employers’  and workers’ organizations as the State  gradually curtails its own role. Egorov (1996) has highlighted the need to establish effective labour relations machinery at the preliminary stage of economic transformation, and the need for a transformation of the parties’ attitudes to collective bargaining.  

       Trends in IR are influenced by history, culture and other contextual factors. These include not only the stage  (agriculture, industrial, services, high-tech technology, economies) nature inward or outward looking strategies and phase of development but also values, philosophy, institutes, and leadership. There is a growing thrust on IR activities of enterprises  and on decentralized systems and structures in IR.  The changes in the work place reflect a growing concerned for flexibility  and competitiveness. As a result the development of skills and contingent compensation are giving importance, with attendant effects in the form of increasing wage inequalities.

        Trade unions are also experiencing major challenges in all countries as the pace of restructuring intensifies, the workforce becomes more diverse, and the average size of the enterprise declines. They face difficulties in maintaining membership in traditional industries and in organizing unions in new industries. Trade unions also find it increasingly difficult to resist employer initiatives to wrest  job control. Worker representation and worker participation in decision making are under stress, with the focus shifting in several cases from union representation to direct participation and worker empowerment.    

         In modern welfare States, job creation is seen as the State’s responsibility. In several countries, it is also seen as the employers’ responsibility. Employers, however, seem to differ in their perception on whether job creation is incidental to or the raison deter  for  all economic activity. Unemployment is seen in some countries as a political an not a socio-economic problem. In such countries  job creation – indeed, the right to work- figures prominently in election manifestos. When the manifestos are not translated into reality, which is more often than not, cynicism and frustration against  the government  start  mounting. The  World Bank (1995)  argues that the demand for labour, not the supply of it, makes the difference for job and wage growth.  Improving employees’ real wages, elevating enterprises’ profits, giving consumers real  worth for their money, and achieving sustainable growth should guide public policies.

             In matters such as job  search, job skills training, placement and outplacement, tripartite initiatives that include the neighbourhood communities  at local  enterprise level, are  more likely  to produce substantial  results. Active labour market policies including  vocational  and skills training are better planned and implemented  at local  levels. This seems to be the experience of Japan and Norway. Employment  related issues have always dominated IR and will continue to dominate.

Prior to 1991, the industrial relations system in India sought to control conflicts and disputes through excessive labor legislation. These labor laws were protective in nature and covered a wide range of aspects of workplace industrial relations like laws on health and safety of labors, layoffs and retrenchment policies, industrial disputes and the like. The basic purpose of these laws was to protect labors. However, these protectionist policies created an atmosphere that led to increased inefficiency in firms, over employment and inability to introduce efficacy. With the coming of globalization, the 40 year old policy of protectionism proved inadequate for Indian industry to remain competitive as the lack of flexibility posed a serious threat to manufacturers because they had to compete in the international market.

With the advent of liberalization in 1992, the industrial relations policy began to change. Now, the policy was tilted towards employers. Employers opted for workforce reduction, introduced policies of voluntary retirement schemes and flexibility in workplace also increased. Thus, globalization brought major changes in industrial relations policy in India. The changes can be summarized as follows:

Collective bargaining in India has mostly been decentralized, but now in sectors where it was not so, are also facing pressures to follow decentralization.

Some industries are cutting employment to a significant extent to cope with the domestic and foreign competition e.g. pharmaceuticals. On the other hand, in other industries where the demand for employment is increasing are experiencing employment growths.

In the expansionary economy there is a clear shortage of managers and skilled labor.

The number of local and enterprise level unions has increased and there is a significant reduction in the influence of the unions.

Under pressure some unions and federations are putting up a united front e.g. banking.

Another trend is that the employers have started to push for internal unions i.e. no outside affiliation.

HR policies and forms of work are emerging that include, especially in multi-national companies, multi-skills, variable compensation, job rotation etc. These new policies are difficult to implement in place of old practices as the institutional set up still needs to be changed.

HRM is seen as a key component of business strategy.

Training and skill development is also receiving attention in a number of industries, especially banking and information technology.

Impact of the Liberalization on IR

Impact on Employment

The new trade policy which aims at reducing industrial protection and seeks balance of payments management mainly through manipulation of exchange rate, results in increased mechanization. Though the globlisation policies  had visualized  that the small-scale industry and service sector employment would grow, no signs of this nature are clear yet. In fact the small-scale sector  is the victim of the liberalizations compared to that of large-scale sector. The tight credit squeeze added the fuel to the sickness of small industry. This situation badly affects the employment situation in the country.  Now the organised industry should be highly quality and productivity oriented and as such adopt most latest technology. These strategies would  normally demand for most skilled people with high degree of dedication and commitment which would  normally be a thin proportion of the existing human resources of the present  organizations. The rest of the human resources would be deployed  or retrenched as the organized sector would no longer afford to retain such employees. The magnitude of this problem is more in public sector which has been referred to as ‘employment sinks’. The government of India introduced the exit policy / voluntary retirement scheme /golden handshake to get rid of the unwanted segment of the manpower.

Impact on Trade Unions

Trade unions in India resisted the implementation of economic liberalization as they do not generally  favour  multination  getting free access into the Indian industrial  field, do favour  the growth  of small-scale sector, oppose privatization of public enterprises and do not want to close the sick industrial units. Though the trade unions voice their argument against new economic policy on various platforms and the through different means, have, in fact, not responded adequately to the possible fall out in employment and salaries.     

