The Evolution of Industrial Relations in India.

Introduction: The problem of industrial or labor management did not arise when the forms of
business were of small type, but they developed only when elaborate organizational structures came
on the scene during the late 19th century, when gigantic industrial empires of the financial tycoons
came into existence followed by technology of mass production. The gradual evolution of industrial
system has passed through the below stated stages:

 Primitive stage
 Agrarian economy stage
 Serfdom stage
 Handicrafts stage
 Cottage or putting-out stage
 Factory or industrial capitalism stage.

In India the industrial relations have been seen through the following three stages:

1. Occupations in ancient India

(a.) Labor in medieval India
(b.) Guilds and Unions.
2. Industrial Relations in India
(a) Early British Rule
(b) 1st World War to Pre-Independence Period
(c) Post independence period.

1. Occupations in ancient India:

In those days, the prime occupation in India was ―Agriculture‖. Trading was of second importance.
Manual service formed the third area of preference. Majority of the states were ruled by kings. India
was greatly advanced in the industrial field, this is evident from the ―Kautilya‘sArthashastra‖. This
gives a comprehensive picture of the organizations and functions of the social and political
institutions in ancient India. The caste system had great influence on the development and progress
of these industries and occupation. The concept of caste systems was originally based on the transfer
of skills and specializations which ultimately led to standardization of professions. The ―Atarvana‖
Veda divides the community into four categories:

1. Kshatriya
2. Vaishya
3. Shudra
4. Arya

The following professions become hereditary: Industrial Relation and Labor Laws- Goldsmiths,
weavers, potters, blacksmiths, carpenters, hunters, charioteers, architects, sculptors, armourers.
Persons engaged in these occupations become separate communities.

(a)Labor Medieval India: The caste system unified a number of persons belonging in particular
occupations and formed the basis of occupational guilds. Indian works of art and crafts were badly
ruined with the foreign invasions, which lasted 700 years. These artisans gradually lost the
traditional skills. This led to the state that there was no difference between a slave and these artisans.
The situation improved only after restoration of law and order under the Mughals. Under Akbar,
government factories operated in Agra, Lahore, Fatehpur and Ahmedabad, where employees could
develop respective art. A large number of occupations were also carried on by small manufacturers
and traders in their cottages mostly on a hereditary basis. A majority of artisans lived in the fringe of
starvation.

(b)Guilds and Unions: From early days, craftsmen and workers felt the need of being united.
Different terms such as Gana and Vrat as in ―Rigveda‖ Sheshthi in Aitareya
Brahmana; Gana and Ganapati in Vajasaneyi Samhita; Sreni in Arthashastra and Puga, Gana, Vrat,
Shremi and Sangha have been used to indicate what Katyanyana calls group.

These unions gradually gained strength and were helpful not only in the evolution of arts but were
powerful centers of arts in themselves. Only responsible persons could become their members. The
union followed democratic principles. In event of a dispute between the president and the members,
the king intervened and brought about conciliations. Kautilya has given a good description of the
unions of employees, craftsmen or artisans. According to him the work of unions should be
controlled by the board of 3 directors, members should pay the entrance fee to the president and the
profits earned by the unions should be equally distributed among their members. Almost every craft,
profession or occupation had its own union which was called ―Shreni‖. Every ―Shreni‖ included
about 1000 members. The Shreni elected its chief who was called the ―Pramukha‖ or ―Jyeshta‖.
These guilds and corporations wielded considerable political power and influence.

2. Industrial Relation in India

However due to the autocratic regime of the Muslim rulers, the economic conditions of the
employees was deplorable. Laborers could be forced to leave home to work on wages, as per the
―Forman‖ of the emperor or the Governor, as the case may be. There were no organizations of the
workers during the Mughal rule which could deal with the difficulties and problems of the members.
The wages, if paid were very meager and insufficient for a day meal too. They were also paid in the
form of old, used and tattered clothes and such other articles, when the emperor and his officials
dealt harshly with the workers cordial relations between layout and capitol could not be expected to
exist. Commercial character of the East India Company did not change the conditions of the
workers. The underdevelopment of the economy continued even under the British rule. But
collective Industrial Relation and Labor Laws relations in industry were modeled on the British
pattern. In fact the growth of industries in different parts of the country was based on the need for
good industrial relations.

