Labour Relations and SHRM+Class 1 & 2

7/27/2019 Labour Relations and SHRM+Class 1 & 2

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Introduction toIndustrial Relations


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Defining Labor Relations

This discipline covers the relationship of workerswith the organization and with each other. Laborrelations is concerned with anticipating,addressingand diffusing workplace issues that may interfere

with an organizations business objectives, as alsowith resolving disputes between and amongmanagement and workers. It includes theprocesses of ensuring that relations with workers

comply with applicable central and local laws andregulations and resolving workplace disputes.


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JOURNEY : LABOR RELATIONS TOEMPLOYEE RELATIONS

Labor Relation in India has been shapedlargely by principles and policies evolvedthrough tripartite consultative machinery at

the industry and the national levels. The Labor Relations system of India has its

origin in the colonial past.

The movement for independence, influencedthe evolution of the Labor relations systemin India


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The Historical evolution of the Labor Relationssystem can be categorized under six phases:

The Protective Phase (1947-1956)

The Consolidation Phase (1957-1965)The Conflict Ridden Interventionist Phase(1966-1976)

The Directionless Phase (1977-1980)

The Productivity efficiency, Quality-orientation phase(1981-1990)

The Economic Growth Competitive Phase(1991-Onwards)


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The Current scenario points to a shiftin the relative bargaining power inLabor relations, away from the

workers to the employers.

The current standing lays emphasison term employee encompassing alarger section of working class thanlabor.


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KEY DIMENSIONS OF TRADITIONAL IRAND EMPLOYEE RELATIONS

DIMENSIONLABOR RELATIONS

(I.R.)EMPLOYEE

RELATIONS (SHRM)

PsychologicalContract

Compliance Commitment

Behavior References Norms, Customs,Practices Values, Mission

Relations

Low trust, pluralist,Collective

High Trust, Unitarist,Individual

Organizational Design

Formal Roles,Hierarchy, Division of

labor, ManagerialControl

Flexible roles, flatstructure, teamworkand autonomy, self

control


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Approaches to IR

IR is related to Class conflict, Mutual-co operationand Competing interests of various groups

There are mainly three approaches to IR

1. Unitary approach

2. Pluralistic Approach

3. Marxist Approach


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Pluralistic

Co-operation

Conflict

Authoritarian

Paternalism

Unitary

Human

resource

management

Systems

Evolution

Revolution

Marxist

Control of

the labour

process

Input Conversion Output

Conflict

(differences)

Institutions

and

processes

Regulation

(rules)

Approaches to organisations

Approaches to industrial relations

Social action

Wider approaches to industrial relations

Approaches to IR

Labour market Comparative


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IR is grounded in mutual co-operation, individual treatment,

team work and shared goals.

Union co-operate with the mgt. & the mgt.s right to

manage is accepted because there is no we they feeling

Assumption: Common interest & promotion of

harmony No strikes are there.

Its a reactive IR strategy.

They seek direct negotiations with employees.

1. Unitary Approach


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2. Pluralistic Approach

It perceives:

Org. as a coalitions of competing interest.

TU as legitimate representatives of employee interests.

Stability in IR as the product of concessions and compromisesbetween mgt. & unions.

Conflict between Mgt. and workers is understood asinevitable.

Conflict is viewed as conducive for innovation and growth.

Strong union is necessary.


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3. Marxist Approach

Regard conflict as Pluralists

Marxists see conflict as a product of the capitalist society.

Conflict arises due to the division in the society between those who own

resources and those who have only labor to offer.

For Marxist all strikes are political.

He regard state intervention via legislation & the creation of Industrial

tribunals as supporting mgts interest rather than ensuring a balancebetween the competing groups.


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Parties to IR

Employer-EmployeeRelations

Employees

EmployeeAssociations

Government Courts &Tribunals

EmployerAssociations

Employers


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A few notable features pertaining to IndustrialRelations are as under:

1. Industrial Relation do not emerge in vacuum they are born of employmentrelationship in an industrial setting. Without the existence of the two parties, i.e.labor and management, this relationship cannot exist. It is the industry, whichprovides the environment for industrial relations.

2. Industrial Relation are characterized by both conflict and co-operations.This is

the basis of adverse relationship. So the focus of Industrial Relations in on thestudy of the attitudes, relationships, practices and procedure developed by thecontending parties to resolve or at least minimize conflicts.

