flowchart TB G[Globalisation] --> IR[Industrial Relations] L[Liberalisation / Privatisation] --> IR T[Technology — automation, AI, platforms] --> IR D[Demographic / social shifts] --> IR I[Informalisation] --> IR E[Climate change / ESG] --> IR IR --> O[New forms of work, voice and rules] style G fill:#FFEBEE,stroke:#C62828 style L fill:#FFF8E1,stroke:#F9A825 style T fill:#E3F2FD,stroke:#1565C0 style D fill:#E8F5E9,stroke:#2E7D32 style I fill:#F3E5F5,stroke:#6A1B9A style E fill:#E0F7FA,stroke:#00838F style IR fill:#FFF3E0,stroke:#E65100 style O fill:#FCE4EC,stroke:#AD1457
28 Industrial Relations in a Changing Scenario
The IR system as Dunlop described it in 1958 — three actors, a stable web of rules, an industrial ideology shared by labour and capital — assumed a world that no longer exists. Manufacturing-dominated employment has shrunk; services and platforms have grown; technology rewrites jobs faster than labour law can catch up; the workforce is more diverse, more educated and more dispersed than at any previous point. This chapter takes stock of how IR is changing and what shape it is taking.
28.1 Forces Reshaping IR
Six external forces, individually significant and collectively transformative, drive the change.
TipSix Forces Reshaping Industrial Relations
| Force | What it does to IR |
|---|---|
| Globalisation | Capital is mobile; labour is not. Wage and standards competition across borders |
| Liberalisation and privatisation | Decline of state-owned employment; private-sector logic dominant |
| Technological change — automation, AI, platforms | Reshapes jobs, skills, and what an “employee” even means |
| Demographic and social shifts | Younger, more educated, more diverse workforce; rising women’s labour-force participation |
| Informalisation | Most workers — especially in India — are outside the formal IR architecture |
| Climate change and ESG | Just transitions; greener jobs; corporate responsibility expanded |
28.2 The Changing Workforce
The composition of who works, how they work and where they work has shifted in five visible ways.
TipFive Shifts in the Workforce
| Shift | What it means |
|---|---|
| From manufacturing to services | Service jobs are typically less unionised, more dispersed, harder to organise |
| From permanent to contingent | Temporary, contract, gig and platform workers grow as a share of total employment |
| From co-located to distributed | Hybrid and remote work disperses the workplace |
| From homogeneous to diverse | Gender, age, ability, nationality, sexual orientation, neurodiversity |
| From low- to high-skill knowledge work | Professional, technical and creative work expands |
The composite effect: the typical worker in 2026 is harder to organise into a traditional union than the typical worker of 1956 — but is also more likely to demand voice, dignity and meaning at work.
28.3 Decline of Trade Unions
Trade-union density — the share of employees who are union members — has fallen across most OECD economies and within most large industries. India shows a similar pattern in formal employment, even as union counts in absolute numbers remain high.
TipReasons for Declining Unionisation
| Reason | Mechanism |
|---|---|
| Sectoral shift | Services, IT, fintech are harder to unionise than steel mills |
| Labour-market deregulation | Easier to hire on contract; union footholds harder |
| HRM individualisation | Performance pay, individual contracts, employee-experience |
| Hostile employer practice | Anti-union strategies; substitution through participation |
| Internal union problems | Politicisation, fragmentation, leadership questions |
| Generational change | Younger workers identify less with collective bargaining traditions |
| Globalisation | Capital mobility weakens national bargaining power |
The classical pluralist IR model relies on unions as the institutional partner. Their decline forces the question: what replaces them as the channel of worker voice?
28.4 The Gig and Platform Economy
The most visible new form of work is the platform economy — Uber, Ola, Swiggy, Zomato, Urban Company, Upwork, Fiverr. Workers are typically classified as independent contractors rather than employees, placing them outside most of the protective IR architecture.
28.4.1 The Classification Question
The defining legal-policy question of the gig economy is: are platform workers employees, contractors, or a third category? The answer determines access to minimum wages, social security, collective bargaining, dispute resolution and dismissal protection.
TipThree Approaches to Gig-Worker Status
| Approach | What it does | Example |
|---|---|---|
| Treat as employees | Apply standard labour law | UK Supreme Court ruling on Uber drivers (2021) |
| Treat as contractors | Minimal protection; market governs | Default in much of the US |
| Create a third category | Specific protections for gig workers | India’s Code on Social Security, 2020; California AB-5 |
India’s Code on Social Security, 2020 explicitly defines and includes gig and platform workers, mandating their registration on a national database and requiring contributions from aggregators to fund social-security schemes. The framework is the first of its scale globally.
