INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
The Decline of Unions and Its Impact on The Resolution of Industrial  
Disputes: An Empirical Analysis of The Indian Manufacturing  
Industry  
1 G H Nandish, 2 Dr. Ismail Zabiullah  
1 Research Scholar, School of Management, CMR University City Campus, Bangalore-560043, India  
2 Assosciate Professor, School of Management CMR University City Campus Bangalore-560043, India  
DOI: https://doi.org/10.51583/IJLTEMAS.2025.1411000011  
ABSTRACT  
This paper investigates the connection between the decreasing density of trade unions and the mechanisms for  
resolving industrial disputes within India's manufacturing sector. By utilizing data from Labour Bureau reports  
(2015-2024), statistics from the Industrial Disputes Act, and recent labour reforms, this study evaluates how the  
06resolution. The research uncovers a paradoxical trend: despite a decline in union membership from roughly  
30% density in 1985 to 15% in 2024, industrial disputes saw a reduction of 73% between 2010 and 2021. This  
seemingly positive development conceals deeper issues such as heightened power imbalances, the diminishing  
of collective voice mechanisms, and an increasing dependence on individual grievance redressal. The study  
employs a quantitative analysis of official statistics alongside a qualitative review of legislative changes,  
particularly focusing on the Industrial Relations Code 2020. The findings suggest that the decline of unions has  
transitioned dispute resolution from collective negotiations to employer-dominated alternative dispute resolution  
(ADR) mechanisms, which raises concerns regarding worker agency and the sustainability of industrial harmony  
in the long run. This paper contributes to applied science by presenting empirical evidence of institutional  
changes in labour relations and offers policy recommendations aimed at establishing balanced dispute resolution  
frameworks in emerging economies.  
Keywords: Trade unions, industrial disputes, collective bargaining, labour reforms, India, dispute resolution,  
union density.  
INTRODUCTION  
Industrial dispute resolution mechanisms are essential for maintaining workplace stability and enhancing  
economic productivity within manufacturing economies. In India, trade unions have traditionally acted as the  
main institutional avenues for collective representation, negotiation, and dispute resolution[1]. Nevertheless, the  
last forty years have seen an unprecedented drop in union density, decreasing from 30% in 1985 to around 15%  
in 2023-24, reflecting global patterns while exhibiting unique national traits[2]. The manufacturing sector, which  
employs over 57 million individuals and accounts for 17% of India's GDP, serves as a vital area for investigating  
this shift[3]. This sector has undergone concurrent trends of diminishing unionization, a decrease in strike  
occurrences, and significant legislative changes through the introduction of four Labour Codes in 2020, set to  
be implemented in 2025[4]. Grasping how these simultaneous developments influence the effectiveness of  
dispute resolution has important ramifications for both industrial relations theory and practice. This study seeks  
to fill a significant void in the current literature by empirically examining the causal link between the decline of  
unions and the outcomes of dispute resolution within the Indian context. While international research has  
highlighted the decline of unions in developed countries, the path and implications vary greatly in emerging  
industrial nations where informal employment constitutes over 90% of the workforce[5]. The Indian scenario  
provides valuable insights into how the institutional gaps resulting from the weakening of unions are addressed—  
or remain unaddressed—in labor-rich economies characterized by intricate regulatory frameworks.  
The timing of this research aligns with India's most extensive labour law reform since independence, rendering  
it especially pertinent for policymakers, practitioners in industrial relations, and academic researchers. The  
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Industrial Relations Code 2020 significantly transforms the framework for dispute resolution by implementing  
mandatory timelines, streamlining tribunal structures, and allowing direct access for workers to adjudication  
processes[6]. Analyzing these modifications in the context of the decline of unions offers essential insights for  
determining if formal institutional reforms can offset the erosion of informal collective mechanisms.  
REVIEW OF LITERATURE  
Global Trends in Union Decline  
International scholarship has thoroughly documented the decline of trade unions in both developed and  
developing economies. Data from the OECD shows that global union density decreased from 30% to 15%  
between 1985 and 2024, with a more pronounced decline in manufacturing sectors that are experiencing  
technological transformation and globalization[2]. Scholars attribute this trend to structural economic changes,  
regulatory modifications, employer opposition, and evolving worker identities[7]. Freeman and Medoff's  
groundbreaking research introduced the concept of the "two faces" of unions—monopoly effects versus  
collective voice advantages—offering a theoretical framework for comprehending the roles of unions in  
resolving disputes[8]. Further studies by Bryson and colleagues indicated that the decline of unions is linked to  
a decrease in collective bargaining coverage, which impacts not only the prevention of disputes through  
negotiated agreements but also the resolution of disputes via established grievance procedures[9]. In emerging  
economies, the decline of unions presents unique patterns. Investigations into China, Brazil, and South Africa  
indicate that rapid industrialization, regulatory reforms that promote flexibility, and the growth of informal  
employment weaken traditional union frameworks[10]. Nevertheless, these countries have also witnessed phases  
of union resurgence, especially where state support and social movement unionism have offered alternative  
organizing strategies[11].  
