National Commission on Labour (1967)||
effectiveness of any industrial relations system, whether based on legislation or
voluntary arrangements, depends, to a great extent, on the attitude that unions and
employers' organisations adopt towards each other. Ability to convince members of the
respective organisations and carry them along is another factor determining its success.
Protection and promotion of the interest of members having identical interest—the
prime motivation for the formation of any organisation—is as valid in the case of
employers' organisations as it is in their counterpart. The intention in covering
employers' organisations also under the Trade Unions Act, 1926 was to place both workers'
unions and employers' organisations on par in matters of rights and responsibilities.) The
principle of giving equal representation to capital and labour on all consultative bodies
like the Indian Labour Conference, Standing Labour Committee and Industrial Committees
recognises this basic tenet in employer-employee relationship. In considering issues
relating to employers' organisations, a basic distinction between them and workers' unions
has to be kept in mind. While workers get together for joint action through a union, an
employer is in many cases an organisation in himself and meets the union on equal terms.
At the same time, employers find it convenient to organise themselves in furtherance of
common objectives of evolving attitudes to labour or approaches to national policies, as
also for standardisation of wages and other conditions of employment in an industry within
a local area.
21.1 The origin, growth and development of employers' organisations have three distinct phases: (i) the period prior to 1930; (ii) the period between 1931 to 1946; and (iii) the post-Independence period. Each phase reveals its own structural and functional characteristics; in each the organisations had to undergo changes because of contemporary economic, social and political developments. These changes have been more rapid in some than in others. The periods referred to also coincided with important developments in the labour field, and these have had a great impact on the pattern and development of employers' organisation as also on their functioning.
21.2 Pre-1930 Period.—This period was characterised mainly by the formation of associations of merchants in the form of chambers of commerce. During the latter half of the last century, industrial associations also came into being with the aim of protecting the commercial interest of their members and securing concessions from the Government. Regional associations at important centres of industrial activity developed, but again with a different focus for action. The Bombay Mill-owners' Association, the Bengal Millowners' Association, the Ahmedabad Millowners' Association are instances in point. Because of the need for industrial development and promotion of indigenous entrepreneurship, society was kind to and proud of persons who were instrumental in setting up industrial establishments generally, and Indian employers particularly. Not until the First World War did the organisations consider it important to deal with labour problems; there used to be stray references about undue militancy shown by labour, but these also were rare. By and large, the attitude of the employers towards labour was one of indifference and, at times, of aggression. The task which the organisations set for themselves was to defend their traditional rights through legislative lobbies and social contacts. Individual members had autonomy in working their units and in dealing with labour as they liked. Notable exceptions were the Indian Jute Mills' Association (IJMA) and the Bombay Millowners' Association which, because of conditions created by the First World War, regulated the working hours of member mills and introduced a system of payment of standard remuneration to workers. The Ahmedabad Millowners followed, but somewhat later. Shortage of skills in those days made individual employers attract workers by better payment. The workers gained in the process, but this did not last long since the employers soon realised the disadvantage of such individual arrangements. In plantations and mines, for instance, the employers were cautious in not allowing 'poaching'.
21.3 It was during this period that unions started gaining ground. Simultaneously, the movement for the liberation of the country also gathered momentum. The Indian National Congress was trying to synthesise the interests of workers and employers by bringing them politically under one fold. The limited
success achieved by it in the process was confined to some industrial centres, because a fair section of employers was outside the pale of such political influence. The combined effect of factors like the setting up of the ILO, the enactment of the Trade Unions Act, 1926, and the Trade Disputes Act, 1929, was the realisation on the part of individual employers of the need for greater coordination of their collective interests.