3. As the labor and management do not operate in isolations but are parts oflarge system, so the study of Industrial Relation also includes vital environmentissues like technology of the workplace, countrys socio-economic and political

environment, nations labor policy, attitude of trade unions workers andemployers.


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Objectives of IndustrialRelation

A. To safeguard the interest of labor and management by securing thehighest level of mutual understanding and good-will among all thosesections in the industry which participate in the process of production.

B. To avoid industrial conflict or strife and develop harmonious relations,which are an essential factor in the productivity of workers and theindustrial progress of a country.

C. To raise productivity to a higher level in an era of full employment bylessening the tendency to high turnover and frequency absenteeism.

D. To establish and nurse the growth of an Industrial Democracy based onlabor partnership in the sharing of profits and of managerial decisions, sothat ban individuals personality may grow its full stature for the benefit ofthe industry and of the country as well.


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E. To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos byproviding reasonable wages, improved living and working conditions, said fringebenefits.

F. To establish government control of such plants and units as are running at a loss orin which productions has to be regulated in the public interest.

G. Improvements in the economic conditions of workers in the existing state ofindustrial managements and political government.

H. Control exercised by the state over industrial undertaking with a view to regulatingproduction and promoting harmonious industrial relations.

I. Socializations or rationalization of industries by making the state itself a majoremployer

J. Vesting of a proprietary interest of the workers in the industries in which they areemployed.


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Relevance of Labor Relations in thefield of SHRM

In many industries (public or private)unionization is the norm. Managers andbusiness owners in these industries have nochoice but to be well versed on the laws thatregulate the relationship with unionemployees.

Competitors maybe unionized and settlements

in those organizations may impact HRpractices, programs and policies needed toremain competitive in recruiting and retainingproductive employees.


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Organized labor presents a number of keystrategic challenges for management

When workers unionize, the power based within

the organization is redistributed. The employersability to mange workers at their discretion isseverely curtailed.

Unionization involves bringing in outside players

whose support must be gained for any new orongoing management initiative


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Organized labor presents a numberof key strategic challenges formanagement

Unionized work setting greatly impactsthe organizations cost structureparticularly payroll expenses.


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EMPLOYEE RELATIONS STRATEGY

Like other business and HR strategies, those concerned withemployee relations can, emerge in response to an evolvingsituation.(Mintzberg 1987)

Employee relations strategy define the intentions of the

organization about what needs to be changed in the ways in whichorganization manages its relationship with the employees and theirtrade unions.

Eg:

1. Strategy- achieving competitive edge through innovation

2.Strategy- achieving competitive edge through cost reduction


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BACKGROUND TO EMPLOYEERELATIONS STRATEGIES

Four approaches to employeerelations have been identified by theIndustrial Relations Services(1993)

Adversarial

Traditional

PartnershipPower sharing


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THE SHRM APPROACH TO EMPLOYEERELATIONS

Build stable and cooperative relationships with theemployees that minimize conflict.

A drive for commitment through employeeinvolvement and communication processes.

An emphasis on mutuality in achieving theorganizational goals through the development of theorganizational cultures based on the shared valuesbetween management and the employees.


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THE SHRM APPROACH TOEMPLOYEE RELATIONS

A shift from collective bargaining toindividual contracts.

Use of employee involvement teamssuch as Quality Circles.

Continuous pressure on quality- TQM.

Emphasis on teamwork. Harmonization of terms and conditions

for all the employees.


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STRATEGIC IMPACT OF THE LEGALENVIROMENT

The legal environment is a major consideration ofstrategic managers because of the potentialexposure to liability, plant location concerns,productivity influences, and other impacts on cost

structures. In future , strategic managers mayneed to become more proactive in the design oflegislation so that the laudable social goals canbe obtained simultaneously with organizational

growth and efficiency.


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Major Strikes & Labour

Unrest in India


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OVERVIEW India's largest passenger car company, accounting for

over 45% of the domestic car market First company in India to mass-produce and sell more

than a million cars

Annually exports more than 50,000 cars

Manufacturing facilities are located at two facilitiesGurgaon and Manesar

It offers 14 brands and over 150 variants ranging frompeoples car Maruti 800 to the stylish hatchback Ritz


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THE PROBLEM

Differencesin

salary pay

Workingcondition

Lack ofproper

negotiation


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FALL IN DEMAND

Expected fall in demand during crucial festiveseason, when car sales touch the peak.

