24  Industrial Relations: Concept, Scope and Approaches

This chapter opens the industrial relations (IR) module — the study of the relationships between workers, employers and the state, and of the institutions that regulate those relationships. Where chapters 4 and earlier examined the individual and the group inside the firm, IR examines the collective — workers organised as unions, employers organised in associations, and the state acting as referee, regulator and employer in its own right.

24.1 What is Industrial Relations?

Industrial Relations is the field that studies the institutions, processes and outcomes of the employment relationship in industrialised societies. The phrase took on its modern meaning in the early twentieth century as factory employment expanded and disputes between workers and employers became matters of public policy.

Three foundational definitions are widely cited.

TipThree Definitions of Industrial Relations
Author Working definition What it foregrounds
Dale Yoder “A whole field of relationships that exists because of the necessary collaboration of men and women in the employment process of an industry” (yoder1972?) Collaboration as the basis of the employment relationship
John Dunlop “An industrial-relations system at any one time in its development is regarded as comprised of certain actors, certain contexts, an ideology which binds the system together, and a body of rules created to govern the actors at the workplace and work community” (dunlop1958?) Systems view; actors, contexts, ideology, rules
Allan Flanders “A study of the institutions of job regulation” (flanders1965?) Job regulation as the heart of IR

The three definitions agree on three elements: an employment relationship exists between workers and employers; institutions — unions, employer associations, the state — shape that relationship; and rules — laws, contracts, agreements, customs — govern it.

24.1.1 Distinguishing Concepts

TipIndustrial Relations vs Related Concepts
Field Focus Lens
Industrial Relations The collective employment relationship — workers, employers, state Institutions, rules, conflict and cooperation
Human Resource Management The management of people in the firm for organisational performance Individual and unitarist
Employee Relations The day-to-day relationship between manager and employee Often individualised, can be a sub-field of IR
Labour Economics Markets for labour, wages, employment Economic
Labour Law Statutes governing employment Legal

The HRM-IR boundary has shifted over the decades. In firms where unions are strong, IR remains a distinct function; in firms where individual employment dominates, it merges with HRM under the employee-relations label.

24.2 Features of Industrial Relations

A working description of IR has six recognisable features.

  • Collective. Workers are organised as unions; employers as associations. The unit of analysis is the group, not the individual.
  • Two- or three-party. The relationship involves at least workers and employers; in most modern IR systems the state is a constant third party.
  • Mixed cooperation and conflict. Workers and employers share an interest in the firm’s prosperity and compete over how its surplus is distributed.
  • Dynamic. IR is shaped by technology, economy, politics and culture, all of which change.
  • Institutional. Permanent bodies — unions, federations, tribunals, ministries — embody the relationship.
  • Rule-bound. Laws, contracts, agreements and customs together form the web of rules that govern the actors.

24.3 Scope of Industrial Relations

The scope of IR is wide. The Indian textbook tradition — drawing on Mamoria, Padhi and others — typically lists the seven areas below.

TipSeven Areas in the Scope of IR
Area What it covers
Labour-management relations Day-to-day interaction between workers and management
Trade union–management relations Recognition, negotiation, bargaining
Employer–employer relations Federations, associations, industry-level bargaining
Government–labour–management relations Tripartism, regulation, conciliation, arbitration
Collective bargaining and negotiation Joint decision-making over wages and conditions
Industrial disputes — prevention and settlement Conciliation, arbitration, adjudication, strikes, lock-outs
Workers’ participation in management Joint councils, works committees, co-determination

24.4 Objectives of Industrial Relations

A healthy IR system serves four nested objectives.

TipFour Objectives of Industrial Relations
Level Objective
Social Industrial democracy, social justice, fair treatment, dignity of work
Economic Higher productivity, optimum use of resources, equitable distribution of gains
Organisational Industrial peace, workforce stability, cooperation
Individual Fair wages, safe working conditions, security, opportunities for growth

The four levels can pull in different directions; reconciling them is the IR practitioner’s craft.

24.5 Parties to Industrial Relations

The three primary parties to IR are workers, employers and the state. Within each, organisations represent collective interests.

