Chapter 4 Industrial Conflict.pptx

Industrial Conflict

1. Industrial Conflict

2. Concept of Industrial Conflicts/ Disputes Industrial Conflicts/Disputes are common where ever unions exist. It arises out of the conflicting interests between two or more parties. Conflicts/Disputes means the difference or disagreement or strike over some issues between the parties. Industrial Dispute/Conflict means “any dispute or difference between employers and employees or between employers and workers , or among employees or work force, which is connected with the employment or non-employment or the terms and conditions of employment of any person.”

3. However, Industrial Conflicts/Disputes are mostly the differences or strike between workers and the employers. They manifest in the form of strikes, bandhs, lockouts and other sabotage industrial actions. Conflicts/ Disputes can be individual as well as collective. The ILO has classified the industrial disputes into two types: 1. Interest Disputes 2. Rights Disputes

4. Figure: Classification of Industrial Disputes

5. Interest Disputes : Interest Disputes are economic disputes. These arise out of terms and conditions of employment, either out of claims made by the employees or offers given by the employers. For example; Lay offs, claims for wages and bonus, job security, fringe benefits, etc. Rights Disputes : Rights Disputes arise out of application or interpretation of existing agreements or contracts between the employees and the management. They relate either to an individual worker or a group of workers. These conflicts are unhealthy. These manifest in the form of strikes and lockouts, loss of production and property as well as sufferings to workers and consumers.

6. Generally, the major causes of industrial conflicts and strikes relate to wages, unions, rivalry, political interferences, unfair labour practices, multiplicity of labour laws, etc. However, Industrial conflicts/Strikes also occurs because of economic and non-economic causes like psychological, ideological, and political causes. Hence, the causes of industrial conflicts can be grouped in to four categories. They are as follows: 1.Economic Causes 2.Management Causes 3.Trade union practices 4.Legal and Political factors. Causes of Conflicts and Strikes:

7. 1. Economic Causes : Economic causes relates to interest disputes and includes wages, bonus, allowances, benefits, incentives, and working conditions. 2. Management Practices : These include: - Management’s threat of use of coercion in exercising the rights of workers to organize themselves in the form of unions as per the legal provisions. - Management’s unwillingness to recognize a particular trade union.

8. - Unwillingness to talk over any dispute with the employees or refer it to “arbitration” even when trade unions want it to do so. - Forcing workers either to join a particular trade union or refrain from joining a trade union. - Discharge or dismiss workers by way of discrimination, victimization, or any other subjective ground. - Management’s denial for consulting workers in the matters of recruitment, promotion, transfer, merit awards, etc. - Unsatisfactory benefits offered by management. - Violation of norms by management such as code of discipline, grievance procedures, agreements between workers and management.

9. 3. Trade unions : Trade Union practices also cause industrial conflicts. Each union tries to show its greater concern for the workers cause so as to attract more and more workers to its folds. In this tug of war, the settlement arrived at between one union and management is opposed by other (rival) union. Added to it is the trade union’s assumption “what they do is only right and what management do is always wrong” breed strike between workers and the management. 4. Legal and political factors : Most trade unions are affiliated to political parties. Workers serve as activists for the political parties by organizing strikes, sit-ins, and gheraos in industries.

10. Similarly, inter-union rivalry, multiplicity of labour laws and political pressures on collective bargaining, etc cause industrial conflicts in the organization. India has 108 legal acts at central and state levels which deal with labour relations. Consequences of Industrial Conflict/Disputes:  Loss of production  Loss of profit  Loss of market shares  Increase in inflation and cost of living  Poor motivation and low employee morale  Even closure of the organization.

11. Prevention and resolution of industrial conflict: “Prevention is better than settlement or cure” underlines the importance of preventing industrial conflicts/ disputes. The preventive machinery is essentially a proactive approach to avoid industrial disputes/conflicts taking place in the organization. Such preventive machinery includes various measures like trade unions, collective bargaining, grievance procedure, workers participation in management, empowerment, health and safety and social security, etc. Apart from these, the additional preventive measures include: 1. Joint consultations 2. Standing orders 3. Code of discipline.