28.4.2 Voice in Platform Work
Platform workers have begun to organise — through worker collectives like the Indian Federation of App-based Transport Workers (IFAT) or associations such as the All India Gig Workers Union (AIGWU). Disputes increasingly use new tactics — log-off campaigns, social-media coordination, app-rating campaigns — alongside traditional ones.
28.5 Informalisation in India
The Indian labour market has long been dominated by informal employment — work without written contracts, social security or union representation. The Periodic Labour Force Survey (PLFS) and the National Sample Survey indicate that more than 80 per cent of Indian workers are in the informal sector.
TipThree Faces of Informal Work
| Type | Examples |
|---|---|
| Self-employed | Street vendors, small farmers, artisans, single-vehicle operators |
| Casual / day-wage | Construction, agriculture, head-loaders, domestic workers |
| Contract or platform workers in formal firms | Security, sanitation, delivery, IT outsourcing |
The IR architecture built for a 1950s mill now reaches a small fraction of the actual workforce. Modernising IR for the informal sector — Self-Employed Women’s Association (SEWA) is the famous Indian example — is one of the most pressing labour-policy questions.
28.6 Indian Labour-Law Reforms — the Four Codes
India’s most ambitious labour reform in seven decades has consolidated 29 central labour laws into four codes (chapters 35 onwards take each up in detail).
TipThe Four Indian Labour Codes
| # | Code | Year | Replaces |
|---|---|---|---|
| 1 | Code on Wages | 2019 | Minimum Wages, Payment of Wages, Equal Remuneration, Payment of Bonus |
| 2 | Industrial Relations Code | 2020 | Industrial Disputes Act, Trade Unions Act, Industrial Employment (Standing Orders) Act |
| 3 | Code on Social Security | 2020 | EPF, ESI, Maternity Benefit, Gratuity, Building & Other Construction Workers Welfare Cess, Unorganised Workers’ Social Security, etc. |
| 4 | Code on Occupational Safety, Health and Working Conditions (OSH Code) | 2020 | Factories, Mines, Plantations, Inter-State Migrant Workers, Contract Labour, Building & Construction Workers, etc. |
Three policy threads run through the codes — consolidation (one law where there were many), modernisation (concepts of fixed-term employment, gig and platform work, women’s working hours, single national registration), and flexibility (raised thresholds for layoff and closure approval, simplified compliance for small establishments).
The codes also restructure IR practice: recognition of negotiating unions by membership threshold (chapter 29), grievance redressal committees (chapter 27), simplified strike procedures (chapter 33), and a re-tooled tribunal architecture.
28.7 The Changing Role of Trade Unions
Modern unions have begun to evolve beyond the classical wages-hours-conditions agenda.
TipSix Evolving Roles of Trade Unions
| Role | What it covers |
|---|---|
| Service unionism | Providing direct services — credit, insurance, training, legal aid |
| Social-movement unionism | Aligning with broader movements on environment, gender, caste |
| Strategic-partner unionism | Working with management on training, productivity, technology adoption |
| International unionism | Cross-border solidarity, framework agreements with multinationals |
| Informal-sector unionism | Organising the unorganised — SEWA, NTUI, agricultural workers’ associations |
| Digital unionism | Using social media, apps and online petitions to organise platform workers |
The slogan that has emerged in much of the global labour movement: organise to grow. Unions that adapt to the changing workforce continue to flourish; those that do not see membership decline accelerate.
28.8 New Forms of Worker Voice
Even where unions are absent, voice finds channels.
TipNew Channels of Worker Voice
| Channel | What it does |
|---|---|
| Social media | Public surfacing of grievances; rapid mobilisation |
| Glassdoor and rating sites | Employer-reputation pressure |
| Employee Resource Groups (ERGs) | Affinity-based communities inside firms |
| Anonymous pulse surveys | Continuous management feedback |
| Whistle-blowing platforms | Protected disclosure of wrongdoing |
| Shareholder activism | Worker concerns raised at AGMs |
| Online worker communities and apps | Cross-employer communities of practice |
Modern HR systems incorporate several of these as voice mechanisms; modern unions use them as organising tools.
28.9 Strategic IR — Beyond the Industrial-Era Model
A strategic approach to IR treats it as a source of competitive advantage rather than a compliance overhead. The shift is most visible in five practices.
TipFive Practices of Strategic IR
| Practice | What it involves |
|---|---|
| Long-term peace agreements | Multi-year settlements that trade flexibility for security |
| Productivity-linked bargaining | Wage rises tied to measurable productivity gains |
| Joint training and skills strategies | Union and employer co-investing in workforce capability |
| Sustainability and just-transition agreements | Union-management pacts on technology change and decarbonisation |
| Global framework agreements | Multinationals signing global codes with international union federations |
The Tata Steel-Tata Workers’ Union long-term agreements remain the textbook Indian example; Volkswagen’s global framework agreement with IndustriALL is the international counterpart.