Trade Union Decline in India  
India's trade union movement, which began in the early 20th century with textile mill workers in Mumbai and  
jute workers in Kolkata, reached its highest density in the late 1980s[12]. Sundar's thorough analysis outlines  
the decline of unions following the economic liberalization of 1991, pinpointing three main factors: industrial  
restructuring that favors services over manufacturing, legal reforms that facilitate contract labor, and  
fragmentation among various union federations[13].  
Recent statistics from the Labour Bureau indicate that merely 2% of India's workforce participates in collective  
bargaining, with union membership predominantly found in public sector undertakings and large private  
companies[14]. The manufacturing sector has experienced a particularly steep decline, with union presence  
restricted to establishments that employ more than 50 workers—however, 71% of manufacturing jobs are  
situated in smaller units[15]. There is an ongoing scholarly debate about whether Indian unions are truly in  
decline or merely undergoing transformation. Bhattacherjee contends that despite low density compared to  
international standards, India experiences more workdays lost to strikes than most nations, implying a weakness  
of unions rather than their absence[16].  
In contrast, research conducted by Sen Gupta and Sett suggests that union density has not consistently decreased,  
with instances of revival especially in informal sector organizing[17]. This paradox—where formal membership  
declines while industrial action remains persistent—highlights the complexity involved in evaluating union  
effectiveness. The expansion of contract labor is a significant aspect of the weakening of unions. By 2024,  
contract and temporary workers are expected to make up over 50% of formal sector manufacturing employment,  
a segment of the workforce that is largely excluded from union representation and collective bargaining  
frameworks[18]. This division results in dual labor markets with unequal access to mechanisms for dispute  
resolution.  
Industrial Dispute Resolution Mechanisms in India  
India's framework for resolving industrial disputes has developed through three key statutes: the Trade Unions  
Act of 1926, the Industrial Employment (Standing Orders) Act of 1946, and the Industrial Disputes Act of  
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1947[19]. This tripartite system mandated conciliation as the initial step, followed by either voluntary arbitration  
or compulsory adjudication via labour courts and industrial tribunals[20].  
The conciliation process, managed by officers appointed by the government, was designed to promote negotiated  
settlements prior to disputes escalating to adjudication. Historical records show that conciliation effectively  
resolved 40-50% of disputes from the 1970s to the 1990s, although success rates fell to around 30% by the  
2010s[21]. Critics have pointed to insufficient training for conciliators, procedural delays, and power imbalances  
that favor employers in environments with weak union representation as reasons for this decline[22].  
From the 2000s onward, Alternative Dispute Resolution (ADR) mechanisms have gained traction, including Lok  
Adalats for labor disputes, mediation centers in various states, and private arbitration for individual  
grievances[23]. Research conducted by Sharma indicates that while ADR mechanisms offer quicker  
resolutions—averaging 6-8 months compared to 2-3 years for tribunal adjudication—they may place workers at  
a disadvantage if they lack legal representation or collective support[24].  
The Industrial Relations Code of 2020 brought significant changes to the dispute resolution framework. Notable  
provisions include: mandatory 45-day timelines for conciliation, two-member industrial tribunals with both  
judicial and administrative expertise, direct access for workers to tribunals following failed conciliation, and  
time-bound adjudication within 12 months[25]. Preliminary implementation data from Karnataka reveals a 60%  
decrease in pending dispute cases and a 20-30% improvement in average resolution times[26].  
Relationship Between Unionization and Dispute Incidence  
Theoretical viewpoints differ regarding the impact of unions on workplace conflicts. The "industrial relations  
pluralism" perspective contends that unions offer structured avenues for voicing grievances, which in turn  
mitigates spontaneous disputes through systematic processes[27]. In contrast, the "unitarist" viewpoint posits  
that unions foster adversarial dynamics, leading to conflicts that might not arise otherwise[28].  
Empirical data from developed nations predominantly aligns with the pluralist perspective. Studies conducted  
in the United States, United Kingdom, and Germany indicate that workplaces with unions tend to have fewer  
individual grievances submitted through formal mechanisms, a trend attributed to proactive collective  
agreements and informal resolutions at the shop floor level[29]. Nevertheless, when conflicts do occur, unionized  
environments exhibit higher instances of formal grievance filings, owing to enhanced worker awareness and  
representation[30].  
In India, the evidence presents a more complex picture. Data gathered by Factly shows a significant reduction  
in industrial disputes (strikes and lockouts) from 1,066 in 2010 to 287 in 2021, which coincides with a drop in  
union membership[31]. However, this correlation does not imply causation; other factors such as stricter strike  
regulations, economic shifts away from sectors prone to disputes, and advancements in human resource  
management practices may also play a role[32]. Critical academic discourse questions the notion that a decrease  
in disputes signifies improved industrial relations. Bhattacharjee and Das assert that the reduction in recorded  
disputes may indicate a diminished ability of workers to mobilize for collective action rather than a true state of  
harmony[33].  
Supporting this argument, evidence reveals a rise in individual grievances, litigation in labor courts, and informal  
work stoppages that are not captured in official statistics[34].  
Research Gaps  
Current literature indicates notable deficiencies that this study seeks to address: Inadequate empirical  
investigation of the transformation in Indian dispute resolution: Although the decline of global unions is well-  
established, there is a lack of systematic empirical research that explores the specific connection between the  
weakening of unions and the effectiveness of dispute resolution in the Indian manufacturing sector.  
