How Disinvestment, Deregulation, and Decentralization affects Industrial Relations?

Disinvestment (often viewed as synonymous with privatization) affects industrial relations in the following ways:

I. It changes ownership, which may bring out changes not only in work organization and employment but also in trade union organization and trade union dynamics.

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II. It changes the work organization by necessitating retraining and redeployment.


III. It affects the rights of workers and trade unions, including job/union security, income security, and social security.

Trade unions, managements, and often governments have together been responding to these challenges through various types of new, innovative, or model arrangements to deal with different aspects of disinvestment. These include

I. Making workers the owners through issue of shares or controlling interest (The latter has not happened in India as yet in the context of disinvestments though it happened in the context of sick companies identified by the Board of Financial and Industrial Restructuring.),

II. Negotiating higher compensation for voluntary separations,


III. Safeguarding existing benefits,

IV. Setting up further employment generating programmes, and

V. Proposals for setting up new safety nets that include not only unemployment insurance but also skills provision for redundant workers.

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