Sunday, April 09, 2017

Industrial Relations Notes - Industrial Disputes and Negotiations

Unit – 4: Industrial Disputes and Negotiations
Industrial Disputes
Industrial disputes are conflicts, disorder or unrest arising between workers and employers on any ground. Such disputes finally result in strikes, lockouts and mass refusal of employees to work in the organization until the dispute is resolved. So it can be concluded that Industrial Disputes harm both parties employees and employers and are always against the interest of both employees and the employers.
Definitions of Industrial Disputes
According to Industrial Dispute Act – 1947 “Industrial Dispute is any dispute or difference between the employees and employers or between employers and workmen or between workmen and workmen, which is concerned with the employment or terms of employment or with the conditions of labour of any person.”
Industrial Disputes are frequently clouded by a sense of exploitation, distrust and discontent between employee and employers. In simple language, the disputes between employers and employees on any Industrial matters are known as industrial disputes. The term ‘dispute’ is characterized by the following factors :
1. Dispute mainly relate to the strife between employers and their employees.
2. There must actually be a difference.
3. Its work related or industrial matter issues.
4. Disputes must be raised by group or class of workmen.
5. Disputes between one or two workmen and their employers are not an industrial dispute.
Forms of Industrial Disputes

Industrial dispute can take place in any of the following forms:
1) Strikes: A strike means a cessation of work by a body of persons employed in any industry acting in combination or a concerted refusal under a common understanding of a number of persons who are or have been so employed to continue work or to accept employment. Strikes are of several types:
Ø  Economic Strike
Ø  Sympathetic Strike
Ø  General Strike
Ø  Set down Strike
Ø  Slow Down Strike
Ø  Lightening Strike
Ø  Hunger Strike
2) Lock Out: lock out is the counterpart of strike. Lock outs bring psychological pressure on the workers to agree to his conditions or face closure of the units. A lockout is decaled as a trial of strength between the management and its employees. Lockouts means the employer closes down his factory where his workers are employed because he wants to force them to agree to his terms and conditions of service during the pendency of a dispute.
3) Gherao: Its means “to surround”. According to National Commission on Labour “ Gherao tend to inflict physical duress on the persons affected and endanger not only industrial harmony but also create problems of law and order”.
4) Picketing: It is primarily a method of drawing public attention towards the disputes and it is legal so there is no violence is involved. In picketing, workers are dissuaded from reporting for work by certain persons stationed at the gate of the factory.
5) Boycott: Boycott aims at disrupting the normal functioning of an enterprise, through forceful appeals and negative behavioural acts.
Causes of Disputes
1) Wages and Allowances: The most important cause for disputes relates to wages. The demand for increase in wages and allowances is the most important cause of industrial disputes. The demand for wages and allowances has never been fully met because of inflation and high cost of living. High inflation results in increased cost of living resulting in never ending demands from unions. There are some more economic reasons who are the cause of industrial disputes are bonus, working conditions and working hours, modernization and automation and demand for other facilities.
2) Union Rivalry: Most organizations have multiple unions. Multiplicity of unions leads to interunion rivalries. If one union agrees to a wage settlement, another union will oppose it.
3) Political Interference: Major trade unions are affiliated to political parties. Political affiliated is not peculiar to our country alone. Even a cursory assessment of labour movements around the world would show that trade unions are, by their very nature, political and that politicization of the rule rather than the exception. Everywhere trade union have been compelled to engage in political action to obtain enough freedom from legal restraint to exercise their main industrial functions.
4) Managerial Causes: These causes include autocratic managerial attitude and defective labour policies. In this includes failures of recognize the trade union, defective recruitment policies, irregular layoff and retrenchment, defiance of agreements and codes, defective leadership, weak trade unions.
5) Unfair labour Practices: The Industrial Dispute Act, 1947 is more specific about the unfair labour practices. According to the Act, the following constitute unfair labour practices:
Ø  To interfere with, restrain from or coerce workmen in the exercise of their right to organize, form, join or assist a trade union or to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.
Ø  Threatening workmen with discharge if they join a trade union
Ø  Threatening a lockout or closure, if a trade union is organised
Ø  Granting wage increases to workmen at crucial periods of the trade union organization, with a view to undermine the efforts of the trade union at organization.
Ø  To, dominate, interfere with or contribute support, financial or otherwise, to any trade union.
6) To encourage or discourage membership in any trade union by discriminating against workmen.
7) To discharge or dismiss workmen.
8) To indulge in acts of force or violence.
9) To refuse to bargaining collectively, in good faith with the recognized trade unions.
10) To insist upon individuals workmen, who are on a legal strike, to sign a good conduct bond as a precondition to allowing them to resume work?
Prevention and Settlement of Industrial Disputes
It is very famous sentences prevention is always better than cure. Prevention steps should, therefore, be taken so that reduced industrial disputes and sometimes try to do not occur the industrial disputes in the organizations. In the socio-economic development of any country cordial and harmonious industrial relations have a very significant note to play. Industry belongs to the society and therefore good and industrial relations are important from Society’s points of view.
Now-a-days, industrial relations are not bipartite affair between the management and the work force or employees. Government is playing an active role in promoting industrial relations. The concept of Industrial Relations has, therefore, become a tripartite affair between the employees, employers and the government concerned. It is possible to settle the industrial disputes if timely steps are taken by the management. Such disputes can be prevented and settled amicably if there is equitable arrangement and adjustment between the management and the workers. The following are the machinery for prevention and settlement of Industrial Disputes:
1)      Works Committees: This committee represents workers and employers. Under the Industrial Disputes Act, 1947, works committees exist in industrial establishments in which one hundred or more workmen are employed during the previous year. It is the duty of the works committee to promote measures for securing and preserving amity and good relations between the employers and workers. It also deals with certain matters viz. Condition of work, amenities, safety and accident prevention, educational and recreational facilities.
2)      Conciliation Officers: Conciliation officers are appointed by the government under the Industrial Disputes Act, 1947. The duties of conciliation officers are:

