Industrial relations

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Industrial relations or employment relations is the multidisciplinary academic field that studies the employment relationship; [1] that is, the complex interrelations between employers and employees, labor/trade unions, employer organizations and the state.


The newer name, "employment relations" is increasingly taking precedence because "industrial relations" is often seen to have relatively narrow connotations. [2] Nevertheless, industrial relations has frequently been concerned with employment relationships in the broadest sense, including "non-industrial" employment relationships. This is sometimes seen as paralleling a trend in the separate but related disciple of human resource management. [3]

Human resource management is the strategic approach to the effective management of people in an organization so that they help the business to gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives. HR is primarily concerned with the management of people within organizations, focusing on policies and on systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and Reward management. HR also concerns itself with organizational change and industrial relations, that is, the balancing of organizational practices with requirements arising from collective bargaining and from governmental laws.

While some scholars regard or treat industrial/employment relations as synonymous with employee relations and labour relations, this is controversial, because of the narrower focus of employee/labour relations, i.e. on employees or labour, from the perspective of employers, managers and/or officials. In addition, employee relations is often perceived as dealing only with non-unionized workers, whereas labour relations is seen as dealing with organized labour, i.e unionized workers. [4] [ better source needed ] Some academics, universities and other institutions regard human resource management as synonymous with one or more of the above disciplines, [5] although this too is controversial.


Industrial relations examines various employment situations, not just ones with a unionized workforce. However, according to Bruce E. Kaufman, "To a large degree, most scholars regard trade unionism, collective bargaining and labour–management relations, and the national labour policy and labour law within which they are embedded, as the core subjects of the field." [6]

A trade union, also called a labour union or labor union (US), is an association of workers forming a legal unit or legal personhood, usually called a "bargaining unit," which acts as bargaining agent and legal representative for a unit of employees in all matters of law or right arising from or in the administration of a collective agreement. Labour unions typically fund the formal organisation, head office, and legal team functions of the labour union through regular fees or union dues. The delegate staff of the labour union representation in the workforce are made up of workplace volunteers who are appointed by members in democratic elections.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.

Management Coordinating the efforts of people

Management is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term "management" may also refer to those people who manage an organization.

Initiated in the United States at end of the 19th century, it took off as a field in conjunction with the New Deal. However, it is generally regarded as a separate field of study only in English-speaking countries, having no direct equivalent in continental Europe. [7] In recent times, industrial relations has been in decline as a field, in correlation with the decline in importance of trade unions [6] and also with the increasing preference of business schools for the human resource management paradigm. [8]

New Deal Economic programs of U.S. president Franklin D. Roosevelt

The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1936. It responded to needs for relief, reform, and recovery from the Great Depression. Major federal programs included the Civilian Conservation Corps (CCC), the Civil Works Administration (CWA), the Farm Security Administration (FSA), the National Industrial Recovery Act of 1933 (NIRA) and the Social Security Administration (SSA). They provided support for farmers, the unemployed, youth and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt.

A business school is a university-level institution that confers degrees in business administration or management. According to Kaplan business schools are "educational institutions that specialize in teaching courses and programs related to business and/or management". Such a school can also be known as school of management, school of business administration, or colloquially b-school or biz school. A business school teaches topics such as accounting, administration, strategy, economics, entrepreneurship, finance, human resource management, management science, management information systems, international business, logistics, marketing, organizational psychology, organizational behavior, public relations, research methods and real estate among others.

Protest against industrial relations legislation in Melbourne in 2005. Ir rally img 3870.jpg
Protest against industrial relations legislation in Melbourne in 2005.

Industrial relations has three faces: science building, problem solving, and ethical. [9] In the science building phase, industrial relations is part of the social sciences, and it seeks to understand the employment relationship and its institutions through high-quality, rigorous research. In this vein, industrial relations scholarship intersects with scholarship in labour economics, industrial sociology, labour and social history, human resource management, political science, law, and other areas.

Social science is a category of academic disciplines, concerned with society and the relationships among individuals within a society. Social science as a whole has many branches. These social sciences include, but are not limited to: anthropology, archaeology, communication studies, economics, history, musicology, human geography, jurisprudence, linguistics, political science, psychology, public health, and sociology. The term is also sometimes used to refer specifically to the field of sociology, the original "science of society", established in the 19th century. For a more detailed list of sub-disciplines within the social sciences see: Outline of social science.

