Skip to content

Industrial Relations and Trade Unions (ICSE Class 10)

questionbuddy.in/icse/class-10/commercial-studies/industrial-relations-and-trade-unions/industrial-relations-objectives-and-functions-of-trade-unions

Commercial StudiesICSE Class 10 · Industrial Relations and Trade Unions

Industrial Relations and Functions of Trade Unions (ICSE Class 10 Commercial Studies)

Updated 17 October 2026 · Fact-checked

Industrial relations are the relations between management and employees (and their trade unions) arising out of work. Their objectives include industrial peace, higher productivity, protection of both parties' interests and industrial democracy. A trade union is a voluntary association of workers formed to protect their common interests through collective bargaining, job security, welfare, grievance handling and legal aid.

Management and the union talk through collective bargaining, the government sets laws, and good relations give peace, productivity and democracy.

Illustration drawn for QuestionBuddy.

Understand Industrial Relations: Objectives, and Functions of Trade Unions

1. Industrial relations

The relationship between management (employers) and employees, including their trade unions, in an industrial organisation, covering wages, working conditions, discipline and the settlement of disputes. The government is a third party: it makes labour laws, provides machinery for settling disputes and protects public interest.

Good relations mean trust, cooperation and peaceful settlement. Poor relations show up as strikes (workers stopping work), lockouts (the employer closing the workplace), go-slow, absenteeism and high labour turnover.

2. Objectives

  • Industrial peace: avoid conflicts, strikes and lockouts.
  • Higher productivity through cooperation.
  • Protect the interests of both: fair wages and conditions for workers, reasonable profit and discipline for employers.
  • Industrial democracy: involve workers in decisions that affect them.
  • Mutual understanding and goodwill.
  • Reduce absenteeism and labour turnover by raising morale.
  • Contribute to national economic development through uninterrupted production.
  • Avoid unfair labour practices by either side.

3. Importance of good industrial relations

Continuous production and timely delivery; fewer losses from strikes and lockouts; better quality and less waste; high morale and loyalty; easier introduction of new methods; good public image; and steady economic growth. Poor relations cause lost wages, lost output and profit, and shortages for consumers.

4. Trade union

A voluntary association of workers in a trade, industry or firm formed to protect and promote their common economic and social interests by collective action.

Features: voluntary membership; association of employees (not employers); permanent body; common interests (wages, working conditions, job security); collective action through elected leaders; funds from members' subscriptions.

Its strength is collective bargaining power: one worker alone has little bargaining strength; all together can negotiate on equal terms.

5. Functions of trade unions

1. Collective bargaining on wages, bonus, working hours and leave.
2. Job security: protect against unfair dismissal.
3. Better working conditions: safety, ventilation, canteens, rest periods.
4. Welfare: education, libraries, sports, cooperative stores, help for the sick or injured.
5. Grievance handling and representation of members.
6. Legal aid in labour courts and tribunals.
7. Communication between workers and management.
8. Promoting discipline and productivity.
9. Industrial action as a last resort within the law.
10. Participation in management through joint committees.

6. Balanced view

Unions help workers, but unreasonable demands or frequent strikes can harm both workers and the firm. Good relations rest on dialogue and fairness from both sides.

7. Writing

Give an objective or function in a heading and one explaining sentence. In cases, connect the facts to the objective served.

Industrial Relations: Objectives, and Functions of Trade Unions: key facts

Objectives of industrial relations
  • Peace
  • Productivity
  • Protection of interests
  • Participation
  • Prosperity of the nation
Five Ps.
Signs of poor relations
  • Strikes
  • Lockouts
  • Go-slow
  • Absenteeism
  • High labour turnover
Effects.
Trade union functions
  • Collective bargaining
  • Job security
  • Working conditions
  • Welfare
  • Grievances
  • Legal aid
  • Communication
Learn at least six.

How to answer Industrial Relations: Objectives, and Functions of Trade Unions questions

Expect the meaning, objectives, importance, meaning and functions of trade unions, or identification from a case.

