Brief note on the Scope of Industrial Relations

Industrial relations have been heavily influenced by the conditions prevalent in the post industrial revolution scenario and in the capitalist system of production. Later changes were caused by developments in the wake of the IT revolution and the rapid technological progress, which is still causing discontinuous changes.

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Globalization is not a new phenomenon, but its effects in the past were different from those occurring now. Earlier, labour was more mobile than capital; now capital is more mobile than labour.

In the past, labour moved to places where jobs were available; now, job losses are taking place everywhere. Also, employers’ exploitation of workers continues to persist to a great extent in the informal sector.


Today’s new-generation knowledge workers and professionals competing for career advancement are ‘willing slaves’, ready to work longer hours and almost seven days a week. Also, in certain cases unions are suspicious of the ‘caring and sharing’ attitude of employers, seeing in the ‘new’ human resource policies a ploy to make trade unions redundant.

More often than not, the study of industrial relations has been preoccupied with the fundamental causes of discontent and discord at work and how to mitigate them. Hare (1965) notes that, ‘The problem of industrial discontent is inherent in, and arises from, the structure of society; from its social organization and political forms; from its religious and ethical norms and the attitudes to property and work which these inculcate and which are given expression in its laws….

In fact, it is true to say that…… the problem of industrial discontent is rooted in fundamentals of our way of living which are so much a part of ourselves that we seldom stop to question them. Consequently we may fail to realise that these fundamentals are neither universal nor immutable, and that, in other times and places, in other forms of society, they may be quite different.’

The conditions prevailing around the time of the First World War and the Second World War brought either communist or socialist ideas and ideals to the fore (for instance, the Beveridge Plan in the UK and the Social Contract under Roosevelt in the US) which produced significant challenges to the capitalist system in many parts of the world.


Also, managements then used to own a large part of the capital employed in industry. With the advent of the joint stock form of company organization, there was a ‘divorce’ between capital and management. Since then, those who own productive resources are not necessarily the same as those who control and manage them.

Under the communist, the socialist, and the mixed economy systems, the government not only became the only (in communist) or a major employer and owner of productive resources (in non-communist systems, including capitalist America), but also introduced heavy regulations in almost every sphere of employment and industrial relations.

The International Labour Organization (ILO) has played a key role in propagating the values of freedom of association and right to collective bargaining, among others, which are now constitutional and legal obligations in many parts of the world. A landmark event in this regard is the 1998 ILO Declaration on Fundamental Principles and Rights at Work, which is one of the components of ‘Decent Work’.

Problems of relations in industries existed in the past and continue to exist in every economic system (Richardson 1959). When the capitalist system was perceived to be responsible for industrial unrest it was felt that socialist policies would bring in peace. The attitudes of management and workers towards each other and towards their work affect industrial relations.


Ownership of capital per se—whether private or public—does not make a big difference. Though communist and socialist economic systems solved some problems associated with the private capitalist system, they created others. Earlier, if economic power was concentrated in private hands, the political power to regulate remained with the government.

The concentration of both powers in the same hands tended to curb rather than confront conflict. Discontent and unrest per se are not bad. In fact, discontent is a precondition for progress, while unrest needs to be tackled rather than suppressed. More than ownership, it is the behaviour, values, and underlying assumptions which make a fundamental difference to industrial relations, be it at the micro (enterprise) or macro (national) level.

The purpose of industrial relations is to secure the highest possible level of mutual understanding and goodwill between the several interests which participate in production and/or associated activities.

‘This will depend primarily upon fair dealing and establishment of good working conditions, including the highest general standards of living and of amenities at the workplace which industry at the time can provide, but a friendly atmosphere and a spirit of working together for a common purpose must be developed.’ Progress towards this objective entails obligations on both employers and employed. ‘The demand for a fair day’s wage implies willingness to perform a fair day’s work’ (Richardson 1959).

The purpose of industrial relations is not just ‘peace’. The peace of the graveyard is different from the peace in a temple, church, or mosque. ‘The peace at any price’ policy will solve one problem, and bring many others. Smooth and cordial relations in an industry should ultimately contribute to achieving the main purpose of that industry—be it production or service—efficiently and equitably.

‘Industrial relations is an art, the art of living together for purposes of production (and/or services) (Richardson 1959).’ It applies knowledge derived from the principles of many disciplines: economics, law, human/industrial psychology, anthropology, sociology, social work, etc.

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