Connect with us

Economy & Market

Social Dialogue for Effective Industrial Relations

Published

on

Shares

Each enterprise has a history of industrial relations and knowledge of the history facilitates in developing enterprise specific strategy for an effective industrial relations climate in the present and the future.

We are well conversant with John T Dunlop’s "System Model", which considered Industrial Relations as a subsystem of society, distinct from, but overlapping other subsystems. He suggested that Industrial Relations system could be divided into four interrelated elements comprising of certain actors, certain context, an ideology which binds the industrial relations system together and a body of rules created to govern the actors at the workplace.

Each enterprise has a history of industrial relations and knowledge of the history facilitates in developing enterprise specific strategy for an effective industrial relations climate in the present and the future. Industrial relations in an enterprise, is also dependent upon the organisation’s culture, governance practices, style of management of the owners/top management as well as the approach and style of functioning of the union/s and the methods deployed by them for handling of industrial relations issues of the organisation. Industrial relations in an enterprise is dependent on applicable relevant labour laws, contract of employment, rules and regulations of the enterprise, as well as past agreements between the management and the trade union that are supposed to be complied with by both management and trade unions.

At times there are differences in approach between managements and trade unions on the methodology to be adopted on resolution of disputes, which at times do create industrial relation problems. Industrial relations issues in an enterprise can be on various issues some of which are recognition of union/s, aspects of work, terms and conditions of employment, compensation, welfare measures, promotion policy, rewards, and punishments arising out of disciplinary proceedings. Both the management and the trade union of an enterprise need to have an approach on finding solutions to the problems, while maintaining discipline, improved quality, and improved productivity coupled with uninterrupted operations and continuity of growth of the enterprise and development of the workforce. Hence, an effective communication involving social dialogue from both management and union does act as a catalyst in building an effective industrial relations climate.

Industrial relations climate is enterprise specific; the industrial relations climate differs from one enterprise to another and from one region to the other, depending upon the attitude and behaviour of the top management towards trade union and of trade union towards top management and also amongst the trade unions.

The ratio of permanent workers to contract workers over a period of time has become skewed; earlier i.e. till 1990s, there used to be higher number of permanent workers than the contract workers. In the decade of 1991 to 2000 the number of above two types of workforce changed drastically, which did gave rise to series of litigation concerning permanency, equal pay for equal work etc. i.e. contract workers desiring parity with the permanent workers. Beyond 2000, the number of contract workers has surpassed the number of permanent workers in many enterprises. Presently large number of enterprises are engaging substantial number of contract workers at the workplace, both in the manufacturing and the service sector, hence wage and service conditions of contract workers working for an enterprise is becoming a major issue for trade unions and workers, hence this is bound to continue to have Industrial Relations implications.

The areas of labour legislation impacting industrial relations in India are governed by The Trade Union Act, 1926, The Industrial Employment [Standing Orders] Act, 1946, The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965, The Equal Remuneration Act, 1976, The Industrial Disputes Act, 1947 and The Contract Labour (Regulation & Abolition) Act, 1970 apart from certain state legislations applicable to certain States of India.

The present National Democratic Alliance (NDA) Government, under the Ministry of Labour and Employment, has looked at clubbing (i) Laws governing wages by consolidating: The Minimum Wages Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976 under Labour Code on Wages Bill, 2017 and (ii) Laws governing terms and conditions of employment by consolidating: Trade Unions Act, 1926, Industrial Employment [Standing Orders] Act, 1946 and Industrial Disputes Act, 1947 under Labour Code on Industrial Relations Bill, 2015. The conversion of these present Acts into two Codes will lead to a commonality of definition under each of the Codes, but the contents of the existing laws have been copied under the Code, with hardly any change in the content of the Acts incorporated in the Code. These two new codes will be the new labour legislations impacting Industrial Relations in India, once they become laws.

ILO convention No. 144 on social dialogue
The ILO is moving towards its centenary in 2019, and the ILO Office has stepped up its efforts to encourage universal ratification of ILO Convention No. 144 passed in 1976 dealing with Tripartite Consultation also referred to as Social Dialogue. The ILO Declaration on Social Justice for a Fair Globalisation, adopted unanimously at the International Labour Conference in 2008, identified this convention as one of the four most significant instruments from the viewpoint of governance.

ILO has been propagating "Social Dialogue" at the international, national and enterprise level with an objective of finding solution to problems and hence developed ILO Convention No. 144 dealing with "Social Dialogue" which was ratified by India in 1978.

