Describe the current labor relations environment. What are the future trends in labor relations?
The general labour relations environment may differ from country to country, and within a country from region to region. So I will limit my discussions to the relations environment in India.
Till about two decades back, the government in India generally tended to favour the labour rather than employers. As a result the the labour force had become somewhat arrogant and careless. The labour unions were frequently able to force the management to increase their wages and benefits without any commitment towards increasing productivity. Taking effective disciplinary action against any unionised workmen became almost impossible. This tended to pull down the productivity and hurt the economy as a whole. Then the government realized the importance of productivity and private investment in rapid economic growth of the country. As a result there has been gradual shift in the general policy of the government, and with that the labour relations environment. The rapid economic development has also opened up many new job opportunities and increased the general wage levels, which acts to motivate labour force to try getting better jobs based on their productivity rather than on just forcing employers to give them concessions under trade union pressure.
Thus in the current situation the trade unions continue to be strong and effective, but they are no longer as unreasonable as they used to be in the past. The management is now also able to take disciplinary action against erring workers. This includes dismissal where warranted.
In last one decade many companies have implemented the programs of downsizing, making their organizations lean. This has led to overall improvement in productivity. It is worthwhile noting that the retrenchment has not caused significant hardship to the labour as, due to rapid economic growth, people have been able to find alternative employment, more in line with their capabilities.
It is expected that this trend of more reasonable trade unions, combined with higher wages as well as higher productivity will continue for some more time to come