a)      He has to evolve a fair and amicable settlement of the dispute. In case of P.U.S he must hold conciliation proceedings in the prescribed manner.
b)      He shall send a report to the government if a dispute is settled in the course of conciliation proceedings along with the charter of the settlement signed by the parties.
c)       Where no settlement is reached, conciliation officer sends a report to the government indicating the steps taken by him for ascertaining the facts, circumstances relating to dispute and the reasons on account which settlement within 14 days of commencement of the conciliation proceedings.

3)      Boards of Conciliation: The government can also appoint a Board of conciliation for promoting a settlement of Industrial Disputes. The chairman of the board is an independent person and other members (may be 2 or 4) are to be equally represented by the parties to the disputes. The duties of the board includes:

a)      A report which has to be sent to the government by the board if a dispute has been settled or not, within 2 months of the date on which the disputes were referred to it.
b)      To investigate the dispute and all matters affecting the merits and do everything fit for the purpose of inducing the parties to reach a fair and amicable settlement.

4)      Court of enquiry: The Government may appoint a court of enquiry for enquiring into any industrial dispute. A court may consist of one person or more than one person and in that case, one of the person will be the chairman. The court shall be required to enquire into the matter and submit its report to the government within a period of 6 months.

5)      Labour Courts: As per the 2nd schedule of the Industrial Dispute Act, 1947 the government sets up labour courts to deal with matters such as:

a)      The propriety or legality of an order passed by an employer under the standing orders.
b)      The application and interpretation of standing orders passed.
c)       Discharge or dismissal of workmen including reinstatement, grant of relief to workers who are wrongfully dismissed.
d)      Withdrawal of any customary concession of privilege.
e)      Illegality or otherwise of a strike or lockout and all other matters not specified in the third schedule.

