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A Case Study on Industrial

Relations at Tata Steel &


Tata Workers Union

Submitted by

Name
Anoop Srivastva
Ayan Lahiri
Jai Kishan Indiwar
Prabhas Kumar

Roll No.
MP14017
MP14021
MP14027
MP14036

PGDM (PT)-2014-17

XLRI- Xavier School of Management, Jamshedpur, India

A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

A Case Study on Industrial Relations at Tata Steel & Tata


Workers Union
Anoop Srivastva-MP14017
Ayan Lahiri-MP14021
Jai Kishan Indiwar-MP14027
Prabhas Kumar-MP14036
Introduction
In todays changing business environment, every organization wants to be a successful
company. The success of any organization depends upon the performance of their
Human Resource and the industrial relationship between management and their
workers. Industrial Relation is a dynamic socio-economic process. It is not the cause
but an effect of social, political and economic forces. In order to understand the issues
and problems associated with industrial relations, it is desirable to study its various
evolutionary phases. Generally, the growth of industrial relations in India is in no way
different from that of other parts of the globe.
The various stages of industrial relations progressed from primitive stage to factory or
industrial capitalism stage. The emergence of tripartite consultative system and
voluntary and statutory approach to industrial relations, immensely contributed to the
growth of a particular system of industrial relations in our country. Also the fast
changing technological development, industrial production techniques, and
ideological values have brought forth in the industrial world a unique type of
employer employee relationship. For a proper theoretical perspective of industrial
relations, it seems essential to have a historical review of industrial relations in India.
Economists have traditionally identified four factors of production, viz., land labour,
capital and organization. The role of labor as a factor of production is becoming
increasingly important in the modern society. Capital and natural resource
endowments, no doubt, are vital elements in the production process but it is labor
which contributes most to the wealth of a company. Human beings are the active
agents who accumulate capital, exploit natural resources, build social, economic and
political organizations and carry forward national development. Growing
industrialization and the rapid expansion of the services sector resulted in the
galloping demand for skilled labor after 1950s.
The emergence of the concept of human relations, human resource management
(HRM) and human resource development (HRD) contributed to the growing
importance of labor. The issue of Industrial Relations arose from the issue of divorce
of the workers from the ownership and management of the production process. This
has brought about a sense of deprivation and loss of independence on the part of
workers and is probably the primary cause of industrial disputes. Industrial work has
drastically reduced the independence of workers and made them mere cogs in the
machine. The disciplinary rules for work have become quite harsh and arbitrary. The
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heterogeneous nature of workers, illiteracy and politicization of trade unions made it


impossible for the workers to bargain for their rights united. All these factors have led
to growing unrest among the rank of workers.
The term Industrial Relations refers to relationship between Management and Labor
or among Employees and their Organizations that characterize or grow out of
employment. Generally, there are two parties in the Industrial relationship workers
and management. Both parties need to work in a spirit of cooperation, adjustment and
accommodation. In their own mutual interest certain rules for co-existence are formed
and adhered to. Over the years, the State has also come to play a major role in
Industrial Relations one, as and initiator of policies and the other, as an employer by
setting up an extremely large public sector.
There are points to examination of the Industrial Relations:
1. Employer-Employee interactions: Industrial Relations arise out of employer
employee interactions. These relations cannot exist without the basic building
blocks, i.e., the employer and on one side and the employees on the other side.
2. Web of rules: Industrial Relations are a web of rules formed by the
interaction of the government, the industry and the labor. They include the
relations between employer and employees and between employers
associations, trade union as well as the State.
3. Multidimensional: Industrial Relations are fairly multi-dimensional in nature
as they are influenced, by a complex set of institutional, economic and
technological factors.
4. Dynamic and changing: Industrial Relations change with the times, generally
keeping pace with the expectations of employees, trade union, employers`
associations, and other economic and social institution in a society.
5. Spirit of compromise and accommodation: The Industrial Relations system
is characterized by forces of conflict and compromise on either side. In the
large interests of society, both the employer and the employees must put out
fires amicably and get along with each other in a spirit of compromise and
accommodation. The individual differences and disagreements must be
dissolved through persuasion and even pressure. The factors responsible for
conflict situations need to be resolved through constructive means.
6. Governments role: The government influences and shapes Industrial
Relations with the help of laws, rules, agreements, awards of courts and
emphasis on usages, customs, traditions, as well as the implementation of its
policies and interference through executive and judicial machinery.
7. Wide coverage: The scope of Industrial Relations is wide enough to cover a
vast territory comprising of grievances, disciplinary measures, ethics, standing
orders, collective bargaining, participatory schemes, dispute settlement
mechanisms etc.
8. Interactive and consultative in nature: Industrial Relations include
individual relations and joint consultation between labor, management.

