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Industrial Relations

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  • Pages: 4
  • Word count: 890
  • Category: Trade

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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.


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.


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 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).

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