21.4 Period 1931—46.—Organising chambers of commerce and industrial associations for dealing with a variety of problems connected with industry was the rule prior to 1930. Some of these chambers dealt with labour matters too.1 The All-India Organisation of Industrial Employers (AIOIE)2 and the Employers' Federation of India (EFI) came into existence in 1933 to comprehend and deal with problems of industrial labour in a concerted manner. The All-India Manufacturers' Organisation (AIMO) followed in 1941. The set ting up of these organisations was again, as in the case of workers' unions, in response to the need then felt for representation on international conferences and legislative bodies. For a long time since 1920, the Government of India used to nominate delegates/members to represent employers' interests at such forums from amongst members of chambers of commerce but the employers soon realised that the chambers of commerce could not effectively look after their interests in labour matters. Each of the three organisations referred to above had a different sponsorship. The AIOE consisted mainly of indigenous entrepreneurs and had links with the Federation of Indian Chambers of Commerce and Industry. The EFI of those days had predominant membership of British industrial interests. The AIMO was sponsored by comparatively small sized establishments to look after their interests. The Government of India Act, 1935 made provision for representation of employers and labour in legislative bodies through special constituencies. The constituents of the AIOE and EFI thus got an opportunity to be represented in the Central and Provincial Legislatures. Labour legislation in the thirties in some Provinces made it necessary for local employers' organisations to expand their services to members in the labour field. The creation of the Labour Department in the Central Government and the constitution of tripartite bodies like the Indian Labour Conference and the Standing Labour Committee during the years of the Second World War helped develop further these activities within the local associations and federations.
21.5 Post-Independence period.—The period since Independence witnessed the growth of planning, expansion of industrial activity, extension of the democratic apparatus, passing of several labour laws and a growing trade union movement, all of which acted as a spur for the strengthening and expansion of employers' organisations. Experience of working together convinced employers of the advantage of unit- ed action. Employers' organisations grew in strength mainly to meet the requirements of individual employers for advice on labour matters. In some cases, they built up their strength' to match that of organised labour; in others, it was the other way round. At present, employers' organisations are organised at three levels:
(a) employers operating through their local organisations or otherwise; (b) industrial associations which cut across State boundaries; and (c) federations which comprise representatives both of industries and centres. Of the three, the local organisations which operate mainly through the chambers of commerce cover all industries in an area; their activities in the labour field are comparatively less extensive. It is the arrangements in the latter two which require a more detailed discussion.
21.6 The industrial association is the general pattern of organisation of employers in India. These associations are formed at the area/regional level as also at the all-India level. Regional/industrial associations are generally affiliated to the central industrial organisation at the apex. Individual employers are also admitted to the apex. The main reason for the development of associations, industry-wise, is the common nature of problems confronting each industry. The setting up of wage boards on an industry wise basis, industrial committees at the Central and State levels, and development of collective, bargaining at the industry level in certain regions, have helped their growth. Jute, cotton textiles, engineering, tea, sugar, cement, paper and chemicals are important industries which have associations at the all-India level with branches in areas/States.
1 The role played by employers' organisations has been described in the Report of the Royal Commission on Labour, pp. 316-17.
2 This organisation has since changed its name. It is now called All India Organisation of Employers (AIOE)
In turn, most of these associations are affiliated to national federations. Development of these associations was gradual. They have been instrumental in providing specialised labour advisory services and developing training facilities for management personnel in the last ten years.
21.7 Existence of more than one industrial association in a particular industry is a problem which has at times hindered the progress of collective bargaining on an industry-wise basis. Difficulties of multiplicity have, to a certain extent, been overcome in coal mining and plantations where joint committees have been formed to ensure a uniform approach by employers in dealing with industrial relations problems concerning the entire industry and in making representations to the Government. We are of the opinion that this is a healthy development; multiplicity of employers' organisations within an industry is not conducive to collective bargaining. Wherever, at present, there is more than one organisation of employers dealing with an industry, we suggest that these should be amalgamated into a single organisation and the first step in this direction would be the constitution of Joint Committees to deal with the problems of the industry as a whole or to negotiate on behalf of the industry at that level.
21.8 We are aware of the limitations of the managements in the public sector to join industry-wise organisations primarily meant for employers in the private sector. The reluctance of some undertakings to fall in line with the private sector may have some justification, but as employers there is an identity of interest between the public sector and the private sector. The Government of India had already permitted public sector units to join the respective industrial associations. There is reason to believe that this is being done. We expect that, in due course, public sector undertakings will be able to play a role in the counsels of the industry to which they belong and through them in the wider forums available to private employers. There is an equally strong case for cooperatives to join the respective industrial associations.
21.9 Our recommendations supporting the growth of industry-wise unions and their recognition will acquire greater strength if parallel arrangements are made on the side of managements. As stated in the Second Plan: "in the interests of industry-wise bargaining in an area, provision should be made for the certification of employers' associations as representatives of industry in an area. Any agreement entered into by such associations would then be binding on all members of the associations, as well as on non-members."1 We consider that the implementation of this recommendation is long overdue. Arrangements should be made through the Industrial Relations Commission for certification of employers organisations at the industry/ area level for purposes of collective bargaining.