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Objective of the study


The main objectives of this study are as follows:
1. To observe the industrial relation operation and satisfaction level of the
employees in Tata Steel Limited, Jamshedpur
a. Brief background of Tata Steel Limited, Jamshedpur
b. Brief about union and the IR history
c. Different welfare schemes provided to the employees
2. To observe the working conditions of the employees
a. Management labour relationship
b. Nature of supervisor-worker interaction
c. Flash-points such as strikes, lockouts etc
3. To observe the grievance handling procedure inside the organization
a. inter and intra- trade union dynamics
b. workers response towards organization
c. Management's response to their grievances
Background History and achievement of Tata Workers Union (TWU)
Tata Workers Union (TWU) is one of the earliest trade unions in India. Its history
dates back to March 1920. Formerly known as 'Labour Association', the trade union at
Jamshedpur, as elsewhere, was born out of worker's suffering and sacrifices caused by
a prolonged strike which ultimately resulted in the increase of wages, introduction of
fringe benefits like Provident Fund and, above all, recognition of the Labour
Association. An Advisory Joint Committee with representatives from Labour and
Management was formed as a precursor to the concept of worker's participation in
management, which was to become in later years a remarkable success in Tata Steel.
There was, however, a serious setback in 1922 when the Union launched a strike for
securing certain basic demands like security of service, better service conditions, etc.
the strike failed. The Management promptly withdrew its recognition and discharged
the General Secretary of the Union from service. The labour at Jamshedpur soon drew
all-India leaders like C.F. Andrews, C.R. Das, and Motilal Nehru into the field. A
conciliation committee with C.R. Das as Chairman was formed to break the deadlock.
It failed. Mahatma Gandhi was persuaded by Andrews to intervene. Gandhiji visited
Jamshedpur in 1925 and through his good offices a settlement was reached. The
recognition of the Union was restored and its General Secretary reinstated. As C.F.
Andrews was abroad, Subhas Chandra Bose was inducted into the organization as
President. Thus, this Union had the unique privilege of all the political stalwarts of the
day association with its activities. But, unfortunately, trade union rivalry also ran high
during this period and the Management exploited it to the full.
Labour Association, Jamshedpur formed in 1920, much before AITUC. Even the
Communist party of India was not in existence during that period.
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Consolidation of the Movement


