Industrial Relations

Employment policy  Is the employment policy has any relations to IR?  IR policies and Labour laws do have impact on employment generation.  IR is one of factors that influences investment decision making.

Framework of employment policy  Its emphasis and content must be conditioned by national circumstances.  International level ILO has made employment a central part of its objectives but others as consequent of macro economic policies.

Link – sustainable development and employment  Sustainable development Economic growth Social progress*** Employment Environment policies

Objectives of employement policy  Generate productive, sustainable employment.  Match skills of people to current and emerging job requirements  Raise the standard of living  Move unemployment into employment through appropriate incentives  Focus public and private investments in the most productive areas.

Employment policy  Process Engage in tripartite consultation Diagnosis of the current situation and the barriers to job creation  Economic and social policies  Physical infrastructure  Health, education and skills of people  Business environment  Good governance  Property rights, contract enforcement and judiciary  Trade and investment policies  Labour market policies

Macro economic environment  Interest rates  Money supply  Taxation and public spending

Business environment  Good governance  Political, economic and institutional stability  Investment in infrastructure, health care, education and skills development.  Promotion of export growth strategy  Attraction of FDI  Support of SME  Labour market policies.

Productive public expenditure  Infrastructure development  Human resources development  Entrepreneurial development

Market supportive institutions  An honest and efficient bureaucracy or public administration

Objectives of labour management relations policy  Harmony vs stable realations

The Nature  It is about relationship among people at work. The relationship between the “employees” and the managers who act on behalf of the “employer” ; Essence of labour relations in the work place. This relations are governed by Internalities; rules, customs, the contracts and other agreements as well as externalities: Laws and agreements.

An Industrial Relations system  It consists of: Actors comprising Employers Workers State Relevant agencies Institutions, rules and Processes those regulate relations Interactions among the actors and the outcomes

Industrial relations  Interactions and outcomes will take place: Macro level Industry level Recent development of NGOs

Coherent body of knowledge  Industrial relations may be described as coherent body of knowledge of different disciplines.

The environment  The nature of Industrial Relations system is determined by the actors and their goals, ideologies and values  But largely the environment in which actor play their roles: Legal environment Economic Environment Technical environment Political environment Socio-cultural and religious environment

Objectives and importance  Relationship between management and employees &  relations between the two and State for harmonious and cooperative than confliction and  create environment conducive for economic efficiency and motivation. It should generate mutual trust and commitment.

Objectives  National level labour relations policy and laws to define the framework for players. Increase employment opportunities Job security Raise standard of living

Role of the law  An auxiliary role- providing legal support to an autonomous system of collective bargaining and ensuing agreements.  A regulatory role- governing minimum terms and conditions  A restrictive role- yes and no in industrial dispute

Transformation of IR Globalization and IT crush time and space. Democratization and increased labour rights Further liberalization and deregulation, including labour markets Competition for investments Increased economic interdependence of nations Increased tech and capital flow Increased internationalization of businesses and mergers and alliances Emergence of customer driven global and local markets, but segmented markets.

Employer Responses and implication on IR  Moving production overseas to reduce cost, facilitate sensitivity to local customers and regional market requirements.  Contracting out and outsourcing  Resort to part- time and temp work  Introduction of new technology  Advocate for deregulations and flexibility in the labour market. Cont.

Employer Responses and implication on IR  Productivity and quality as business strategies  Employee empowerment  Collective bargaining shift from industry and national level to enterprise level.  Concession bargaining.  Downsizing  Multi-skills  Team based work Cont.

Impact on traditional IR  Expansion on service sector  Rapid influx of women into work force  Knowledge worker  Though working for an org but not working in one org.  Decreasing number of permanent workers.

Union response  International Trade unions realization that their days of power in the industrialized countries is reduced.  Increased political democratization may provide with more opportunities.  Cozy relationships between govt. and unions have reduced.  Corporate Social responsibility to regulate international labour market practices.

A strategic perspective of IR  The degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets while simultaneously maintaining and expanding the real incomes and improving living conditions of its people over the long term.- OECD-

Facilitation towards competitive advantage through IR  Competitiveness  Productivity improvement  Flexibility in pay, working hours, types of contracts, nature of working.  Cooperation between managers and employees.

IR in essence  Employers see: Setting minimum rules Procedure and mechanism to settle disputes Supporting negotiations

Employment Governed by status or Contract?  “The common law of master and servant has fallen into misuse “ Lord Delvin  In Western world in early industrialization era employment was governed by contact.

Evolution of law  Originally law was method of maintaining peace  Later is was to preserve privileges of the ruling class  Means to maximize individual self- assertion  Moved away from contract to new concept of status.( social engineering)

Sri Lankan --law  Social legislations curbed the freedom of contract The Wages Board ordinance Shop and office Act  Minimum wage legislation are of two types First type makes it obligatory for parties to negotiate wage in conformity with “fair wage” The second type imposes statutory minimum standard in particular trade or industry.

Unique law in Sri Lanka and India  The Termination of Employment of Workmen Act- reinforces employee prima facie right to his job.  Neither in India nor Sri Lanka stipulate the ground for termination of employment; Grounds are reflected in the decision of the labour and civil courts

Termination of employment  The decision of labour tribunals, arbitrators and industrial courts.  The common law- termination based on termination of terms and conditions.  The service Contracts Ordinance- termination with one month notice or summarily in cases of misconduct.  The Estate labour Ordinance- termination of employment consequent to termination of employment of the spouse. 

The Global Governance of IR  International Confederation of Free Trade Unions World Confederation of labour and Global Union Federations  In essence these unions advocate regulatory framework of national systems of IR through Global IR Establishment global works council The acceleration of the expansion of Framework Agreement between multinational enterprises and Global Union Federations. The development of mechanism to monitor implementation of above The conduct of social audits of enterprises by ILO The removal of legal and non legal barriers to cross boarder industrial action by workers.

ILO Declaration  The freedom of association and the effective recognition of collective bargaining.  The elimination of all forms of forced or compulsory labour  The effective abolition of child labour  The elimination of discrimination in respect of employment and occupation.

Codes of Conduct, social labels and Corporate Social responsibility  Labour standards through the supply chain.  The motivation to implement Codes of conduct Improving working conditions in the developing countries Protection of reputation Consumers’ good conscience Motivation of company staff Improvement of product quality.

Shareholder proxy process  USA American trade unions use the proxy process

Labour market flexibility  Numerical  Working time  Wage  Functional Through degulations

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