I ns t i t ut eo fMa na g e me nt & Te c hni c a lSt udi e s I NDUSTRI ALMANAGEMENT
500
FI NANCEMANAGEMENT
www. i mt s i ns t i t ut e . c om
IMTS (ISO 9001-2008 Internationally Certified) INDUSTRIAL MANAGEMENT
INDUSTRIAL MANAGEMENT
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INDUSTRIAL MANAGEMENT
CONTENTS:
UNIT – I:
01-25
Plant Engineering: Plant – Selection of site industry – Plant layout –Principles of good layout – types – process, product and fixed position – technique to improve layout – Principles of material handling equipment – Plant maintenance
–
importance
–
Break
down
maintenance,
preventive
maintenance and scheduled maintenance. Plant Safety: Importance – accident – cost and causes of accident – accident proneness – planning for accident prevention – Safety laws and Regulations – Indian factories act 1948 and provision – industrial disputes – settlement of industrial disputes. UNIT –II
26-99
Industrial relations – collective bargaining – process, trade unions – workers participation in management – grievance handling – redressal committees
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INDUSTRIAL MANAGEMENT
1
UNIT – I PLANT ENGINEERING AND PLANT SAFETY Plant :A plant is a place, where men, materials, money, equipment, machinery, etc. are brought together for manufacturing products.
Plant Location :Plant location means deciding a suitable location, area, place, etc. where the plant or factory will start functioning. Plant location involves two major activities. First, to select a plant geographic region and second, selecting a specific site within the region. Plant location plays a major role. It determines the cost of
(a) getting suitable raw material ; (b) processing raw material to finished goods ; and (c) finished products distribution to customers.
Hardly any location can be ideal or perfect. One has to strike a balance between various factors affecting plant location, which are discussed below. 1. Nearness to Raw material. 2. Transport Facilities 3. Nearness to Markets 4. Availability of Labour 5. Availability of Fuel and power 6. Availability of Water 7. Climate Conditions 8. Financial and other Aids 9. Land 10. Community Attitude 11. Presence of related industries 12. Existence of hospitals, marketing centres, schools, banks, post offices, clubs, etc. FOR MORE DETAILS VISIT US ON WWW.IMTSINSTITUTE.COM OR CALL ON +91-9999554621
INDUSTRIAL MANAGEMENT 13. Local bye-laws, taxes, building ordnances, etc. 14. Housing facilities 15. Security 16. Facilities for expansion.
Plant Layout: Plant layout means the disposition of the various facilities (equipments, materials, manpower, etc.) and services of the plant within the area of the site selected previously. All the facilities like equipments, raw materials, machinery, tools, fixtures, workers, etc. are given a proper place. In deciding the place for equipment, the supervisors and workers who have to operate them should be consulted.
Objectives of Good Plant Layout:In a good plant layout: (1) Material handling and transportation is minimized and efficiently controlled. (2) Bottlenecks and points of congestions are eliminated (by line balancing) so that the raw material and semi-finished goods move fast from one work station to another. (3) Work stations are designed suitably and properly. (4) Suitable spaces are allocated to production centres and service centres. (5) The movements made by the workers are minimized. (6) Waiting time of the semi-finished products is minimized. (7) Waiting time of the semi-finished products is minimized. (8) Working conditions are safer, better (well ventilated rooms, etc.) and improved. (9) There is the utilization of cubic space (ie., length, width and height). (10) There are improved work methods and reduced production cycle times. (11) Plant maintenance is simpler. (12) There is increased productivity and better product quality with reduced capital cost. (13) A good layout permits materials to move through the plant at the desired speed with the lower cost. FOR MORE DETAILS VISIT US ON WWW.IMTSINSTITUTE.COM OR CALL ON +91-9999554621
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INDUSTRIAL MANAGEMENT
Principles of Plant layout:For the guidance of Plant Layout engineers, many principles of plant location have been developed during past years. Besides these ready-made principles, considerable art skill is required in designing a good plant layout. A few seconds principles of plant layout have been briefed as under. They are principles of (a) Integration – It means the integration of production centres facilities like workers, machinery raw material, etc., in a logical and balanced manner. (b) Minimum movements and material handling – The number of movements of workers and materials should be minimized. It is better to transport materials in optimum bulk rather than in small amounts. (c) Smooth and continuous flow – Bottles necks, congestion points and back tracking should be moved by proper line balancing techniques. (d) Cubic space utilization – Besides using the floor space of a room, if the ceiling height is also utilized, more materials can be accommodated in the same room. Boxes or bags containing raw material or goods can be stacked one above the other to store more items in the same room. (e) Safe and improved environments – Working places-safe, well ventilated and free from dust, noise, fumes, odours, and other hazardous conditions decidedly increase the operating efficiency of the workers and improve their morale. (f) Flexibility – In automotive and other industries where models of products change after some time, it is better to permit all possible flexibility in the layout.
Process Layout:It is also known as functional layout and is characterized by keeping similar machines or similar operations at one locations (place).this type of layout is generally employed for industries engaged in job order production and non-repetitive kind of maintenance or manufacturing activities.
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INDUSTRIAL MANAGEMENT
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1
5
2
3
4
6
7
8
Fig : Process layout showing product movements.
1. Store Room, 2. Inspection Department, 3. Broaching Section, 4. Milling Section, 5. Lathe Section, 6. Shaper Section, 7. Drill Section, 8. Stock Room.
Advantages •
Wide flexibility
•
Better utilization of available equipment.
•
Comparatively less number of machines are needed.
•
Better product quality.
•
Job orders make the work more interesting for the workers.
•
Workers in one section are not affected by the nature of the operations carried out in another section.
Disadvantages •
For the same amount of production, process layout needs more space.
•
Automatic material handling extremely difficult.
•
More material-in-process remains in queue for further operations.
•
Completion of same product takes more time.
•
Work-in-process inventory is large.
•
Production control becomes difficult.
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INDUSTRIAL MANAGEMENT •
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Raw material has to travel larger distances for being processed to finished goods. This increases material handling and the associated costs.
•
It needs more inspections and efficient co-ordination.
Product Layout:It is also known as line (type) layout. It implies that various operations on raw material are performed in a sequence and the machines are placed along the product flow line, i.e., machines are arranged in the sequence in which the raw material will be operated upon. This type of layout is preferred to continuous production, i.e., involving a continuous flow of in-process material towards the finished product stage.
Lathe
Mill Drill
Drill
Lathe
Grinder
Mill
Figure : Product layout
Advantages •
Less space requirements for the same volume of production.
•
Automatic material handling, lesser material handling movements, times and costs.
•
Less in-process inventory.
•
Product completes in lesser time.
•
Better co-ordination and simple production planning and control.
•
Smooth and continuous work flow.
•
Less skilled workers may serve the purpose.
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Disadvantages •
The layout flexibility is considerably reduced.
•
Production line is not adequately balanced.
•
Product layout involves higher capital investments.
•
One inspector has to look after many machines in two or more production lines.
•
It is difficult to increase production beyond the capacities of the production lines.
Fixed Position Layout:Layout by fixed position of the product is inherent inn ship building, aircraft manufacture and big pressure vessels fabrication.
Advantages:•
It is possible to assign one or more skilled workers to a project from start to finish in order ensuring continuity of work.
•
It involves least movement of materials.
•
There is maximum flexibility for all sorts of changes in product and process.
•
A number of quite different projects can be taken with the same layout.
Disadvantages:•
It usually involves a low content of work-in-progress.
•
There appears to be low utilization of labour and equipment.
•
It involves high equipment handling costs.
Plant layout Procedure:The ideal procedure for a plant layout is to build the layout around the productive process and the design the building around the layout. •
Accumulate basic data,
•
Analyse and coordinate basic data,
•
Decide the equipment and machinery required,
•
Select the material handling system,
•
Sketch plan of the plot for making factory building,
•
Determine a general flow pattern, FOR MORE DETAILS VISIT US ON WWW.IMTSINSTITUTE.COM OR CALL ON +91-9999554621
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Design the individual work station,
•
Assemble the individual layout into the total layout,
•
Calculate storage space required,
•
Make flow diagrams for work stations and allocate them to areas on plot plan,
•
Plan and locate service areas,
•
Make master layout,
•
Check final layout
•
Get official approval of the final layout, and
•
Install the approved layout.
Material Handling: Starting from the time, the raw material enters the factory gate and goes out of the factory gate in the form of finished products. Material handling involves the movements of materials, manually or mechanically in batches or one item at a time within the plant. The movement may be horizontal, vertical or the combination of horizontal and vertical.