With the appearance of Prof. Abdul Bari on the scene in 1936, the movement took
deep roots. A psychological thrust was given to the movement when he changed the
name of the Labour Association to "Tata Workers' Union". The unity and maturity
that he brought about among the Tisco workers were so strong that they survived all
political onslaughts with perfect confidence. Under his dynamic leadership the Union
launched its struggle for a thorough revision of the wage structure, introduction of the
incentive bonus scheme, etc. through the efforts of Prof. Bari, the Bihar Labour
Enquiry Committee was constituted with Dr. Rajendra Prasad as Chairman, and Prof.
Bari as one of the members. The Report submitted by this august body in 1940
constituted the first authentic document on labour situation in Bihar in general and at
Jamshedpur in particular.
After a prolonged struggle for a decade and repeated strike threats in 1945 and 1946,
an Agreement was signed in February 1948 by the Union and the Management which
not only secured higher wages and better working conditions but also, what is more
significant, stipulated the formation of joint committees with equal representation to
ensure better understanding and settlement of disputes by negotiations. But, before the
advent of this new era of conciliation in place of conflict, our beloved leader and great
patriot, Prof. Bari, died under tragic circumstances on 28th March 1947.
Era of Constructive Trade Union Movement
Shri Michael John, who took over the presidentship of the Union after Prof. Bari's
death, was the architect of this new era. Sri John as President and Sri V. G. Gopal as
General Secretary, both of whom came from the working class, provided a formidable
and harmonious leadership which could secure maximum gains to the workers with
minimum sufferings, a phenomenon rarely evidenced anywhere else.
As a first step to reduce tension within the ranks, the supervisory and technical staff
was brought under the same roof by forming the Supervisory and Technicians Unit as
an integral part of the Union-a unique feature in industrial relations.
A shining example of this new era and new outlook was the famous Agreement of
1956 which has been hailed as the 'magna carta' of the working class and reckoned as
a landmark in the history of the trade union movement in India. Besides the usual
benefits it secured for the workers by way of higher wages, more houses, improved
medical facilities, etc., the Agreement laid down a three-tier programme of closer
association of employees with management. At the bottom, departmental councils
were formed with equal representation of workers and officers; at the middle, Joint
Works Council and Joint Town Council were constituted, and at the apex Joint
Consultative Council of Management was set up. Another feature of this Agreement
was the introduction of a streamlined grievance procedure, which aimed at redressing
individual grievances in the shortest possible time at the lowest possible level. A
provision of far-reaching importance incorporated in the Agreement was to the effect
that there should be no retrenchment as a result of any rationalization scheme in Tisco.
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Further, redundant labour shall be provided with training and retraining facilities and
absorbed in suitable jobs without any monetary loss.
TWU has always given a stable leadership with continuous guidance, which stands as
its major strength. Between 1920 and 2006 there were 9 presidents, in comparison
with the other national trade union organizations such as AITUC and TLA. The TWU
has always given utmost importance in their collective bargaining with the
management in the sphere of the revision of wage, incentive bonus, house and medical
facilities, family welfare, community & social development and annual bonus etc.
TWU has the membership over 93% employees in Tata Steel. It is the only union
recognized by Tata Steel since 1920.
Over the last 85 years TWU has a long way to become a responsible union. The
leadership has been matured and consistent.
TWU leaders took active part in the freedom movement since 1928 to 1942 Quit India
Movement and went to jail several times.
Total 19 agreements between TISCO and TWU through collective bargaining between
1920 to 2008.
President or general secretary of the TWU since 1920 were either employees or
former employees of the company or TWU.
All financial, social and fringe benefits gained through non-violent and peaceful
means. Since 1928 there is no industrial strike in TISCO.
In 1962, the TWU spent Lacs of rupees to run two high schools for the education of
member`s children. Later on Government of Bihar took over the charge of these
schools.
Since 1954 TWU has introduced a sickness benefit scheme for the benefit of its
member in the event of their sickness causing loss of pay.
TWU publishes a paper ISPAT MAZDURto give updated information and
enlighten the member.
Each year TWU organizes a memorial lecture in the name of its fifth President, Late
Michael John in which national and international reputed personality, who has made
an important contribution in this sphere, are recognized and a gold medal is rewarded
to him.
TWU also considers the improvement of workers education and awareness level as
one of its responsibilities and keeping this in view Michael John Centre is established,
which conducts trained and developmental programmes for workers and supervisors.

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The long-felt desire of the union to have its own building has been fulfilled with
turning a new leaf in the history. The building is being dedicated to the cherished
memory of Prof. Abdul Bari, the founder president of Tata workers' union and
Auditorium named after Shri Michael John who provided all the inspiration and
direction for 30 years as president of the union.
TWU took the lead in forming the Indian National Metalworkers Federation,
embracing all the steel and engineering industry.
At present Mr. R. Ravi Prasad is newly elected President and Mr. B.K. Dinda is newly
elected General Secretary of TWU.

