This paper attempts to review the dynamics of employee relation in government as it exists today in India. In recent past, India has witnessed a sizeable increase in its governmental workforce, a notable growth of trade unionism among civil servants and a substantial amount of industrial disputes in government. It is argued that economic dissatisfaction of the central government employees due to relatively low emoluments compared with non-government organization and a gradual fall in real income is the main source of conflict in government. Government employee as an individual is no different from a private employee in his hopes and aspirations for higher salary and better standard of living. So long as government as employer is unable to fulfil its employees' minimum economic need an overt employer-employee conflict is inevitable. It is suggested that employee unrest in government could be avoided by developing an effective dispute settlement machinery like Whitleyism in Great Britain, recognizing employee's right to form and join association according to one's own choice and changing legislation in favour of employees' current need. In so far as the central government is uncompromising in favour of the changing need of the employees and remains complacent with its traditional sovereignty attitude employee unrest will continue unabated.