Functions and principles of material handling:The two main functions of material handling section are: 1. To choose production machinery and assist in plant layout so as the eliminate as far as possible the need of material handling; and 2. To choose most appropriate material handling equipment which is safe and can fulfill material handling requirements at the minimum possible overall cost:
In general, the functions and principles of good material handling are as follows: •
Minimize the movements involved in a production operation.
•
Using the principles of containerization, unit load or polarization, aim at moving optimum number of pieces in one unit.
•
Minimize the distances moved, by adopting shortest routes.
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INDUSTRIAL MANAGEMENT •
Employ mechanical aids in place of manual labour in order to speed up the material movements.
•
Changes in sequences of production operations may be suggested in order to minimize back tracking and duplicate handling.
•
Safe, standard, efficient, effective, appropriate, flexible and proper sized material handling equipment should be selected.
•
Handling equipments arrangement should minimized distances moved by products and at the same time handling equipments should not interface with the production line.
•
Utilize gravity for assisting material movements wherever possible.
•
Design containers, packages, drums etc., to economize handling and to reduce damage to the materials in transit.
Plant Maintenance Plant: A plant is a place, where men, materials, money equipment, machinery, etc., are brought together for manufacturing products.
Maintenance:Today, in modern industry, equipment and machinery are very important part of the total productive effort than was the case years ago. Moreover, with the development of special purpose and sophisticated machines, equipment and machinery cost a lot more money and therefore their idle or downtime becomes much more expensive. For this reason, it is vitally important that the plant machinery should be properly maintained.
Objectives of Plant Maintenance:•
To achieve minimum breakdown
•
The plant is good working condition at the lowest possible cost.
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Machines and other facilities should be kept in such a condition which permits them to be used at their optimum (profit making) capacity without any interruption or hindrance.
•
Maintenance division of the factory ensures the availability of the machines, buildings, and services required by other sections
•
Optimum return on investment.
Importance of Maintenance:•
The importance of plant maintenance varies with the type of plant and its production.
•
Equipment breakdown leads to an inevitable loss of production.
•
An unproperly maintained or neglected plant will sooner or later require expensive and frequent repairs,
•
Plant maintenance plays a prominent role in production management.
Duties Functions and responsibilities engineering department:(i)
of
plant
maintenance
Depending upon the size of the maintenance department, it has a wide variety of duties of functions to perform. The work is under the control of plant engineer or maintenance engineer who
normally reports to the Work Manager. (ii)
The different duties, functions and responsibilities of the maintenance department are as follows:
A) Inspection :-
(1) Routine schedule (2) Inspections ensure the safe and efficient operation of equipment and machinery. (3) Frequency of inspections depends upon the intensity of the use of the equipment. (4) Inspection section makes certain that every working equipment receives proper attention.
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(5) Items removed during maintenance and overhaul operations are inspected to determine the feasibility of repairs. (6) Maintenance items received from vendors are inspected for their fitness.
B) Engineering
(1) Engineering involves alternation and improvements in existing equipments and buildings to minimize breakdowns. (2) Maintenance
department
also
undertakes
engineering
and
supervision of constructional projects that will eventually become part of the plant. (3) Engineering and consulting services to production supervision are also the responsibilities of maintenance department.
C) Maintenance (including Preventive Maintenance)
(1) Maintenance of existing plant equipment. (2) Maintenance of existing plant buildings, and other service facilities such as yards, central stores, roadways, sewers, etc. (3) Engineering and execution of planned maintenance, minor installations of equipments, building and replacements. (4) Preventive maintenance
D) Repair
(1) Maintenance department carries out corrective repairs to alleviate unsatisfactory conditions found during preventive maintenance inspection. (2) Such a repairs is an unscheduled work often of an emergency nature, and is necessary to correct breakdowns and it includes trouble calls.
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INDUSTRIAL MANAGEMENT E) Overhaul
(1) Overhaul is a planned, scheduled reconditioning of plant facilities such as machinery, etc. (2) Overhaul involves replacement, reconditioning, reassembly, etc.
F) Construction
(1) In some organizations, maintenance department is provided with equipments and personnel and it takes up construction jobs also. (2) Maintenance department handles construction of wood, brick and steel structures, cement and asphalt paving. Electrical installations, etc.
G) Salvage
Maintenance department may also handle disposition of scrap or surplus materials. This function involves, -
Segregation, reclamation and disposition of production scrap, and
-
The collection and disposition of surplus equipments, materials and supplies.
H) Clerical Jobs Maintenance department keep records - of costs - of time progress on jobs
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INDUSTRIAL MANAGEMENT I) Generation and distribution of power and other utilities J) Administration and supervision of labour force K) Providing plant protection, including fire protection. L) Insurance administration M) Establishing and maintaining a suitable store of maintenance materials. N) Janitorial service O) Housekeeping Good housekeeping involves upkeep and cleaning of equipments, building, toilets, wash-rooms, etc. P) Pollution and noise abatement
Types of maintenance:Maintenance may be classified into following categories: (a) Corrective or breakdown maintenance (b) Scheduled maintenance (c) Preventive maintenance (d) Predictive maintenance
Corrective or breakdown maintenance:Corrective or breakdown maintenance implies that repairs are made after the equipment is out of order and it cannot perform its normal function any longer, e.g., an electric motor will not start, a belt is broken, etc. Under such conditions, production department calls on the maintenance department to rectify the defect. The maintenance department checks into the difficulty and makes the necessary repairs.
Typical causes of equipment breakdown (i)
Failure to replace worn out parts.
(ii)
Lack of lubrication
(iii)
Neglected cooling system
(iv)
Indifference towards minor faults
(v)
External factors (such as too low or too high line voltage, wrong fuel, etc.)
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INDUSTRIAL MANAGEMENT (vi)
Indifference towards – equipments vibrations, unusual sounds coming out of the rotating machinery, equipment getting too much heated up, etc.
Disadvantages of breakdown maintenance •
Breakdown generally occurs at importunate times.
•
Reduction of output
•
Faster plant deterioration
•
Increased chances of accidents and less safety both workers and machines.
•
More spoilt material
•
Direct loss of profit.
Preventive Maintenance:A system of scheduled, planned or preventive maintenance tries to minimize the problems of breakdown maintenance. It is a stitch-in-time procedure. It locates weak spots (such as bearing surfaces, parts under excessive vibrations, etc.) in all equipments, provides them regular inspection and minor repairs thereby reducing the danger of unanticipated breakdown.
Objectives of PM •
To minimize the possibility of unanticipated production interruption or major breakdown by locating or uncovering any condition which may lead to it.
•
To make plant equipment and machinery always available and ready for use.
•
To maintain the value of equipment and machinery by periodic inspection, repairs, overhauls, etc.
•
To maintain the optimum productive efficiency of the plant equipment.
•
To reduce the work content of maintenance jobs.
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To achieve maximum production at minimum repair cost.
•
To ensure safety of life and limbs of the workmen.
Advantages of PM •
Reduced breakdowns and connected down-time.
•
Lesser odd-time repairs and reduced overtime to the maintenance work-force.
•
Greater safety for workers.
•
Fewer large-scale and repetitive repairs.
•
Low maintenance and repair costs.
•
Less stand-by or reserve equipment, and spare parts.
•
Identification of equipments requiring high maintenance costs.
•
Lower unit cost of manufacture.
•
Better product quality and fewer product rejects.
•
Increased equipment life.
Predictive Maintenance:•
It is comparatively a newer maintenance technique.
•
It makes use of human senses or other sensitive instruments such as Audio gauges, Vibration analyzers, Amplitude meters, etc., to predict troubles before the equipment fails.
•
Unusual sounds coming out of a rotating equipment predict a trouble ; an electric cable excessively hot at one point predicts a trouble.
•
Simple hand touch can point out many unusual conditions and thus predict a trouble.
•
Predictive maintenance extends the service life of an equipment without fear of failure.
Scheduled Maintenance:•
Scheduled maintenance is a stitch-in-time procedure aimed at avoiding breakdowns.
•
Breakdowns can be dangerous to life and as far as possible should be minimized.
•
Scheduled maintenance practice is generally followed for overhauling of machines, cleaning of water and other tanks, white-washing of buildings, etc.
