Industrial Relations and Labour Welfare: An Indian Perspective by Bishal Basak


In simpler terms, Industrial relations manages the worker and employer connection so as to solve disputes and to diminish the opportunity of disputes towards establishing a healthy workplace. Nowadays it has become a sole obligation to every single industry to develop and maintain the latest and powerful administration relations framework to make employees motivated, satisfied and efficient. Presently Industrial relation management framework often modifies all the business and making their employees aware, the administration of Indian relation is an imperative issue since it generally increases the cooperation of employer and employees for powerful and effective working conditions. In brief, the role played by the Judiciary is brilliant in the areas of the working or labour class. As the Judiciary is considered as the gatekeeper and defender of the Constitution so it is in like manner its obligation to secure the basic rights of the citizens in India. Indian Labor laws are made to characterize obvious relations among employees and managers. Indian labour laws are made to shield the interests of the workers.

Keywords: Industrial Relations, employers, workers, employees


Industrial relations touch all aspects of labour such as union policies, personnel policies and practices including wages, welfare and social security, service conditions, supervision and communications, collective bargaining; attitude of management, trade unions and Government action on labour matters. Therefore, it is defined as all relationships between the members of an organization as individual or groups, trade unions, management, and the State institutions concerned specifically related to the various aspects of industrial labour-management problems. Anything done for the intellectual, physical, moral and economic growth of the workers, whether by employers, government or other agencies over and above legal provisions, industrial customs or contractual benefits would fall under Labour Welfare. It can be interpreted in different ways, in different countries, depending upon the stages of economic development, political outlook and social philosophy. It might even include benefits for family in some cases. These may be statutory or voluntary and intra-mural or extra-mural (within or outside the premises of the industry/factory). Labour welfare has two aspects: negative and positive. On the negative side, labour welfare is concerned with counteracting the baneful effects of the large-scale industrial system of production — especially capitalistic, and so far as India is concerned — on the personal/family, and social life of the worker. On its positive side, it deals with the provision of opportunities for the worker and his/her family for a good life as understood in its most comprehensive sense. In India, the framework of providing welfare measures to workers consists of statutory and voluntary measures, the former being taken by the management and the latter being achieved through collective bargaining agreements.


The following key features represents Industrial Relations, such as:

  • Earlier a personalized concept of master and servant
  • Now due to rapid industrialization it is more complex and impersonal
  • Parties directly concerned with industrial relation are: the employer/management and the employee/worker/trade unions.
  • The Government has varied roles to play, like it plays a direct role in maintaining healthy industrial relations, in cases of PSUs; wherein other cases the State often plays the role of a mediator.
  • In the conduct of industrial relations, the Government plays an important role with a view to further the welfare interest of all sections of the society including employers and employees.
  • The role played by the Government agencies varies in degree. It ranges from only formulation of rules for the observance of the two parties-employers and the workers to direct intervention when the Government agencies regulate the terms of bargain and intervene in industrial disputes to fasten their settlement.


India is being rapidly transformed from a state-driven economy into a market-driven economy committed to privatization, liberalization, and globalization. At the regional level, the states are forced to enter the rat race of liberalization among them to attract funds for investment and development. The State is becoming less interventionist and it is shifting from a pro-labour to pro-investor policy. In the process, the State has ceased to be tender minded and has become less sensitive to the problems of working people and has shown readiness even to dilute some of the labour statutes which hitherto had provided some protection to the working people.


The importance of industrial relations are as follows:

  1. Good industrial Relations are necessary for the economic development of a country and for establishing and maintaining true industrial democracy. It encourages the collective bargaining as a means of self-regulation and to help Government in making laws forbidding unfair practices of unions and employers. It boosts up the discipline and morale of workers.
  2. Cordial industrial relations are possible only if the workers have minimum grievances, good working conditions, better job satisfaction and a proper balance between individual aspirations and organizational goals.


The functions of industrial relations are to bring about solutions for conflicts between labour and management, conflicts between objectives and values, between profit motive and social gain, between the discipline and freedom, between authority and workers, between bargaining and co-operation, and these solutions should be in the interest of individual, the group and the community.


The need for Labour Welfare are as Follows:

  • To counter the handicaps the workers are exposed in their work-life and folk-life.
  • To provide opportunities and facilities for a harmonious development of the workers personality.
  • To make workers comfortable, as most of them coming from rural background feel out of the place in a city/industrial township.
  • To ensure the efficiency, contentment and commitment of the workers.
  • To establish the idea of socialism as provided in the Preamble of the Constitution of India.
  • To achieve these, job satisfaction is key, which could ensure industrial peace and high productivity. Wherein job satisfaction is influenced by factors like work environment, personal factors, work, organizational climate, job security and provision of social security by the employer.


