Academic journal article Indian Journal of Industrial Relations

Dynamics of Employment Relations & Employee Unionization in Banking Industry

Academic journal article Indian Journal of Industrial Relations

Dynamics of Employment Relations & Employee Unionization in Banking Industry

Article excerpt


Employees unions play an important role in influencing the relationship between employees and the management. It has been considered that for smooth employee-management relationship, a collectivistic representational approach towards managing employees is better (Ray, 2004). Employees unions have been considered a force to check the unilateral power of management in employment relationship (Seth, 1993a; Nulty, 1993)

The right to unionize to employees of all cadres and categories is now formally and legally sanctioned in almost all countries of the world.

However, owing to internationalization of economic activities in the wake of increased globalization of production and liberalization of world trade and the consequent emergence of global level competition among firms putting pressure on employers to perform better to survive, emergence of the wave of proactive human resource management practices bestowing dominant role to employers in the employment relations system, decreasing size of conventional manufacturing industries and the emergence of service industries employing skilled and more educated employees, unprecedented advancements in technology and its larger use in industries, major restructuring of industries and downsizing of permanent workforce, decline in the size of public sector and expansion in private sector, emergence of non-unions firms, shortening of product life cycle, changing profile of employees have changed the role and effectiveness of trade unions. (Kochan and Mare, 1994; Gannon and Nollen, 1997; Rojot, 1992, Mankidy, 1998, Sharma and Joshi, 2001; Ghosh, 1995; Saini, 2003).

The advances in the field of technology have been affecting every sphere of life including employment relations. The innovative production techniques of lean production have given management the option to engage casual, contractual and part-time workforce and outsourcing of organization's non- core activities and processes have reduced dependence on permanent workforce and eased the management of workforce. Technological changes have fostered decentralized enterprise level bargaining as issues are now enterprise specific and the setting up of ancillary units or farming out business to vendors, setting up multi-site production locations, shifting production to green-site locations and automation of operations have resulted in the shifting of union power from national federations to enterprise level unions (Ratnam, 1994:30).

Owing to these challenging changes trade unions have been facing a difficult choice between following the traditional path and thereby getting further marginalized or join hands with the management to evolve new methods of protecting the interests of both the members and the enterprise (Srivastava, 2006).

These techniques are a double-edged weapon. While on one hand, they create an atmosphere of job insecurity among employees and severely curtail their trade union activities and on the other hand, organizational bottom-line would not be jeopardized because in the event of labor trouble in one plant, management could either declare a 'lockout' or close the plant without affecting overall production. It is said to be the reason for increased number of 'lock outs' over 'strikes' in the post reform period in India. (Rao & Prasad, 2006)

The present study is aimed at finding the relationship between employee unionization and employment relations in Indian commercial banking industry in the light of above changes and the radical reforms unleashed in the banking sector from early 1990s which culminated in the emergence of a new crop of private sector no-union banks which have been developing very fast in the last two decades.


The study has been confined to public and private sector commercial banks. The private sector has been further classified as old private sector and new private sector banks to give a more accurate picture of the employment relations in the private sector banks. …

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