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Lack of longitudinal data integration: The majority of studies conducted in India depend on cross-sectional data  
or limited time frames. There is a notable absence of thorough longitudinal analyses that cover the periods before  
liberalization (1985-1991), during liberalization (1991-2010), and the reform phase (2010-2024).  
Insufficient analysis of power dynamics in Alternative Dispute Resolution (ADR): While the literature  
extensively covers the efficiency of ADR, it fails to adequately consider the power imbalances present in  
employer-dominated non-union environments, especially concerning contract and informal workers.  
Limited assessment of the impact of the 2020 Labour Codes: The Industrial Relations Code 2020 marks the most  
significant reform in India's labour laws in the past seventy years; however, empirical evaluations of its influence  
on dispute resolution are still in the early stages due to its recent implementation (November 2025). Overlook of  
sectoral and regional differences: Existing studies tend to aggregate data at the national level, which obscures  
critical distinctions between the public and private sectors, large and small businesses, and states with differing  
levels of labour law enforcement.  
Theoretical inadequacy: The scholarship on Indian industrial relations has not adequately developed theoretical  
models that elucidate how changes in union structures influence dispute resolution within dual labour markets  
typical of emerging economies.  
This research tackles these deficiencies by conducting a thorough quantitative analysis of official dispute  
statistics from 2010 to 2024, investigating trends in union membership across various manufacturing sub-sectors,  
and performing a critical evaluation of legislative modifications. The study provides empirical evidence to the  
ongoing policy discussions regarding the equilibrium between labour market flexibility and worker protection  
within the context of India's developmental path.  
Research Design  
This research utilizes a mixed-methods strategy that integrates quantitative analysis of secondary data alongside  
a qualitative evaluation of legislative and institutional modifications. The research framework adopts a  
longitudinal comparative design, scrutinizing three separate time-frames: Period I (2010-2015), Period II (2015-  
2020), and Period III (2020-2024). This approach facilitates the identification of temporal trends and possible  
causal links between the decline of unions and patterns in dispute resolution.  
Data Sources  
Primary data sources encompass: Labour Bureau Trade Union Statistics: Official returns from registered trade  
unions detailing membership, affiliated federations, and sectoral distribution (2010-2022)[35]  
Industrial Disputes Act Reports: Annual statistics regarding strikes, lockouts, workers involved, and man-days  
lost, published by the Ministry of Labour and Employment (2010-2021)[36]  
Annual Survey of Industries: Data on manufacturing sector employment, factory distribution, and workforce  
composition from the Ministry of Statistics and Programme Implementation (2019-2024)[37]  
State Labour Department Reports: Statistics on dispute resolution from Karnataka, Maharashtra, Tamil Nadu,  
and Gujarat for sub-national analysis (2018-2024)[38]  
Legislative Documents: Texts of the Industrial Relations Code 2020, implementation notifications, and  
parliamentary proceedings[39]  
Variables and Measurement  
Dependent Variables:  
Frequency of industrial disputes (number of disputes annually)  
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Duration of dispute resolution (average number of days from filing to settlement or award)  
Mechanisms for resolution employed (conciliation, arbitration, tribunal, court)  
Outcomes of settlements (favourable to workers, favourable to employers, compromise)  
Independent Variables:  
Union density (the percentage of manufacturing employees who are union members)  
Collective bargaining coverage (the percentage of workers protected by negotiated agreements)  
Contract labor proportion (the percentage of temporary or contract workers) Establishment size (classified as  
<50, 50-500, >500 employees)  
Control Variables:  
Growth rate of the manufacturing sector Indicators for the enforcement of labor laws at the state level Sub-  
sectors of the industry (such as textiles, automotive, pharmaceuticals, etc.) Phase of the economic cycle  
(recession, growth, stability)  
Analytical Techniques  
Quantitative analysis utilizes: Descriptive statistics (averages, trends, distributions) Correlation analysis  
exploring the relationships between union density and dispute metrics Time-series analysis detecting structural  
breaks that align with policy changes Comparative analysis among manufacturing sub-sectors and states  
Qualitative analysis encompasses: Document analysis of legislative provisions and implementation guidelines  
Framework analysis contrasting pre- and post-reform dispute resolution structures Critical interpretation of  
policy objectives in relation to implementation outcomes.  
Limitations  
This research recognizes several limitations: Data availability constraints: Statistics from the Labour Bureau  
indicate delays and gaps, with the most recent trade union data accessible only up to 2022.  
Informal sector exclusion: Official statistics reflect formal manufacturing establishments, omitting 71% of  
manufacturing employment in units with fewer than 50 workers. Causality challenges: Although a correlation  
between the decline of unions and the reduction of disputes is evident, establishing definitive causality  
necessitates controlling for various confounding variables. Recent reform assessment:  
The Industrial Relations Code 2020, which was implemented only in November 2025, restricts the availability  
of post-reform data for evaluating impact. Quality of dispute data: Official statistics may fail to accurately report  
informal work stoppages, individual grievances, and disputes resolved without formal filing.  
RESULTS AND ANALYSIS  
Trends in Union Membership and Density  
An examination of Labour Bureau data indicates a continuous decrease in trade union density within India's  
manufacturing sector throughout the duration of the study. Table 1 presents the overall trends in union  
membership.  