6)      Industrial Tribunals: A tribunal is appointed by the government for the adjudication of Industrial Disputes. It consists of one person who is either a sitting judge or a noticed judge of a high court and two more persons are appointed for assisting the tribunal. It deals with matters such as more of payment of wages, compensatory and other allowances, hours of work and nest internals, bonus, profit sharing, P.F. & gratuity etc.

7)      National Tribunal: National Tribunal is constituted by the Central Government if the matter is of national importance or related to an undertaking which has industries, scattered more than one states, it is referred to National Tribunal. Generally, it depends on the will of the government to refer the disputes in industrial establishment to National Tribunal. But, it becomes compulsory to refer the matter to National Tribunal when there is an info of strike in P.U.S. and this info is not merely threat.

8)      Arbitration: The employer and employees may agree to settle the dispute by appointing an independent and impartial person called Arbitrator. Arbitration provides justice at minimum cost. The Arbitrator is not vested with any judicial powers. He derives his power to decide the dispute from the agreement that parties have made between themselves regarding the reference of dispute to the arbitrator.

9)      Wage Board: There should be an appropriate machinery for the fixation of workers wages in order to avoid industrial disputes which are mostly due to the question of wages. In this job of the determination of wages, the government of the country can play a very important note. It can determine appropriate wages of the workers of different industries by forming tripartite bodies consisting of the representative of the workers, the representatives of the employers and independent representatives, Wage board, i.e. tripartite body can also make a provision of changes in the wages from time to time.
10) Collective Bargaining: Collective Bargaining is the most effective method of resolving industrial disputes. The role of collective bargaining in solving the problems arising between the management and the worker has been widely recognized. Collective bargaining not only includes negotiation, administration and enforcement of the written contracts between the employees and the employers but also includes the process of resolving labour management conflicts. Collective bargaining offers the following benefits to both of the employees and employers :
a)      It helps increase economic strength of both the parties at the same time protecting their interest.
b)      It helps resolve disputes when it is occur in the organization.
c)       It also help to establish uniform conditions of employment with a view to avoid occurrences of industrial disputes.
d)      It lays down rules and norms for dealing with labour.
11) Workers Participation in Management: It is a method whereby the workers are allowed to be consulted and to have a say in the management of the unit. The important schemes of workers participation are:
a)      Work Committees consisting of representatives of employer and employee where every industrial undertaking employing 100 or more workers is under an obligation to set up. Its main purpose to promote industrial relations.
b)      Joint Management Councils: Government suggested setting up joint management council to make a start in labour participation in management.
c)       Shop council: it have been set up in the manufacturing and mining industries employing 500 or more workers in private, public and joint sectors. Its main function to assist the management in achieving production targets, improving production, productivity efficiency, eliminating wastage and in achieving optimum utilization of machinery and manpower.
d)      Joint Council : joint council have been established for the whole unit and deals with matters relating to optimum production and efficiency and the fixations of productivity norms for man and machine for the unit as a whole.
12) Consultative Machinery: It is set by the government to resolve disputes. The main function of this machinery is to bring the parties together for mutual settlement of differences in a spirit of co-operation and goodwill. Consultative machinery operates at the plant, industry, state and the national level. At the plant level, there are works committees and joint management councils being bipartite in character and at the industry level there are wage boards and industrial committees.
 Negotiations
Negotiation has been defined as any form of direct or indirect communication whereby parties who have opposite interests discuss the form of any joint action which they might take to manage and ultimately resolve the dispute between them. Negotiations may be used to resolve an already existing problem or to lay the groundwork for a future relationship between two or more parties. The characteristics features of negotiations are:
1.       Voluntary: No party is forced to participate in a negotiation. The parties are free to accept on a eject the outcome of negotiations and can withdraw at any point during the process.
2.       Bilateral/Multilateral: Negotiations can involve two, three or dozens of parties. They can range from two individuals seeking to agree on the sale of a house to negotiations involving diplomats from dozens of states.
