Wage settlement often becomes the most visible expression of the industrial relations framework. Industrial relations has traditionally been associated with collective bargaining, wage settlement, grievance handling, disciplinary matters, and managing disputes between employers and employees.
It can be described as: Wages → Negotiation → Disputes → Settlements → Stability
However, the nature of work and the expectations of both employees and the organisation have changed significantly. In a competitive, technology-driven, and increasingly skill-intensive economy, industrial relations cannot be primarily a mechanism for managing conflict. The central question, therefore, is no longer simply: “What wage increase can we afford or negotiate?” It should increasingly be: “How can the organisation and the workforce create greater value together?”
Modern IR gives importance to compensation with productivity, business performance, skill development, Quality (Product and people), innovation, and workforce flexibility
It can be described as: Fair wages → Productivity → Capability → Social Security → Workforce Sustainability → Shared Growth
With the advent of new labour codes, to ease the process and business, they should therefore be viewed as a platform of transition
Productivity
What is legally required vs what should the employee receive in addition for the value they create (Productivity and value sharing framework)
Traditionally, productivity is often discussed as a management objective in a counter-COD, whereas wage increments are the primary objective of employees in a COD. In reality, productivity and employee prosperity can reinforce each other. In modern IR strategy, instead of discussing productivity during wage negotiation, organisations should establish an ongoing mechanism for employees and their representatives to identify productivity opportunities.
Collective Bargaining to Collective Problem Solving (Classification of negotiating body with One Union, Multi Union, Negotiating Union Council & Union Confederation)
Capability Building
The biggest challenge for organisations is the rapid transformation of skills. Automation, artificial intelligence, digitalisation, advanced manufacturing (Industry 5.0) and changing customer expectations are reshaping jobs. Traditional IR has often focused on protecting existing jobs. Modern IR must focus on preparing people for changing job scenarios. The pertinent questions are:
- From “Will Technology reduce jobs?” to “What skills will the future require, and how can we prepare our people for them?”
- From “How do we protect existing employees?” to “How do we protect employability?”
Modern IR should focus on re-skilling, multi-skilling, Internal Mobility & Skill Improvement Programs
Sustainability
The future workforce will include multiple categories: Permanent (on-role), Contractual Labour, Project-Based Employment, Fixed-Term Employment, Trainees & Apprentices, Gig and platform workers. In modern IR, employer and Employee representatives play a critical role in building trust during periods of change. Under the new labour codes, the focus on strengthening & clarifying Works Committees and GRCs aims to address issues hindering organisational growth by building trust.
Focus on social security has broadened the employee value proposition beyond mere statutory compliance . Traditionally, IR measurement matrices are primarily on the number of disputes & their resolutions, and man-days lost. The focus should shift to Safety, Health, Fatigue, Absenteeism, Engagement, and Productivity.
Conclusion
Compensation will always be primary, and collective bargaining will remain an essential part of the employment relationship. Modern IR strategies must help the organisation navigate the business under the difficult intersection of business competitiveness and employee prosperity .
It must create dialogue around productivity , build capability for the future , support responsible technology adoption and strengthen workforce sustainability. It must help all categories of employment to see organisational performance not as something belonging to management , but as a shared outcome that can create opportunities for prosperity for everyone.
The term is still valid: IR = I/ ER