The ILO definition on "Social Dialogue" is ‘All types of negotiations, consultation or simply exchange of information between or amongst representatives of governments, employers and workers on issues of common interest to economic and social policy’. This ILO Convention No. 144 dealing with Social Dialogue is an approach at finding solutions to problems and hence the International Labour Organization does propagate this convention to the Governments, Employer Organizations and Trade Unions of each member coutry, so as to improve the climate for effective Industrial Relations.

Employment model post 1991
In India post 1991, majority of the enterprises in the manufacturing as well as service sector undertook voluntary retirement schemes and heavily reduced the unionised workforce; hence the industrial relations climate in enterprises has gone through a major change, as unionised work force in the formal sector, who were employees of the enterprise and members of trade unions, fell drastically. These enterprises in the future limited the employment of unionised workforce and met future requirement of workforce by and large, through recruitment of employees in the management cadre, and in quite many case by obtaining contract work force through a contractor / service provider or outsourced quite a few activities.

Enterprises born post 1991, both in the manufacturing and service sector have built an employment model wherein maximum employees are in the management cadre; few employees are in the worker category. Enterprises engage a substantial number of contract workers, who work for the enterprise through a contractor/service provider and their working for the enterprise are governed by the The Contract Labour (Regulation & Abolition) Act, 1970.

This employment model has brought in new dimensions in Industrial Relations wherein the enterprise claim that the contract workers are employees of the contractor and not of the enterprise, though they continue to work for the enterprise , through the contractor / service provider for many years. In certain enterprises break in service is given to these contract workers through the contractor/service provider, who transfers their service to another enterprise or terminates their employment periodically. Presently there are many contractors/service providers supplying large number of workforce to enterprises. Some of these contractors employ more than 30,000 workers and supply contract labour to various enterprises.

Human resource development initiatives
Post 1991, enterprises in India have undertaken various human resource development initiatives for employees that belong to the management cadre. For an effective and conducive industrial relations climate there are enterprises that have undertaken human resource development initiative/activity, which impacts the workers in the enterprise, who could be or are members of a trade union. Very few enterprises extend these human resource development initiative/activity to contract workers engaged by the enterprise, as these workers are employees of the contractor/service provider and not of the enterprise where they work.

In a training programme on "Improving Industrial Relations" conducted by me for an enterprise, I was explaining ILO Convention No. 144 dealing with Social Dialogue to the participants. I conducted a brainstorming exercise with the participants and they evolved a list of Human Resource Initiative / Engagement Activity that can be undertaken by the enterprise for improved communication and building a conducive and positive work culture. The list that emerged is by and large the type of initiatives that most enterprises presently undertake. I then divided the participants which comprised of management personnel and internal trade union leaders to form groups of management team and trade union team and then look at each of the Human Resource Initiative / Activity and identify the perception of benefit to the Management and perception of benefits to the Trade Union / Workers. The result that emerged in the exercise is given in the table.

The perceptions that emerged during the exercise was to make both the management and trade union participants understand each other’s perspective, and the need to have social dialogue with an objective of building a conducive and effective industrial relations climate in the enterprise and building a culture of collaboration rather than confrontation.

These human resource development initiatives/engagement activities are long term in nature.

It cannot do a magic to change the union-management relationship in a short period. It needs involvement of the entire workforce at the site plus their unions. It takes a lot of time for the union-management relationship to mature and be institutionalised where both sides trust each other. The principle of trust is that trust is built on trust and never on mistrust.

A conducive and effective Industrial Relations climate can facilitate in avoiding a culture which could lead to strikes / lockouts, as they are expensive remedies for both sides.

Conclusion
In India post 1991, the employment model in most enterprises has changed and the engagement of contract workers through contractors/service providers both in manufacturing and service sector enterprises is not marginal but substantially high. In quite many enterprises the contract workers working is more than the total permanent employees (management staff plus permanent workers).

The labour codes drafted by the present National Democratic Alliance (NDA) Government under the Ministry of Labour & Employment have still not dealt with the issue of Contract Labour which is covered under The Contract Labour (Regulation & Abolition) Act, 1970. To reduce litigation / dispute on contract labour there is a need to define core and noncore jobs and defining areas of engagement of contract labour and permanent employees by Government of India. Andhra Pradesh Government under the Rules of Andhra Pradesh dealing with The Contract Labour (Regulation & Abolition) Act, 1970 permits engagement of contract labour only in defined noncore jobs. This has helped in ensuring that contract labour is not engaged in core jobs of an enterprise and the same are carried out by permanent workers.