Employment is a relationship between two parties, usually based on a contract where work is paid for, where one party, which may be a corporation, for profit, not-for-profit organization, co-operative or other entity is the employer and the other is the employee. Employees work in return for payment, which may be in the form of an hourly wage, by piecework or an annual salary, depending on the type of work an employee does or which sector she or he is working in. Employees in some fields or sectors may receive gratuities, bonus payment or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits can include health insurance, housing, disability insurance or use of a gym. Employment is typically governed by employment laws, regulations or legal contracts.

Labour economics seeks to understand the functioning and dynamics of the markets for wage labour.

Industrial relations scholarship assumes that labour markets are not perfectly competitive and thus, in contrast to mainstream economic theory, employers typically have greater bargaining power than employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts of interest between employers and employees (for example, higher wages versus higher profits) and thus, in contrast to scholarship in human resource management and organizational behaviour, conflict is seen as a natural part of the employment relationship. Industrial relations scholars therefore frequently study the diverse institutional arrangements that characterize and shape the employment relationship—from norms and power structures on the shop floor, to employee voice mechanisms in the workplace, to collective bargaining arrangements at company, regional, or national level, to various levels of public policy and labour law regimes,[ citation needed ] to varieties of capitalism [10] (such as corporatism, social democracy, and neoliberalism).

When labour markets are seen as imperfect, and when the employment relationship includes conflicts of interest, then one cannot rely on markets or managers to always serve workers' interests, and in extreme cases to prevent worker exploitation. Industrial relations scholars and practitioners, therefore, support institutional interventions to improve the workings of the employment relationship and to protect workers' rights. The nature of these institutional interventions, however, differ between two camps within industrial relations. [11] The pluralist camp sees the employment relationship as a mixture of shared interests and conflicts of interests [12] that are largely limited to the employment relationship. In the workplace, pluralists, therefore, champion grievance procedures, employee voice mechanisms such as works councils and trade unions, collective bargaining, and labour–management partnerships. In the policy arena, pluralists advocate for minimum wage laws, occupational health and safety standards, international labour standards, and other employment and labour laws and public policies. [13] These institutional interventions are all seen as methods for balancing the employment relationship to generate not only economic efficiency but also employee equity and voice. [14] In contrast, the Marxist-inspired critical camp sees employer–employee conflicts of interest as sharply antagonistic and deeply embedded in the socio-political-economic system. From this perspective, the pursuit of a balanced employment relationship gives too much weight to employers' interests, and instead deep-seated structural reforms are needed to change the sharply antagonistic employment relationship that is inherent within capitalism. Militant trade unions are thus frequently supported.


Industrial relations has its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. [15] As society wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism,[ citation needed ] with Sidney Webb and Beatrice Webb's Industrial Democracy (1897) being a key intellectual work. [16] Industrial relations thus rejected the classical econ.

Institutionally, industrial relations was founded by John R. Commons when he created the first academic industrial relations program at the University of Wisconsin in 1920.[ citation needed ] Another scholarly pioneer in industrial relations and labour research was Robert F. Hoxie. [17] Early financial support for the field came from John D. Rockefeller Jr. who supported progressive labour–management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado.[ citation needed ] In Britain, another progressive industrialist, Montague Burton, endowed chairs in industrial relations at the universities of Leeds, Cardiff, and Cambridge in 1929–1930. [18]

Beginning in the early 1930s there was a rapid increase in membership of trade unions in the United States, and with that came frequent and sometimes violent labour–management conflict. [19] During the Second World War these were suppressed by the arbitration powers of the National War Labor Board. [20]

However, as the Second World War drew to a close and in anticipation of a renewal of labour–management conflict after the war, there was a wave of creations of new academic institutes and degree programs that sought to analyse such conflicts and the role of collective bargaining. [21] The most known of these was the Cornell University School of Industrial and Labor Relations, founded in 1945. [22] [23] But counting various forms, there were over seventy-five others. [23] These included the Yale Labor and Management Center, directed by E. Wight Bakke, which began in 1945. [24] An influential industrial relations scholar in the 1940s and 1950s was Neil W. Chamberlain at Yale and Columbia universities. [25]

In the 1950s, industrial relations was formalized as a distinct academic discipline with the emergence in the UK of the so-called "Oxford school", including Allan Flanders  [ de ], Hugh Clegg, [26] and Alan Fox, Lord William McCarthy, Sir George Bain (all of whom taught at Nuffield College, Oxford), as well as Otto Kahn-Freund (Brasenose College, Oxford).