Soruce: Dainik Bhaskar, Jamshedpur Dated March 14, 2015

TWU : Achievements
1. Minimum Wages :
Minimum Wages has gone up from Rs. 13 Per Month in 1920 to Rs. 393 per
Month in 1974.
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2. Average Annual Earnings :


The Average Annual Earnings of the TISCO Employees have gone up from Rs.
780 in 1939-40 to Rs. 9,200 in 1977-78.
3. Ratio :
The ratio between the lowest paid worker (Mazdoor) and the highest paid
worker (First-Hand) has been narrowed down from 1:30.81 in 1939 to 1:3.53 in
1977. Thus, while the monthly wages of the Mazdoor were raised from Rs.
21.77 in 1939 to Rs. 435 in 1977, the First-hand's Monthly income was raised
from Rs. 655.55 in 1939 to Rs. 1537.40 in 1977.
4. Annual Bonus :
An amount of Rs. 557 lakhs was paid as annual bonus for the year 1976-77 as
against Rs. 55 lakhs paid in 1947-48.
5. Incentive Bonus Scheme :
In addition to Performance Bonus, Incentive Bonus Schemes were introduced
in all the production and maintenance departments in 1948. Effective from
August 1, 1975 those employees who were not covered by the departmental
incentive bonus schemes have also been covered by the plant wide bonus
scheme. In 1977, the bonus potential for all the service departments was raised
from 53 to 60 bonus points.
6. Leave Facilities :
Sick leave of 30 days on half pay was introduced in 1959 for all employees. In
1965, in addition to privilege leave and festival leave, casual leave of 5 days
was extended to the factory workers also.
7. Medical Facilities :
A fully-equipped hospital consisting of 800 beds and 8 dispensaries in various
localities of the town cater free medical and surgical services to all employees
and their families. Effective from April 1972, free medical aid has also been
extended to the retired employees with 25 years of service and their wives and
those settled on medical grounds. From April 1975, reimbursement of medical
expenses is made to the employees for specialised treatment outside
Jamshedpur, provided such medical care is not available at Jamshedpur.
Extensions and renovations were made to the Female Medical Ward,
Childrens Ward, Intensive Care Unit, O.P.D., etc. A new hospital named after
the late Sir JehangirGhandy has recently been constructed at a cost of Rs. 150
lakhs.

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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

8. Education :
About 24,000 wards of the employees receive free education up to the high
school standard from 21 schools run by the Company. The annual net
expenditure on this account comes to about Rs. 73 lakhs.
9. Housing :
Up to 1973, 15,950 houses were built for theemployees.
10. Gratuity :
Effective from November 1970, the retiring gratuity was revised entitling
employees to one month's wages for every completed year of service in excess
of 33 years.
11. Life Cover Scheme :
With effect from 1st April 1976, in the event of death of an employee before
retirement, his nominee is entitled to an amount, under this Scheme, which,
together with the retiring gratuity, shall be equal to 20 months' salary, provided
the amount in addition to the normal gratuity shall not be less than Rs. 11,000.
12. Workmen's Compensation :
Effective from January 1974, in the event of rehabilitation of an employee in a
lower grade, arising out of an accident, his substantive rate in the former grade
is protected.
In accordance with the decision taken by the National Joint Consultative
Committee for Steel Industry, with effect from 1st December 1977, I.O.W.
wages paid to the employees during the accident leave period are not deducted
from the compensation paid on account of partial or total disablement.
13. Revision of Incentive Bonus Scheme :
Effective from December 1977, the bonus potential of Re-building Gang and
Tearing-out Gang of Refractories Department was raised from 60 to 66 bonus
points for 100% efficiency.
14. Interim Revision of Grades :
With effect from December 1977, the grades of the staff of Security (Works &
Town), Stores and Education Department covering a total strength of about
1900 employees have been revised upwards.