  1. 1Define in one sentence, naming the parties (management, employees, unions).
  2. 2For objectives or functions write five to six points, each with a short explanation.
  3. 3In a case, find the function being used (for example, negotiating wages is collective bargaining).
  4. 4For a balanced answer give one benefit and one risk.

Industrial Relations: Objectives, and Functions of Trade Unions in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Collective bargaining

Suppose the workers of a factory, through their union, meet the management to ask for a revision in wages and bonus before a festival.

Which function of the union is this?

Try it first, then show the solutionSolution
  1. The union negotiates on behalf of all members.
  2. This is collective bargaining.

Answer: Collective bargaining.

Memory hook: Together at the table.

Industrial peace

Imagine two firms in the same industry; in one, management and workers talk regularly and settle disputes early, and in the other there are frequent strikes.

Which firm is likelier to have higher output and why?

Try it first, then show the solutionSolution
  1. Peace means uninterrupted production.
  2. Strikes lose working days.

Answer: The first firm; peaceful relations avoid stoppages and raise productivity.

Memory hook: Peace pays.

Tricks to remember Industrial Relations: Objectives, and Functions of Trade Unions

Short memory aids. Say each one aloud once, then use it on a question the same day.

  • 5 Ps

    Peace, Productivity, Protection, Participation, Prosperity of the nation.

    Use it when: Objectives.

  • B-J-W-W-G-L-C

    Bargaining, Job security, Working conditions, Welfare, Grievances, Legal aid, Communication.

    Use it when: Union functions.

Industrial Relations: Objectives, and Functions of Trade Unions: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Identify · 1 mark · MCQBoard level

A union negotiating wages with the management on behalf of all workers is performing the function of:
(a) legal aid
(b) collective bargaining
(c) welfare
(d) communication

Try it first, then show the solutionSolution
  1. Negotiating terms collectively is collective bargaining.

Answer: (b)

Example 2: Meaning · 2 marks · Very short answerBoard level

What is a trade union? State one feature.

Try it first, then show the solutionSolution
  1. A voluntary association of workers formed to protect their common economic and social interests by collective action.
  2. Feature: membership is voluntary.

Answer: A voluntary association of workers to protect their common interests; membership is voluntary.

Example 3: Objectives · 4 marks · Short answerHarder board level

Suppose a company's owner says industrial relations are a waste of time. Explain four objectives of industrial relations that would benefit the company.

Try it first, then show the solutionSolution
  1. Industrial peace: fewer strikes and lockouts.
  2. Higher productivity: cooperation raises output and efficiency.
  3. Protecting interests of both parties: fair wages for workers and reasonable profit for the owner.
  4. Reduced absenteeism and labour turnover through better morale.

Answer: Peace, productivity, protection of interests and lower absenteeism and turnover.

Example 4: Functions · 4 marks · Short answerHarder board level

Explain four functions of trade unions.

Try it first, then show the solutionSolution
  1. Collective bargaining: negotiating wages, bonus and hours for all members.
  2. Job security: protecting members from unfair dismissal.
  3. Better working conditions: pressing for safety, canteens and rest periods.
  4. Welfare and grievance handling: help for sick members and taking complaints to management.

Answer: Collective bargaining, job security, working conditions and welfare/grievances.

Example 5: Dispute at the plant · 8 marks · Case-basedHOTS / competency

Suppose workers at a plant are angry because of delayed bonus and unsafe machines, and management says the plant cannot afford a pay rise. A strike is threatened. (a) Identify the functions the union should use. (b) Suggest steps for management to restore peace. (c) State two losses from a strike.

Try it first, then show the solutionSolution
  1. (a) The union should use collective bargaining on the bonus, press for better working conditions on safety, and take up the grievances of members.
  2. (b) Management should talk to the union, give a clear account of the firm's finances, repair the machines first, offer a schedule for the bonus, and set up a joint committee for regular communication.
  3. (c) Workers lose wages; the firm loses output, orders and goodwill, and consumers face shortages.
  4. A strike is a last resort within the law, after negotiation fails.

Answer: The union should use bargaining and welfare functions; management should negotiate, fix safety and share the facts; a strike harms all.

Where students lose marks in Industrial Relations: Objectives, and Functions of Trade Unions

The slips examiners see most often, and what to write instead.