21.10 At the national level, apart from the AIOE and the EFI which have had representation on consultative bodies in labour matters, the AIMO has also been given a seat almost since Independence. The AIMO is an omnibus multipurpose body which represents the voice of small and medium-size employers, but its membership is not necessarily restricted to them. Unlike the AIOE and the EFL the AIMO combines in itself both the trade and labour interests of its members. Membership of these organisations is open to individual firms or joint stock companies engaged in any industry and to any association/ chamber of commerce representing an industry/ industries in the country. Between them the three federations cover almost all employers; some employers/associations are members of more than one national federation. It is true that the spheres of influence of these organisations vary from area to area and from industry to industry, but their functions are not exclusive; indeed, they have a mutuality of interest. This explains the reason for a firm or an association joining more than one federation.
21.11 All the three federations have special committees to deal with specific problems. Besides, they operate through their regional committees and maintain close links with the respective chambers of commerce as well. In many cases, the labour departments attached to a chamber of commerce and to a federation are common to both. For example, the representatives of firms and associations connected with the Bengal Chamber of Commerce and Industry in the eastern region and who are also members of the EFI, have formed the Eastern Regional Committee which is the same as the Industrial Affairs Committee of the Chamber. These members of the Eastern Regional Committee serve on the Executive Committee of the Employers' Federation of India. The Labour Department of the Chamber acts as the secretariat of the Eastern Regional Committee. The position in regard to regional committees in other parts of the country is not any different. Since the headquarters of the EFI is located in Bombay, its Western Regional Committee is serviced in part by the main secretariat of the EFI.
1 Second Five Year Plan, p. 574.
Arrangements in the case of AIOE are somewhat similar. The regional committees serve as a vital link between the Federation and the chambers as also its affiliated industrial associations. The AIMO activities centre round the functioning of 20 special committees, one of which is for industrial relations. Its membership is spread throughout India and has nine State Boards, four Regional Boards and seven District Councils.
21.12 (a) Employers' Federation of India: The principal objects for which the EFI has been established are embodied in its Constitution. These are:
(i) "to promote and protect the legitimate interests of employers engaged in industry, trade and commerce;
(ii) to maintain harmonious relations between management and labour and to initiate and support all well considered schemes that would increase productivity and at the same time give labour a fair share of the increased return;
(iii) to collect and disseminate information affecting employers and to advise members on their employer/employee relations and other ancillary problems".
These objects lie within the field of what may broadly be termed 'industrial relations'. Although consideration of broad economic problems is not altogether excluded, the EFI does not generally comment on commercial questions of customs, taxation and the like which lie in the sphere of the Associated Chambers of Commerce and Industry.
(b) The All India Organisation of Employers: The objects of the AIOE are inter alia:
"(i) To take all steps which may be necessary for promoting, supporting or opposing legislative and other measures affecting or likely to affect directly or indirectly, industries in general, or particular industries;
(ii) To nominate delegates and advisers, etc., to represent the employers of India at the International Labour Conference, United Nations Organisation, International Chamber of Commerce and other conferences and committees affecting the interests of trade, commerce and industries, whether as employers or otherwise;
(iii) To promote and support all well-considered schemes for the general uplift of labour and to take all possible steps to establish harmonious relations between capital and labour".
(c) The All India Manufacturers' Organisation: The objectives of the AIMO are:
"(i) To help bring about the rapid industrialisation of the country through sound and progressive economic policies;
(ii) To help in increasing the aggregate wealth of India;
(iii) To raise the standard of living of the people of India by utilising to the fullest possible extent all the available national resources and talent in the country; and
(iv) To play a positive role in relieving the pressure of population on land."
The industrial relations functions of the AIMO are similar in material particulars to those of the EFI and AIOE.
21.13 All these federations function through their regional offices which have, over the years, developed departments well equipped to deal with labour matters. The two federations, AIOE and EFI, operated severally in securing representation on consultative bodies, but jointly in their approach to problems connected with labour. Such a joint front was, for a long time, on an informal basis. With the coming together of these two main bodies in the Council of Indian Employers (CIE) in 1956, it is this Council which has now taken on the functions of choosing delegates to represent Indian employers international conferences/committees. It is this Council which is a member of the International Organisation of Employers at Brussels in place of the AIOE and the EFI which were earlier affiliated separately. The period since Independence is thus particularly important because of the joint approach by employers to labour problems, informally in the first half and somewhat more formally in the second. Building up of adequate specialised advisory services in labour matters and training of management and personnel officers at various levels have been the result of this joint approach, although a beginning in this direction had been made earlier by individual industrial associations.
