Industrial relations define relationships between employers and employees toward each other in terms of supervision, direction, planning and coordination of organizational activities, with minimal human effort and functions; all this done with an enthusiastic spirit taking into consideration the safety of all employees. Industrial relations may also be defined as relations between employees and management.

Definition and Meaning of Industrial Relations

In the broad sense, industrial relations cover all such relationships that a business enterprise maintains with various sections of the society such as workers, state, customers and public who come into its contact. The concept of Industrial relations has been defined using various terminologies, but in the strictest sense, it is essentially the relationship between management and labor. The full concept of industrial relations (IR) is the organization and practice of multi-pronged relationships between labor and management, unions and labor, unions and management in an industry.

The term ‘industrial relations’ has been variously defined;

Dale Yoder (1982) defines IR as a “whole field of relationships that exists because of the necessary collaboration of men and women in the employment process of an industry.” Yoder understood industrial relations as the process of management dealing with one or more unions with a view to negotiate and subsequently administer collective bargaining agreement or labour contract.

  John Thomas Dunlop (1993) defined industrial relations as “the complex interrelations among managers, workers and agencies of the governments”.  Dunlop regarded IR as a system of rules regulating employment and the ways in which people behave and relate to each other at work.  The systems’ theory of Industrial Relations express that the role of the system is to produce the regulations and procedural rules that govern how much is distributed in the bargaining process and how the parties involved in the industrial relations scene relate to each other.

The system is expressed in more or less formal and informal ways, in legislation and statutory orders, in trade orders, in trade unions’ regulations by collective agreements and arbitration awards.  In social conventions, in managerial decisions, and in accepted “customs and practice. The “rules” may be defined and coherent or ill-defined and incoherent.  

In industrial relations, therefore, one seeks to study how people get on together at their work, what difficulties arise between them, how their relations including wages and working conditions etc., are regulated.  

Background to the field of Industrial Relations

 Industrial relations constitute one of the most delicate and complex problems of the modern industrial society. This phenomenon of a new complex industrial set-up is directly attributable to the emergence of ‘Industrial Revolution”. The pre-industrial revolution period was characterized by a simple process of manufacture, small scale investment, local markets and small number of persons employed. All this led to close proximity between the manager and the managed. Due to personal and direct relationship between the employer and the employee it was easier to secure cooperation of the latter.

Any grievance or misunderstanding on the part of either party could be promptly removed. Also, there was no interference by the State in the economic activities of the people. Under such a set-up industrial relations were simple, direct and personal. 

This situation underwent a marked change with the advent of industrial revolution, size of the business increased needing investment of enormous financial and human resources, there emerged a new class of professional managers causing divorce between ownership and management, and relations between the employer and the employer became estranged and gradually antagonistic. This new set up rendered the old philosophy of industrial relation irrelevant and gave rise to complex, indirect, and impersonal industrial relations.

Industry today is neither viewed as a venture of employers alone nor profit if considered as its sole objective. It is considered to be a venture based on purposeful cooperation between management and labour in the process of production and maximum social good is regarded as its ultimate end and both management and employees contribute in their own way towards its success.  

Similarly, labour today is no more an unorganized mass of ignorant works ready to obey without resentment or protest the arbitrary and discretionary dictates of management. The management has to deal with employees today not as individuals but also as members of organized social groups who are very much conscious about their rights and have substantial bargaining strength. Hence, the objective of evolving and maintaining sound industrial relations is not only to find our ways and means to solve conflicts to resolve differences but also to secure the cooperation among the employees in the conduct of industry. But maintaining smooth industrial relation is not an easy task. 

Almost all the industrialized countries of the world face the problem of establishing and maintaining good management-worker relationships in their industries. Each country has sought to find out a solution, depending upon its economic, social and political environment. However, industrial conflict still arises and therefore establishment and maintenance of satisfactory industrial relations forms an important plank in the personnel policies of modern organization.

Coverage of industrial Relations

Industrial relations, thus, include both ‘industrial relations’ and ‘collective relations’ as well as the role of the state in regulating these relations. Such a relationship is therefore complex and multidimensional resting on economic, social, psychological, ethical, occupational, political and legal levels.  

There are mainly two set of factors that determine the state of industrial relations –  described as ‘institutional factors’ include type of labour legislation, policy of state relating to labour and industry, extent and stage of development of trade unions and employers’ organizations and the type of social institutions.

The other set of factors, described as ‘economic factors’ include the nature of economic organization capitalist, socialist technology, the sources of demand and supply in the labour market, the nature and composition of labour force etc.