Contents

Industrial Relations
1. Industrial Relations
2. Labor Relations
3. Industrial Relations theories
4.Labor Unions
5. Participation in Labor Unions
6. Managing Labor relation process
7. Trends in union membership
8. Labor Relations: Ethiopian Context
1. Industrial Relations

Industrial relations is the process

through which employers and
employees interact, and through
which they regulate conflict at the
workplace.
 1. Industrial Relations
Industrial relations begins with the
employment contract that establishes
relationship but moves beyond the
employment relationship.
Without the employment relationship there
will be no industrial relations.
Industrial relations usually involves
employees as a group and employers as a
group.
 Relations
Industrial Labor Employee
Relations Relations Relations
Refers to all types of Refers to the Refers to the
relationships between relationship relationship between
parties concerned within between the management and
industrial undertakings labor union and individual employee.
including industry, management It is some times called
agriculture, mining, Employee-employer
commerce finance, transport relations.
and other services
 2. Labor Relations
2.1. Origin of Labor Relations
Feudalism
Under Feudalism there was no Labor
relations, it is specific to capitalism.

Labor relations arose as a direct

consequence of the way capitalism
organised work.
 2. Labor Relations
2.1. Origin of Labor Relations

Capitalism
The change from feudalism to capitalism
marked by Industrial Revolution saw the
emergence of labor relations as a
discipline.
 2. Labor Relations
2.2. Consequence of capitalism (large factories)
The movement of people from villages and rural areas to
the cities in search of employment.
People uprooted from their traditional way of life and
traditional forms of work.
Creation of a new class of people: proletariat or working
class.
Society now becomes divided between the working class
on the one hand and owners and managers on the other
hand.
Human beings have to sell their labour power in order to
survive wage labor.
Created era of mass employment and also soon mass
unemployment.
 3. Industrial Relations Theories

3.1. Introduction
Three major perspectives that contrast in
their approach to the nature of workplace
relations. The three views industrial
relations perspectives are:
Unitary,
Pluralist, and
Marxist .
 3. Industrial Relations Theories

3.1. Introduction
Each offers a particular perception of
workplace relations and will therefore
interpret such events as workplace
conflict, the role of trade unions and job
regulation very different.
 3. Industrial Relations Theories

3.2. Unitary Perspective

Organization is perceived as an integrated
and harmonious whole with the ideal of
one happy family.
Believes that management and other
members of the staff all share a common
purpose.
Emphasize mutual cooperation.
 3. Industrial Relations Theories

3.2. Unitary Perspective

Has a paternalistic approach where it demands
loyalty of all employees, being predominantly
managerial in its emphasis and application.
Labor unions are deemed as unnecessary since
the loyalty between trade unions and
organizations are considered mutually exclusive,
where there can't be two sides of industry.
Conflict is perceived as disruptive and the
pathological result of agitators, interpersonal
friction and communication breakdown.
 3. Industrial Relations Theories

3.3. Pluralistic Perspective

Organization is perceived as being made
up of powerful and divergent sub-groups,
each with its own legitimate loyalties and
with their own set of objectives and
leaders.
The two predominant sub-groups are the
management (Owners Representative) and
labor unions.
 3. Industrial Relations Theories

3.3. Pluralistic Perspective

Labor unions are deemed as legitimate
representatives of employees
Conflict is dealt by collective bargaining
and is viewed not necessarily as a bad
thing and if managed could in fact be
channeled towards evolution and positive
change.
 3. Industrial Relations Theories

3.4. Marxist Perspective

Believes that in capitalist society, there is a
fundamental division of interest between
capital and labor,
Inequalities of power and economic
wealth have their roots in the nature of the
capitalist economic system.
 3. Industrial Relations Theories

3.3. Marxist Perspective

Conflict is therefore seen as inevitable and
labor unions are a natural response of
workers to their exploitation by capital.
Believes that institutions of joint regulation
(labor union) would enhance rather limit
managements position as they presume the
continuation of capitalism rather than
challenge it.
 4. Labor Union
4.1. Union: Definition