21.14 Apart from these important activities, the two main Federations took special steps to organise the movement for scientific management. The All India Management Association which has been active in the last ten years and which is supported by local associations is now
an active force in the counsels of management. The two management institutes set up about ten years back and the departments for the study of management set up in some universities and the training courses they organise have to some extent helped in meeting the shortage of trained management cadres.
21.15 Multiplicity of organisations at the national level has not been a problem with employers' organisations. Unified representation of employers' interest at tripartite forums has, for all practical purposes, been effectively secured by the main employers' organisations coming together under the CIE. But the AIMO is outside the CIE. It will be desirable that the CIE brings this organisation also within its fold. It is easier for the employers' organisations to come closer, because there are no special ideological differences to divide them. The CIE can continue to provide the coordination. Determination of representation on important national organisations should rest with the apex body. Taking into account the nature of agenda to be discussed at any meeting, the reconstituted CIE will be in a better position to nominate persons competent to partake in the deliberations. Some organisations at the industry level and the Employers' Federation of India at the national level, originally registered under the Companies Act, are now registered under the Trade Unions Act, 1926, while many are still outside its purview. We realise the psychological difficulties in employers' associations registering under the Act, which though designed for both employers and workers, has a special appeal to workers' organisations. If such barriers are considered insurmountable, separate arrangements for registration will be appropriate. In any case, registration of employers' organisations should be made compulsory.
21.16 The main role and functions of an employers' organisation is to protect and promote the interest of its members. The membership of employers' organisations is basically composed of corporations/employers who have certain purely economic ends to pursue. All enterprises have to survive the test of economic viability. For a proper appraisal of the role and functions of an organisation, this aspect cannot be brushed aside. Naturally, its activities are designed and directed in such a manner that their members stand to gain. Also the organisations have to work on a broader plane; labour problems are only a part of their over-all responsibilities. Economic, commercial and fiscal matters and policies are equally or even more important for them Services rendered by the organisations in representing their members' views oh Government's policies, 1rules and regulations and in giving advice to members on the interpretation and extent of applicability of agreements arrived at various bipartite and tripartite bodies and on Acts and Regulations which come into force constitute their main functions. Labour departments/advisory services, which have come in vogue in many employers' organisations to advise and assist members have been the direct consequence of the recognition of these functions.
21.17 Employers' organisations find it necessary to have legislative support for realisation of their objectives. The pursuit of their activities leads to their involvement in politics or to their developing lobbies without directly aligning themselves with any political party. There is evidence on record to show that individual employers, and not the employers' organisations, have used these avenues to the extent necessary, although providing finances to political parties or sponsoring candidates are not unknown to the organisations or industrial associations, national or local. Political activity by employers' associations may be as inimical to peace in industry as that by workers' associations, particularly when we are envisaging employers' organisations to include both public and private sector units. This should be eschewed. It is thus that they will be able to establish rapport between the two sectors and work exclusively to the interest of industry rather than to the sectional interests of one or the other form of ownership.
21.18 The pursuit of economic gains by employers' organisations does not mean that they should not recognise social responsibilities. With planned economic development and increasing democratisation of the institutional framework of society, there is active consultation by the State with all organisations, including those of employers, for formulation, inter alia, of economic, educational, social and labour policies. Employers' organisations are, therefore, expected to take a stand consistent with the social and economic objectives of the community/ country as a whole and be active in promoting policies and measures that are not contrary to the general interest of the community. Along with their gains, they should keep in view the needs of the developing economy, the requirements of planned growth, importance of maintenance of peace in industry and the desirability of an equitable distribution of the national wealth. There can, however, be differences as in the case of trade unions, as to priority between the interests of the community and the
interests of their members. Since these conflicting interests require to be harmonised, it would be appropriate to deal with the role and functions of the employers' organisations by studying them specifically in relation to their obligations to their constituents on matters which impinge directly on labour. The broader obligations of the organisations to society are discussed later as a part of our recommendations.