Impact on Human Resource Development

Liberalisation has positive impact on HRD. HRD strategies of industries  of liberalized India would be performance planning and development, encouraging  innovative and creative orientation, motivation building, providing training  and retraining developing the aptitude towards different jobs and encouraging job rotation.

Impact on Wages and Benefits 

Liberalisation  results in higher salaries and benefits  for highly skilled, talented and committed people, and low salaries and benefits for those whose skills and talents are in less demand.

Impact on Collective Bargaining

The socialistic pattern of society  and dominance of trade unionism  have attributed importance to collective   bargaining in deciding various issues relating to labour problems and personnel policies.

Impact on Participative Management

           The outcome of participative management is making use of human resources to the maximum extent through satisfying their social and psychological needs. Hence, the significance of participative management would be magnified under liberalized economy.   

Impact on Quality circles 

Quality improvement, upgradation and maintenance are the central plan of the new economic policy.

Managing Diversified Cultures 

        The increasing globalisation of workforce has contributed to the need for managing different cultures and subcultures effectively. The ethnic mix of workforce due to entrance of multinationals  and foreign companies with their people into India posed a challenge to manage the diversified international cultures.       

Improved situations in industrial relations:

This can be seen from the below statistics-   

During the last 20 years, on an average, about ten industrial disputes involving more than 1252225 workers and resulting in loss of more than 13,365 man days per year were reported in India (Table 1). In 1992, 1,714 total strikes and lockout were recorded. As a result, 31259 workdays were lost. More than 1252225 workers were involved in these labour disputes. The number and seriousness of strikes and lockouts have varied from year to year. As can be seen from the below chart, there has been a steep decline in the number of disputes in India. There were 91 labour disputes in 2011, resulting in the loss of 621 man-days, while the number of workers involved stood at 48156. Year 1992, recorded highest industrial dispute year and also recorded as highest man days lost year. Above table reveal that highest worker involved in disputes during the year 2005, i.e. 2913601 lakhs worker involved in 456 disputes, resulting more than 600 man-days lost . Year 2011 recorded as less strikes and lockouts, less man days lost, less worker involved in industrial disputes in India. This continuous decline in strikes and lockouts indicates that the industrial relations in India are improving.

WORKERS' PARTICIPATION IN CONFLICTS For assessing the extent of workers' participation and involvement in industrial conflicts, three criteria have been adopted from Ross and Hartman (1960): (A) Dispute Duration Ratio, (b) Dispute Coverage Ratio, and (c) Time Loss Ratio

Disputes Duration Ratio: It is seen from Table 2 that an employee involved in disputes, generally remained off the job for a relatively shorter duration, averaging 1.90 days per year, during 1992-2011. However, there is evidence of an unsystematic behaviour. The average duration of the disputes varied from a low of 0.82 days to a high of 3.46 days. The main reason for the overall low dispute duration is the low sustaining power of the trade unions to withstand the pangs of strikes and lockouts, arising out of the loss of their earnings during the periods of strike activity.

Dispute Coverage Ratio: Taking the period under study, as a whole, about 2146 workers have been involved per conflict per year. The year-wise performance shows variable trend in the Dispute Coverage Ratio. However, the general upswing in die ratio is the probable result of two factors: (i) rapid growth in the number of relatively large sized firms involving large number of workers, and (ii) a considerable increase in the number of trade unions accompanied by a higher membership involvement

Time Loss Ratio: Though, on an average, about 3374 man-days were lost per dispute during 1992-2011, no regular trend is witnessed. The ratio has ranged from as low as 682.42 in 2011 to as high as 6983.80 in 2007.

Wages and allowances: Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.

Personnel and retrenchment: The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% were caused by retrenchment

Indiscipline and violence: From the given table, it is evident that the number of disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel with 20.4% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes.

Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively.

Leave and working hours: Leaves and working hours have not been so important causes of industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working hours.

The analysis of the situation of industrial relation in India revealed that :

The year 1992 was the most disturbed year, registering maximum number of strikes and lockouts, with maximum number of man days lost.

The year 2011 faced the minimum number of strikes and lockouts with the least number of man days lost and minimum workers involved.

Cause wise distribution of industrial disputes during the year 2002 to 2005 has been shown that demand for higher wages has been the dominant cause for the industrial disputes.

The growth of trade union during the 1992- 2007 has been extraordinary; the number of registered union improved in entire study period.

The continuous decline in strikes and lockouts and extraordinary growth of trade union indicates that the industrial relations in India are improving.

Conclusion 

               So far India is concerned it is suffering with the political fever and high growth population, political leaders involvement in the  representation of  trade unions.  The political leaders are giving promises against the liberalization and giving more government jobs. Where by the educated youth  are misguided and misdirected. The present liberalization policy will be successful  100 per cent if population is controlled well, and political parties should work voluntarily for the development of the country.

Bibliography:

http://iosrjournals.org/iosr-jhss/papers/Vol2-issue6/D0262226.pdf?id=5685

https://www.imf.org/external/np/exr/ib/2001/110801.htm

https://en.wikipedia.org/wiki/Economic_liberalization

https://en.wikipedia.org/wiki/Industrial_relations

http://gandhamrk.blogspot.in/2015/05/industrial-relations-dimensions-after.html

http://www.naukrihub.com/industrialrelations/industrial-relation-policy.html