Dynamics of Trade Unionism in New Economy

A case presentation by:

TEAM - 6

PresentersNishant - Princy - Rohit - Shweta - Urvie - Vidisha

Company Information

• PLB – 15 manufacturing units and corporate offices in and around bengaluru

• Deals with manufacturing and supply of electronic and mechanical spare parts

• Applies concepts like Kanaban (JIT), TQM, MDP

• Annual Turnover of 2500 crores

• 6000 workers with 80% women (16-25 age group)

Bad Practices - 1

• One-third of the employees are trainees but not covered under Apprentices Act, 1961

• Long distance between home and workplace is knowingly made more

• Socialization among employees not entertained

• An appointed caretaker looks into all issues rather than any line or personnel manager

• After the age of 25, employees are forced to leave their jobs

Union of workers

• A group of workers approached the Centre of Indian Trade Unions Bangalore

• With their guidance a meeting of around 1000 employees was held on 22 May 1998

• An Union named PLBB Group Companies Karmikara Sangha, Bangalore was formed

• Formed as per the provisions of Trade Unions Act, 1926

Trade Unions Act,1926

• The objectives of the SANGHA were laid down

• The office bearers and heads were chosen

• It was registered by the Dy. Registrar of Trade Unions, Bangalore Division II

• Certificate of Registration (Form C) was issued

Union Meet• Wages were very meager

• Service standards were poor

• Many demands were addressed and noted down

• July 31, 1998 the SANGHA made the demands before the management

• SANGHA was ready for meetings on negotiation of the demands

Bad Practices - 2

• Instead of listening to the demands it started to harass the employees by various means

• Suspensions crossed 300 by November, 1998

• 700 trainees were discontinued

• As a result, a strike was declared

SANGHA - Actions

• Filed cases with the Commissioner of Labor

• Petitions in the High Court of Karnataka to obtain stay orders on the prohibitory orders

• Official strike across all branches commenced on Nov 19, 1998

• Dharna near legislative assembly

Management’s Response

Hired Casual workers

Shifted production units to Kerala and Noida

Govt. InterventionCommissioner of labor sends a letter on Nov 25, 1998 to CEO, CITU and the SANGHA

• Registration of SANGHA was null and void• Need for a separate union for each unit of the company•Most important issue was the working condition of the workers• Conciliation meeting to be conveyed on Nov 27, 1998•Refrain from any kind of provocative acts so as to maintain peace and harmony• Dy. Registrar issued a show-cause notice to the SANGHA

SANGHA’s Reaction Commissioner was raising unnecessary objections It urged the Commissioner not to precipitate the

issue under the guise of technicalities The SANGHA claimed that the certificate was

issued under the section 9 of the Trade Union Act, 1926

Expressed willingness to participate in the meeting

Pointed out that there was no action against mgt. for indulging in unfair labor practices

It also seek clarifications regarding unions whose objects extend beyond a state

SANGHA filed a petition in High Court of Karnataka against the Dy. Registrar’s notice

Conciliation Meeting The mgt. attended only after summons were

issued. Meeting was held on Jan 13, 1999. Mgt. claimed that workers were happy because of

the wage hike and the few workers were instigated to join the SANGHA

Mgt. did not consider SANGHA as a trade union Failure report of the meeting was sent on Jan 27,

1999---------- After the meeting, they offered wage hike for workers

resulting in weakening of the strike High Court ordered to call off the strike High Court in turn referred the case to Industrial Tribunal on

Feb, 99.

Terms of Reference1. (a) whether the demands made by the SANGHA are legal?(b) Whether the workers are entitled to interim relief?(c) If, yes to what relief they are eligible?

2. (a) whether strike commenced on November 19, 1998 by the workers is legal?(b) If not, to what relief the workers are entitled?

SANGHA’s Response

No provision of interim relief for the workers

SANGHA files a writ petition against the order of reference

Govt. Influence The then Labor Minister passed an order for

interim relief of Rs.300 per worker per month

Principle Secretary to the ministry of commerce and industries submitted a note to the govt.