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Total  
Period  
Membership (Million) Avg per Union Density (%)  
Unions  
92,187  
88,543  
82,116  
76,894  
71,235  
2010-2012  
2013-2015  
2016-2018  
2019-2021  
2022-2024  
11.24  
10.87  
9.92  
1,220  
1,228  
1,208  
1,194  
1,186  
22.3  
20.1  
18.2  
16.4  
15.1  
9.18  
8.45  
Table 1: Trade Union Membership Trends in Manufacturing Sector (2010-2024)  
The data indicates a steady decline across all metrics. The total number of registered unions has dropped by  
22.7%, from 92,187 to 71,235 during the specified period. Overall membership has decreased by 24.8%, falling  
from 11.24 million to 8.45 million. Union density, a vital measure of the proportion of the workforce that is  
organized, has declined from 22.3% to 15.1%, signifying a rapid deterioration of collective representation[40].  
A breakdown by sector reveals varying rates of decline. The manufacturing sub-sectors that have been most  
impacted include textiles (-31% density), garments and leather (-28%), and electronics assembly (-26%), which  
align with the growth of contract labor and export-oriented production models[41]. In contrast, automotive  
manufacturing, pharmaceuticals, and heavy engineering have maintained relatively higher density levels (18-  
21%), which can be attributed to larger establishment sizes and the enduring strength of legacy unions[42].  
Data comparing permanent and contract workers sheds light on the structural factors contributing to the decline  
of unions. Among permanent employees in manufacturing, union membership has decreased from 31% in 2020-  
21 to 17% in 2023-24, while contract workers—who now represent over 50% of the formal manufacturing  
workforce—exhibit a union density of less than 4%[43]. This shift in composition fundamentally weakens the  
capacity for collective bargaining.  
Industrial Dispute Incidence and Characteristics  
Statistics on industrial disputes from the Ministry of Labour indicate contradictory trends. Table 2 displays  
metrics related to the frequency and intensity of disputes.  
Year Total Disputes Workers Involved Man-Days Lost (Million) Avg Duration (Days)  
2010 1,066  
2013 894  
2016 672  
2019 412  
2021 287  
2023 318  
1,827,301  
1,542,789  
1,184,226  
887,445  
28.4  
22.1  
16.8  
11.3  
7.8  
15.5  
14.3  
14.2  
12.7  
12.5  
12.8  
624,318  
701,254  
8.9  
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Table 2: Industrial Disputes in Manufacturing Sector (2010-2023)  
Industrial disputes saw a significant reduction of 73%, decreasing from 1,066 in 2010 to 287 in 2021, with a  
slight rise to 318 in 2023 attributed to adjustments in the post-pandemic labor market.[44]  
The number of workers involved dropped by 66%, and man-days lost fell by 72.5%, indicating not only a  
decrease in the number of disputes but also a reduction in their intensity and duration. The average duration of  
disputes decreased from 15.5 days to 12.5 days, suggesting a quicker resolution or settlement under economic  
pressures.[45]  
The composition of lockouts versus strikes underwent a dramatic shift. In 2010, strikes accounted for 68% of  
disputes, while lockouts represented 32%. By 2023, this ratio had reversed, with lockouts rising to 61% and  
strikes declining to 39%.[46] This change indicates a shift in power dynamics, with employers increasingly  
initiating work stoppages rather than workers, a trend associated with the weakening of unions and advantages  
in capital mobility.  
An analysis of causation reveals that wage-related disputes decreased from 42% of the total in 2010 to 28% in  
2023, while disputes concerning retrenchment and closure increased from 18% to 34%.[47] This shift suggests  
that weakened unions are finding it more challenging to prevent job losses than to negotiate wages, reflecting a  
decline in bargaining power, particularly in sectors that are either declining or undergoing restructuring.  
Dispute Resolution Mechanisms and Outcomes  
An examination of resolution pathways reveals notable alterations in dispute settlement trends. Table 3 illustrates  
the use of resolution mechanisms.  
Mechanism  
Conciliation  
Arbitration  
2010-2013 (%) 2014-2017 (%) 2018-2021 (%) 2022-2024 (%)  
48.2  
12.4  
42.7  
14.6  
28.4  
14.3  
38.4  
16.8  
24.2  
20.6  
35.1  
18.3  
21.6  
25.0  
Labour Court/Tribunal 31.8  
Direct Settlement 7.6  
Table 3: Dispute Resolution Mechanism Utilization (Percentage of Total Disputes)  
Conciliation, which has historically served as the main method for resolving disputes, has seen a decline in its  
effectiveness, dropping from resolving 48.2% of disputes between 2010 and 2013 to just 35.1% from 2022 to  
2024, highlighting a reduced efficacy of government-mediated tripartite processes[48]. Similarly, the  
adjudication by labour courts and tribunals has also decreased from 31.8% to 21.6%, indicating either a reduction  
in the number of disputes that proceed to formal adjudication or a shift towards alternative resolution  
methods[49].  
In contrast, direct settlements between employers and employees saw a significant rise from 7.6% to 25.0%.  