Industrial relations was formed with a strong problem-solving orientation [27] that rejected both the classical economists' laissez-faire solutions to labour problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal legislation in the United States, such as the National Labor Relations Act and the Fair Labor Standards Act.

By the early 21st century, the academic field of industrial relations was often described as being in crisis. [28] In academia, its traditional positions are threatened on one side by the dominance of mainstream economics and organizational behaviour, and on the other by postmodernism.

In policy-making circles, the industrial relations emphasis on institutional intervention is trumped by a neoliberal emphasis on the laissez-faire promotion of free markets. In practice, trade unions are declining and fewer companies have industrial relations functions.[ citation needed ] The number of academic programs in industrial relations is therefore shrinking, while fields such as human resource management and organizational behaviour grow. [29] The importance of this work, however, is stronger than ever, and the lessons of industrial relations remain vital. The challenge for industrial relations is to re-establish these connections with the broader academic, policy, and business worlds.

Theoretical perspectives

Industrial relations scholars such as Alan Fox have described three major theoretical perspectives or frameworks, that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralism, and the radical or critical school. Each offers a particular perception of workplace relations and will, therefore, interpret such events as workplace conflict, the role of unions and job regulation differently. The perspective of the critical school is sometimes referred to as the conflict model, although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories, although they are not limited to these.[ citation needed ]

Pluralist perspective

In pluralism, the organization is perceived as being made up of powerful and[ citation needed ] divergent sub-groups, each with its own legitimate interests [30] and loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups in the pluralist perspective are the management and trade unions. The pluralist perspective also supports that conflict is inherent in dealing with industrial relations since different sub-groups have different opinions in the day-to-day operations.[ citation needed ]

Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and coordination.[ citation needed ] Trade unions are deemed as legitimate representatives of employees, [30] 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. It is the opposite of the unitary approach, there are different the group within the environment. Hence, the interest of employers and employee are divergent.[ citation needed ] The employers want to maximize profit at the expenses of employees[ citation needed ] and employees want to enjoy social benefits in the form of increased wages, [30] conducive environment. Therefore, conflict is inevitable and the need for the trade union to protect the interest of both parties. Also, there is dual authority/loyalty in this approach. Therefore, employees are loyal to the management as well as their labour leaders.[ citation needed ]

Unitarist perspective

In unitarism, the organization is perceived as an integrated and harmonious whole with the idea of "one happy family" in which management and other members of the staff all share a common purpose by emphasizing mutual co-operation. [31] Furthermore, unitarism has a paternalistic approach: it demands loyalty of all employees [31] and is managerial in its emphasis and application. [32] Consequently, trade unions are deemed as unnecessary [33] since the loyalty between employees and organizations are considered mutually exclusive, and there cannot be two sides of industry.[ citation needed ] Conflict is perceived as destructive and[ citation needed ] the result of poor management. [34]

Radical or critical perspective

This view of industrial relations looks at the nature of the capitalist society, where there is a fundamental division of interest between capital and labour, and sees workplace relations against this background. This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system.[ citation needed ] Conflict is therefore seen as a natural outcome of capitalism, thus it is inevitable and trade unions are a natural response of workers [31] to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management's position as they presume the continuation of capitalism rather than challenge it.[ citation needed ]

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Human resources are the people who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with "human resources", although human capital typically refers to a narrower effect. Likewise, other terms sometimes used include manpower, talent, labor, personnel, or simply people.

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United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK benefit from a minimum charter of employment rights, which are found in various Acts, Regulations, common law and equity. This includes the right to a minimum wage of £7.83 for over 25-year-olds under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempts to limit excessively long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995.