3.       Non-adjudicative: Negotiation involves only the parties. The outcome of a negotiation is reached by the parties together without recourse to a third-party neutral.
4.       Informal: There are no prescribed rules in negotiation. The parties are free to adopt whatever rules. They choose, if any. Generally, they will agree on issues such as the subject matter, timing and location of negotiations.
5.       Confidential: The parties have the option of negotiating public or privately.
Significance of Negotiations
Negotiation allows the parties to agree to an outcome which is mutually satisfactory. The actual terms of the agreement must be concluded by the parties and can be as broad or an specific as the parties desire. A negotiated settlement can be recorded in the form of an agreement. One signed, has the force of a contract between the parties. If the settlement is negotiated in the context of a litigious dispute, then the parties may wish to register the settlement with the court in conformity with the applicable rules of practice.
1)      In procedural terms, negotiation is probably the most flexible form of dispute resolution as it involves only those parties with an interest in the matter and their representatives if any. The parties are free to shape the negotiations in accordance with their own needs. By ensuring that all those who have an interest in the dispute have been consulted regarding their willingness to participate and that adequate safeguards exists to prevent inequities in the bargaining process, the changes of reaching an agreement satisfactory to all are enhanced.
2)      Like any method of dispute resolution, negotiation cannot guarantee that a party will be successful. However, many commentators feel that negotiations have a greater possibility of a successful outcome when the parties adopt an interest-based approach as apposed to a positional-based approach. By focusing on their mutual needs and interests and the use of mechanisms such as objective standards, there is a greater chance of reaching an agreement that meets the needs of the parties. This is sometimes referred to as a ‘win-win’ approach.
3)      Negotiation is a voluntary process. The parties are free to accept or reject the outcome of negotiations and can withdraw at any point during the process.
4)      Assuming that the parties are negotiating in good faith, negotiation will provide the parties with the opportunity to design an agreement which reflects their interests.
5)      Negotiations may preserve and in some cases even enhance the relationship between the parties once an agreement has been reached between them.
6)      Opting for negotiation instead of litigation may be less expensive for the parties and may reduce delays.
7)      It is inevitable that from time to time, conflict and disagreement will arise as the differing needs, wants aims and beliefs of people are brought together. Without negotiation such conflicts may lead to argument and resentment resulting in one or all the parties feeling dissatisfied. The point of negotiation is to try to reach agreements without causing future barriers to communications.
Process of Negotiations
The process of negotiation is as follows:
1.       Preparation: Before any negotiation takes place, a decision needs to be taken as to when and where a meeting will take place to discuss the problem and who will attend. Setting a limited time scale can also be helpful to prevent the disagreement continuing.
2.       Discussion: During this stage, individuals or members of each side put forward the case or they see it, i.e. their understanding of the situation.
3.       Clarifying goals: From the discussion, the goals interests and viewpoints of both sides of the dispute need to be clarified. Classification is an essential part of the negotiation process, without it misunderstandings are likely to occur which may cause problems and barriers to reaching a beneficial outcome.
4.       Negotiate towards a win-win outcome: This stage focuses on what is termed a win-win outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration.
5.       Agreement: Agreements can be achieved after understanding of both sides; viewpoints and interests have been considered.
6.       Implementing a course of action: For the agreement, a course of action has to be implemented to carry through the decision. 
Skills required for effective negotiation
Job description offer list negotiation skills as a desirable asset for candidates, but the ability to negotiate requires a collection of interpersonal and communication skills used together to bring a desired result. The circumstances of negotiation occur when two parties or groups of individuals disagree on the solution for a problem on the goal for a project or contract. A successful negotiation requires the two parties to come together hammer out an agreement that is acceptable to both.
1)      Problem analysis: Effective negotiations must have the skills to analyze a problem to determine the interests of each party in the negotiation. A detailed problem analysis identifies the issue, the interested parties and the outcome goals. Ex. In a employer and employee contract negotiation, the problem or area where the parties disagree may be in salary or benefits. Identifying the issue for both sides can help to find a compromise for all parties.