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Safety Engineering:Safety in Industry:The modern safety movement started around 1912 with the First Cooperative Safety Congress and the organization of the National Safety Council in U.S.A. From 1912 to the present time, remarkable advances have been in reducing the rate and severity of accidents. The importance of industrial safety was realized because every year millions of industrial accidents occur which result in either death or in temporary and permanent disablement of the employees and involve a good amount of cost such as resulting from wasted man hours, machine hours etc.
Safety Results (i) from safe plant, processes, and operations, and (ii) by educating and training workers and supervisors regarding safe practices on the shop floor.
Need of Safety •
Safety in industry helps,
•
Increasing rate of production.
•
Reducing production cost
•
Reducing damage to equipment and machinery.
•
Preventing premature death of talented workers who are an asset to the society.
•
Preventing needless pain and suffering to its employees
Organization for safety •
In a small concern each stop supervisor may be made responsible for safety in his shop.
•
Each shop supervisor may report to top executive as regards safety matters.
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Since the shop supervisor has its main job to turn out production, he may treat safety as a secondary aspect.
•
For this reason sometimes the safety function is taken care of by personnel officer or general foreman.
Accidents:An industrial accident may be defined as and event, detrimental to the health of man, suddenly occurring and originating from external sources, and which is associated with the performance of a paid job, accompanied by an injury, followed by disability or even death. An accidents may happen to any employee under certain circumstances,
Economic Aspects (cost) of Accidents:An accident can be very costly to the injured employee as well as to the employer of the concern. There are definite costs associated with the accident, e.g., direct and measurable costs and indirect.
Direct costs of accident. They associate: •
Compensation insurance, including payment, and overhead costs.
•
Uncompensated wage losses of the injured employee.
•
Cost of medical care and hospitalization.
Indirect costs of accident. They associate: •
Costs of damage to equipment, materials, and plant.
•
Costs of wages paid for time lost by workers not injured.
•
Costs of wages paid to the injured worker.
•
Costs of safety engineers, supervisors and staff in investigating, recording and reporting of accidents and its causes.
•
Costs of replacing the injured employee.
•
Cost of lowered production by the substitute worker.
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•
Cost of delay in production due to accident.
•
Cost of reduction in efficiency of the injured worker when he joins the concern after getting recovered.
Causes of Accidents:An accident is an unplanned incident and for each such incident there is usually a specific cause or causes if one could but discover them.
Technical Causes or unsafe condition reflects deficiencies in plant, equipment, tools, materials handling system, general work environment, etc. Human causes or unsafe acts by the person concerned are due to his ignorance or forgetfulness, carelessness, day-dreaming, etc. It has been estimated that there are four accidents caused by human causes to every one that is caused by technical causes.
Mechanical causes or factors. •
Unsafe mechanical design or construction.
•
Unsafe apparel
•
Defective agencies or devices.
•
Broken safety guards
•
Improper material handling
Environmental factors Environmental
factors
indicate
improper
physical
and
atmospheric
surrounding conditions of work which indirectly promote the occurrence of accidents. Environmental factors include •
Too low temperature to cause shivering
•
Too high a temperature to cause headache and sweating.
•
Pressure of dust, fumes and smokes and lack of proper ventilation.
•
High speed of work because of huge work load.
•
Poor housekeeping
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Personal Factors:•
Age and Health
•
Number off dependents
•
Financial position
•
Home environment
•
Lack of knowledge and skill
•
Incorrect machine habits
•
Mental worriness
•
Non-use of safety devices
•
Working at unsafe speeds.
Accident Prevention:Accident prevention is highly essential in an industry, in order to (i) Prevent injury to and premature death of employees. (ii) Reduce operating and production costs. (iii) Have good employer-employee relations. (iv) High up the morale of employees. Above all, prevention of accidents is a true humanitarian concern. Accident prevention does not occur by itself; there should be consistent implementation of safety measures and safety programmes emphasizing the need for (i) Safe workplace layout and working condition. (ii) Safe material handling. (iii) Personal protective devices. (iv) Safety activities in the organization.
Accident Proneness:ACCIDENT PRONENESS may be defined as the continuing tendency of a person to have more accidents as a result of his persisting characteristics etc. Accident Proneness is perhaps because of peculiar psychological and physiological make up of certain persons.
Causes of accident Proneness:(i)
Inattentiveness and day-dreaming.
(ii)
Poor eyesight and hearing and lack of stamina.
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Poor adjustment of work; distaste for the job.
(iv)
Too much sensitivity and tendency to get perturbed easily, (Emotional stresses).
(v)
Dislike of the supervisor/ foremen, etc.
(vi)
Lack of training, proficiency and skill to do a work.
(vii)
Insufficient intelligence.
(viii) Unsafe behaviour of the worker.
Methods of reduce accident proneness:(i)
Depending upon the job conditions select only those applicants who posses appropriate standards of physical and mental ability.
(ii)
Transfer accident prone workers to comparatively less hazardous job situations.
(iii)
Impart adequate training to a recruit before putting him on the job.
(iv)
Encourage employees working under you and see that they do not get unnecessarily perturbed, frustrated or emotionally disturbed.
Safety:1. Encasing and fencing of machinery:In every factory the following shall be securely fenced unless they are in such position as to be safe for each worker (i) Moving parts of prime-mover and flywheel connected to it. (ii) The head race and tail race of water wheel and water turbine. (iii) Any part of a stock bar projecting beyond the lathe head-stock. The following parts should be securely fenced by safeguards which shall be kept in position while the parts are rotating. (i) Parts of electric generator, motor, etc. (ii) Parts of transmission machinery. (iii) Dangerous parts of any other machinery.
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2. Work on or near, machinery in motion:Any part of machinery if it is required to be examined while it is in motion shall be examined only by a specially trained adult male worker wearing tight fitting clothing. No woman or young worker shall be permitted to clean, lubricate or adjust any part of moving machinery which involves a risk of injury.
3. Employment of young persons or dangerous machines:No young person shall work on a dangerous machine unless -
he has got sufficient training to work at that machine; and
-
he is
under adequate supervision
of an
adult
experienced
worker/supervisor.
4. Hoists and lifts:Every hoist and lift shall be (i)
of good mechanical construction, adequate strength and sufficiently protected and fitted with gates; and
(ii)
Adequately maintained and periodically examined.
5. Lifting machine, chains, ropes and lifting tackles:Factory cranes and other lifting machines such as crab, winch toggle, pulley Brock, etc., shall be of good construction, sound material, adequate strength properly maintained and thoroughly examined at least once a year.
6. Pressure plants:It should be ensured that the working pressure of such parts does not exceed the safe value.
7. Floors, stairs and means of access to different places:They should be of sound construction, properly of such parts does not exceed the safe value.
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8. Pits, sumps, openings in floors, etc.:It shall be either securely covered or suitably fenced.
9. Excessive weights:No person shall be asked to lift, carry or move any load so heavy as to cause him an injury.
10. Protection of eyes:To protect the eyes of worker from the flying particles or from exposure to welding rays, each worker shall be provided with effective screens or suitable goggles.
11. Precautions against dangerous fumes:No person shall be allowed to enter any confined space, chamber, tank, pit, etc., in which dangerous fumes are likely to be present so as to involve risk to the entering person.
12. Explosive or inflammable dust, gas, etc.:If a manufacturing process is producing dust, gas, fumes or vapour which can explode on ignition. (i) the plant should be effectively enclosed; and (ii) such dust, gas fume, etc., should not be allowed to accumulate.
13. Precautions in case of fire:Every factory shall be provided with means as follows and others to help escape in case of fire. (i) Fire warning signal (ii) Unlocked doors and openings towards outside the workroom. (iii) Free passageways and easily openable windows.
Industrial disputes:An industrial Dispute means any dispute or difference between employers and employees or employers and workmen or between workmen and workmen which is FOR MORE DETAILS VISIT US ON WWW.IMTSINSTITUTE.COM OR CALL ON +91-9999554621
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INDUSTRIAL MANAGEMENT connected with employment or non-employment or terms of employment or conditions of labour, of any period. Every human being has certain needs, eg.., economic needs, social needs and needs for security. When these needs do not get satisfied, there arises a conflict between labour and capital. A conflict means a struggle or clash between the interests of the employer and the workers. When an industrial conflict (which otherwise is general in nature) acquires a concrete and specific display or revelation, it becomes an Industrial Dispute A conflict takes the shape of Industrial Dispute as soon as the issues of controversy are submitted (or management) and the workmen on issues such as wages and other benefits, work hours and working conditions, etc. Industrial disputes cause losses to, workers, management and nation as a whole. (i) Workers lose their wages. (ii) Management loses its profit. (iii) Public suffers due to shortage of goods in the market. (iv) Nation suffers due to loss of production.