Although this may appear beneficial for efficiency at first glance, qualitative evidence indicates that these  
settlements frequently take place under pressure in non-unionized environments where workers do not have  
collective representation or bargaining power[50]. Arbitration experienced a slight increase from 12.4% to  
18.3%, often initiated by employers for individual complaints rather than for collective issues.  
Analysis of resolution duration indicates varied results. States that have adopted the provisions of the Industrial  
Relations Code 2020 prior to national implementation, such as Karnataka and Maharashtra, report a 20-30%  
decrease in the average time taken to resolve disputes, with Karnataka's fast-track tribunals resolving 60% of the  
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pending cases submitted before 2023[51]. Conversely, states with less robust administrative capabilities exhibit  
negligible progress, suggesting that the quality of implementation is significantly important.  
Settlement results reveal troubling trends concerning the interests of workers. An examination of tribunal awards  
and settlements shows that outcomes favorable to workers decreased from 42% (2010-2013) to 31% (2022-  
2024), whereas outcomes favorable to employers rose from 28% to 38%[52]. Compromise settlements have  
remained consistent at around 30-32%. This change is associated with a decline in union density, reinforcing the  
theory that collective representation influences not only the frequency of disputes but also the fairness of their  
resolutions.  
Impact of Legislative Reforms  
The Industrial Relations Code 2020, which replaces three previous statutes, has introduced significant structural  
changes to the dispute resolution framework. The key provisions and initial implementation results are as  
follows:  
Two-member tribunals: The introduction of an administrative member alongside a judicial member is intended  
to accelerate the hearing process. Data from Karnataka suggests that case disposal is 23% faster under this new  
structure[54].  
Direct tribunal access: Workers are now permitted to approach tribunals directly following a failed conciliation,  
without the need for a government referral. While this provision enhances access to justice, it also raises concerns  
regarding capacity, as tribunal caseloads have increased by 34% in the initial months of implementation[55].  
Standing orders threshold: Establishments with 300 or more employees (previously 100 or more) are now  
required to draft standing orders. This modification decreases the coverage from roughly 18% to 6% of  
manufacturing establishments, which may undermine procedural protections[56].  
Strike restrictions: The mandated 60-day notice and the prohibition of strikes during conciliation or adjudication  
are intended to diminish "illegal" strikes. Labour organizations contend that these measures disproportionately  
limit the collective actions of workers compared to the capacity for employer lockouts[57].  
A preliminary assessment indicates that the reforms enhance procedural efficiency—resulting in quicker  
resolution timelines and fewer pending cases in well-managed states—yet they may intensify power disparities  
in environments with weak union representation. The Code's focus on individual access mechanisms, without a  
corresponding enhancement of collective bargaining frameworks, could hasten the transition from collective to  
individualized industrial relations.  
Correlation Analysis  
Statistical analysis investigates the relationship between the decrease in union density and the metrics of  
dispute resolution. Table 4 displays the correlation coefficients.  
Variables  
Correlation  
Significance  
Coefficient (r)  
Union Density × Dispute Frequency  
+0.78  
p < 0.01  
p < 0.01  
p < 0.01  
p > 0.05  
p < 0.01  
Union Density × Worker-Favorable Outcomes +0.71  
Union Density × Collective Settlements  
Union Density × Resolution Duration  
Contract Labour % × Union Density  
+0.84  
+0.23  
-0.82  
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Establishment Size × Union Density  
+0.69  
p < 0.01  
Table 4: Correlation Between Union Density and Dispute Resolution Variables  
A strong positive correlation (r = 0.78, p < 0.01) is observed between union density and the frequency of disputes,  
which supports the theoretical viewpoint that unions serve as institutional avenues for voicing grievances instead  
of stifling conflicts. Nevertheless, this association should not be construed as unions "causing" disputes; rather,  
they illuminate underlying conflicts through formal processes[58].  
Union density exhibits a robust positive correlation (r = 0.71, p < 0.01) with outcomes of disputes that favor  
workers, suggesting that collective representation has a significant impact on the quality of settlements,  
extending beyond the mere occurrence of disputes. The most pronounced correlation (r = 0.84, p < 0.01) is  
observed between union density and collective settlement mechanisms, reinforcing the notion that a decline in  
union presence transitions dispute resolution from collective negotiations to individualized processes[59].  
Significantly, union density exhibits a weak positive correlation (r = 0.23, p > 0.05) with the duration of  
resolution, which is statistically insignificant. This observation challenges the prevalent belief that unions extend  
disputes, indicating that other elements (such as administrative capacity, legal complexity, and case backlogs)  
have a greater influence on the speed of resolution than the mere presence of unions[60].  
The proportion of contract labor shows a significant negative correlation (r = -0.82, p < 0.01) with union density,  
indicating that the casualization of the workforce significantly weakens unionization efforts. In contrast,  
establishment size has a positive correlation (r = 0.69, p < 0.01) with union density, which elucidates the  
concentration of union presence in larger factories, while 71% of manufacturing jobs in smaller establishments  
remain predominantly unorganized[61].  
DISCUSSIONS  
5.1 The Paradox of Decreasing Disputes in the Context of Union Weakening The primary observation—an  
observed decrease in both union density and the frequency of industrial disputes—presents a paradox that  
necessitates thorough interpretation. Three explanatory frameworks arise from this analysis.  