Objectives of labour welfare measures as proposed by John (1998) are summarized below:

  • Enabling workers to live richer and more satisfactory lives.
  • Contributing to the productivity of labour and efficiency of the enterprise.
  • Enhancing the standard of living of workers by indirectly reducing the burden on their purse.
  • Enabling workers to live in peace and harmony.
  • Based on an intelligent prediction of the future needs of the industrial workers, designing policies to cushion off and absorb the shocks of industrialization and urbanization to workers.
  • Fostering administratively viable and essential developmental outlook among the workforce and discharging social responsibilities.


The constituents of labour welfare, according to C. P. John (1998), include working hours, working conditions, safety, industrial health insurance, workmen’s compensation, provident fund, gratuity, pensions, protection against indebtedness, industrial housing, rest rooms, canteens, crèches, wash places, toilet facilities, lunches, cinemas, theaters, music, reading rooms, holiday rooms, worker’s education, co-operative stores, excursions, playgrounds, and scholarship and other help for education of employee’s children.


The theories of labour welfare are as follows:

  • Religious Theory: Welfare activities are considered to be necessary under this theory on the basis religious principle and sentiments of the employer. Religious appeal demands sharing the fruits of progress and wealth partly with your fellow beings as God will not tolerate too much selfish and materialistic tendency.
  • Philanthropic Theory: Going ahead of the religious theory, this theory argues that everyone should have brotherly relations with the rest of mankind. It is a duty of the rich to help the poor as mutual help would lead to a peaceful and cooperative atmosphere within the society
  • Trusteeship Theory: It takes paternalistic attitude towards industrial production and ownership of resources. Entrepreneur as a trustee looks after the productive activities wherein his duty is to distribute and use the wealth wisely in the larger interest of every workman who contributes to the production of wealth.
  • Policing Theory: As per this theory welfare is a legal or statutory responsibility of the employer, who is compelled to make available minimum comforts to the workers like minimum wages, safety and security so that the state does not punish the employer for not taking up the statutory labour welfare activities. The State regulation, supervision, inspection of the industrial premises in such cases become very crucial.
  • Placating Theory: Employers promote welfare as a fruit of sustained efforts of the working class due to their pressure. The working class organize itself into militant unions, plan agitation activities and compel the employers to concede to more and more facilities to the working class. Thus, stronger the working-class unity, greater the benefits in the form of welfare provisions.
  • Efficiency/Functional Criterion: It attempts to relate additional expenditure on the welfare promoting activities and resultant increases in the productive efficiency of the workers. Every addition to the welfare promoting activity is found to pay rich dividends in the course of time. Thus, commercial approach to labour welfare activities is the key here.
  • Public Relations Theory: According to this theory, welfare activities are provided to create a good impression on the workers and the public. Clean and safe working conditions make a good impression on the workers, visitors and the public. Some employers proudly take their visitors around the plant to show how well they have organized their welfare activities.
  • Social Theory: The social obligation of an industrial establishment has been assuming great significance these days. The social theory implies that employer is morally bound to improve the conditions of the society in addition to improving the conditions of its employees. Labour welfare should gradually become social welfare.


The following are the laws related to Labour Welfare: 

  • Factories Act, 1948
  • Payment of Wages Act, 1936
  • Workmen’s Compensation Act, 1923
  • Maternity Benefit Act, 1961
  • Employees’ State Insurance Act, 1948
  • Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
  • Payment of Gratuity Act, 1972
  • Employees’ Pension Act, 1995


Labour market is significant and the most sensitive issue in our nation. While making labour reforms the officials need to consider the interest of all the stakeholders related to it. It ought not so to happen that the change impacts any of the party in a manner which isn’t so acceptable or desirable. The perspective of workers needs to change and be more acceptable with regard to changes. Let them be aware that every change will not result in the loss of jobs for them or their fellow members. The Union Government as a major aspect of labour law reforms has embraced the drive to rationalize 38 Labor Acts by outlining 4 labour codes viz Code on Wages, Code on Social Security, Code on Industrial Relations and Code on Occupational Safety, well-being and working conditions. The codification of labour Laws will eliminate an assortment of definitions and specialists promoting simplicity of compliance without compromising wage security and social security to all the workers. Trusting that this will bring updates which are applicable in the present time and the changes or reforms are not made for the sake of it.










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