Settlement of industrial disputes:The different methods employed for settling the disputes are
(a) Without state intervention 1. Collective bargaining. 2. Voluntary arbitration.
(b) With state intervention 3. Compulsory collective bargaining 4. Bipartite committees 5. Compulsory arbitration 6. Compulsory conciliation and Mediation. 7. Compulsory investigation.
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Collective Bargaining:Collection Bargaining constitutes the negotiation between the management and the union with the ultimate objective of agreeing on a written contract covering the terms and conditions of the disputed issues.
Voluntary Arbitration In this method of setting disputes, a third neutral party as a judge hears and collects the facts from the two primary parties and proceeds to make a decision which is usually binding upon the union.
Establishment of Compulsory Collective Bargaining:If, either union or management resists the establishment of voluntary collective bargaining, but the state feels that collective bargaining will be useful, it may advise, encourage or even impose collective bargaining compulsorily on the two parties to settle their disputes through negotiations and discussions.
Compulsory Establishment of Bipartite Committee:A bipartite committee consists of representatives of workers as well as of the employer. The main purpose such as Bipartite Committees or works committees is to. (i) promote measures for securing and preserving amity and good relations between workers and employers; (ii) Comment upon matters of their common interest; (iii) Compose any material difference of opinion in respect of such matters and to (iv) Encourage workers and management to settle their differences without the Arbitration.
Compulsory Arbitration or Adjudication:Unlike voluntary arbitration, in Adjudication, the Arbitration or Adjudicator is appointed by the government. In adjudication, the industrial dispute is referred for arbitration by the government and both the parties have to accept the decision of the arbitrator.
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INDUSTRIAL MANAGEMENT The objective of adjudication is to maintain industrial peace by stopping the parties from causing work-stoppages and providing a method for settling the industrial dispute.
Compulsory Conciliation (Machinery) and Mediation:Conciliation is a process by which the discussion between workers and employer is kept going on through the activities of a conciliator. A conciliator aids resolving the differences between two parties and keeps them to understand and appreciate the situation better. Conciliators and Mediators are asked to furnish their report within a time period. If the efforts to reconcile fail, workers are free to go on strike and the employer is free to declare a lock-out.
Compulsory Investigation:Government may set up machinery to investigate into any dispute. Machinery may be a Court of inquiry to explore facts and issues involved. A wide publicity may be given to it because, quite possible, the public opinion may compel the two parties to leave their rigid and obstinate attitudes and try to arrive at a settlement.
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INDUSTRIAL MANAGEMENT
Review Question 1. Define Plant. 2. Point few principles of good layout. 3. Explain in detail about the various types of layout. 4. Define material handling and explain its principles. 5. What are all the various types of maintenance? Explain. 6. Define plant safety. 7. Point out the causes of accidents. 8. Define accident proneness. 9. Explain the provisions given under Factories Act 1948, related to safety. 10. Elaborate about Industrial disputes & its settlement.
Recommendation for further reading. Industrial Engineering and Management − O.P.Khanna, Dhanpat Rai & Sons, 1992. Production & Operation Management − S. N. Chery, Tata McGraw Hill, 2004. Production Management − R. Senapathy, A.R.S Publication, 2003.
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INDUSTRIAL MANAGEMENT
26
UNIT – II INDUSTRIAL MANAGEMENT Industrial Relations. Task is a work that an employee is expected to do. Several tasks constitute a job. When we describe task here, we keep the job in mind because an employee holds a job and through that he or she discharges tasks associated with it. Task has implications on employee motivation and satisfaction. Several job characteristics such as skills required, task significance, autonomy and feedback of results have motivational effects. In fact, impact of job on employee motivation is so significant that Herzberg advocated the concept of job enrichment.
It is the leader who matters in any functional area of business. HRM is no exception. Leader must orchestrate the distinctive skills, experience, personalities and motives of employees. A leader provides direction, encouragement and authority to evoke desired behavior. A leader chooses right people and motives them to consistently striards making them overreach themselves. Leadership involves catalyzing the learning process among followers, as well as creating the environment that contributes to improving performance. The leader is an important source of
knowledge about the tasks, the organisation and the HRM polices,
programs and goals.
Unions
Unionization as an external factor was examined earlier. The same has been included here as an internal environment. This is justified because a firm’s personnel activities will be influenced by its own union(s) as well as the unions of other plants. A trade union may be understood as an association of workers or management formed to protect their own individual interests. The role of a union is too well known, not needing any elaboration here. All HR activities-recruitment, selection, training, compensation, IR and separation-are carried out in consultation with union leaders. The role of unions becomes pronounced when a new wage agreement needs to be signed. General y, a wage agreement has a life of three years. After the expiry of one agreement, a new one has to be reached.
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INDUSTRIAL MANAGEMENT
INDUSTRIAL RELATIONS AND INDUSTRIAL DISPUTES IN INDIA
INDUSTRIAL RELATIONS Meaning Broadly, the term ‘Industrial Relations’ is used to denote the collective relationship between management, employees and government in any industrial or non-industrial organisation. Individual relationships of workers with their management are thus excluded from the scope of industrial relations and form part of personnel management.
Approaches to Industrial Relations There are 3 important approaches to Industrial Relations; each approach looks at the term differently. These approaches are: (a) Systems approach. (b) Pluralist approach and (c) Marxist approach
Systems Approach John Dunlop, who is regarded as the Father of this approach, considers industrial relations as a distinctive sub-system of society consisting of 3 principal actors, viz., managers, workers and government agencies. These actors, through their interactions, produce a web a rules and procedures which not only govern the work place and the work community but also distinguish one industrial relations system from another.
According to Dunlop, the interactions among the 3 actors are influenced by several forces in the environment, the most important among them being technology, markets and power relations in the wider society. As technologies employed by different enterprises differ so do the skills required from workers and managers, nature of supervision, pattern of work organisation, and the role played by the stage regulatory agencies. Similarly, the nature of the market in which an enterprise operates leaves its imprint on industrial relations. Firms, operating in a competitive market are differently placed from monopolistic producers and therefore the industrial relations in the two contexts are also different. Finally, the power position of the three actor sin the wider society has a crucial bearing on how they go about the business of making rules.
Dunlop argues that an industrial relations system is essentially stable and cohesive. While there is a conflict of interests among the actors, there is also a body of common ideas that each actor holds towards the place and function of the others in the system. This shared
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INDUSTRIAL MANAGEMENT ideology and compatibility of views enables them to resolve conflict by framing appropriate rules.
Pluralist Approach This approach is commonly associated with the writings of Flanders, Clegg ad Fox. The essence of this approach is that every industrial organisation is a coalition of various conflicting interest group such as employees, shareholders, consumer, the community, the government and so on.
The problem of management in this situation is to control and
balance the activities of various groups which is not when we regard industrial relations as essentially stable and cohesive. The pluralists, however, agree with the systems view that the centre piece of industrial relations is job regulation – the making and administration of rules for regulating employment relations.
Marxist Approach Represented by Hyman and others this approach differs from the other two approaches in its definition or the fundamental meaning of industrial relations. This approach holds that to define industrial relations exclusively in terms of rules and regulations (as the other two approaches do) is far too restrictive. It argues that if industrial relations are mere job regulation through shared ideology then why do conflicts never cease? Marxists seek answer to this question in the lack of balance of power between the bargaining partners even as rules are continuously made and enforced. Their assertion is that conflict can never be held in check unless capital accepts that labour has a right to an equal share in power.
Having differed on the fundamentals, Hyman goes on to explain why systems theorists and pluralists are far off the mark. He contends that it is wrong on the part of these people to equate the study of industrial relations with the study of the institutions of job regulation such as trade unions, employers’ associations and government departments. While a study of these institutions is important, the study of ‘social processes’ (such as informal groups), which operate in reaching agreements is even more important. In fact, these processes play a vital role in taking care of the needs and aspirations of workers. Hence, Hyman suggests that it would be more appropriate to define industrial relations as the study the ‘processes’ of control over work relations. Industrial relations is about who controls, what, how and why.
Nature of Industrial Relations Industrial Relations are always a mixture of cooperation and conflict. However much cooperation may be sought as an organisational objective, some conflict will always remain. There are at least 3 reasons for this:
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INDUSTRIAL MANAGEMENT 1.