TipThree Parties to Industrial Relations
Party Representative organisations Role
Workers Trade unions, federations Collectively bargain, represent grievances, secure job conditions
Employers Individual firms, employer associations Set workplace rules, negotiate, run the enterprise
State (government) Labour ministry, tribunals, conciliation officers, factory inspectors Regulator, conciliator, adjudicator, lawmaker, sometimes itself the employer

A fourth party — the public or society — is increasingly relevant in modern IR, as work touches consumers, communities and the environment.

24.6 Dunlop’s Systems Approach

John Dunlop’s Industrial Relations Systems (1958) is the most influential framework in the field. Dunlop argued that IR can be analysed as a system with three sets of actors, three contexts, a binding ideology and a web of rules (dunlop1958?).

TipDunlop’s Industrial Relations System
Element What it covers
Actors Workers and their organisations; managers and their organisations; specialised government agencies
Contexts Technological context (work organisation); market or budgetary context (economic conditions); locus and distribution of power in the wider society
Ideology The shared beliefs that bind the system — each actor’s view of its own and others’ roles
Web of rules The output of the system — substantive rules (wages, hours, conditions) and procedural rules (how rules are made and enforced) 

flowchart TB
  A[Three Actors<br/>Workers · Managers · Government]
  C[Three Contexts<br/>Technology · Markets · Power distribution]
  I[Shared Ideology<br/>Binds the system]
  A --> R[Web of Rules<br/>Substantive + Procedural]
  C --> R
  I --> R
  style A fill:#E3F2FD,stroke:#1565C0
  style C fill:#FFF3E0,stroke:#E65100
  style I fill:#F3E5F5,stroke:#6A1B9A
  style R fill:#E8F5E9,stroke:#2E7D32

Dunlop’s framework is descriptive rather than prescriptive — it tells you what to look at when analysing any IR system, anywhere in the world. The lasting contribution is the focus on rules (substantive and procedural) as the system’s main output.

24.7 Approaches to Industrial Relations

Beyond Dunlop’s systems approach, several theoretical perspectives compete to explain IR. They differ on how they view conflict between workers and employers — as a sign of a flawed system, a normal feature of plural interests, or a symptom of class struggle.

24.7.1 Alan Fox’s Three Frames of Reference

Alan Fox’s Industrial Sociology and Industrial Relations (1966) offered the cleanest classification — three frames of reference that sum up most IR writing (fox1966?).

TipFox’s Three Frames of Reference
Frame View of the firm View of conflict View of unions Lead writers
Unitary One harmonious team with shared goals Pathological — caused by misunderstanding or troublemakers Disruptive intrusion HRM tradition
Pluralist A coalition of interest groups with overlapping but distinct objectives Normal and inevitable; needs structured channels Legitimate counter-power Flanders, Clegg, Fox
Radical / Marxist An arena of class conflict over surplus value Inherent in capitalism; reflects deeper structural inequality One vehicle for working-class action Hyman, Marx

The three frames are not just academic positions — they correspond to practitioner stances. The HR business partner who finds union demands “irrational” sits in the unitary frame; the IR officer who institutionalises bargaining sits in the pluralist frame; the labour activist who sees every dispute as a battle for the surplus sits in the radical frame.

24.7.2 The Pluralist Approach

Pluralism is the working philosophy of most modern IR systems. It accepts that workers and employers have legitimate but distinct interests, that conflict between them is inevitable, and that the task of IR is to channel conflict through institutions — collective bargaining, conciliation, arbitration, joint consultation — rather than to suppress it.

The pluralist tradition runs from the Webbs (Sidney and Beatrice) through Clegg, Flanders and Fox in the British school, and the Wisconsin school in the US.

24.7.3 The Unitary Approach

The unitary view treats the firm as a team with one set of objectives. Conflict, in this view, is dysfunctional and arises from poor communication, troublemakers or external interference. Modern HRM, with its emphasis on shared values, vision and culture, often takes a unitary stance — sometimes explicitly, sometimes by default.