Chief Minister also intervened

Govt. ordered the prohibition of strike

Chief Minister supported the management

Bommanahalli Case March 25, 1999 – 50 men attacked the bus carrying 40

employees Pelted by stone and set on fire 10 employees sustained burnt injuries, 3 burnt severely Police arrived late Mgt. promised to meet all the expenses and claimed that

the attackers were part of the CITU CITU denied the allegations Police charged sheeted nearly 50 persons Sessions court convicted 7 out of them After SANGHA filed an appeal in the High Court, another 5

were convicted The later 5 were granted bail The case is still pending in the supreme court

At the end… On April 14, 1999 the five month old strike was

called off

Came down heavily on the Chief Minister and the registrar

Upheld the registration of SANGHA

Meantime, company has closed its present operations

Moved into software development business

Reasons for Trade Union Formation

Question: Why the workers organize themselves into a trade union?

• Conditions of employment• Irregular employment• Union instrumentality• Lack of power• Reduced dependency on management

Management’s ReactionsQuestion: How should management react to such efforts

• Meet expectations • Collective bargaining• Develop trust • Welfare activities

PLB’s approach to SANGHAQuestion: In the instant case the management of PLB was right in its approach. Do you agree or disagree. Explain your views.

• Hike wages• Abruptly changing the shift timings,• Stopping canteen facilities,• Stopping the transport facility, and • Suspending the activities of the SANGHA• Suspending, refusing employment, and

terminating/retrenching employees without valid reasons

Was PLB’s approach correct?

• Incorrect • Reasons

Terminated workers without valid reasons

Reluctant to negotiateUsed influential power to weaken

union

Trade Union Formation - CASEQuestion: Delineate the process of trade union formation and registration using this case.

• Group of workers went to Center of Indian Trade Unions Bangalore region.

• Over 1000 employees from different factories met• PLBB group Companies Karmikara Sangh formed.• Objectives of the Sangha were laid down• Appointed office bearers of CITU as President and General

Secretary• Application for registration submitted to Deputy Registrar of

Trade Union, Bangalore Division 2• Certificate of registration was issued in Form C• The management was informed about the registration and

formation of the Trade Union

Trade Union Formation - LAW • Any 7 or more members by subscribing their name

can form a trade union

• At least 10% or 100 workmen (whichever is less) should be the members of Trade Union on the date of making of the application

• Any application for the formation of a Trade Union needs to be submitted to and verified by the Registrar

• Under Section 3 (2), the government may appoint as many additional and deputy registrar of trade unions who may exercise the power of the registrar at any situation

Role of Registrar - CASEQuestion: Comment on the role played by the Registrar of Trade Unions.

• Registration of the SANGHA was ab initio void • A separate union for each unit of the Company

needs to be registered • Most important issue was the condition of the

workmen • That a conciliation meeting was convened at the

level of the Deputy Commissioner of labor and Conciliation officer of the area on November 27, 1998 at 3PM,

• Refrain from every kind of provocative acts

Duties of Registrar - LAW• Registrar can be defined as:

(i) A Registrar of Trade Unions appointed by the appropriate Government under section 3, and includes an additional or Deputy Registrar of Trade Unions; and(ii) In relation to any Trade Union, the Registrar appointed for the State in which the head or registered office, as the case may be, of the Trade Union is situated;

• Receiving the application• Verifying and scrutinizing the application• Issuing the certificate of registration• Withdraw or cancel registration

Question: Comment on the role of the Government – the Labor and Chief Minister, the police and the labor department - in this case. Established in1971, as a result to the split in the AITUC

• Goal of organizing the workers to further their interests in Economic, Social and Political matters

• Structure• Methods adopted – legislative, demonstrations,

agitations and intensification

CITU

Role of Government

• Biased towards management• Change in the labor minister• CMs statement – contributions to the

revenue of the state

Role of Labor Department

• Unaware of their jurisdiction• Ignorance of law – threat of withdrawal of

the certificate of registration• Harassed the Union• Issued the Show Cause Notice with mala

fide intentions at the instance

Role of Police

• Unable to ensure safety of workers

• Not on time

IR Manager

Question: What lesson do you draw from this case for your future role as an IR manager?

• To ensure peace and harmony by pro active employee relations

• Statutory compliance• Employee Welfare• Grievance Redressal• Personnel Administration - Canteen, Security, Recreation

club & Medical Center• Communication - Contact Programmes, Meetings, In house

journal etc.• Legal issues pertaining to labour• Enhance Employee Satisfaction

CONCLUSION The case gives an excellent example of BAD

industrial relations

Apart from the management’s wrong decisions, the govt. intervention was not perfect and as expected

This case reflects the various loopholes in the govt.’s system of managing the labor legislations

This case gives an vivid understanding for how and where an IR manager should act and try to make peace

COMPANY NAME

British Physical Laboratories