21.19 The functions of national organisations on the labour side are somewhat limited. In the industrial relations system, as it exists today, the powers and responsibilities are largely concentrated in the associations operating at the industry/area level or in individual employers. While in Sweden and Italy the national federations are negotiating bodies as well, in India they neither participate in any negotiation with unions nor do they deal with the industrial relations problems of their constituents. Barring exceptions, instances in which all-India organisations have espoused the cause of an individual employer/company are few.
21.20 The main obligations that are being discharged at present by national organisations in the labour field are to formulate policies for the guidance of delegations to international conferences and tripartite meetings and advisory bodies. Organising broad-based discussions on certain aspects of labour problems and occasional training courses and seminars have also been recently acquired functions. As such, the activities of the national organisations are almost exclusively directed to dealing with and influencing policy at the national and international levels, ascertaining and representing the views of their constituents, and ensuring that the decisions adopted are properly understood and implemented by the constituents. Collection of data to aid and support their stand and dissemination of information to members and the public are important aspects of their activities. In these tasks, regional committees set up by them are the main functionaries. These committees have in their turn constituted screening committees in some centres to examine proposals made by their constituents for filing appeals against the decisions of tribunals and labour courts. This is one of the obligations imposed on them by the Code of Discipline. While we take note of the setting up of these committees, we would like to record that there is dissatisfaction both among unions and Governments about the manner of working of these committees.
21.21 Industry-wise associations occupy a key position in the industrial relations system, as they are better placed to appreciate the problems of the industry concerned and provide guidance to their constituents. The local/regional industrial associations are in a still better position to do this. Because of the ease with which they can contact their members and reach unions and vice versa, the role of these associations in industrial relations has been quite significant. The philosophy behind providing such machinery, supplementary to that which takes care of influencing Government policies in other matters, is that the function of these associations is as much to safeguard and promote the long-term benefits of the industry as to look to the short-term interests of individual employers. In undertaking these obligations effectively, the industrial associations have built up their own hierarchy. The central industrial organisations primarily undertake the function of representation at various bipartite or tripartite bodies at the industry level.
21-22 In the eastern and western regions, particularly in industries such as jute, tea, coal, engineering and cotton, the industrial associations have played an effective role in sponsoring standard practices and in giving guidance to members on all matters governing industrial relations. Direct negotiations between industrial associations and trade unions have not made headway, because collective bargaining at the industry level or on a national plane has not yet developed. There are instances, however, where an area/industry-wise understanding has been reached between an industrial association and the trade unions in the meetings of the industrial committee or even in conciliation. Industrial associations particularly those at the local/area level, maintain informal contacts with trade union organisations. Labour departments of such associations have resolved disputes between workers and managements of their constituents units.
21.23 To complete this part of the account, it would be useful to record the work done by some individual industry/central organisations, since it has lessons for the future. Apart from the conventional role that the IJMA has been performing, its contribution in training management personnel and in organising extensive training for junior supervisory staff has been noteworthy. The IJMA started its labour department in 1939 to study labour relations within the industry and encourage a uniform approach to the solution of the industry's labour problems. One of the main promotional activities of the Indian Engineering Association, the Engineering Association of India and the Indian Mining Association is to provide expert labour
advisory services to their constituents. The U.P. branch of the Indian Sugar Mills Association has got a separate labour department fully equipped with technical staff; the services of the staff are extended to the constituent units. The UPASI, the Indian Tea Association and the Indian Tea Planters' Association have developed on somewhat similar lines. In the western region, the Bombay Millowners' Association and the Ahmedabad Millowners' Association have built up certain traditions of industry-wise negotiations. Their role in collection and dissemination of statistical information relating to trade, commerce and labour has been commendable. For this purpose, they have gradually built up a full-fledged research and labour advisory service. These organisations have also been instrumental in the development of training institutions for Managers and Personnel/Welfare Officers.
21.24 We have noticed, during our observational visits, that in certain areas a tradition of industry/area-wise negotiations has evolved, and in some undertakings run by enlightened employers, collective bargaining has taken root. We have recognised elsewhere the important role which collective bargaining and arbitration can play in promoting industrial harmony, and in this context, the role of employers' organisations is clear. They should encourage collective bargaining and should also encourage voluntary arbitration and wean away reluctant employers from recourse to third party intervention. This can be achieved only when individual employers change their attitude. Our recommendation for legislative support for union recognition requires, in addition, an educative effort on the part of organisations among their members. It requires that employers' organisations should strengthen themselves by way of provision of adequate research facilities and equipping themselves with data for understanding the problems of the concerned industries. It is only thus that they can assist and advise companies in matters of negotiations.