28.10 International Labour Standards
The ILO is the global standard-setter for IR. Its eight fundamental conventions establish core labour rights.
TipThe Eight ILO Fundamental Conventions
| Cluster | Conventions |
|---|---|
| Freedom of association | C87 (Freedom of Association), C98 (Right to Organise and Collective Bargaining) |
| Forced labour | C29 (Forced Labour), C105 (Abolition of Forced Labour) |
| Child labour | C138 (Minimum Age), C182 (Worst Forms of Child Labour) |
| Discrimination | C100 (Equal Remuneration), C111 (Discrimination — Employment and Occupation) |
| (added 2022) Safe and healthy working environment | C155, C187 |
India has ratified six of the eight (the two on freedom of association, C87 and C98, remain unratified — a long-standing point of debate). The 1998 Declaration on Fundamental Principles and Rights at Work binds all member states to respect the conventions in principle even where unratified.
28.11 The Decent Work Agenda
The ILO’s Decent Work Agenda, launched in 1999, organises modern IR concerns under four pillars.
TipThe Four Pillars of Decent Work
| Pillar | What it covers |
|---|---|
| Employment creation | Productive jobs in adequate numbers |
| Rights at work | Freedom of association, abolition of forced and child labour, non-discrimination |
| Social protection | Health, retirement, unemployment, family, occupational injury cover |
| Social dialogue | Effective tripartism and bipartism |
The Decent Work Agenda is now embedded in the UN Sustainable Development Goals — Goal 8 specifically calls for decent work for all. The framework offers a useful diagnostic: where is decent work falling short, and which pillar needs strengthening?
28.12 Just Transition
The shift to a low-carbon economy will eliminate some jobs (coal, oil, fossil-fuel manufacturing) and create others (renewables, electric mobility, green building). The just transition framework — endorsed by the ILO and embedded in the Paris Agreement — aims to manage this shift without leaving workers and communities behind.
TipPillars of a Just Transition
| Pillar | What it requires |
|---|---|
| Social dialogue | Workers, employers, communities consulted on transition plans |
| Decent jobs | New employment of comparable quality |
| Skills | Re-training and re-skilling for new sectors |
| Social protection | Support for displaced workers during transition |
| Regional development | Coal-belt and similar regions supported with diversified investment |
For India — with substantial coal-dependent employment — just transition is now an active IR question.
28.13 Post-Pandemic IR
The 2020-22 pandemic accelerated five trends that were already underway.
TipFive Pandemic-Era Shifts in IR
| Shift | What it changed |
|---|---|
| Hybrid and remote work | Workplace boundaries blurred; new questions on monitoring, hours, equity |
| Digital monitoring | Surveillance technologies as worker concerns |
| Mental health and wellbeing | Centrality of psychological wellbeing in HR practice |
| Renewed strike activity | The “great resignation” and the wave of union organising in tech and services |
| Greater attention to essential workers | Recognition of frontline labour — health, food, delivery |
The lasting effect: the psychological contract (the unwritten understanding between employer and employee) has been renegotiated. Workers expect more flexibility, more meaning, more well-being and more voice; firms that fail to adjust face higher turnover and recruitment difficulty.
28.14 Towards a New IR Model
The classical Dunlop framework still asks the right questions — actors, contexts, ideology, rules — but the answers are different.
TipOld Model vs New Model of IR
| Element | Old (industrial-era) | New (post-industrial) |
|---|---|---|
| Typical worker | Male, manufacturing, full-time, lifetime employer | Diverse, services / platform, contingent, multiple employers |
| Voice channel | Trade union | Mix — unions, ERGs, social media, surveys, ratings |
| Bargaining venue | Plant or industry | Plant, network, platform, global framework |
| Dispute resolution | Tribunals and conciliation | + Online platforms, ombudsperson, ADR |
| Ideology | Class-based pluralism | Stakeholder pluralism — workers, customers, community, planet |
| Web of rules | National labour law | National + corporate codes + ESG + ILO + global frameworks |
A working IR system in 2026 layers the new on the old: the older institutions remain useful for protected-employment workers, while new institutions reach platform workers, the gig economy and remote employees.
28.15 Practice Questions
Eight questions to test the chapter. Each card hides the answer — click Show answer to reveal it.
Q1
Which of the following is not
Which of the following is not a major force reshaping industrial relations in the contemporary era?