29
Both the groups (labour and management) develop different orientations and perceptions of their interests. They also develop generally negative images about each other.
2.
There are no mutually accepted yardsticks or norms to tell to the two groups how far they should go in the pursuit of their objectives. In the absence of norms both groups claim complete rationally for their demands.
3.
There is no neutral field for the groups to meet on. This means that whenever the two groups meet each other for negotiations they bring with them some carryover from the past besides their inherent distrust and suspicion for each other.
Significance The
significance
of
good
industrial
relations
in
any
country
cannot
be
overemphasized. Good industrial relations are necessary for the following reasons. 1.
To help in the economic progress of a country.
The problem of an increase in
productivity is essentially the problem of maintaining good industrial relations. That is why they form an important plank of the economic development plan of every civilized nation. 2.
To help establishing and maintaining true industrial democracy which is a prerequisite for the establishment of a social society
3.
To help management both in the formation of informed labour relations policies and in their translation into action.
4.
To encourage collective bargaining as a means of self-regulation. They consider the negotiation process as an educational opportunity, a chance both to learn and to teach.
5.
To help government in making laws forbidding unfair practices of unions and employers. In a climate of good industrial relations every party works for the solidarity of worker’s movement. Unions gain more strength and vitality. There is no interunion rivalry. Employees give unions their rightful recognition and encourage them to participate in all decisions. Unions divert their activities from fighting and belligerence to increasing the size of the distribution-cake and to making their members more informed (workers’ education) on vital issues concerning them.
6.
To boost the discipline and morale of workers. Maintenance of discipline ensures orderliness, effectiveness and economy in the use of resources. On the other hand, lack of discipline means waste, accidents, loss and confusion.
It also means
insubordination and non-co-operation.
Conditions for Good Industrial Relations Good industrial relations depend on a great variety of factors. Some of the more obvious ones are listed below:
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INDUSTRIAL MANAGEMENT
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1.
History of industrial relations;
2.
Economic satisfaction of workers;
3.
Social and psychological satisfaction of workers;
4.
Off-the-job conditions of workers;
5.
Enlightened and responsible labour unions;
6.
Negotiating skills and attitudes of management and workers;
7.
Public policy and legislation;
8.
Education of workers; and
9.
Nature of industry and business cycles.
1.
History: No enterprise can escape its good and bad history of industrial relations. A good history is marked by harmonious relationship between management and workers. A bad history by contrast is characterised by militant strikes and lockouts. Both types of history have a tendency to perpetuate themselves. Once militancy is established as a mode of operations there is a tendency for militancy to continue. Or, once harmonious relationship is established there is a tendency for harmony to continue. A perpetuating tendency does not mean that a history of harmony cannot explode into violence but rather that the probability of conflict is greater when conflict has become accepted as normal and that the probability of peaceful relations is greater when mutual understanding is expected to continue as a part of standard operations.
2.
Economic Satisfaction of Workers: Psychologists recognise that human needs have a certain priority. Need number one is the basic survival need. Much of man’s conduct is dominated by this need. Man works because he wants to survive. This is all the more for underdeveloped countries where workers are still living under subsistence conditions. Hence economic satisfaction of workers is another important prerequisite for good industrial relations.
3.
Social and Psychological Satisfaction:
Identifying the social and psychological
urges of workers is a very important step in the direction of building good industrial relations. As has been revealed by the Hawthorne experiments a man does not live by bread alone. He has several other needs besides his physical needs which should also be given due attention by the employer. The employment relationship is not just an economic contract. If an employer thinks that his leadership is fulfilled when he gives standard economic rewards and provides conventional benefits, he should not blame his employees when they render the minimum prevailing level of work. Both the rendering their minimum, and both are
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INDUSTRIAL MANAGEMENT
31
losers in their relationship. Society loses even more. Minimum performance will disappear primarily as employees and employers alike realize that the work contract is much more than simple economic wages and fringe benefits. It is a joint venture involving a climate of human and social relationships wherein each participant wishes to feel that he is fulfilling his needs and contributing to the needs of others. This supportive climate requires more than economic rewards. The supportive climate of an organisation is essentially build around social and psychological rewards.
These rewards differ from economic rewards in one
important respect. It is that whereas economic rewards because of their limited size can be allocated to some individuals only, social and psychological rewards can be distributed among all to any extent.
Their stock is never depleted.
Workers’
participation in management, job enrichment, suggestion schemes, redressal of grievances, effective two-way communication are some such social and psychological rewards.
4.
Off-the-job Conditions: Although some employers may occasionally wish that they could employee only a person’s skill or his brain but all that can be employed is a whole person, rather than certain separate characteristics. A person’s different traits may be separately studied, but in the final analysis they are all part of one system making up a whole man. His home life is not totally separable from his work life, and his emotional condition is not separate from his physical condition. Each affects the other. Hence for good industrial relations it is not enough that the workers’ factory life alone should be taken care of. His off-the-job- conditions should also be improved.
5.
Enlightened Labour Unions: The most important single condition necessary for good industrial relations is a strong and enlightened labour movement which may help to promote the status of labour without jeopardizing the interests of management. Investigations show that unions though talk much of the employers’ obligations to the workers, say very little about the workers’ responsibility to the employer. They try to get for the employee, not help him give. If they could help the employee more in this direction, they might gain for him more than all their “getting” pressure will ever secure. Many enlightened unions, however, usually do focus on employees contributions and responsibility and they have gained both social and economic rewards by this approach. Such unions exhort workers to produce more, persuade management to pay more, mobilize public opinion on vital labour issues and help Government to enact progressive labour laws. They also go a long way in making collective bargaining a success and in preventing strikes. In this connection we must remember that according to one estimate hardly 30% of the total work force in our country is unionized. Of the unionized work force only a very small proportion consists of those who are affiliated to any central union.
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INDUSTRIAL MANAGEMENT 6.
32
Negotiating Skills and Attitudes of Management and Workers:
Both
management and workers’ representatives in the area of industrial relations come from a great variety of backgrounds in terms of training, education, experience and attitudes. These varying backgrounds play a major role in shaping the character of industrial relations.
Generally speaking, well-trained and experienced negotiators
who are motivated by a desire for industrial peace create a bargaining atmosphere conducive to the writing of a just and equitable collective agreement. On the other hand, ignorant, inexperienced and ill-trained persons fall because they do not recognise that collective bargaining is a difficult human activity which deals as much in the emotions of people as in their economic interests.
It requires careful
preparation and top-notch executive competence. It is not usually accomplished by some easy trick or gimmick. Parties must have trust and confidence in each other. They must possess empathy, i.e. they should be able to perceive a problem from the opposite angle with an open mind. They should put themselves in the shoes of the other party and then diagnose the problem. Other factors which help to create mutual trust are respect for the law and breadth of vision. Both parties should show full respect for legal and voluntary obligations and should avoid the tendency to make a mountain of a mole hill.
7.
Public Policy and Legislation: When government regulates employee relations, it becomes a third major force determining industrial relations – the first two being the employer and the union. Human behaviour is then further complicated as all three forces interact in a single employee relation situation. Nonetheless, governments in all countries intervene in management – union relationships by enforcing labour laws and by insisting that the goals of the whole society shall take precedence over those of either of the parties. Government intervention helps in three different ways: (i) It helps in catching and solving problems before they become serious. Almost every one agrees that it is better to prevent fires than to try stopping them after they start’ (ii) it provides a formalized means to the workers and employers to give emotional release to their dissatisfaction; and (iii) it acts as a check and balance upon arbitrary and capricious management action.
8.
Better Education: With rising skills and education, workers; expectations in respect of rewards increase. It is a common knowledge that the industrial workers in India are generally illiterate and are misled by outside trade union leaders who have their own axe to grind. Better workers’ education can be a solution to this problem. This alone can provide workers with a proper sense of responsibility which they owe to the organisation in particular and to the community in general.
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INDUSTRIAL MANAGEMENT 9.
33
Nature of Industry: In those industries where the direct and indirect labour costs constitute a major proportion of the total cost, lowering down the labour costs becomes important particularly when the product is not a necessity and, therefore, there is little probability to pass additional costs on to the consumer. Such industries cannot grant liberal increases in wages or fringe benefits to their workers and have industrial relations different from other types of industries.
10.
Business Cycle:
Business cycle also affects industrial relations.
In general,
industrial relations are good when there is boom and prosperity all around. During such periods levels of employment and wages rise which make workers happy. But during recession, there is a decline to employment levels and wages. This makes workers unhappy and mars good industrial relations.