The Manesar plant is the hub for the key 'Swift'model, which runs a huge backlog in the retailmarket.

The bookings for the new Swift and waiting list ofcustomers are very high. Delay in productionaffect the delivery of cars resulting indisappointment among customers.


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LOSS IN OUTPUT

Estimated loss of more than 90 million dollar.

On August 24, 1,230 cars were planned to beproduced, but only 437 were assembled. Out ofwhich, just 96 cars could pass quality check.

Halt in production on the 5th September, around4000 workers rallied till the highway to block it.

Poor dispatch numbers with respect to meetingtargets and quality control


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CONT.

With only around 20-25 of 950workersagreed to sign the Good Conduct

undertaking Production was stalled as the company

barricaded various entrances to

prohibit entry of those who refused tosign the 'good conduct bond'.


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PROBLEM FROM WORKERS VIEW POINT

If the floor supervisor is rude and

even slaps us, he is awarded with apromotion but in case a labourer daresto reply, he is issued a notice ongrounds of disciplinary action," saidRajender Kumar, a technician


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CONT.

Cockroaches and dead flies found in the food in the hurried lunch-break thatworkers earn in the canteen km from the working station.

The tea was without tea leaves or sugar in the 7 minute break

The company doctor give heavy doses of instant medicines even on minor

complaint so that disruption of work could be prevented.

One days wage cut of Rs.1500, two days Rs.2200, three days cut of Rs.7-8000 is implemented, so that almost the total months wage is cut.

One second late into punching-card entry is a days wage cut, but they haveto give full production for that day too.

Forced to fill an undertaking form, which means that in case of any problem,workers cannot raise any objections against management.


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WORKERS DEMAND

Workers demand to establish anindependent union Maruti Suzuki

Employees Union (MSEU)in thecompany.

Currently, the company has one

recognized union Maruti UdyogKamgar Union which is dominated byworkers at the Gurgaon plant


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MANAGEMENT VIEW OFPROBLEM

Unhappy workers have found out a new way to disrupt ongoingwork at the plant by creating serious defects in quality of thecars, so they would fail the compulsory vehicle inspection quality

test.

Source: http://www.ndtv.com/


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CONT.

Workers indulging in deliberate attempts to reduceoutput and are compromising customer interests

Revenge for the June strike.

Refused to sign good conduct form which aims atensuring the production of good quality products.

Employees are being charged with sabotage andcausing quality problems in the cars produced.


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CONT.

"In the last three days, a series of serious quality problems hadbeen observed in the vehicles produced. For example, vehicledoor was not properly clamped leading to doors falling duringproduction, wiring harnesses were found cut in producedvehicle, dents were noticed on the body and critical

components were not fitted on to vehicles. Such deliberateacts, if not detected during quality checks, would have led toserious implications and directly harmed customers," a seniorcompany official said.


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What ideas

come into yourmind afterseeing thispicture?Uninteresting nature

of work..

Political nature ofunions..

Poor wages.

Occupationalinstability.

Poor behaviouralclimate


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ACTION TAKEN AGAINSTEMPLOYEES

Suspension of 10 workers

Dismissal of five

Discontinued the services of six trainees.

Also suspended four workers for "instigatingindiscipline" a week before

Another four suspended in late July for manhandling

supervisors. Charges of sabotage and causing quality problems in

the cars produced.

On 14th August; police force of 500 sent to occupy

the factory to prevent violent activities


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CONT.

The company terminated 11 workers and suspended 38 on August 29thand 30th on false charges demanding a good-conduct bond with thestate police and administration, the media, and bouncers on its payrollas its willing pawns.

The Maruti Suzuki Employees Union (MSEU) was demanded as animmediate measure, the withdrawal of the charge-sheet, termination,suspension of the 49 workers. The workers were sitting day-and-night atthe factory gate, peeling off the layers of Maruti Suzukis way of life.


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Facts June

1) 13-days strike demanding the recognition of the MSEU at the Manesar plant

2) Production loss of 12,600 cars, valued at about Rs 630 crore.

July

1) Production stopped for a day at the same plant because of strike by some workers.

August

1) Reported 12.74 per cent fall in sales for August to 91,442 as compared

to the sale of 1,04,791 units in the same month last year

September 7

1) Loss suffered is estimated at about 8,550 units, valued at about Rs 425 crore.

