The traditionally centralised system of industrial relations in NSW state education has a bitter history sustained by an adversarial culture (Mitchell, 1975; Spaull, 1977). The nature of this history, and the destructive effects of its associated industrial culture in schools, have led to a series of calls at state and national levels for holistic and fundamental reform (egs. Manefield, 1988; Scott, 1990; Ashenden, 1990). In early 1991, the New South Wales Department of School Education (NSW DSE) decided to sponsor the development of a School Leadership/Management Certificate (SL/MC). The Human Resources Directorate determined that one of the optional units of the SL/MC should be entitled `Industrial Relations and the Principal'. The North West Region of the NSW DSE was asked to assemble a planning team and to `develop the basis for the industrial relations unit'. The team comprised two regional officials, three principals, a cluster director and the authors of this paper. The authors were asked by the planning team to review the political, policy and philosophical context of the SL/MC initiative, take account of current issues in the region, synthesise the findings of an exploratory workshop and a survey designed to elicit the perceived professional development needs of the region's principals, and to help elaborate human resource development (HRD) policies concerned with industrial relations (IR) at regional and central levels. This paper argues that both the policy context and an educative moral theory support two propositions. First, management education in industrial relations should help prepare principals, school executives, cluster and regional personnel to offer educative leadership in the industrial relations of their schools. Second, the key strategy should be devolutionary so that school, cluster and regional personnel can make industrial relations part and parcel of the day-to-day human resource management services they give to learning communities.