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  1. Ackers 2002; Kaufman 2004, p. 94.
  2. Lewis, Thornhill & Saunders 2003, p. 3.
  3. Banfield & Kay 2008, p. 114.
  4. Ogilvie, John R. (2006). CLEP Principles of Management. Piscataway, New Jersey: Research & Education Association. p. 141. ISBN   978-0-7386-0125-0.
  5. Rose 2008.
  6. 1 2 Kaufman 2008, p. 31.
  7. Ackers 2002.
  8. Taras 2008, p. 124.
  9. Kaufman 2004, p. 94.
  10. Hamann & Kelly 2008, p. 129.
  11. Budd & Bhave 2008.
  12. Budd & Bhave 2008, p. 104.
  13. Befort & Budd 2009.
  14. Budd 2004.
  15. Kaufman 2004, pp. 15–16.
  16. Farnham 2008.
  17. Kuhn, Lewin & McNulty 1983, p. 157.
  18. Sigsworth 1990, p. 124.
  19. Kaufman 1993, pp. 61–62.
  20. Kaufman 1993, p. 62.
  21. Kaufman 1993, pp. 61–67, 80–81.
  22. Kaufman 1993, p. 63.
  23. 1 2 Fine, Benjamin (9 February 1947). "Growth and Variety of University Programs in Labor Studies Shown in a Survey" . The New York Times. p. E9. Retrieved 14 July 2018.
  24. Porter, Russell (15 July 1946). "Behavior Studied for Labor Peace" . The New York Times. p. 23. Retrieved 14 July 2018.
  25. Kuhn, Lewin & McNulty 1983.
  26. Ackers & Wilkinson 2005, p. 446.
  27. Kaufman 1993, p. 187.
  28. Ackers 2002; Kaufman 2004; Whalen 2008.
  29. Kaufman 1993, pp. 189, 192.
  30. 1 2 3 Calveley et al. 2017, p. 290.
  31. 1 2 3 Zhang 2014, p. 228.
  32. Barchiesi 2014, p. 243.
  33. Budd & Bhave 2008, pp. 92–93, 103.
  34. Budd & Bhave 2008, p. 103.