2)      Preparation: Before entering a bargaining meeting, the skilled negotiator prepares for the meeting. Preparation includes determining goals, areas for trade and alternatives to the stated goals. In addition, negotiators study the history of the relationship between the two parties and past negotiations to find areas of agreement and common goals.
3)      Active listening: Negotiators have the skills to listen actively to the other party during the debate. Active listening involves the ability to real body language as well as verbal communication. It is important to listen to the other party to find areas for compromise during the meeting.
4)      Emotional Control: It is vital that a negotiator have the ability to keep his emotions include during the negotiation.
5)      Verbal Communication: Negotiators must have the ability to communicate clearly and effectively to the other side during the negotiation. Misunderstandings can occur if the negotiator does not state his case clearly. During a bargaining meeting, an effective negotiator must have the skills to state his desired outcome as well as his reasoning.
6)      Collaboration & Teamwork: Negotiation is not necessarily a one side action against another. Effective negotiators must have the skills to work together as a team and faster a collaborative atmosphere during negotiations.
7)      Problem Solving: Individuals with negotiation skills have the ability to seek a variety of solutions to problems. Instead of focusing on his ultimate goal for the negotiation, the individual with skills can focus on solving the problem, which may be a breakdown in communication to benefit both sides of the issue.
8)      Decision making ability: Leaders with skills have the ability to act decision by during a negotiation. It may be necessary during a bargaining arrangement to agree to a compromise quickly to end a statement.
9)      Interpersonal Skills: Effective negotiators have the interpersonal skills to maintain a good working relationship with those involved in the negotiation.
10)   Ethics and reliability: Ethical standards and reliability in an effective negotiator promote a trusting environment for negotiations. Both sides in a negotiation must thrust that the other party will follow through on promises and agreements. A negotiator must have the skills to execute on his promises after bargaining ends.
Negotiation for win-win dispute resolution
Negotiation is a means of resolving difference between people. In the process of negotiation, not only different opinions are taken into account, but also individual needs, aims, interests and differences in background and culture are considered.
We can adopt win-lose or win-win approach of negotiation. Negotiation is sometimes seen in terms of ‘getting your own way’ ‘driving a hard bargain’ or ‘beating off the opposition’. While in the short term bargaining may well achieve the aims for one side, It is a win-lose approach. This means that while one side wins the other losses and this outcome may well damage future relationships between the parties. It also increases the likelihood of relationships breaking down of people walking out or refusing to deal with the ‘winners’ again and the process ending in a bitter dispute.
But many processional negotiations prefer to aim towards what is known as a win-win solution. This involves looking for resolutions that allow both sides to gain. In other words, negotiators aim to work together towards finding a solution to their differences that result in both sides being satisfied. The key points which must be considered for win-win negotiation are:
a)      Focus on maintaining the relationship: This means not allowing the disagreement to damage the interpersonal relationship not blaming the others for the problem and aiming to confront the problem not the people. This can involve actively supporting the other individuals while confronting the problem.
b)      Focusing on Interests Not Position: Rather than focusing on the other side’s stated position, consider the underlying interests they might have what are their needs, desires and fears? These might not always be obvious from what they say. When negotiating, individuals often appear to be holding on to one or two points from which they will not move. It is important to clearly express our own needs, desires, wants and fears so that others can also focus on your interests.
c)       Generate a Variety of options: Rather then looking for one single way to resolve differences, it is worthwhile considering a number or options that could provide a resolution and then to work together to decide which is most suitable for both sides.
d)      Aim for the Result to be based on an objective standard: Rather than resorting to a confrontational bargaining approach, which may leave individuals. Feeling let-down or angry, it can be helpful to seek some fair, objective and independent means of resolving the differences. It is important that such a basis for deciding is: (a) Acceptable to both parties; (b) Independent to both parties; (c) Can be seen to be fair.  

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