EVOLUTION OF INDUSTRIAL RELATIONS Evolution of IR Industrial

EVOLUTION OF INDUSTRIAL RELATIONS

Evolution of IR • Industrial relations has its roots in the industrial revolution which created the modern employment relationship by spawning free labor markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labor problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19 th century. • Industrial relations was formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labor problems and the Marxist solution of class revolution and concentrated on legislations like National Labor Relations Act and the Fair Labor Standards Act. • In the late 19 th century, the industrial relations system started shaping up, due to new managerial techniques, work complications etc due to industrialisation. The popularity of the laissez-faire doctrine waned when it proved inadequate to deal with the social and economic problems caused by industrialization.

History • In the pre-industrial society, agriculture was the major source of wealth. Production was mainly based on crude farming tools. All the factors of production i. e. labour and capital was tied up with land. Only those who had control over these three factors had economic power. • Transformation started in the society, with the industrial revolution, from the latter half of the 18 th century, starting from Great Britain to India by the end of that century. The most important change was that capital became the critical factor of production. Industrialisation brought about drastic changes in the working methods and manpower management relations in the workplace. • The trends in the early stages of industrialization were: – Loss of freedom – Unlike in previous domestic industries, working in factories involved strict discipline and less freedom. The workers didn’t have much say in matters like working conditions, rest intervals, holidays, wages etc. – Unhygienic working conditions – Attention was not paid to the health and safety of the workers and the working conditions were mostly unhygienic and unhealthy. – Employment of children – There was exploitation of children due to economic necessity and they also worked in unhygienic working conditions.

Laissez Faire • In the early 19 th century, the doctrine of laissez faire was in vogue, • In economics, laissez-faire means allowing industry to be free from state intervention, especially restrictions in the form of tariffs and government monopolies. It is an economic theory from the 18 th century that is strongly opposed to any government intervention in business affairs. • People who support a laissez faire system are against minimum wages, duties, and any other trade restrictions. An economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws.

Important features of laissez faire: • Freedom to Contract: - The parties to a contract were free to lay down terms and conditions of contract without any intervention from third party. Normally the weaker party i. e. the labourers have to accept the dictate of the stronger party. Government or workers’ unions’ intervention was rigidly opposed. • The Dynamics of Market: - This doctrine believed that dynamics of market revolves round economic forces. The forces of demand supply that operates in the market decides determine the price as well as the labour market. Thus if the supply of labour exceeds demand the wages of workers were low. Any interference regarding wages either from government or unions was opposed. • The Pursuit of Self-Interest – This doctrine believed that pursuit of self interest served the best interest of everyone. There interference by any other party would adversely affect their interest.

INDUSTRIALIZATION: • The Industrial Revolution was a period from the 18 th to the 19 th century where major changes in agriculture, manufacturing, mining, and transport had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom, then subsequently spreading throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. • Starting in the later part of the 18 th century there began a transition from manual labour and draft-animal–based economy towards machine-based manufacturing. • The technological advancements also led to the factory system and thereby to the emergence of two distinct classes, viz, the capitalist class and the working class. The capitalist class provided the important input of production – machinery, means of production and premises and the workers supplied labour and were mainly untrained, uneducated and unorganized.

Effects of Industrial Revolution: • The Industrial Revolution brought severe consequences to society. Factory owners, needing cheap, unskilled labor, profited greatly by using children and women to run the machines. By the age of 6, many children were already working 14 hours a day in factories! These children had no free time to do anything else and earned low wages. Some got sick and died because of the toxic fumes, while others were severely injured and sometimes killed working at the dangerous machines in factories. Obviously, the Industrial Revolution had both good and bad sides. • In terms of social structure, the Industrial Revolution witnessed the triumph of a middle class of industrialists and businessmen over a landed class of nobility and gentry. • Ordinary working people found increased opportunities for employment in the new mills and factories, but these were often under strict working conditions with long hours of labour dominated by a pace set by machines. However, harsh working conditions were prevalent long before the Industrial Revolution took place. Pre-industrial society was very static and often cruel—child labour, dirty living conditions, and long working hours were just as prevalent before the Industrial Revolution.

EVOLUTION OF INDUSTRIAL RELATIONS IN INDIA • In ancient India, agriculture was the prime occupation followed by trading and then manual services. Some of the cottage industry sector (comprising of weaving of woolen clothes, dyeing of leather, etc. ) was greatly advanced. The caste system in India was based on transfer of skills and specialization to the descendents. • British invasion over 700 years badly ruined the work of art and craft. The work was revived under the Mughal rule and carried in big apartments called Karkhanas. The workers were exploited under the Autocratic rule of Mughals and paid wages as meager as Rs. 3/4 per month (comprising of 40 days). INDUSTRIAL RELATIONS - Kautilya first emphasized that the minor faults of the employees should be condoned and both the workers and the management should never violate the terms of employment by engaging in some another work or by employing some other worker, respectively. EARLY BRITISH RULE (19 th CENTURY) - The industry developed at a fast pace during this era. Following industries had established their presence in India: Indigo Plantations - 1831/ Cotton Mills, Bombay – 1853/ Jute Mills, Calcutta -1853 However, the agriculture sector of India was completely destroyed by British by exploiting the workers and India was left as a Backward Agriculture Economy. PRE-INDEPENDENCE PERIOD - During 1 st and 2 nd world war, profits went up enormously. But these profits were not shared with the workers. Under the influence of ILO, Trade Disputes Act (1917) and Trade Union Act (1926) were made.