12. there are two important consultative arrangements made to prevent industrial disputes. These are works committees and joint management. Work Committees: Organization employing 100 or more persons have to set up works committees at unit level. These committees have equal number of representatives from the workers and the employers. Work committees are purely consultative in nature and have been regarded as the most effective agency for the prevention of industrial disputes. The objective of work committees are to: Remove the causes of friction in the day to day work situation Foster amity and harmonious relationship between the parties Create an atmosphere for volunteering settlement of disputes and frictions Joint Consultations

13. Issues relating to wages, benefits , bonus, terms and conditions of employment, hours of work, welfare majors, training , development , promotion, transfer etc fall under the purview of works committees. Joint Management Council(JMC): T hese councils were set up to enable workers to participate in management and enfuse a spirit of cooperation between the workers and the management. The salient features of the JMCs are as follows: The scheme is a volunteering one. The minimum and maximum number of its members are six and twelve respectively consisting of equal number of representatives of workers and employers. The JMCs deal with matters like information sharing and administrative.

14. The decision taken by the JMC should be unanimous once. The JMCs can be set up in the units employing 500 or more persons and having strong trade unions. Standing orders The very purpose of having Standing Orders in the organizations is to regulate industrial relations. Essentially, the term ‘Standing Orders’ refers to the rules and regulations which govern the conditions of employment of workers. These standing orders are binding on the employer and the employees. Code of Discipline According to the code of discipline, both employees and employer voluntarily agree to maintain and create an atmosphere of mutual trust and cooperation in the industry.

15. The code of discipline provides for that: Strikes and lockouts can not be declared without prior notice. No party should take any direct action without consulting the other. The existing machinery for the settlement of disputes should be followed. When industrial disputes could not be prevented even after adopting various preventive measures, as just discussed, disputes occurred need to be settled at the earliest possible so as its impending costs are minimized. This calls for a discussion on “settlement of industrial disputes”.

16. Settlement of industrial disputes/conflicts Whatever may be the cause of industrial conflicts , the consequences are harmful to all stakeholders-management, employees, economy and the society. Various methods/approaches are available for resolving disputes/conflicts in the organizations and most common are: Collective bargaining Code of discipline Grievance procedure Arbitration Conciliation Adjudication Consultative machinery

17. Collective bargaining : It is probably the most effective method of resolving industrial conflicts. It occurs when representatives of a labour union meet management representatives to determine employees' wages and benefits and to solve other issues. It involves six major steps: Preparing for Negotiations Identifying bargaining issues Negotiation Reaching the agreement Ratifying the agreement Administration of the agreement

18. 2 . Code of Discipline : It defines duties and responsibilities of workers and employers. The objectives of code are : To ensure that employers and employees recognize each other’s rights and obligations. To promote constructive co-operation between the parties concerned at all levels. To secure settlement of disputes and grievances by negotiation, conciliation and voluntary arbitration. To eliminate all forms of coercion, intimidation and violence in IR. To avoid work stoppages. To facilitate the free growth of trade unions. To maintain discipline in industries.

19. 3. Grievance procedure: All labour agreements contain some form of grievance procedure. If the procedure is followed strictly, any conflicts/disputes can easily be resolved. A grievance may be understood as an employee’s dissatisfaction or feeling of personal injustice relating to his/her employment relationship.

20. General grievance procedure can be seen as : Stage 4: Complaint to union Stage 3: Complaint to Divisional head Stage 2: Complaint to Dept. head Stage 1: Complaint to Section head YES NO YES NO YES No

21. 4. Arbitration : It is a procedure in which a neutral third party studies the bargaining situation, listen to both the parties and gathers information, and then makes recommendations that are binding on the parties. It has achieved the certain degree of success in resolving disputes between the labour and the management. However, it is not without its weaknesses, such as: It is expensive and the expenditure needs to be shared by the labour and the management. Judgment becomes arbitrary if there is a mistake in selecting the Arbitrator. Too much Arbitration is not a sign of healthy IR. 5. Conciliation: It is a process by which representatives of workers and employers are brought together before a third party with a view to persuading them to arrive at an agreement by mutual discussion between them. The third party may be individual or a group of people. They are also named as mediators.

