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Industrial relations refers to relationships between employers and workers. In common parlance, the term is particularly associated with trade unions and the exercise of overt conflict, most notably by workers in the form of strikes, picketing, and work-to-rules, although employers' lockouts of workers and explicit resistance to trade unions' attempts to recruit workers are also significant. Trade unions are associations of workers that provide a distinctive form of empowerment, as they are independent of management and have an existence beyond the boundaries of the organization. In most countries, trade union rights are protected by the state, although this protection may take a variety of forms. Trade union rights may be part of a country's constitution, as is the case, for example, in Germany, Italy, Sweden, Brazil, and South Africa. In contrast, in North America and the United Kingdom, where no such constitutional rights exist, there are laws defining the processes of the certification of trade unions so their independence from management is protected.

Industrial Relations as a Field

Industrial relations has also been defined, especially in North America, the United Kingdom, and Australasia, as a field of study within the social sciences. Spawned by the rise of trade unions and the conflict associated with the management–worker relationship, it was particularly strong in the immediate postwar period. As the study developed, attempts to define its scope stressed that it extended beyond trade unionism so it included forms of regulation other than collective bargaining and, particularly, the law and unilateral rule making by management or work groups. It was also concerned with substantive labor problems such as low pay, job insecurity, health and safety risks, poor working conditions, and unequal opportunities, and not just procedural problems involved in the handling of conflict, as well as the more general issues of economic efficiency and social justice.

Nonetheless, much academic study was centered on trade unions, as they were seen as a vital concomitant of industrialization and political liberalization in most countries. As trade unions' influence grew to unprecedented heights in developed countries in the 1950s, social theorists saw them as a key ingredient of the capitalist economy and symbols of the maturity of liberal democratic societies, which within the Cold War era were contrasted with communism. Trade unions were seen to offer workers a channel to air their grievances and ensure due process in the Workplace. Their core activity, collective bargaining with management, provided a means by which the benefits of productivity growth could be distributed in a fair way, and in the wider political arena, trade unions could serve as vital intermediary organizations in pluralist societies.

The Role of Trade Unions

Yet through the 1960s and 1970s, particularly in the United States and United Kingdom, the activities of trade unions increasingly became a source of concern among employers, governments, and the public. The purported role of unions in fueling inflation, and their potential negative effect on cost reduction, technological innovation, and productivity growth, were given particular prominence. Research has confirmed that wages tend to be higher in unionized firms, although the effect of unions on productivity and technical change is less clear-cut.

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