24.7.4 The Marxist / Radical Approach

The radical view, drawing on Marx and refined by Richard Hyman and others, sees the firm as an arena of class conflict between capital and labour over the distribution of surplus value (hyman1975?). The pluralist’s institutionalised conflict is, in this view, a way of containing genuine class antagonism rather than resolving it. The radical approach has shaped much of the academic literature on labour history and political economy.

24.7.5 The Human Relations Approach

Drawing on the Hawthorne studies (chapter 1), the human-relations approach argues that good IR requires attention to the social and psychological needs of workers — their need for recognition, belonging, voice. The approach is sometimes seen as a refined variant of the unitary frame; it treats conflict as solvable through better communication, supervision and team relationships.

24.7.6 The Gandhian Approach

In the Indian context, Mahatma Gandhi’s thinking on labour produced a distinctive approach grounded in trusteeship. The employer is a trustee of capital that ultimately belongs to society; the worker should pursue rights through non-violent means; both parties owe each other ethical obligations. Gandhi led the 1918 Ahmedabad textile strike using these principles, and the Textile Labour Association — Majoor Mahajan — that emerged is the institutional embodiment of the approach.

TipGandhi’s Principles for Industrial Relations
Principle What it means
Trusteeship Capital is held in trust for the welfare of all stakeholders
Non-violence (Ahimsa) Strikes and bargaining should be peaceful; Satyagraha as a tool
Truth (Satya) Honesty in negotiations and grievance handling
Mutual obligation Workers and employers owe each other duties
Self-reliance Workers should develop their own capacity, not depend on external rescue

24.7.7 The Giri Approach

V.V. Giri, a former President of India and life-long advocate of organised labour, argued that bipartism — direct negotiation between unions and employers — should be the primary mechanism of IR, with the state intervening only when bipartism fails (giri1972?). Compulsory adjudication, he believed, weakens both unions and employer organisations and stunts the growth of mature industrial relations.

The Giri approach contrasts with the interventionist model that Indian IR has actually followed; the debate it framed continues to shape Indian labour policy.

24.7.8 Other Approaches

  • Psychological approach. Focuses on individual and group psychology — perceptions, attitudes, motivation — as the root of cooperation or conflict.
  • Sociological approach. Locates IR in the wider social structure — class, caste, religion, gender, urbanisation.
  • Human-resource approach. Treats IR as a sub-domain of broader human-resource policy aimed at organisational effectiveness.

24.8 Industrial Relations in India — A Brief Genealogy

The Indian IR system has evolved through five identifiable phases.

TipFive Phases of Indian Industrial Relations
Phase Period Defining feature
Colonial Up to 1947 First factory legislation (1881); Trade Unions Act, 1926; nationalist-trade-union linkages
Nehruvian / planning era 1947 – 1969 Heavy state intervention, public-sector growth, ID Act, 1947; central trade-union federations
State-dominated maturity 1969 – 1991 Bonus Act, MRTU & PULP, growth of public-sector unions, frequent strikes
Liberalisation 1991 – 2014 Decline of unionised manufacturing; rise of contract labour, services and IT-led informalisation
Codified era 2014 – present Consolidation of 29 central labour laws into four labour codes — Wages, Industrial Relations, Social Security, OSH

The four labour codes mark the most significant overhaul of Indian IR since independence. Each is treated in detail later in the book.

24.9 Tripartism in India

The Indian IR system is built on tripartite consultation — workers, employers and government meeting at standing forums to set policy.

TipMajor Tripartite Bodies in India
Body Purpose
Indian Labour Conference (ILC) Annual top-tier consultation on labour policy
Standing Labour Committee (SLC) Smaller body that develops recommendations for ILC
Industrial Committees Sector-specific tripartite committees (textile, mining, etc.)
Wage Boards Industry-level tripartite bodies for wage determination (largely defunct)

Tripartism’s effectiveness has waxed and waned with political and economic cycles, but it remains the primary forum for policy-shaping in Indian IR.