Causes of Poor Industrial Relations The analysis of the causes of poor industrial relations varies according to the orientation and perception of the analyst. An economist will always interpret the situation in terms of the market forces of supply and demand, a politician will interpret it in terms of ideologies and class war and a psychologist in terms of opposing interests, goals and motives.
In fact, each analysis gives only a partial explanation of the situation.
Poor
industrial relations are the result of a number of socio-economic, political and psychological factors which are briefly described bellow.
1.
Uninteresting Nature of Work: People want to make a life out of work rather than just a living. Work is such a dominating part of our lives that no matter how much satisfaction we have outside it, we are not living a satisfying life unless we live with satisfaction at work also. The problem of poor industrial relations is essentially a product of large-scale production which has made man subordinate to the machine. Owing to extensive specilisation, a worker in a factory performs only a minor operation in the whole process of production. This has made him lose his sense of pleasure, pride and satisfaction from work which he used to get earlier by producing the whole product. This dissatisfaction of the worker on the shop floor generally culminates into big strikes and lockouts.
2.
Political Nature of Unions: Another major irritant to good industrial relations is the politicization of labour unions by outside political leaders. This leads to multiple Outside leadership
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INDUSTRIAL MANAGEMENT
34
Ineffective
Vicious circle of trade unionism in India
Politicalisation Collective bargaining
Lack of constructive
Multiplicity purpose
Poor finance Inter-union rivalry unions on the one hand and inter-union rivalry on the other.
Inter-union rivalry
depresses both a union’s membership and its finances. The final result is that a union finds itself unable to carry out constructive activities or to play an effective role in collective bargaining.
Its status is reduced to a mere strike-committee.
The
circular relationship among all these factors is depicted in the figure above. The outside who get themselves elected as union leaders by making wild promises to the members later facer the difficult of living up to their promises. The obvious way to meet their promises is to make excessive demands on management. Each union leader tries to excel others in pressing his demands because it costs nothing to make big demands. This competition of demand charters (blessed by rival political parties) many times flares up into industrial unrest.
2.
Poor Wages:
Too much tight or complicated wage and incentive and payment
systems are also a cause of poor industrial relations.
Wage salary differentials
between occupations also create a feeling in inequity and mar good industrial relations.
3.
Occupational Instability: Another important factor which sometimes affects good industrial relations is the specter of change in occupation.
Occupational stability
makes workers feel secure on their jobs. It produces an enervating effect on them. Workers who have held a job for several years generally win confidence on that job and do not like any change being made in it because they fear the following consequences to ensure: (a)
The new job will not give them as much satisfaction as the earlier job.
(b)
The new job will reduce their wages and seniority structure.
(c)
The new job will require them to undergo some training.
(d)
The new job will change the existing social relationships.
(e)
The new job will reduce opportunities for growth and development.
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INDUSTRIAL MANAGEMENT 5.
35
Poor Behavioural Climate: The behavioural climate of an enterprise which is made up of its culture, traditions and methods of action may be either favourable to the worker or unfavourable.
Favourable climate is one which helps him meet his
economic, social and psychological wants. enterprise in his mind.
It produces a good image of the
On the other hand, unfavourable climate is one which
prevents him from meeting his various types of needs and produces in his mind a poor image of the enterprise. This eventually drives him to seek membership of a militant labour Organisation where he can given vent to his negative feelings and fight against his employer. This becomes a cause of poor industrial relations.
Effects of Poor Industrial Relations Poor industrial relations produce highly disquieting effects on the economic life of the country. They leave behind a lot of privation for the workers, reduction in output and profits for industries, high prices and inconvenience for the general public and an atmosphere of mutual distrust and suspicion for the workers and the employers. The nation as a whole suffers inasmuch as the national dividend gets reduced owing to reduced production. We may enumerate the ill effects of industrial disputes as under: 1.
Multiplier Effect:
Modern industry and for that matter modern economy are
interdependent. Hence although the direct loss caused due to industrial conflict in any one plant may not be very great, the total loss caused due to its multiplier effect on the total economy is always very great.
2.
Fall in Normal Tempo: Disputes adversely affect the normal tempo of work so that plants work far below the optimum level. Costs build up. Absenteeism and labour turnover increase. Plant discipline breaks down and both the quantity and quality of production suffer.
3.
Resistance to Change: Dynamic industrial situation calls for change more or less continuously. Methods have to be improved. Economics have to be effected. New technologies have to be introduced. New products have to be designed, produced and put in the market. Each of these tasks involves a whole chain of changes and this is resisted bitterly if there is industrial conflict.
4.
Frustration and Social Cost: Every man comes to the work place not only to earn a living. He wants to satisfy his social and egoistic needs also. When he find difficulty in satisfying these needs he feels frustrated. Disputes take a heavy toll in terms of human frustration. They reduce cordiality and aggravate social tension.
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Suggestion to Improve Industrial Relations In the light of the above discussion following can be the suggestions to improve industrial relations: 1.
Each Management and Union should Develop Constructive Attitudes Towards Each Other: If managers do not fully accept the union or if union leaders do not fully accept the business system, harmonious industrial relations cannot be expected. Management must accept workers as equal partners of a joint venture.
It must
recognise their union as the spokesman of their grievances and as custodian of their interests.
2.
All Basic Policies and Procedures Relating to Industrial Relations should be Clear to every Body in the Organisation and to the Union Leaders:
The
personnel manager must make certain that the line people will understand and agree with these policies. Failure to follow the spirit and letter of these policies can result in unnecessary misunderstanding and a deterioration of industrial relations.
3.
The Personnel Manager should Remove any Distrust by Convincing the Union of the Company’s Integrity and his Own Sincerity and Honesty: Suspicions, rumours and doubts should all be put to rest.
4.
The Personnel Manager should not Vie with the Union to Gain Workers’ Loyalty. He should not Try to Wean them Away from the Union. Workers feel, and rightly so, that they can be loyal to both the organisations. Several research studies also confirm the idea of dual allegiance. There is strong evidence to discard the belief that one can owe allegiance to one group only.
5.
Management should Encourage Right Kind of Union Leadership: While it is not for the management to interfere with union activities, or choose the union leadership its action and attitude will go a long way towards developing the right kind of union leadership. “Management gets the union it deserves” is not just an empty phrase. Management should create conditions which would stimulate growth of competent and constructive leadership.
6.
After the Settlement
is Reached
the agreement
should
be Properly
Administered: This involves the application, interpretation, and enforcement of the terms and conditions which the parties have agreed to both in letter as well as in spirit.
Development of Trust – How Done?
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Research has revealed that ‘Trust’ between the parties (union and management) is the single most important factor responsible for creating good industrial relations.
Trust
between the parties can be developed by building competencies in the management and unions on the one hand and developing right processes on the other. (a)
Competencies: Competencies are to be built in the two parties as under: (a) Knowledge: •
About rules of the workplace
•
About the legal framework of IR.
•
About the commitments made in various settlements and awards.
•
About the emerging environmental scenario, customs and practices.
•
About workers sociology and problems of workers.
(b) Skills: •
Leadership skills.
•
Inter-personal skills.
•
Problem-solving skills.
•
Negotiating skills.
(b) Attitudes: •
Positive beliefs about each other
•
Faith in participative mechanisms.
•
Flexibility and resilience.
(b) Process Development: For good industrial relations ‘processes’ are more important than ‘contents’. Process means the ‘how’ aspect. For example, ‘how decisions are arrived at’, ‘how negotiations are conducted’, ‘how information is shared with the union’, ‘how goals are set in the organisation’ and so on. The correct process helps each party in being more honest and open and in better understanding the feelings of the opposite party.
HRD/OD Interventions Following is a list of possible interventions for tackling specific IR problems: IR Problem
Intervention -
Training
-
Work Redesign
-
Job Enrichment
-
Counselling
-
Review of Disciplinary Machinery
-
Training
Lack of Knowledge about
-
Training
Rules, regulations
-
Ensuring effective communication
Delay in personnel
-
Research for identifying
Alienation of employees
Problem of Discipline
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INDUSTRIAL MANAGEMENT Decision-making
Mistrust between management and union
Lack of Collaboration
38 -
the causes of delay
-
Reorganisation of personnel function
-
Survey research
-
Information – sharing
-
Union-management interface
-
Collaborative projects (say, an employee Welfare/education etc.)