In majority of the enterprises in India the contract workers are engaged in noncore and core jobs, paid only the statutory minimum wages or marginally higher, while they continue to serve the enterprise for years, just like permanent employees (management staff plus permanent workers). In most cases, the contract workers do not enjoy benefits of any annual rise in wages like the permanent employees (management staff plus permanent workers) or the long term settlement benefits received by permanent workers. There is a need for social dialogue between management and unions and work on a constructive approach, as employers/top management desire flexibility linked to business needs, as a step towards ease of doing business; at the same time the unions desire reasonable remuneration plus a safety net, when they lose employment, because of the employers decision to restructure workforce based on business needs.

This present business model on contract workers being paid minimum wages along with negligible security of employment is bound to lead to industrial relations issues when this workforce compares its remuneration and working conditions with the employees who are directly employed by the enterprise. There is need for managements and trade unions to find solutions to the problem of contract workers through social dialogue at the enterprise level, otherwise this will one day lead to reemergence of unpleasant Industrial Relations climate at enterprise levels, similar to those that we witnessed in the 1960’s, 1970’s and 1980’s in certain parts of India.

About the author Dr. Rajen Mehrotra is immediate past president of Industrial Relations Institute of India (IRII), Former Senior Employers’ Specialist for South Asian Region with International Labour Organization (ILO) and Former Corporate Headof HR with ACC Ltd and Former Corporate Head of Manufacturing and HR with Novartis India Ltd.

He can be contacted on: Email: rajenmehrotra@gmail.com

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

Published

on

By

Shares

World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

 

Continue Reading

Concrete

Building a Greener Future Together

Published

on

By

Shares

Environmental sustainability requires immediate action, not just long-term commitments and discussions. Recycling, circular economy practices, and technology-driven waste management can help industries reduce environmental impact while supporting sustainable growth.

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

World Environment Day serves as an important reminder that environmental sustainability can no longer remain confined to discussions, reports, or long-term commitments. The environmental challenges facing the world today demand immediate, measurable, and collective action. Across industries and communities, waste generation continues to outpace our ability to process it responsibly, placing increasing pressure on ecosystems, natural resources, public health, and the well-being of future generations.

One of the most significant shifts required today is a change in how society perceives waste. Rather than being viewed as a material to be discarded, waste must be recognised as a valuable resource that can contribute to both economic growth and environmental protection when managed through the right technologies and systems. This mindset forms the foundation of the circular economy model that countries across the world are increasingly adopting to reduce landfill dependence, recover valuable materials, and create more sustainable industrial ecosystems.

India has made meaningful progress in strengthening awareness around sustainability, recycling, and environmental responsibility over the past decade. Significant efforts are being made to formalise the recycling sector through improved infrastructure, technology adoption, policy implementation, and broader stakeholder participation. These developments are creating a stronger foundation for responsible waste management and resource recovery across the country.

However, achieving long-term environmental impact requires collaboration from all stakeholders. Industries, policymakers, technology providers, and communities must work together with greater accountability to strengthen recycling ecosystems, encourage responsible waste management practices, and create sustainable outcomes through consistent execution rather than temporary interventions.

As someone closely associated with the recycling industry, I firmly believe that technology will play a decisive role in addressing future environmental challenges. Advanced recycling systems have the potential to recover valuable resources, reduce pollution, minimise landfill burdens, and conserve energy, creating a more sustainable future for generations to come. This belief is deeply reflected in Fornnax’s motto, “Committed to Create a Green Future,” which embodies our commitment to building long-term environmental value through innovation and responsible action.

At the same time, technology alone cannot deliver meaningful change. Real progress requires intent, awareness, participation, and a shared sense of responsibility. Sustainable development can only be achieved when innovation is supported by collective action and a genuine commitment to environmental stewardship.

On this World Environment Day, let us move beyond conversations and take meaningful steps towards creating a cleaner, greener, and more sustainable planet. By embracing innovation, strengthening recycling ecosystems, and acting responsibly today, we can create lasting environmental impact and secure a better future for generations to come.

Continue Reading

Concrete

Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

Published

on

By

Shares

Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.

Continue Reading

Video Thumbnail

    SIGN-UP FOR OUR GENERAL NEWSLETTER


    Trending News

    SUBSCRIBE TO THE NEWSLETTER

     

    Don't miss out on valuable insights and opportunities to connect with like minded professionals.

     


      This will close in 0 seconds