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Research and Analysis:


Industrial Relations studies the relationship between employer and employee in paid
employment: the ways in which employees are rewarded, motivated, trained and
disciplined, together with the influences of these process on the major institutions
involved, namely: management, trade unions and the State. In its wider connotation
Industrial Relations means the organization and practice of multipronged relationships
between workers and management, unions and workers and the unions and
management in an industry. In order to observe this relationship between an employer
and an employee, it is imperative for us to gather some observations in real-life
factory conditions and make our conclusions accordingly. In our segment of research
and data collection, we took a survey of the 25 workers of Tata Steel and the outcome
of this survey has been enumerated as follows:
1. Welfare schemes provided by Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED

22
3
SATISFIED

100%
80%
60%
40%
20%
0%

% of Respondents
88%
12%

DISSATISFIED

88%

12%
% of Respondents

Observation 1
Majority of Employees are aware about the welfare schemes provided by the Tata
Steel.
2. Wages and incentives provided by Tata Steel:
I. R. Rating
SATISFIED
DISSATISFIED

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Total Respondents
20
5

Human Resource Management

% of Respondents
80%
20%

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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

SATISFIED
100%

DISSATISFIED

80%

80%

60%
40%

20%

20%
0%
% of Respondents

Observation 2
Majority of Employees are satisfied with the salary and incentives provided by the Tata
Steel.
3. Provision of canteen at the workplace provided by Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED

21
4

SATISFIED
100%
80%
60%
40%
20%
0%

% of Respondents
84%
16%

DISSATISFIED

84%

16%
% of Respondents

Observation 3
84% Employees are satisfied and 16% are not satisfied with the canteen facility
provided by the Tata Steel.
4. Drinking Water facility in Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED
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% of Respondents
22
3

Human Resource Management

88%
12%
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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

SATISFIED
100%

DISSATISFIED

88%

80%
60%
40%
12%

20%
0%
% of Respondents

Observation 4
88% Employees are satisfied and 12% are not satisfied with the drinking water facility
provided by the Tata Steel, Jamshedpur.
5. Medical Facilities provided by Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED

100%
80%
60%
40%
20%
0%

% of Respondents
23
2

SATISFIED
92%

92%
8%

DISSATISFIED

8%
% of Respondents

Observation 5
92% Employees are satisfied and only 8% are dissatisfied with the medical facilities
provided by Tata Steel.
6. Retirement benefits provided by Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED
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% of Respondents
19
6

Human Resource Management

76%
24%
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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

80%

SATISFIED
76%

DISSATISFIED

60%
40%

24%

20%

0%
% of Respondents

Observation 6
76% Employees are satisfied and 24% are dissatisfied with the retirement benefits
facility provided by the Tata Steel.
7. Recreation facilities at Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED

20
5

SATISFIED
100%

% of Respondents
80%
20%

DISSATISFIED

80%

80%
60%
40%

20%

20%
0%
% of Respondents

Observation 7
80% Employees are satisfied and 20% are not satisfied with the recreation facility
provided by Tata Steel.
8. Transport facilities provided in Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED
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% of Respondents
18
7

Human Resource Management

72%
28%
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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

SATISFIED
80%

DISSATISFIED

72%

60%
40%

28%

20%
0%
% of Respondents

Observation 8
72% Employees are satisfied and 28% are dissatisfied with the transport facilities
provided by the Tata Steel.
9. Grievance handling procedure in Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED

% of Respondents
24
1

SATISFIED

96%
4%

DISSATISFIED

150%
100%

96%

50%
4%
0%
% of Respondents

Observation 9
96% Employees are satisfied and only 4% are dissatisfied, with the grievance
handling procedure provided by Tata Steel.
10. Are you satisfied with the working conditions in Tata Steel:
I. R. Rating

Total Respondents

SATISFIED
DISSATISFIED
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% of Respondents
20
5

Human Resource Management

80%
20%
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A Case Study on Industrial Relations at Tata Steel & Tata Workers Union