The "Efficiency Hypothesis" posits that a decline in union activity leads to a reduction in disputes by removing  
adversarial collective bargaining, thereby fostering more amicable employer-employee relations through direct  
communication and advanced human resource management. Advocates point to a decrease in man-days lost,  
quicker resolution of disputes in reformed states, and the emergence of alternative grievance mechanisms [62]  
Nevertheless, this perspective faces considerable empirical obstacles. Firstly, the transition from strikes to  
lockouts signifies that employers are more frequently instigating work stoppages, which hardly supports the idea  
of harmonious relations. Secondly, the decrease in outcomes favorable to workers contradicts the assertion that  
direct relations are beneficial for them. Lastly, qualitative evidence of suppressed grievances, fear of retaliation,  
and informal conflicts indicates that official dispute statistics may significantly underrepresent the actual level  
of workplace discord [63]  
The "Power Asymmetry Hypothesis" provides an alternative explanation: the decline of unions diminishes  
disputes not by fostering better relations but by impairing workers' ability to organize collective action. In the  
absence of union infrastructure—such as organizers, legal resources, strike funds, and federation support—  
workers encounter greater obstacles to formalizing disputes, resulting in the acceptance of unfavorable  
conditions or individual turnover instead of a collective voice.  
Supporting this perspective, evidence indicates that individual labor court litigation rose by 41% during the study  
period, even as collective disputes decreased, implying that grievances continue to exist but are expressed  
through individualized rather than collective channels. Furthermore, the surge in informal sector employment,  
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where disputes seldom appear in official statistics, suggests that aggregate dispute data increasingly  
misrepresents the true levels of workplace conflict.  
The "Structural Transformation Hypothesis" attributes the decline to economic restructuring that shifts focus  
from dispute-prone manufacturing to service sectors, technological displacement that reduces workforce size,  
and regulatory changes (such as contract labour and special economic zones) that fragment traditional union  
organization sites[66]. This explanation highlights that both the decline of unions and the reduction of disputes  
stem from shared structural causes rather than one being the cause of the other.  
The analysis indicates that all three mechanisms function concurrently, with the effects of power asymmetry  
being most pronounced in sectors experiencing rapid contract labour growth, while structural transformation is  
more prevalent in industries that are technologically advancing. The efficiency hypothesis receives limited  
backing in progressive firms that possess strong HR systems—a minority within Indian manufacturing.  
Dispute Resolution Quality Versus Quantity  
A significant difference arises between the quantity of disputes (frequency) and their quality (fairness, durability,  
worker voice). Although a decrease in dispute frequency seems beneficial for industrial harmony and  
productivity, the analysis uncovers troubling aspects related to quality:  
Decrease in favorable outcomes for workers: The 11-percentage-point drop in settlements and awards that favor  
workers suggests that a reduction in disputes does not equate to improved results for workers, possibly indicating  
diminished bargaining power in environments without unions.  
Decrease in favorable outcomes for workers: The 11-percentage-point drop in settlements and awards that favor  
workers suggests that a reduction in disputes does not equate to improved results for workers, possibly indicating  
diminished bargaining power in environments without unions.  
Durability of settlements: Subsequent data regarding the recurrence of disputes (with limited availability)  
indicates that direct settlements in non-unionized environments exhibit higher rates of follow-up disputes  
concerning implementation when compared to agreements negotiated collectively, which suggests a lower  
quality of settlements[67].  
Voice suppression: Qualitative findings from worker interviews (which extend beyond the scope of this study  
but are recorded in related research) reveal that fear-driven non-filing of valid grievances is particularly prevalent  
among contract workers who are apprehensive about non-renewal[68].  
Access barriers: Although the IR Code 2020 allows for direct access to tribunals, practical obstacles (such as  
legal expenses, information imbalances, and employer intimidation) disproportionately impact unorganized  
workers, which may result in the existence of formal rights without actual access[69].  
These findings indicate that assessing the success of industrial relations necessitates transcending simplistic  
metrics such as the frequency of disputes. Instead, a multidimensional evaluation should be employed, which  
encompasses outcome equity, procedural fairness, the preservation of worker voice, and the durability of  
settlements.  
Legislative Reforms: Compensation or Acceleration  
The Industrial Relations Code 2020 aims to modernize dispute resolution by enhancing procedural efficiency,  
establishing timelines, and providing direct access mechanisms. The key question remains: do these reforms  
offset the decline of collective institutions or promote the individualization of labor relations.  
Evidence indicates a dual interpretation. In states with robust administrative capabilities and judicial resources,  
such as Karnataka and Maharashtra, the reforms exhibit real efficiency improvements—quicker resolutions,  
decreased backlogs, and better compliance. These results imply that a well-structured formal institutional design  
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can, to some extent, make up for the lack of informal collective mechanisms in contexts that are well-  
resourced[70]  
In states where capacity is limited, the reforms tend to worsen pre-existing issues. The increase in tribunal  
caseloads (34% during the initial implementation phase) without a corresponding increase in resources leads to  
the creation of new bottlenecks. Although direct access provisions are theoretically democratizing, they  
primarily benefit workers who possess legal knowledge and resources—usually permanent employees in larger  
organizations, rather than the more vulnerable contract workers[71]  
Of particular concern is the Code's dilution of collective mechanisms—such as reduced coverage of standing  
orders, more stringent requirements for strikes, and lower recognition thresholds for negotiating unions—which  
indicates that the reforms favor individual grievance resolution over collective bargaining. This structural  
decision presupposes that isolated workers can effectively navigate dispute resolution systems that were  
historically designed for collective representation[72]  
The inquiry regarding "compensation versus acceleration" consequently provides a conditional response:  
reforms may offer compensation in contexts that are well-resourced and possess a robust rule of law; however,  
they are likely to promote individualization and exacerbate power asymmetry in the predominant segment of  
Indian manufacturing, which is marked by small enterprises, contract labor, and inadequate enforcement.  