AGlobalisation
BTechnological change including AI and platforms
CReduction in life expectancy across developed economies
DClimate change and ESG concerns
Show answer
Correct answer
C. The reshaping forces are globalisation, liberalisation, technology, demographic shifts, informalisation and climate change.
Q2
Match the Indian labour code with
Match the Indian labour code with the laws it consolidates:
| Code | Consolidates | ||
|---|---|---|---|
| (i) | Code on Wages, 2019 | (a) | EPF, ESI, Maternity Benefit, Gratuity |
| (ii) | Industrial Relations Code, 2020 | (b) | Minimum Wages, Payment of Wages, Equal Remuneration, Bonus |
| (iii) | Code on Social Security, 2020 | (c) | Industrial Disputes, Trade Unions, Standing Orders |
| (iv) | OSH Code, 2020 | (d) | Factories, Mines, Plantations, Contract Labour, Migrant Workers |
A(i)-(b), (ii)-(c), (iii)-(a), (iv)-(d)
B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
C(i)-(c), (ii)-(d), (iii)-(b), (iv)-(a)
D(i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
Show answer
Correct answer
A. (i)-(b), (ii)-(c), (iii)-(a), (iv)-(d)
Q3
Approximately what share of India's workforce
Approximately what share of India's workforce is in the informal sector?
A20 per cent
B50 per cent
C80 per cent and above
D100 per cent
Show answer
Correct answer
C. PLFS and NSS surveys consistently put the informal share above 80 per cent.
Q4
The Code on Social Security, 2020
The Code on Social Security, 2020 is notable for explicitly recognising:
AOnly factory workers
BOnly managerial cadre
CGig and platform workers
DOnly government employees
Show answer
Correct answer
C. The 2020 Code defines and includes gig and platform workers — a global first at this scale.
Q5
The ILO's eight fundamental conventions cover
The ILO's eight fundamental conventions cover four clusters. Which of the following is not one of those clusters?
AFreedom of association
BForced labour
CChild labour
DSectoral wage rates
Show answer
Correct answer
D. The clusters are freedom of association, forced labour, child labour and discrimination (with safe and healthy working environment added in 2022).
Q6
The four pillars of the ILO's
The four pillars of the ILO's Decent Work Agenda are:
AWages, hours, leave, security
BEmployment, rights, social protection, social dialogue
CProductivity, profitability, sustainability, equity
DSkills, jobs, pay, voice
Show answer
Correct answer
B. Employment creation, rights at work, social protection, social dialogue.
Q7
Which of the following is the
Which of the following is the most well-known Indian example of organising informal-sector workers?
ACITU
BSelf-Employed Women's Association (SEWA)
CTata Workers' Union
DICMA
Show answer
Correct answer
B. SEWA, founded by Ela Bhatt in Ahmedabad, is the textbook example.
Q8
Just transition refers primarily to
Just transition refers primarily to:
AThe shift from industrial to post-industrial economies
BA managed transition to a low-carbon economy with social dialogue, decent jobs, skills, social protection and regional support
CThe change from compulsory adjudication to bipartism
DThe post-pandemic shift to remote work
Show answer
Correct answer
B. Just transition is the framework for managing the climate-driven shift to low-carbon economies fairly.
ImportantQuick recall
- Six forces reshaping IR: globalisation, liberalisation, technology (AI / platforms), demographics, informalisation, climate / ESG.
- Five workforce shifts: services, contingent work, distributed sites, diversity, knowledge intensity.
- Reasons for declining unionisation: sectoral shift, deregulation, HRM individualisation, hostile employers, internal union problems, generational change, globalisation.
- Gig classification options: employees, contractors, third category. India’s Code on Social Security, 2020 explicitly recognises gig and platform workers.
- Indian informal sector: >80 per cent of workers.
- Four Indian labour codes: Wages (2019), IR (2020), Social Security (2020), OSH (2020) — consolidating 29 central laws.
- Evolving union roles: service, social-movement, strategic-partner, international, informal-sector, digital.
- New voice channels: social media, Glassdoor, ERGs, pulse surveys, whistle-blowing, shareholder activism, online communities.
- Strategic IR practices: long-term peace agreements, productivity bargaining, joint training, sustainability pacts, global framework agreements.
- ILO eight fundamental conventions: freedom of association (C87, C98), forced labour (C29, C105), child labour (C138, C182), discrimination (C100, C111). India has not ratified C87 and C98.
- Decent Work Agenda (1999): Employment + Rights + Social protection + Social dialogue.
- Just transition pillars: social dialogue, decent jobs, skills, social protection, regional development.
- SEWA, NTUI, IFAT — modern Indian organising of informal and platform workers.