Ackers, Peter (2002). "Reframing Employment Relations: The Case for Neo-Pluralism". Industrial Relations Journal. 33 (1): 2–19. doi: 10.1111/1468-2338.00216 . ISSN   1468-2338.
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Banfield, Paul; Kay, Rebecca (2008). Introduction to Human Resource Management (1st ed.). Oxford: Oxford University Press. ISBN   978-0-19-929152-6.
Barchiesi, Franco (2014). "Conflict, Order, and Change". In Wilkinson, Adrian; Wood, Geoffrey; Deeg, Richard (eds.). The Oxford Handbook of Employment Relations: Comparative Employment Systems. Oxford: Oxford University Press. pp. 241–259. doi:10.1093/oxfordhb/9780199695096.013.011. ISBN   978-0-19-969509-6.
Befort, Stephen F.; Budd, John W. (2009). Invisible Hands, Invisible Objectives: Bringing Workplace Law and Public Policy Into Focus. Stanford, California: Stanford University Press. ISBN   978-0-8047-6153-6.
Budd, John W. (2004). Employment with a Human Face: Balancing Efficiency, Equity, and Voice. Ithaca, New York: ILR Press. ISBN   978-0-8014-4208-7.
Budd, John W.; Bhave, Devasheesh (2008). "Values, Ideologies, and Frames of Reference in Industrial Relations". In Blyton, Paul; Bacon, Nicolas; Fiorito, Jack; Heery, Edmund (eds.). The SAGE Handbook of Industrial Relations. London: SAGE Publications. pp. 92–112. doi:10.4135/9781849200431.n5. ISBN   978-1-84920-043-1.
Calveley, Moira; Allsop, David; Rocha Lawton, Natalia; Huesmann, Monika (2017). "Managing the Employment Relationship". In Rees, Gary; Smith, Paul E. (eds.). Strategic Human Resource Management: An International Perspective (2nd ed.). London: SAGE Publications. pp. 281–323. ISBN   978-1-4739-6931-5.
Farnham, David (2008). "Beatrice and Sidney Webb and the Intellectual Origins of British Industrial Relations". Employee Relations. 30 (5): 534–552. doi:10.1108/01425450810888295. ISSN   0142-5455.
Hamann, Kerstin; Kelly, John (2008). "Varieties of Capitalism and Industrial Relations". In Blyton, Paul; Bacon, Nicolas; Fiorito, Jack; Heery, Edmund (eds.). The SAGE Handbook of Industrial Relations. London: SAGE Publications. pp. 129–148. doi:10.4135/9781849200431.n7. ISBN   978-1-84920-043-1.
Kaufman, Bruce E. (1993). The Origins & Evolution of the Field of Industrial Relations in the United States. Cornell Studies in Industrial and Labor Relations. 25. Ithaca, New York: ILR Press (published 1995). ISBN   978-0-87546-192-2.
 ———  (2004). The Global Evolution of Industrial Relations: Events, Ideas, and the IIRA (PDF). Geneva: International Labour Office. ISBN   978-92-2-114153-2 . Retrieved 13 July 2018.
 ———  (2008). "The Original Industrial Relations Paradigm: Foundation for Revitalizing the Field". In Whalen, Charles J. (ed.). New Directions in the Study of Work and Employment: Revitalizing Industrial Relations as an Academic Enterprise. Cheltenham, England: Edward Elgar Publishing. pp. 31–47. ISBN   978-1-84844-520-8.
Kuhn, James W.; Lewin, David; McNulty, Paul J. (1983). "Neil W. Chamberlain: A Retrospective Analysis of His Scholarly Work and Influence". British Journal of Industrial Relations. 21 (2): 143–160. doi:10.1111/j.1467-8543.1983.tb00127.x. ISSN   1467-8543.
Lewis, Philip; Thornhill, Adrian; Saunders, Mark (2003). Employee Relations: Understanding The Employment Relationship. Harlow, England: Prentice Hall. ISBN   978-0-273-64625-9.
Rose, Ed (2008). Employment Relations. Harlow, England: Prentice Hall. ISBN   978-0-273-71008-0.
Sigsworth, Eric M. (1990). Montague Burton: The Tailor of Taste. Manchester: Manchester University Press. ISBN   978-0-7190-2364-4.
Taras, Daphne (2008). "How Industrial Relations Is Marginalized in Business Schools: Using Institutional Theory to Examine Our Home Base". In Whalen, Charles J. (ed.). New Directions in the Study of Work and Employment: Revitalizing Industrial Relations as an Academic Enterprise. Cheltenham, England: Edward Elgar Publishing. pp. 123–141. ISBN   978-1-84844-520-8.
Whalen, Charles J., ed. (2008). New Directions in the Study of Work and Employment: Revitalizing Industrial Relations as an Academic Enterprise. Cheltenham, England: Edward Elgar Publishing. ISBN   978-1-84844-520-8.
Zhang, Yan (2014). "The Relationships between Employees and Organizations". In Zhang, Zhi-Xue; Zhang, Jianjun (eds.). Understanding Chinese Firms from Multiple Perspectives. Heidelberg, Germany: Springer. pp. 227–256. doi:10.1007/978-3-642-54417-0_9. ISBN   978-3-642-54417-0.

Further reading

Ackers, Peter; Wilkinson, Adrian, eds. (2003). Understanding Work and Employment: Industrial Relations in Transition. Oxford: Oxford University Press. ISBN   978-0-19-924066-1.
Commons, John R. (1919). Industrial Goodwill. New York: McGraw-Hill Book Company. OCLC   429243 . Retrieved 14 July 2018.
Hyman, Richard (1975). Industrial Relations: A Marxist Introduction. London: Macmillan.
Kaufman, Bruce E., ed. (2004). Theoretical Perspectives on Work and the Employment Relationship. Champaign, Illinois: Industrial Relations Research Association. ISBN   978-0-913447-88-8.
Kelly, John (1998). Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves. London: Routledge. ISBN   978-0-415-18672-8.
Mullins, Laurie J. (2016). Management and Organisational Behaviour (11th ed.). Harlow, England: Pearson Education. ISBN   978-1-292-08848-8.
Nichols, Theo (1997). The Sociology of Industrial Injury. London: Mansell Publishing. ISBN   978-0-7201-2255-8.
Richardson, J. Henry (1954). An Introduction to the Study of Industrial Relations. London: Routledge (published 2003). ISBN   978-0-415-31384-1.
Salamon, Michael (2000). Industrial Relations: Theory and Practice (4th ed.). Harlow, England: Prentice Hall. ISBN   978-0-273-64646-4.
Webb, Sidney; Webb, Beatrice (1897). Industrial Democracy . London: Longmans, Green, and Co.