Source: Economic Times

Source: Economic Times


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Confirmed by companysspokesperson

Production stopped at Manesar

Third production halt in three monthsat Manesar.

The company stopped operations for10 working days in June

The firm lost Rs 425 crore because ofthe strike.


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Solution

Identify reasons of the conflict.

1. Establishment of separate union forManesar Plant

2. Code of Conduct- Falling standardsof manufacturing.

3. Basic sanitary enhancementsdemanded by the workforce.


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Code Of Conduct And SanitaryProblems

ADOPT CHANGE PROCESS THEORY


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Improvedhygienic

conditions atworkplacereducesemployees

dissatisfaction


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Economy and the labour force in India

Two phases

1.The import substitution era post-independence(1947-1991)

2.The era of economicliberalization(1991-till date)


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Before Liberalization and AfterLiberalization

State mediated and statesponsored development

Protected domesticmarket

Welfare state active inlabour market

Stable governingstructure and policy

regime

Market led and privateenterprise dominated

Competitive market

Labour neutral andinvestment friendly statepolicies

Crisis of governance andfear of political andeconomic instability


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Protesting non-payment of their salary and allowances, a sectionof Air India pilots have decided to go on no-pay-no-work agitationfrom Friday 14January 2012 midnight.

The pilots held a meeting in Delhi, Mumbai, Kolkata and Chennaiand decided to go on the agitation from midnight tonight, said a

pilot associated with the development. This is like work-to-rule,said another pilot who requested anonymity. The airlinemanagement can pay the oil companies when they refuse to sellthem jet fuel. They can pay for car rental when the company asksfor payment but they have no money to pay the employees formonths", the pilot said.

The pilots said they would be on agitation till the government paysour due allowances for five months, which is 80-85 per cent of oursalary component.

Air India


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After the cancellation of at least 44 Air India domestic flights from Delhi andover 50 nationwide on Saturday, domestic pilots of Air India called off theirundeclared day-long strike on Saturday evening after the airline managementagreed to pay them two months arrears of Productivity-linked incentives (PLIs)by January 20, an additional month of arrears of PLI by February 20 as well asclear all their PLI and other dues by March.

This was the third pilot strike in Air India in less than three years, with theprevious two strikes being in 2009 and 2011. But this time around, the strike

ended very quickly.

All dues of the pilots will be cleared by March subject to the clearance of AirIndias Financial Restructuring Plan by the government.

Air India CMD Rohit Nandan secured the approval of recently-appointed civilaviation minister Ajit Singh and top officials of the civil aviation ministry to

give the concerned assurances to the pilots.

Air India Continues.


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Strike has commenced at solar panel and CD-maker Moser Baer's Noida

unit from October17 where workers are demanding a revision in wagesand bonuses."Unfortunately, a very small group of approximately 150associates from the packaging section of one of our optical disc plants,out of around 10,000 associates, have come up with unreasonabledemands," Moser Baer India CEO (Blank Optical Media & ConsumerElectronics) Bhaskar Sharma said.

Workers at Moser Baer's Noida facility struck work last week demandinga revision in wages and bonuses.

According to brokers, the company has not satisfactorily addressed thedemands put forth by workers. "Most of these workers are manning thecritical optical disc plant. The company may suffer losses, if the labourunrest continues," an institutional dealer said.

Moser Baer


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On Oct 18 2011, Dunlop India ltd.(DIL), declared suspension of work at itsSahaganj factory in West Bengal's Hooghly district, alleging law and orderproblem at the plant and non-cooperation from workers.

Mainly because of the law and order problem at the plant, inability to removegoods and material from the factory and non-production. In this situation it is notpossible to run the factory," a DIL spokesman said.

State Labour Minister Purnendu Bose described the DIL move as 'undesirable' andsaid the management of the Pawan Ruia-owned company must make it clearwhether it has the intention of running the factory.

According to Bose, the DIL management had not responded to the government'sinvitation to come for meetings to find ways to solve the problems. "We have alsosought a detailed report from the management on how it proposes to make thefactory viable, but we are yet to receive it."

Industry Minister Partha Chatterjee said his department would soon convene ameeting in a bid to solve the problem.

Dunlop India Ltd.


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Labour Relations and SHRM+Class 1 & 2