A Union is an organization of workers,

acting collectively, seeking to promote and
protect its mutual interests through
collective bargaining.
 4. Labor Union
4.2. Basic principles of Unionism
There are three basic principles upon
which unionism is founded. If any one of
them is threatened, the union will fight
back. These are:
In unity there is strength,
Equal pay for the same job,
All terms and conditions of
employment should be based on
seniority.
 4. Labor Union
4.3. Objectives of Labor Union
Labor unions have the following practical
objectives:
Higher pay;
Shorter hours of work on a daily, weekly or
annual basis;
Improved physical, social, and
psychological working conditions, and
Improved security both of the person and
the job. For example, union opposes
automation if it threatens the job security of
its members.
 4. Labor Union
4.4. Why do Employees join Unions?
4.4.1 Job Security
A worker feels very weak when he is alone
and strong with the union.
It ensures stable employment by opposing
the move by management to replace the
workforce.
 4. Labor Union
4.4. Why do Employees join Unions?
4.4.2 Wages and Allowances
Union protects the economic interest of
the workers and ensures a reasonable
wage, bonus allowances.
Union provides certain assistance such as
cash at the time of sickness or termination
of job.
 4. Labor Union
4.4. Why do Employees join Unions?
4.4.3 Influence over work rules
Union conduct negotiation and settles
disputes.
Union provide opportunity to participate in
management decisions.
 Government

Management Union
5. Participants in Labor Relations

Government Restrictions
Illegal practices of management.
Illegal practices of union.
6. Managing the Labor Relations Process

The labor relation process has three

phases:
Union Organizing,
Collective Bargaining, and
Contract Administration.
6.1. Union Organizing
In the union organization, management
confronts the issues involved with union
solicitation, election or re-election, and the
certification of election.
6. Managing the Labor Relations Process

6.2. Collective Bargaining

Collective bargaining is the process
whereby workers organize collectively and
bargain with employers regarding the
workplace.
It is the coming together of workers to
negotiate their employment with
management.
6. Managing the Labor Relations Process

6.2. Collective Bargaining

A Collective Agreement is the outcome of
collective bargaining. It is a labor contract
between an employer and one or more
unions.
Collective Bargaining consists of the
process of negotiation between
representatives of a union and employers.
6. Managing the Labor Relations Process

6.2.1. Scope of Collective Bargaining

Negotiation between management and
union in respect of the terms and
conditions of employment of employees
include:
wages,
hours of work,
working conditions,
grievance-procedures, and
rights and responsibilities of labor
unions.
6. Managing the Labor Relations Process

6.2.2. Collective Bargaining Process

A. Preparing to Negotiate
Fact-gathering: Includes internal information
(e.g., employee performance records, overtime)
and external (i.e., data on what similar
organizations are doing and the economy).
Goal-setting: Management decides what it can
expect from the negotiation.
Strategy development: This includes assessing
the other sides power and tactics.
6. Managing the Labor Relations Process

6.2.2. Collective Bargaining Process

B. Negotiating at the bargaining table
Each side usually begins by publicly
demanding more than they are willing to
accept.
More realistic assessments and
compromises take place behind closed
doors.
After oral agreement, a written contract is
submitted to the union for ratification.
6. Managing the Labor Relations Process

6.3. Contract Administration

It refers to the implementation,
interpretation and monitoring of the
negotiated contract between labor and
management.
Information dissemination: includes helping
staff and workers understand the new contract
provisions.
Implementing: refers to making the changes to
comply with contract terms.
6. Managing the Labor Relations Process

6.3. Contract Administration

Interpreting the contract and grievance
resolution:
Grievance (rights): arbitration is typically the final
step in the grievance process.
Disputes that cannot be resolved are resolved by an
arbitrator, or third party, whose decision is final.
Monitoring: involves both union and
management keep track of how effective the
current contract is and any need for changes.
6. Managing the Labor Relations Process

6.4. Failure to reach Agreement

If negotiation fails in the collective
bargaining a situation called impasse is
created.
To come into agreement third party enters:
Mediation, and
Arbitration.
6. Managing the Labor Relations Process

6.4. Failure to reach Agreement

Forcing the Other party to comply with Demand
Management might engage in:
Yellow dog contract: As a means of
breaking the unions employees sign
the contract not to join union (now
illegal);
Black list (now illegal);
Temporary layoff; and
Lockout.
6. Managing the Labor Relations Process

6.4. Failure to reach Agreement

Forcing the Other party to comply with
Demand
Union might engage in:
Mass sick out,
Slow downs,
Picket lines, and
Boycott of the manufacturers product.
7. Trends in Union Membership
Union membership in the U.S. reached a
high of 36% in the early 1940s.
The trend in union membership in
developed countries is declining.
 Union Membership in the
United States, 1930-1999

40
Percent of the Labor Force

35

30

25

20

15

10
1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 1999

Year
8. Labor Relation: Ethiopian context
Labor union was forbidden in Ethiopia
until the establishment of OAU in 1963
Those trying to organize unions were
deported to Adola, Arba Minch etc.
It was started at the Ethio-French Railway
corporation.
It further continued to other industries like
textiles etc.
CETU (Confederation of Ethiopian Trade
Unions): current union in the country.
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