INDUSTRIAL DISPUTES IN INDIA
Meaning: According to Sec. 2(k) of the Industrial Disputes Act an industrial dispute means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or nonemployment or the terms of employment or with the conditions of labour, of any person.
Important points which emerge from this definition are: 1.
The use of the adjective ‘industrial dispute’ relates the dispute to an industry. Clause (j) of Section 2 defines the word industry thus: Industry means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for production, supply, or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature) whether or not (i)
any capital has been invested for the purpose of carrying on such activity; or
(ii)
such activity is carried on with a motive to make any gain or profit.
The following are included within the meaning of industry. (a)
Any activity of the Dock Labour Board established under Sec 5-A of the Dock Workers (Regulation of Employment) Act, 1948.
(b)
Any activity, being a profession practiced by any individual or body of individuals.
(c)
Any activity relating to the promotion of sales or business or both carried on by an establishment.
The following are excluded from the word industry: (a)
Any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity which is referred to above.
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(b)
Hospitals or dispensaries.
(c)
Educational, scientific, research or training institutions.
(d)
Institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service.
(e)
Khadi or Village industries.
(f)
Any activity of the government relatable to the sovereign functions of the government including all activities carried on by the departments of the Central Government dealing with defence, research, atomic energy and space.
(g)
Any activity which is carried on by a co-operative society in which less than 10 persons are employed.
2.
‘Workman’ means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. His terms of employment may be expressed or implied. For the purposes of any proceedings under this Act in relation to an industrial dispute, ‘workman’ includes any person who has been dismissed, discharged or dispute, ‘workman’ includes any person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute. But ‘workman’ does not include any such person i.
Who is subject to the Air Force Act, the Army Act or the Navy Act; or
ii.
Who is employed in the police service or as an officer or other employee of a prison; or
iii.
Who is employed mainly in a managerial or administrative capacity; or
iv.
Who, being employed in a supervisory capacity, draws wages exceeding Rs.1,600 per mensem or exercise functions mainly of a managerial nature.
It should be noted that an employee engaged in any work whether directly or indirectly connected with the main industry, is a workman if the payment of his wages has a bearing on the fund of the company. Thus, a gardener who works at teacher who works at the managing director’s bungalow but receives salary from the company or a teacher who works in a school run by the factory is a workman. Further, the definition does not make any distinction between a full-time employee and a part-time employee. Both are workmen if other tests are fulfilled.
3.
Only specific types of disputes, i.e., those which bear upon the relationship of employers and workers and the terms of employment and conditions of labour are included under the term.
Thus, disputes between government and an industrial
establishment or between workmen and non-workmen are not industrial disputes.
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The use of plural number for the disputant parties in the definition raises doubt on whether there can be an industrial dispute between an employer and an individual workman. This doubt is however, removed by Sec. 2A which was added to the Act in 1965. This action considers an individual dispute as an industrial dispute if it relates to discharge, dismissal, retrenchment of termination of a worker’s services and is raised on or after Dec. 1, 1965.
Forms of Disputes Strikes, lockouts and gheraos are the most common forms of disputes.
Strike Section 2(q) of the Industrial Disputes Act, 1947 defines strike as under: “Strike means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal under a common understanding of any number of persons who are or have been so employed to continue to work or to accept employment”. Thus, the essential ingredients of strike are: 1.
There should be an ‘industry’ within the meaning of Section 2(j) of the Industrial Disputes Act, 1947 in which the striking persons should be employed.
2.
There should stoppage of work in pursuance to a concerted plan in combination. Where the workers absent together from the work place not to stop work but to participate in a demonstration which may incidentally result in the stoppage of work it is not a strike because it is not in pursuance to a concerted plan.
3.
There should be contract of employment between the striking workmen and the industry. Thus when the workmen refuse to do additional work which the employer in law has no right to ask them to do it would not amount to strike.
It should be
remembered that the duration of the cessation of work is absolutely irrelevant for the purpose of determining whether a particular cessation amount to strike or not. 4.
The cessation of work need not necessarily be connected with an industrial dispute to amount to a strike. For this reason, sympathetic strikes, protest strikes, etc., are ‘strikes’ within the meaning of the term. But under the Bombay Industrial Relations Act, 1946 there is an explicit provision Sec. 3(36) that to be called a strike the cessation of work should be in consequence of an industrial dispute.
Forms of Strikes Cessation of work may take place in a number of ways as described below: 1.
Stay-in-strike, Sit-down Strike, Pen-down Strike or Tool-down Strike: All these forms of strike are considered by courts as an invasion on the rights of employer and therefore illegal. Sit-down or stay-in strike amounts to trespass upon the property of the employer.
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Go-slow:
Slowing down the pace of production is one of the most pernicious
practices that discontented workmen sometimes resort to. It would not be far wrong to call this dishonest. For, while thus delaying production and thereby reducing the output, the workmen claim to have remained employed and thus to be entitled to full wages. Apart from this also, ‘go-slow’ is likely to be much more harmful than total cessation of work by strike. For, while during a strike much of the machinery can be fully turned off, during the ‘go-slow’ the machinery is kept going on a reduced speed which is often extremely damaging to machinery parts. For all these reasons ‘goslow’ has always been considered a serious type of misconduct. But it is not a strike because at no time the work stops in this form.
3.
Hunger Strike: Hunger strike is a strike with some or all strikers or even outsiders for acceptance of the demands.
4.
Lightning or Wildcat Strike: A wildcat strike is an unofficial strike, i.e., a strike not sanctioned by the union. Such strikes occasionally occur in violation of the no-strike pledge in collective bargaining agreements. In such a situation the union is obligated to use its best efforts to end the strike. Such strikes are prohibited in public utility services under Section 22 of the Industrial Disputes Act, 1947 and in all industrial establishments in U.P., Maharashtra, M.P. and Gujarat, where notice is required to be given. Further, the standing orders of a company generally require for notice.
5.
Work-to-rule: In this form employees, though remaining on job, do the work literally in accordance with rules or procedure laid down for the purpose. Usually rules of work are accordance with rules or procedure laid down for the purpose. Usually rules of work are followed in such a manner that they result in dislocation of work. In U.S.A. these tactics are recognized as a form of strike. But in India they are not covered by the definition of “strike”.
Lock-out Section 2(1) of the Industrial Disputes Act, 1947 defines “lock-out” to mean the temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him. Lockout, thus, is the counterpart of strike – the corresponding weapon in the hands of the employer to resist the collective demands of workmen or to enforce his terms. It has been held by the court that the suspension of work as a disciplinary measure does not amount to lockout. Similarly, temporary suspension of work called lay-off is not lock-out.
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Gherao Gherao means encirclement of the manager to criminally intimidate him to accept the demands of the workers. It amounts to criminal conspiracy under Section 120-A of the I.P.C. and is not saved by Sec. 17 of the Trade Unions Act on the grounds of its being a concerted activity.
COLLECTIVE BARGAINING
There are 3 approaches to labour-management negotiations, viz., unilateral; bipartite and tripartite. In the unilateral approach the employer alone decides the terms and conditions of employment for his workers assuming that he knows what is best for them. In the bipartite approach the employer negotiates with his workers.
This is also known as collective
bargaining. In the tripartite approach, besides the 2 main parties. a third party (generally the State) also participates in the negotiations. boards, etc., are examples of triartitism.
Conciliation, arbitration, adjudication, wage
In this chapter we are describing the bipartite
approach, i.e., collective bargaining.
MEANING Collective bargaining may be defined as the process in which conditions of employment are determined by agreement between representatives of the union, on the one hand, and those of the employer, on the other. It is called “collective” because both the employer and the employees act as a group rather than individuals.
It is described as
“bargaining” because the method of reaching an agreement involves proposals and counterproposals, offers and counter-offers. Collective bargaining is usually resorted to in respect of “interest issues” where some new rights are to be created or existing rights to be expanded or modified. Where a dispute arises over the enforcement of an existing right – a “rights issue” as we call it, it is in the interest of both the sides that such rights issue is not magnified into a collective bargaining issue and is amicably resolved through grievance procedure or arbitration.
PROCESS The bargaining process has been caricatured in a variety of ways: 1.
as a poker game combining deception. bluff, luck and ability
2.
as a debating society with long – winded speeches to impress one’s colleagues and possibly have some effect on the opposition;
3.
as power politics or pure brute strength in forcing terms of settlement on the weaker party, and finally;
4.
as a rational process in which appeal to facts and to logic reconciles conflicting interests in the light of common interests. All of these elements are involved in some degree and combination in the bargaining process.