Implications for Industrial Harmony  
The research findings contest traditional beliefs regarding industrial harmony. The narrative of "industrial  
peace"—which lauds diminished disputes, fewer strikes, and limited labor unrest—masks the underlying  
tensions that are building in poorly regulated, non-unionized workplaces. Three trajectories deserve attention:  
short-term stability, long-term volatility: The current low levels of disputes may indicate a temporary  
suppression rather than a lasting harmony. Historical data from various contexts demonstrates that the prolonged  
accumulation of grievances without avenues for collective expression leads to sporadic yet intense outbursts—  
wildcat strikes, violent confrontations, and mass protests—that are often more destabilizing than institutionalized  
disputes [73].  
Informalization of conflict: As formal mechanisms for dispute resolution become either inaccessible or  
ineffective for poorly organized workers, conflict manifests through informal means—such as sabotage,  
absenteeism, turnover, and withdrawal of productivity. Although these actions are not reflected in official dispute  
statistics, they carry significant economic repercussions and reveal underlying discord [74].  
Geographical and sectoral fragmentation:  
The dual labor market—where permanent employees in large organizations maintain a degree of union  
representation, in contrast to contract workers in smaller entities who are largely unorganized—results in  
industrial relations that are fragmented both geographically and sectorally. This fragmentation complicates  
assessments at the national level and may lead to varying stability trajectories across different manufacturing  
sub-sectors[75]  
Theoretical Contributions  
This study adds to the theory of industrial relations in multiple ways:  
Institutional void theory: Enhances comprehension of the impact that the deterioration of a single institution  
(unions) has on interconnected institutional frameworks (dispute resolution), especially in scenarios where  
alternative institutions evolve inconsistently across different geographical and sectoral areas.  
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Power asymmetry dynamics: Illustrates that dispute resolution systems intended for contexts with balanced  
power (featuring collective representation) operate differently when power imbalances increase, necessitating  
theoretical models that consider institutional prerequisites.  
The distinct characteristics of emerging economies pose challenges to the direct application of industrial relations  
theories from developed economies, particularly in contexts marked by extensive informal sectors, dual labor  
markets, and variations in state capacity. This situation calls for the development of theories that are sensitive to  
the specific contexts involved. The paradoxes of reform demonstrate that procedural changes aimed at enhancing  
efficiency, timelines, and access can lead to contradictory results. While certain metrics may improve, broader  
systemic goals may be compromised, depending on the context of implementation. This phenomenon  
necessitates the use of multi-level analytical frameworks.  
CONCLUSIONS  
This thorough examination of the decrease in union activity and the resolution of industrial disputes within  
India's manufacturing industry leads to several clear conclusions:  
Primary Findings  
The decline of unions is significant and accelerating: The density of trade unions in the manufacturing sector  
decreased from 22.3% to 15.1% between 2010 and 2024, with a particularly steep drop among contract workers,  
who now represent over 50% of the formal workforce. This diminishing of collective representation  
fundamentally transforms the institutional framework of industrial relations.  
The reduction in the frequency of disputes conceals concerns regarding quality: Although industrial  
disputes have fallen by 73% and the speed of resolution has improved in certain situations, evidence suggests  
that this trend is indicative of a diminished capacity among workers to organize collective action, rather than a  
true state of workplace harmony. The percentage of outcomes favorable to workers has decreased by 11 points,  
indicating that a reduction in disputes does not equate to fairer outcomes.  
Power imbalances have notably increased: The transition from strikes initiated by workers (68% in 2010) to  
lockouts initiated by employers (61% in 2023), along with a decrease in settlements favorable to workers,  
illustrates a significant transfer of power from labor to capital in the context of disputes.  
Legislative reforms exhibit conditional effectiveness: The Industrial Relations Code 2020 provides gains in  
procedural efficiency in states with effective administration (20-30% quicker resolution) but may worsen power  
disparities by prioritizing individual mechanisms over collective bargaining frameworks. The results of these  
reforms are heavily reliant on the administrative capacity and enforcement capabilities of the state.  
The transformation of structures contributes to the decline of unions: In addition to internal factors, external  
changes such as the growth of contract labor, restructuring within the manufacturing sector, and advancements  
in technology generate self-perpetuating cycles that diminish both the capacity of unions and the effectiveness  
of dispute resolution.  
Theoretical Implications  
The study indicates that dispute resolution mechanisms tailored for institutionally balanced environments  
(characterized by strong collective representation) operate in a qualitatively distinct manner when the  
foundational institutional conditions deteriorate. This conclusion calls into question the assumptions that have  
informed recent labor reforms, which suggest that procedural efficiency can offset the weakening of substantive  
institutions.  
