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Unit 7: Industrial Relations

of enterprises. This has been perceived to be so in countries such as India and Sri Lanka, Notes
where employers have for some time canvassed for greater flexibility and less legislative
control over industrial relations. A plethora of laws makes rapid adaptation to change
difficult, and avoidance of laws can be a preoccupation of employers in such circumstances.
Over regulation is sometimes based on the misconception that sound industrial relations can
be achieved through the law. The creation of harmonious industrial relations needs to be
achieved by other, non-legal means; the law cannot ‘compel’ parties to establish good
relations. By way of analogy, in a different field of human relations, the law can prescribe
the rules to be followed if people wish to marry. But the law cannot create a happy
relationship or marriage. Similarly, harmonious industrial relations can be achieved not
primarily through the law but through better human relations and human oriented practices
at the enterprise level. Some countries, such as those in South Asia, which have a tradition
of a plethora of labour laws, have tended to overlook the fact that if the energy expended
by the State in enacting and enforcing a mass of labour laws had been spent in finding ways
and means of encouraging mechanisms and systems geared to achieving sound labour
relations, better results may have been achieved. In such countries parties tend to look to
the law for the solution of what are essentially human relations problems, and creativity
and innovation in industrial relations are consequently stifled. As a result, attention is
focused more on dispute settlement rather than on dispute prevention, when emphasis on
the latter is one way of building a sound industrial relations system.
Statute law is one of the specific means used by the State to condition industrial relations
outcomes, and represents the most direct means of State intervention. Statutory regulation
of minimum terms and conditions such as minimum wages, working conditions, safety and
health, social security and protection become terms and conditions in contracts of employment
which must conform to them; they cannot be ‘bargained’ away. Other statutory provisions
may be of a more facilitating nature such as ones which establish the conditions and the
environment for collective bargaining (e.g. rights of association, unfair labour practices, and
conciliation services); they are no less fundamental and important. Another - and more
indirect - method through which the State influences industrial relations is the system of
labour courts, tribunals or arbitration, which is a common feature in many countries.
Through these institutions the State seeks to dispense equity in the employment relationship,
and they may also protect collective interests as in the case of trade union rights. Such
institutions have been considered necessary where the normal system of courts does not
have the power or jurisdiction to apply equitable principles and to takes into account the
realities of the employment relationship, which results in a rather ‘legalistic’ view of labour
relations. The pronouncements of these courts often constitute important limits to the
freedom of action of the actors in industrial relations. Still another method of State intervention
is through its ‘administrative’ role, for example, as conciliator or mediator.

Institutionally, industrial relations were founded by John R. Commons
when he created the first academic industrial relations program at the
University of Wisconsin in 1920.

7.3.4 Collective Bargaining
Collective bargaining may take place at the national, industry or enterprise level. It could
be said that collective bargaining is a means of settling issues relating to terms and conditions
of employment and has little to do with labour management relations policy formulation.
Nevertheless collective bargaining may reflect - sometimes explicitly and at other times
implicitly - labour management relations policy e.g., on wage guidelines, termination of
employment procedures. It can also be a means of developing policy formulation at the
industry level. For instance, arrangements and agreements resulting from collective bargaining

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