  • Mistake: Describing a trade union as an association of employers

    Employers have their own bodies.

    Wrong working

    A trade union is formed by employers and workers.

    Right working

    A trade union is an association of workers.

    Do this: Union means workers.

    Usually costs: 1-2 marks.

  • Mistake: Mixing strike and lockout

    Both stop work.

    Wrong working

    Lockout: workers stop work.

    Right working

    Strike: workers stop work. Lockout: the employer closes the workplace.

    Do this: Who takes the action?

    Usually costs: 1 mark.

  • Mistake: Writing "increasing wages" as the only function

    Functions are wider.

    Wrong working

    Union function: higher pay.

    Right working

    Collective bargaining, job security, welfare, grievances and others.

    Do this: List at least five.

    Usually costs: 2 marks.

  • Mistake: Leaving out the government in industrial relations

    The third party is forgotten.

    Wrong working

    Relations between workers and owners.

    Right working

    Relations between management and employees; the government provides laws and machinery.

    Do this: Mention it in one line.

    Usually costs: 1 mark.

Exam tips

  • Learn the full definition of trade union with "voluntary", "workers" and "collective action".
  • Functions: give a heading and an explaining line to each.
  • In cases, name the function or objective and quote the clue.
  • Mention that a strike is the last resort.

Practice questions on Industrial Relations: Objectives, and Functions of Trade Unions

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

  1. Q1 · 2 marks · Very short answerBoard level

    Distinguish between a strike and a lockout.

    Hint

    Who stops work?

    Answer

    In a strike the workers stop work together to press their demands. In a lockout the employer closes the workplace and does not allow workers to work.

  2. Q2 · 4 marks · Short answerHarder board level

    Suppose a worker says "I can bargain for a better wage on my own." Explain why the union's collective bargaining usually works better.

    Hint

    Strength in numbers.

    Answer

    A single worker has little bargaining strength against an employer who can replace him. A union acts for all workers together through elected leaders, so the management must deal with the whole workforce, which gives them equal strength in negotiation and more chance of better wages and conditions.

  3. Q3 · 4 marks · Short answerHarder board level

    State four benefits of good industrial relations to a firm.

    Hint

    Output, quality, morale, image.

    Answer

    Production continues without interruption and goods reach customers on time. Fewer losses occur from strikes and lockouts. Quality improves and waste falls as morale and loyalty are high. The firm also earns a good public image and can introduce new methods more easily.

  4. Q4 · 4 marks · Short answerHarder board level

    Describe four welfare activities a trade union may undertake for its members.

    Hint

    Education, health, shops, housing.

    Answer

    It may run classes for education and training, libraries and sports, cooperative stores that sell goods at fair prices, and housing schemes. It may also help sick or injured members and their families.

  5. Q5 · 4 marks · Case-basedHOTS / competency

    Suppose a trade union leader insists on strikes whenever any small demand is not met. Evaluate this approach with reference to the objectives of industrial relations and the functions of a union.

    Hint

    Last resort.

    Answer

    Strikes are meant as a last resort, within the law, after negotiation fails. Using them for every small issue loses wages for workers and output for the firm, and spoils goodwill and industrial peace, which are the main objectives of industrial relations. The union should first use collective bargaining, grievance handling and communication, and save industrial action for serious cases.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

  1. 1.Who are the two main parties in industrial relations?Show answer

    Management and employees (with their unions).

  2. 2.What is a lockout?Show answer

    The employer closing the workplace and not letting workers work.

  3. 3.Name one function of a trade union.Show answer

    Collective bargaining (or job security, welfare, grievance handling).

  4. 4.Is membership of a trade union voluntary?Show answer

    Yes.

  5. 5.What does industrial democracy mean?Show answer

    Involving workers in decisions that affect them.

Industrial Relations: Objectives, and Functions of Trade Unions: frequently asked questions

Is a trade union permanent?

Yes, it is a permanent body, not formed only for one dispute.

Do managers also join trade unions?

The syllabus defines a union as an association of workers; learn it that way.

Why is collective bargaining powerful?

Because the workers act together and cannot be easily replaced.