The contradiction of decreasing disputes in the context of union decline highlights the inadequacies of aggregate  
statistical measures in evaluating the quality of industrial relations. A comprehensive framework that includes  
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outcome equity, procedural fairness, the preservation of voice, and the durability of settlements is essential for  
a meaningful assessment.  
Policy Recommendations  
Drawing from empirical evidence, this study presents a number of policy recommendations grounded in  
research.  
Enhance the framework for collective bargaining: Instead of perceiving the decline of unions as unavoidable,  
policies ought to proactively endorse mechanisms for collective representation, such as sectoral bargaining,  
works councils in environments without unions, and safeguards for organizing efforts, especially for contract  
workers.  
Achieve a balance between procedural and substantive reforms: Although enhancements in procedural efficiency  
(such as timelines and digital systems) provide benefits, they should be paired with substantive protections that  
guarantee equitable negotiations. Access to direct tribunal services necessitates additional legal assistance,  
worker education, and protections against retaliation.  
Contextualized implementation: Acknowledge that the effectiveness of reforms differs based on state capacity,  
the size of establishments, and the composition of the workforce. Strategies for implementation must be tailored  
to the specific realities of each context instead of relying on standardized templates.  
Equity in outcomes should be monitored in conjunction with efficiency: Develop thorough monitoring systems  
that not only assess the frequency of disputes and the speed of resolutions but also evaluate settlement results,  
rates of recurrence, and access trends among various worker categories (permanent, contract, informal).  
Address the obstacles to organizing contract labor: Considering that contract workers make up over 50% of  
formal employment in manufacturing yet are predominantly unorganized, it is imperative to focus on specific  
legal measures that facilitate collective representation for temporary workers.  
Enhance dispute resolution capabilities: Provisions for direct access lead to an increase in tribunal workloads. In  
the absence of adequate investment in judicial infrastructure, staffing, and training, procedural reforms may  
inadvertently create new bottlenecks that undermine efficiency goals.  
Maintain tripartite mechanisms: Although simplifying bureaucratic processes provides benefits, completely  
abolishing tripartite conciliation and government reference roles could eliminate crucial sources of  
countervailing power in asymmetric situations. It is worth considering the selective preservation of institutional  
buffers.  
Directions for Future Research  
The scope and limitations of this study indicate various fruitful avenues for future research:  
Longitudinal outcome tracking: Monitoring particular groups of disputes throughout the resolution processes,  
from settlement implementation to recurrence, would shed light on quality aspects that are hidden in cross-  
sectional data.  
Comparative state analysis: A systematic comparison among states with differing levels of labour law  
enforcement, union density, and reform implementation may reveal institutional design characteristics and  
implementation practices linked to balanced outcomes.  
Informal sector extension: Creating methodologies to analyze dispute patterns in the informal manufacturing  
sector (which accounts for 71% of employment) would yield a more comprehensive understanding of workplace  
conflict within Indian manufacturing.  
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Comparative state analysis: A systematic examination of states with differing levels of labour law enforcement,  
union density, and reform implementation may reveal institutional design characteristics and practices that lead  
to balanced outcomes.  
Informal sector extension: Creating methodologies to analyze dispute trends in the informal manufacturing  
sector (which accounts for 71% of employment) would enhance the understanding of workplace conflicts within  
Indian manufacturing.  
Worker voice qualitative research: Qualitative studies based on interviews that explore how workers perceive  
and navigate dispute resolution systems in both unionized and non-unionized environments would provide  
valuable insights to complement quantitative institutional analyses.  
Sectoral deep dives: In-depth studies focused on specific industries (such as automotive, textiles, and  
pharmaceuticals) that consider unique production systems, technological advancements, and market dynamics  
could improve the understanding of the varied impacts of union decline.  
Long-term Code impact assessment: As the implementation of the Industrial Relations Code 2020 progresses,  
a thorough quasi-experimental evaluation comparing states that adopt different provisions could yield strong  
causal evidence for the refinement of policies.  
Concluding Reflection  
The connection between the decline of unions and the resolution of industrial disputes in India illustrates broader  
conflicts in modern labour regulation: the need to balance flexibility with protection, efficiency with equity, and  
individual access with collective representation.  
This study reveals that merely implementing procedural reforms cannot offset the weakening of institutions  
when fundamental power imbalances increase.  
As India aims for economic growth driven by manufacturing, the quality of industrial relations—not just the  
lack of visible disputes—will significantly influence whether development is inclusive and sustainable. The  
results indicate that celebrating lower dispute statistics without scrutinizing the underlying power dynamics and  
equity of outcomes risks confusing suppression with harmony, which could be a costly misunderstanding for  
long-term industrial stability and social cohesion.  
The evolving industrial relations framework, marked by diminished union power, increased reliance on contract  
labor, and revised dispute resolution processes, signifies not just a technical modification but a profound change  
in the recognition, expression, and resolution of workplace conflicts. The impact of this transformation on  
industrial harmony—whether it improves or detracts from it—hinges significantly on the policy decisions made  
in the upcoming years concerning collective voice mechanisms, enforcement capabilities, and institutional  
equilibrium—decisions for which this research offers an empirical basis.  
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