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Industrial Relations

Last updated date: 25th Feb 2024
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The Concepts Behind Industrial Relations

Industrial relations imply the relation between both employer and employees during the period of employment in an industrial organisation. However, the concept of industrial relations has a broader meaning. In a broader sense, the term industrial relations refers to the relation between various unions, state and union, and between employers and government. Relations of all those associated with the industry may be known as industrial relations.

According to the International Labour Organisation (ILO), industrial relations deals with relationships between either state and employers and workers organisations or the relationship between the occupation organisation themselves.

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Industrial Relation Meaning

The term industrial relations comprises two words, i.e. ‘industry’ and ‘relations’. The term ‘industry’ refers to any productive activity in the organisation in which the employees are engaged. On the other hand, the term ‘relations’ refers to the relationship, which exists within the industry between the management and the employees. The relationship between management and employees within the organisation within the organisational settings is defined by industrial relations. Industrial relations emerge directly or indirectly from management-trade union relationships.

Characteristics of Industrial Relation

Following are the significant features of industrial relations:

  • Industrial relations are the result of employment relationships in industrial enterprises.

  • Industrial relations introduced the concept and method of balancing and cooperating.

  • Industrial relations formulate rules and regulations to maintain harmonious relations.

  • The intervention of the Government to shape the industrial relation is made through laws, agreements, rules, charters, etc.

  • Industrial relations incorporate both individual relations and collective relations.

  • Several parties play a role in industrial relations. The main parties are employees and their organisation, employers and their association, and government. 

Objectives of Industrial Relation

Following are the different objectives of industrial relation.”

  • To establish industrial peace.

  • To safeguard the interests of both workers and management.

  • To avoid industrial disputes.

  • To raise the production capacity.

  • To establish industrial democracy.

  • To minimise the labour turnover rate and absenteeism.

  • To safeguard the workers economic and social interests.

  • To contribute to the economic development of the country through productivity.

  • To establish a full employment situation.

  • To minimise strikes, lockout, Heroes, etc., by providing good working conditions and fair wages to the workers.

Nature of Industrial Relation

  • Industrial relations are concerned with the relationship between management and workers.

  • Industrial relations safeguards the interest of employees.

  • Industrial relations are concerned with the system, rules, and procedures used by unions and employees to determine the reward for effort and other conditions of employment, safeguard the interests of the employees and their employer and regulate how employers treat their employees.

  • Industrial relations maintain a balance with employee expectations, employer associations, trade unions, and other social and economic institutions of societies.

  • Industrial relations help in resolving disputes, conflicts, and controversies between labour and management.

Scope of Industrial Relation

Industrial Relations is a wide-reaching term. Different scholars have expressed their different views on the scope of industrial relations. According to Dale Yoder, “Industrial relations incorporate policies related to recruitment, selection, training of workers, personnel management, and collective bargaining.” According to the International Labour Organisation (ILO), industrial relations incorporate the relations between state and employers and relations between trade unions and employers associations.

According to Richard A Lester, the scope of industrial relations is no longer limited only to trade unions and industrial management, rather it includes all aspects of labour such as wages, productivity, social security, management, and employee policies. Trade Union policies also form part of it.

In a modern organisation, the industrial relations functions are performed by the Industrial Relations Department. This function is performed under the supervision of the Director of the Industrial Relations department. In the performance of this function, support is rendered by different managers and subordinates. Different important functions performed by workers of the industrial relation department includes:

  • Management of policies and programs of industrial relations.

  • Public Relation

  • Labour Relation

  • Recruitment, Selection, and Placement of labourers.

  • To provide medical and health-related services.

  • To maintain employment records of the employees.

  • Provision of recruitment test, ability test, skill test, and intelligence test.

  • Provision of training and education program

What is the Importance of Industrial Relations?

  • Promotes Democracy: Industrial relations means employing collective bargaining to resolve issues faced by workers. This collective bargaining is generally employed through cooperation and mutual agreement amongst all the affected parties, i.e., democracy, management, and employees unions. This enables an organisation to establish industrial democracy, which eventually motivates the workers to perform their best to the growth and prosperity of the organisation.

  • High Morale: Good industrial relations enhance the morale of the employees and motivate the workers to work more efficiently.

  • Avoid Conflicts Between Management And Union: Industrial relations minimise issues between unions and management. This is because industrial relations incorporate setting up machinery to resolve issues faced by management and employees through mutual agreement to which both these parties are bound. This results in ignoring any unfair practices that could lead to major conflicts between employers and trade unions.

  • Minimises Wastage:  Satisfactory Industrial relations are maintained on the basis of co-operation and recognition of each other in the department. It helps to minimise wastage of material, manpower, and costs.

  • Economic Growth And Development: Good and harmonious industrial relations result in increased efficiency and hence prosperity, which in turn minimise turnover and other tangible benefits to the organisation. This promotes economic growth and development.

Functions of Industrial Relations

The important functions of industrial relations are:

  • To establish communication between workers and management to maintain the sound relationship between the two.

  • To establish support between managers and employees.

  • To ensure the creative contribution of trade unions to avoid industrial conflicts.

  • To safeguard the interests of workers and the management,

  • To avoid an unhealthy and unethical atmosphere in an industry.

  • To formulate such considerations that may promote understanding, creativity, and cooperativeness to enhance industrial productivity.

  • To ensure better workers’ participation.


To conclude, industrial relation, also known as an employment relationship, is the versatile academic field that studies the employment relation, i.e. the complex interaction between employer and employees, labour/trade union, and employer organisation and state. Also, it is observed that a good industrial relation increases the efficiency of workers and eventually increases the productivity of an organisation.

FAQs on Industrial Relations

1. What are the parties involved in industrial relations?

The parties involved in the industrial relation are management, employees, and statutory authorities.

2. What are the benefits of harmonious industrial relations?

Some of the benefits of harmonious industrial relations include:

  • Establishing of industrial democracy

  • IR contributes to the growth and development of an organization.

  • Improve the morale of employees.

  • Ensure the optimum use of scarce resources.

  • Discouraging unfair practices on the part of both management and employees.

  • Encouraging execution of sound regulatory legislation.

3. What are the main components of industrial relations?

The main components of industrial relations include labour relations, relations between employees and executives, human resource management practices, trade union activities, collective bargaining, and compliances with regulatory and statutory requirements.

4. How effective communication supports the management of industrial relations in the organization in the case of industries?

In the case of industries, effective communication supports industrial relations management in organisations with a proper hierarchical system. Adequate communication is important to keep the employees informed about decisions that affect their interests. Communication is significant for strengthening trust and for teamwork among employees. Satisfying employees is significant for maintaining better industrial relations, and this can be obtained with a transparent and effective communication system in the organisation.