21.25 Because of complexities introduced in dealing with industrial relations in the context of technological change, technicalities involved in interpretation of labour legislation and also sound understanding of industrial case law and practices developed in enlightened concerns, managerial functions have acquired new dimensions. The old pattern of employer-manager functions combined in one person is yielding place to a specialised managerial and personnel system. Some employers' associations have not only been inducting personnel management consciousness among their affiliates, but have also built up their own cadres to assist managements in dealing with personnel problems. However, taking an overall view, there are no regular and scientific arrangements for training of supervisors and middle management personnel in the art of handling labour. This aspect of training should receive due attention from the employers' organisations. It is difficult for smaller units to have the full-time services of personnel officers; nor is it necessary for them to do so in view of their small size. This is a field where associations can assist them by making available their own officers and rendering guidance in matters of personnel policies.
21.26 From the view-point of labour management relations, employers' associations should, in our view, accept the following functions:
(i) undertake promotion of collective bargaining at various levels;
(ii) encourage observance and implementation by its members of bipartite and tripartite agreements in real spirit and form;
(ii) expedite implementation of wage awards by members without undue delay and reservations;
(iv) work towards elimination of unfair labour practices by employers;
(v) encourage adoption by members of personnel policies conducive to productivity and industrial peace;
(vi) promote rationalisation of management or organisation to improve productivity;
(vii) arrange employers' education (a) in the concept of labour partnership in industry, (b) for ensuring identity of interests of labour and management and (c) for promoting harmony between the goals of industry and of the community; and
(viii) work towards the collective welfare of its members through training, research and communication in the field of labour-management relations.
We do not propose statutory provisions to compel employers' associations to undertake the above functions, but hope that these functions would voluntarily be adopted and discharged by them.
21.27 Employers' organisation rely heavily on subscription from members. They have two rates of subscription—one for individual members
and the other for associations. EFI collects subscriptions from ordinary members at the rate of Rs. 50 per 100 workers employed subject to a minimum of Rs. 1,000 and maximum of Rs. 12,000 annually. Membership subscription from associate members is Rs. 170 per vote, each vote representing 1,000 to 2,000 employees covered. AIOE has fixed Rs. 750 per year for individual members and Rs. 1,000 for associations. AIMO charges Rs. 100 annually from individual members; district associations, company members, State associations, and chambers of commerce have to pay an annual subscription of Rs. 150.
21.28 Data are inadequate to assess the coverage, membership, and finances of these associations. For 163 employers' organisations which have registered themselves under the Trade Unions Act, 1926, the annual income was Rs. 76.97 lakhs and expenditure Rs. 74.83 lakhs in 1964-65, the latest year for which data are available. Membership fee accounted for 58.3 per cent of the income on an average and donations for 3.9 per cent; the rest accrued by sale of periodicals and books, etc., interest on investment, and miscellaneous items. Maintenance of offices and establishment accounted for about 34.4 per cent of the expenditure. Income of the organisations in relation to the role and functions which they have to discharge appears to have been adequate. In any case, there is enough flexibility in these matters. Lack of finance has not come in the way of expanding the activities of the apex organisations and associations at the area/industry level.
21.29 For the efficient and effective functioning of employers' organisations, an essential requirement is the existence of active communication, from the association to its constituents and vice versa. It is through such communication that the association can represent the views of its members and facilitate implementation of the commitments it makes. As at present, the procedure seems to be to exchange views through annual and special meetings, occasional discussions and through seminars devoted to specific subjects, in all of which the constituents are expected to participate. Federations also issue instructions, circulars, research papers, annual reports and directives, where necessary, to their constituents. Even with these arrangements, difficulties have arisen when the constituents are fairly dispersed. In the evidence before us, some employers have pointed out that there is scope for improvement in the arrangements for exchange of views between the central organisations and their constituents on a continuing basis. We have heard statements from industry/ local organisations that the central organisations have sometimes made commitments at the tripartite committees on issues of vital economic consequence without adequate prior deliberations. Such grievances could be exaggerated. With the best of intentions, it will be difficult for apex organisations to satisfy all members, each having its own peculiar problems. Communication between an employers' organisation and organisations of workers to discuss common problems is rarer still. This does not mean that problems do not exist; rather there is reluctance on the part of both to get together.