24.11 Practice Questions

Eight questions to test the chapter. Each card hides the answer — click Show answer to reveal it.
Q1 John Dunlop's industrial relations system ident...
John Dunlop's industrial relations system identifies four elements. They are:
AWorkers, employers, government, society
BActors, contexts, ideology, rules
CInputs, throughputs, outputs, feedback
DWages, hours, conditions, security
Show answer
Correct answer
B. Actors, contexts, ideology, web of rules.
Q2 Match Fox's three frames of reference
Match Fox's three frames of reference with their view of conflict:
Frame View of conflict
(i) Unitary (a) Inevitable; reflects class struggle
(ii) Pluralist (b) Pathological; caused by trouble or misunderstanding
(iii) Radical / Marxist (c) Normal; needs structured channels
A(i)-(b), (ii)-(c), (iii)-(a)
B(i)-(a), (ii)-(b), (iii)-(c)
C(i)-(c), (ii)-(a), (iii)-(b)
D(i)-(a), (ii)-(c), (iii)-(b)
Show answer
Correct answer
A. (i)-(b), (ii)-(c), (iii)-(a)
Q3 The phrase trusteeship in industrial relations
The phrase trusteeship in industrial relations is most closely associated with:
AJohn Dunlop
BMahatma Gandhi
CAllan Flanders
DKarl Marx
Show answer
Correct answer
B. Trusteeship is the central principle of Gandhi's IR thought.
Q4 V.V. Giri argued that the primary
V.V. Giri argued that the primary mechanism of IR should be:
ACompulsory adjudication
BBipartism — direct negotiation between unions and employers
CState ownership of all industry
DTripartism alone
Show answer
Correct answer
B. Giri championed bipartism as the test of mature IR.
Q5 Which of the following is not
Which of the following is not a party to industrial relations in the standard three-party model?
AWorkers / trade unions
BEmployers / employer associations
CGovernment / state
DReligious institutions
Show answer
Correct answer
D. The standard three are workers, employers and the state.
Q6 The pluralist approach to industrial relations
The pluralist approach to industrial relations:
ATreats the firm as a single team with shared goals
BTreats conflict as inevitable and seeks to channel it through institutions
CSees the firm as the site of class struggle
DRejects the role of trade unions
Show answer
Correct answer
B. Pluralism accepts conflict as legitimate and structures it through bargaining and arbitration.
Q7 The four Indian labour codes consolidate
The four Indian labour codes consolidate central labour laws into chapters on:
AWages, Industrial Relations, Social Security, Occupational Safety and Health
BWages, Pensions, Trade Unions, Strikes
CWages, Bonus, Provident Fund, Gratuity
DWages, Welfare, Disputes, Migration
Show answer
Correct answer
A. The four codes — Wages; Industrial Relations; Social Security; Occupational Safety, Health and Working Conditions.
Q8 Allan Flanders defined industrial relations as
Allan Flanders defined industrial relations as the study of:
AThe institutions of job regulation
BTrade-union politics
CWage determination in factories
DThe Hawthorne effect at scale
Show answer
Correct answer
A. "A study of the institutions of job regulation" is Flanders's signature definition.
ImportantQuick recall
  • IR studies the collective employment relationship — workers, employers, state.
  • Yoder (collaboration), Dunlop (system), Flanders (job regulation) — three founding definitions.
  • Six features: collective, two- or three-party, mixed cooperation and conflict, dynamic, institutional, rule-bound.
  • Seven areas in scope: labour-management; union-management; employer-employer; government-labour-management; collective bargaining; dispute prevention and settlement; workers’ participation.
  • Four objectives: social, economic, organisational, individual.
  • Three parties: workers (unions), employers (associations), state. Sometimes a fourth — society / public.
  • Dunlop’s IR System: actors + contexts + ideology + web of rules (substantive + procedural).
  • Fox’s three frames of reference: Unitary, Pluralist, Radical / Marxist.
  • Other approaches: Human Relations (Mayo), Gandhian (trusteeship + non-violence), Giri (bipartism), Psychological, Sociological, HR.
  • Indian IR phases: Colonial → Nehruvian → State-dominated → Liberalisation → Codified (four labour codes).
  • Tripartism in India: ILC, SLC, Industrial Committees, Wage Boards.
  • Modern trends: decline of unionisation, globalisation, technology/automation, informalisation, individualisation, new forms of voice.