Industrial (or labour) relations encompasses the study of the employment relationship. Ultimately the rationale for the discipline is the continued significance of work for the maintenance and advance of human societies. This necessitates the existence of a vitally consequential labour or employee group, which is involved in a fundamental economic, social and political relationship with employers and management. Moreover, the outcomes of this relationship are so crucial to the long-term survival, let alone continued prosperity of any given country, that it inevitably includes the state or government as well.

In more detail, industrial relations scholars tend to assume that in every industrial and industrializing country, there are three main 'actors' or parties with partly common and partly divergent interests: employers and managers, employees and labour (and often trade unions), and the state. A degree of conflict between these groups is regarded as inevitable, but there are typically mechanisms to ensure that it is channelled or accommodated, notably: (1) individual resolution (supported by freedom of contract and by the lack of any substantial restrictions to the operation of the labour market); (2) unilateral determination (by employers, managers, the state, trade unions or workers); and (3) plural modes of regulation (typically under collective bargaining and in which differences are 'expressed, articulated and defended' through independent associations of employers and working people and in which joint determination and responsibility for the terms and conditions of employment has been instituted).

It is further assumed that interests may be shared or conflicting in both so-called production and distribution spheres (the first encompasses the actual work process, the second economic rewards which accrue from employment). On the one hand, then, a series of creative or productive activities are defined by the functions of all organizations. But while their performance may be free of conflict (for example, when managerial decision making is legitimated), equally there are often fundamental struggles along the so-called 'frontier of control', between working people who seek 'freedom on the job' and managers and supervisors who endeavour to plan the overall organization and conduct of work. On the other hand, the allocation of rewards from work may also occasion consensus or conflict. The former depends on fairness or justice governing the principles of distribution. However, in its absence, antagonism is likely and is reflected in familiar disputes over pay and income.

Michael Poole