21.30 The inadequacy of the present system of communication is perhaps reflected in non-implementation and non-acceptance of obligations under certain agreements accepted by the organisations. In the midst of this general complaint, it is worth mentioning that some employers' organisations like the IJMA, the Indian Sugar Mills' Association, the Bombay Millowners' Association, the Ahmedabad Millowners' Association and the United Planters' Association of Southern India (UPASI) have worked out arrangements which give adequate satisfaction to their respective constituents in this regard. Apart from the conviction that they have about the usefulness of constant and continuing exchange of views, easy accessibility to members is the main reason for the success achieved by these associations.
21.31 We have been told that the system of voting and representation adopted by the Central federations tends to favour the bigger industrialists and employers, and this has created difficulties in proper and effective representation of medium-sized units which form the backbone of the country's industrial structure. Inadequate consultation with such units is reported to be the cause of ineffective implementation of their obligations by employers. We have found during the course of our inquiry that such grievances can be more psychological than real. It does not mean that if prior consultation had taken place, the obligations could have been less onerous on employers. Difficulties in implementing tripartite conclusions/decisions have sometimes arisen at the establishment/plant level because of difference in interpretation of such conclusions/decisions or due to the special circumstances prevailing at the unit level. In the implementation of agreements, persuasion is the only instrument which the employers' organisations can adopt. It is obvious that in such matters other sanctions cannot work. The causes for non-implementation of agreements are many
and varied; ineffective and inadequate communication is only one of them. What has been said about national organisations is equally valid in case of industry/area-wise associations. Employers' organisations should build up their internal consultation system in such a manner that all matters, which have far-reaching impact on members, are scrutinised by the constituents prior to any decisions that might be taken at the national level,
21.32 The role played by the employers in the country's development needs no elaboration. Consistent with their interests, they have contributed to the national progress. However, the community gets directly concerned with employers' organisations only when it fails to get goods of approved quality at reasonable prices. Service and courtesy to customers are really an indication of good employer practices. Employers' organisations should see that their members do not exploit the community through combines, trusts or monopoly operations. These observations have a special relevance in the context of other developments in the economy. The surpluses that are generated in an industry are a social product; their distribution has to be according to the contribution made by labour and capital, keeping in view that the community has an equal claim on the increases in production and productivity.
21.33 Employers' organisations have a stake in the success of the national plans for economic development. In this context, important aspects of social responsibilities of employers are in the following fields:
(i) Promotion of national integration: Employers' organisations can help to achieve national integration by paying due regard to the sentiments of the local people where a project is located. But this has to be within the overall national interest;
(ii) Eliciting responsive cooperation from the unions in improving levels of production and productivity: This does not require elaboration in view of the more detailed discussion elsewhere;
(ii) Maintaining high standards of quality and competitive prices in the international market: Difficulties of foreign exchange are well known; these have hit employers in their expansion plans. What is suggested, therefore, falls within employers' enlightened self-interest;
(iv) Helping civic authorities and seeking their cooperation in matters connected with improvement of the area in which the establishment is located: Where an establishment is set up in an already settled town, this function acquires a special significance. By the very setting up of a unit, particularly if the size is large, civic amenities get taxed. It is true that the employer in turn is taxed on that score, but the duty of the employer should not end there. He has to see that by establishing his unit he does not make the life of persons in the area more difficult. The advantages that accrue through an industrial establishment are looked upon by the people as a matter of right; not so the inconveniences;
(v) Bridging the gap in regional disparities in the economic development of the country: This is indeed a Governmental function, but the employers' organisations can certainly help; and generally,
(vi) pursuing of policies that are conducive to the development of industry and the economy and to the fulfilment of priorities of planned development from time to time.
21.34 The International Organisation of Employers (IOE) was established in 1920 to reinforce, at the international level, the activities of the larger national employers' organisations aimed at preserving and developing an economic and social system based on free private enterprise. One of the important tasks of the IOE is to assist employers1 delegations at the tripartite meetings of the ILO. A member of the general secretariat of the IOE has acted as secretary to the employers' group at almost every ILO meeting held since the ILO was established. The IOE also helps its member organisations to exchange mutual experience and facilitates the study of common problems and keeps them informed of labour and social problems the world over. The members of the IOE belonging to our country have often pleaded the cause of developing nations and emphasised the need for channelising the investible resources of the institutions affiliated to IOE into countries starving for want of capital. The contacts in the IOE have helped members from our country in reaching collaboration arrangements which have been in vogue in India, particularly since Independence.