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Hrm : Industrial Relation

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Industrial Relations paradigm in India had dramatically changed following the adaptation of free market policy in the early nineties. With the dawn of liberalization, privatization and globalization (LPG), the country is, by and large, able to preserve a sound and positive industrial relations climate. This is apparent from the statistical figures of Union Government’s Labour
Bureau, which exhibits drastic decline of industrial disputes from 1,825 in 1990 to 421 in 20081
,
and India being the third most preferred global investment destination. Foreign direct investment inflows to India went up to $32 billion in 2011, which was a 33 percent increase over the previous year.2

‘Liberalization’ and ‘Globalization’ introduced change of business environment, and increased competition among industries for survival. Potential market capacity and availability of workforce lured many MNC’s, representing the best brands of the world, to set up their offices in India, giving a tough competition to their counterparts. To compete in this customer driven market economy, industries requires flexibility in managing manpower to address occasional upsurge or slowdown in demand. But the archaic and rigid Indian labour laws, which were enacted 8 – 4 decades back, restricting right-sizing of manpower, are creating hurdles in smooth functioning of industries. These factors are tending industries to hire more and more numbers of contract labours to have greater flexibility to adjust the number of workforce based on economic efficiency, better utilization of resources, optimization of profit and bringing cost effectiveness, despite the of risk of lower worker loyalties and lousy pay. But primarily we need to know, who is a ‘Contract Labour’? ‘Contract Labour’ can be distinguished from ‘direct labour’ in terms of employment relationship with

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