22. 6.Adjudication: It means a mandatory settlement of an individual dispute by a labour court or a tribunal. Generally, the government refers a dispute for adjudication depending on the failure of conciliation proceedings. 7.Consultative machinery: Towards the end, it is essential to refer to the consultative machinery set by the government to resolve conflicts. Its main function is to bring the parties together for mutual settlement of differences in a spirit of cooperation and goodwill. It operates at the plant, industry, state and the national levels. At plant level, there are works committee and joint management councils Similarly, labour advisory boards operate at the state level and national level.

23. Case Study: The Bulb Manufacturing Company Bulb Manufacturing Company, the subsidiary of well- known international cooperation, specialized in the manufacture of electrical equipments like bulbs, electric stoves, heaters, coolers and presses. It had been operating in India for about two decades. The company had recently finalized the expansion plans of its only factory in India. It was decided to shift the factory to a new location, five miles away. The company had to do the shifting because the expansion plans required more space than was available at the old site. Since the present factory was situated in the heart of town, the workers did not have much transport difficulty. The old factory site was easily accessible, and it did not cost much on transport either. The new site though far-off was well connected by train and bus service. There was no transport difficulty and some of the workers were already living in that area. The workers agreed to shift to new premises only if the company granted a flat increase of Rs.25 in their monthly salary. The company instead offered to give the workers a lump sum of Rs.30 as a resettlement allowance and a permanent increase in salary of Rs.5 per month to each workers. This was the situation in October, 1979. When the plant was being shifted to new site, negotiations between the company management and the workers representatives went on uninterrupted for about six months. The workers modified their original demand and content with a lump sum of Rs.70 as resettlement allowance and a permanent increase of Rs. 5 per month as a conveyance as allowance. After further negotiations and some informal bargaining the agreed amount was Rs. 45 as lump sum and Rs.5 as conveyance allowance.

24. The company’s representatives promised to consider this demand. This was taken by the union leaders to mean that the company has already conceded this demand. The management’s attitude became stiff and it struck to its old offer. The workers refused to compromise on those terms. The workers threatened to adopt the ‘go-slow’ tactics. For three months since December they went slow, the company’s production of bulbs was adversely affected. The production went down. The company assembled 30,000 bulbs per month previously and with the ‘go-slow’ the production declined to 20,000. the management refused to intimidate. It sat stiff on its stand. During this period also, the negotiations were going on. It was at this stage that the union sought the ministerial intervention. The company argued that unless the workers resumed normal production, it would not consider the inflated demands much less concede to them. The Labour Minister agreed. The Central Government was absolutely against ‘go-slow’ tactics. The workers stressed that the production figure 30,000 was the result of overtime work. They also said that it there were no overtime the normal production would be 20,000 bulbs. The company proved the Minister, by quoting previous records, that the workers were going slow. The minister could not help the workers. He could intervene only when the workers resumed normal production. It was at this stage that the company charge sheeted the 10 ring leaders and suspended them pending inquiry. This proved too much for the workers. The labour leader agreed to accept the very original terms of the company and offered to give normal production provided the suspended leaders were reinstated. The company refused to take any notice of even this modified demand. Then the workers gave notice of strike on February 28, 1980.

25. The whole idea was to put pressure on the company in the most critical month of the year, namely, March when the company needed maximum production to dispose of outstanding orders for bulbs. This was the assumption on which the workers proceeded. The company refused to yield. During the first three days, the workers staged a stay in strike. After that, the company dared to lock-out for two days. The company opened the gates of the factory on the sixth day but the strike continued for two months. The company refused to budge an inch from its stand. QUESTIONS: 1.What is the problem in this case? 2.Are the ‘go-slow’ tactics and the strike justified? Who are responsible for them? What is the remedy? 3.Should the management reinstate the suspended ring leaders? 4.Comment on the collective bargaining approach of the union and management representatives.