(a)Early British Rule: There was not much if scope for industrial development in India during the
early British rule. India was expected to be colonial market for British goods till the second half of
the 19th Century. A cotton mill was established in Bombay and Calcutta. The workers were to work
in subversive and deplorable conditions, while they were exploited by their contractors. Their
relations had been strained and the workers abstained themselves from work. As a result, many
disputes rose. Mining industry also started slowly. Tata Iron and Steel industry had been established
in Jamshedpur, which produced on a moderate scale. Engineering and railway workshops, iron and
brass foundries etc had also been developed in a moderate way prior to World War-I. The modern
industry in India owes a great deal to the initiative of the Europeans. However the workers were not
satisfied with the working conditions and the worker-management relations were not cordial. Hence
the Factories Act of 1881 was passed which gave an impetus to the worker‘s approach for redressal.
 (b)World War-I: This was period of Boom for all employers. With the rising prices, the profit also
went up enormously. The wages of the workers, however did not keep pace with this tendency. The
economic distress brought workers together and an organized working class movement began in the
country. The unrest among the workers found an outlet in increased strike actions among which the
one at Ahmedabad and other at Chennai are famous. During this period, as a result of ILO influence,
various laws were enacted (Workmen‘s compensation act -1923, the trade unions act-1926 and the
Trade disputes act-1917)

During the second war, employers made enormous profits. The workers demanded a share in them.
Bonus and dearness allowance were granted to them but as money wages did not increase in
proportion to the rise in prices, the government tried to check dissatisfaction of workers and
consequential strike activity by prohibiting strikes under the emergency rules.

(c)Post Independence Era: Immediately after independence, in the interests of the national
economy, it was considered necessary to put a stop to strikes and lockouts that interrupted
production. A tripartite conference was adopted, giving paramount importance to the maintenance of
industrial peace. The minimum wages act, the factories act and Employees State insurance Act were
all enacted 1948.

Post independence industrial relations were very much influenced by the pre-independence industrial
environments and labor management relations. Industrial unrest and shattered worker management
relations prevailed everywhere when India became independent in 1947. Government has emerged
as an arbitrator between management and workers. During the second five year plan, certain norms,
mechanisms and practices were evolved which formulate the need of minimum wage, wage boards,
guidelines on rationalization, code of discipline, code of conduct, scheme for workers participation
in management.
 State intervention in labor/ industrial relations had its beginning when the British Government in
India was constrained to protect its commercial interests in this country. An ILO Publication
observes ― Far from protecting the interests of labor, the earlier attempts to regulate labor
consisted of enactments such as the Assam Labor Act, the workmen‘s Breach of Contract Act, 1859,
and the Employer’s and Workmen‘s (Disputes) Act of 1860. These Acts aimed at
Protecting the social system against labor rather than protecting labor against the social system.
Deterioration in working conditions, because of greater development of industrial units: unduly low
wages and consequent dissatisfaction of the working class; growing indiscipline among the workers;
strained relations between labor and management the formation of ILO: the emergence of AITUC
(1920) and demands for higher wages, improved working conditions led to serious industrial
troubles and labor problems. The beginning of industrial relations dynamics can be traced back to
the inception of the Indian Labor Conference as far as 1942 by B.R.Ambedkar, when the policy of
bringing together three parties namely, govt., management and labor on a common platform as
consultative tripartite forum for all matter of labor policy and industrial relations was accepted.
In Post-Independence India

The Industrial Disputes Act (1947) provided for The establishment of a permanent machinery for
the settlement of disputes in the shape of certain authorities like the Works Committee, Conciliation
Officers, Industrial Tribunals, and Labor Courts: Making an award of a Tribunal or any settlement
brought about by the conciliator binding on the parties and legally enforceable. This Act seeks:
Industrial Relation and Labor Laws

The prevention and settlement of industrial disputes in all industries through conciliation, arbitration
and adjudication/to prohibit strikes lock-outs during the pendency of conciliation and adjudication
proceeding. Besides the enactment, 2 major efforts were made to amend the Trade Unions Act 1926
–once in 1947 and, again in 1950. A law was enacted which defined unfair employer practices and
unfair union practices. These amendments were a break with the colonial British tradition and were
influenced by the American National Labor relations. Unfortunately these amendments to Trade
Unions Act never came into force. In 1950, two bills were brought by the government- a Labor
Relations Bill and a Trade Unions Bill. They retained the provisions of the 1947 amendment. They
also introduced the principle that―Collective bargaining would be compulsory for both employers
and unions under stipulated conditions. Labor courts were empowered to certify unions as sole
bargaining agents.

(b). Future of Industrial Relations in India.

1. The first is the issue of strengthening collective bargaining by trying to determine a sole
bargaining agent for negotiation. The state of Maharashtra has already passed a law for the creation
of a sole bargaining agency in every unit and industry. Collective Bargaining is advocated where the
parties involved have a fuller understanding. This will help to arrive at a speedier settlement of
disputes between themselves.

2. The second issue relates to the gaps that are occurring as a result of the variations that occur in
Central and State legislation as far as labor matters is concerned. In India, labor falls under the
Concurrent List though NCL has made a recommendation for forming a common labor code, which
is yet to be adopted. Adoption of this
recommendation will go a long way in solving some of the problems that India‘s legislation process
in facing.
 3. Another issue is that of worker‘s participation in management. India has already experienced
working of many forms of worker participation schemes but none of them seems to have made any
headway. The reasons for the failure of these schemes need to be probed into.

Its strategic importance extends beyond the limited frontiers of union-management relationship and
overlaps with the future prospects for Indian democracy on one hand, and the basic concepts and
assumptions of economic development on the other. The set of strategic choices must be made in the
midst of economic and political difficulties that the country is undergoing.