SATISFIED
100%

DISSATISFIED

80%

80%
60%
40%

20%

20%
0%
% of Respondents

Observation 10
80% Employees are satisfied and 20% are dissatisfied with the working conditions
of Tata Steel.
Conclusions:
Trade union is a form of human association for the attainment of common purposes of
its members. Maximisation of common human happiness is the chief purpose of this
organisation. It grows out of human need for cooperation. Outstanding anthropologists
admit that co-operation is the natural tendency. As an organisation giving extension of
democracy trade unions have varied social, political and economic implications. Trade
unions shape the workers attitudes, outlook and approach towards industry and
management and vice versa. The study also reveals the roles of politics in trade union,
the way in which workers interest are defended, trade union funds are managed and
how multi-unionism is resulted. The affiliations and actions of unions seem to have
led at least some of the workers to a state of lethargy leading even to absenteeism.
Thus a trend to defeat the purpose of common human happiness seems visible. The
total dynamics seem to be changing. The human relations in industry are very much
wanting.
The organization has adopted a better kind of welfare activities which create an
effective working environment and thus better productivity. There is different kind of
welfare schemes like medical allowance; death relief fund, insurance, housing and
transportation facilities, recreation club etc. are provided by the company to the
employees to maintain the industrial relation better one .The premises and the
departments are maintained healthy. Also proper safety measures have been adopted
in the organization. All matters relating to safety, health and welfare of employees are
properly implemented. A better relationship between the employees, trade union and
the management has been followed which helps to reduce the problems in the
organization and also helps to increase the productivity. It is evident that good
industrial relations is the basis of higher production with minimum cost and higher
profits. It also results in increased efficiency of workers. Good industrial relations
reduce the industrial disputes. Industrial relations has become one of the most delicate
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and complex problems of modern industrial society. Industrial progress is impossible


without cooperation of labors and harmonious relationships. Therefore, it is in the
interest of all to create and maintain good relations between employees (labor) and
employers (management).Thus industrial relation measures followed should be given
prime emphasis which may lead to an effective relationship between management and
employees. An effective industrial relation results in the increase of the productivity
of the organization.
Better relationship between the employee and employer is very essential for
successful running of any organization. Favourable relationship can avoid many
adverse situations. With a huge manpower, Tata Steel Plant has taken every step to
maintain a cordial relation. It has given a thrust on participation of employees through
many forums - both traditional and revolutionary. Structured Communication as an
important vehicle for carrying the employees and management together has been
adopted nicely by Tata Steel to facilitate the flow of information, ensure employees
commitment and involvement in all critical aspects of the operation. Of course there
are many scopes for improvement. Both management and recognized union should
come forward to restore the relationship of trust. The management also needs to be
more committed to implement the plans more properly.
References:
1. A.S. Mathur, Labour Policy and Industrial Relations in India, Ram Prasad
and Sons, Agra, 1958, p.126.7.
2. C.B. Kumar. Development of Industrial Relations in India, Orient Longman
and Co., Bombay, 1961.
3. M.K. Singh, Industrial Relations in Maharashtra. The Indian Journal of society
work, Vol. XLIV(1),April,1983,p.193.
4. N. Kumar, R. Mittal, Personnel management and Industrial Relations first
edition2001, P.2629.
5. R Ram Reddy, Industrial relations in India, K.M.Mittal for Mittal
Publications,1990,P.2
6. R.A. Lester,(ed.),Labour and Industrial Relations, Macmillian and Co.,
NewYork,1964,p.398.6.
7. T.N. Kapoor, (Ed),Personnel Management and Industrial Relations in
India,1968,p.106.5.
8. V.B. Singh, Climate for industrial relations: A Study of Kanpur Textile
Industry, Allied Publishers, Bombay,1967,p.9.4.
9. Srivastava, K.B.L.(2001), Changing Power Dynamics in the Emerging
Industrial Relations Scenario, Management & Labour Studies, vol.26, No. 4,
219-227.
10. Venkataratnam C.S. (1992), Structural Change and Its Impact on Industrial
Relations, Vikalpa, Vol.17, No.1.
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