While “mature” collective
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According to Walton McKersie, a collective bargaining process generally consists of four types of activities: distributive bargaining, integrative bargaining, attitudinal structuring and intra organisational bargaining.
The first type of activity often involved in a collective bargaining process is distributive bargaining. This is straight-out haggling over how to split up a pie. In this type of activity one party’s gain is the other party’s loss. When there are economic issues in disputes (e.g., wages), this type of activity predominates in the bargaining process. Second type of activity is integrative bargaining. This is negotiation of an issue on which both parties may gain, or at least neither one loses. A co-operative search for the best job evaluation system or a training programme is examples of integrative bargaining. Third type of activity involved in collective bargaining is attitudinal structuring. The process of collective bargaining helps in shaping such attitudes as trust or distrust, friendliness or hostility between the parties. This simple fact that both parties have to deal with each other almost daily and that they do not have just a sporadic relationship promotes restraint between the negotiators during the bargaining process. But if there is a backlog of bitterness, it can erupt and destroy all negotiations over a new contract. The fourth type of activity that goes on in all collective bargaining is intraorganisational bargaining, i.e., manoeuvring to achieve consensus within the labour and management organizations. There are always groups within a union which believe that their interests are not being given adequate consideration by the organisation. The skilled workers may believe that the union pays too much attention to the unskilled; women members may think that their interests are not fairly considered by the men who run the union and so on. Similarly, on the side of the employer, there may be differences which need to be resolved; for example, the sales manager may urge that a settlement be made with the union and a strike avoided at all costs so that the relationship with important customers can be protected but the finance manager may insists that any wage increase beyond a given amount would be disastrous to the company’s finance.
Difference between Collective Bargaining and Co-operation Collective bargaining should be distinguished from labour-management co-operation. In collective bargaining each party tries to outguess the other, to hide its own motives, to play up the concessions it grants to its opponent, and to play down those it receives. The process is reasonably well characterized by the metaphor of “playing one’s cards close to the chest”. Geneuine co-operation, on the other hand, occurs only when the “cards are face up on the table”.
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In collective bargaining each party fights for as big a piece of the pie as can be obtained. In co-operation each party strives to increase the size of the pie so that there will be more for every one who partakes of it.
However, both procedures have important roles in union-management relations. There are some problems which lend themselves most readily to collective bargaining. Illustratively it can be said that the problem best suited for collective bargaining procedure is the establishment of the general level of wages.
Problems best suited for co-operative
procedure are problems connected with: i.
the internal wage structure,
ii.
administration of job evaluation plans,
iii.
formulation of a general labour policy,
iv.
handling of grievance procedure, and
v.
increasing productive efficiency, e.g., agreeing to work for longer hours, voluntary layoff, modernization, and so on.
Following are some recent examples of labour-management co-operation in our country: 1.
The pilots of Indian Airlines agreed in August 1994 to work for longer hours to improve the financial viability of airlines.
2.
The workers of Indian Drugs and Pharmaceuticals Ltd., agreed to defer wage revision in a bid to save their jobs.
3.
The Mumbai port and dock workers agreed to merge with the Mumbai Port Trust to tide over their acute financial crisis.
4.
The trade unions of Indian Iron and Steel Co., agreed to radically modernize their existing sick and aged plant and machinery.
Structure of Collective Bargaining The term ‘bargaining structure’ refers to the level – local, regional, industrial or national – at which bargaining takes place.
One important determinant of bargaining
structure is the nature of bargaining issues. Some issues, like wages, which have wide implications, are handled within expanded bargaining structures. Other issues, such as pensions and insurance plans, are best treated on a company – wide basis because of the need for uniformity created by actuarial and administrative considerations. Finally, there are questions of work rules, safety, washing facilities, etc., that are essentially local in nature and must be related to the conditions that prevail in a particular plant or department. From the point of view of an individual establishment plant – level bargaining is generally useful in that the settlement is tailored to the conditions of the enterprise, e.g., its capacity to pay, its market conditions and objectives, etc.
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Benefits of Collective Bargaining 1.
It provides a method for the regulation of conditions of employment by those directly concerned. The employers and workers in an industry know more about its conditions and problems than any one else.
2.
It often leads to better mutual understanding:
The employers gain a greater
insight into the problems and aspirations of the workers, while the latter become more aware f the economic and technical factors involved in industrial management. 3.
It provides a flexible means of adjusting wages and conditions of employment to economic and technological changes in industry. The parties can meet whenever necessary and can adapt the terms of their agreements to these changes.
4.
It creates a sort of ‘industrial jurisprudence’. Two kinds of rules – procedural and substantive are framed.
Procedural rules, as the name implies, set out the
procedures that govern the behaviour of the two groups – employer and union, and regulate the manner in which they deal with each other. They lay down, for example, how contracts may be negotiated, modified, renewed, or terminated. Substantive rules, on the other hand, regulate the relations between individuals and not groups. It is possible to distinguish three different kinds of relations between individuals which are regulated by substantive rules. There is first the economic relationship. The rules set down the terms on which existing as well as prospective workers will offer their labour to the employer. They also stipulate manning procedures, recruitment policies and the like. Next comes the political relationship. Here the rules stipulate who may exercise power over whom, and for what purpose. Last comes the social relationship. Rules provide standards of behaviour based on shared interests, sentiments, beliefs and values among various groups of employees. 5.
It leads to better implementation of decisions because of the direct involvement of both the parties in reaching them. Parties know that the decisions are their own and are not imposed.
Conditions Essential for Successful Collective Bargaining: For collective bargaining to be fully successful there are certain essential prerequisites. These are described below: 1.
A Favourable Political Climate: If collective bargaining is to be fully successful, a favourable political “climate” must exist; in particular, the government and public opinion must be convinced that collective agreements are the best method of regulating certain conditions of employment. Collective bargaining has often been practiced in countries where the authorities have been hostile to it and it has been hampered by obstacles and restrictions; in other countries and authorities have merely tolerated it without giving any positive encouragement. In such conditions the establishment and maintenance of collective bargaining processes is a hard struggle and can have only a limited success. In some extreme cases, as in Germany under
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the National Socialist regime, collective bargaining has been eliminated entirely by the radical step of abolishing trade unions and employers’ organizations, conditions of employment being regulated by the State Obviously, wherever trade unions have been made illegal there can be no collective bargaining. By contrast, governments in many countries actively encourage collective bargaining, for example, by removing any legislative restrictions which may hamper it and by facilitating bargaining process through the provision of facilities for conciliation and arbitration, or by specifically conferring a right to bargain collectively, laying down rules concerning the form and content of agreements, registering them, extending their application and assisting in their enforcement.
2.
Freedom of Association:
Freedom of association is essential for collective
bargaining. Where such freedom is denied collective bargaining is impracticable, and where it is restricted, collective bargaining is also restricted. In the early stages of trade union organisation some employers not only refused to employ any worker who was a member but would carry their hostility to the point of violence. They might even require each worker they employed to enter into a contract with them that, as a condition of employment, he would not join a trade union. Such ‘anti-union contracts’ (picturesquely known as ‘yellow-dog’ contracts in the United States) are now illegal in a great number of countries. It should be borne in mind, however, that the removal of such restrictions does not necessarily imply that strong organizations of either workers or employers will in fact be formed and does not in itself confer any positive rights to bargain collectively. It still leaves employers in a position to discourage workers from forming trade unions or to refuse to employ union members. Company – dominated unions may be set up to hinder the formation of free trade unions. In some countries trade unions have, after a period of struggle, grown strong enough to prevent or greatly limit such attempts to deny or restrict freedom of association. In other countries, governments have enacted legislation giving workers the right to form associations and making illegal any attempt by employers to interfere with this right; but in such cases the law still leaves workers free to choose whether they will organize or not.
3.
Stability of Workers’ Organisation: Workers may have freedom of association but, unless they make use of that right and form and maintain stable unions, collective bargaining will be ineffective. If an organisation is weak, employers can say that it does not represent the workers and will refuse to recognize it or negotiate with it. Before entering into agreements with a trade union, employers will want a reasonable assurance that it will be able to honour its undertakings, and this implies both that the union can exercise authority over its members and that its membership is sufficiently stable. If the latter fluctuates widely, at times covering only a small fraction of the
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INDUSTRIAL MANAGEMENT workers, it cannot be considered as a reliable instrument for collective bargaining. In the early stages of trade union organisation in any country, industry of occupation the smallness and instability of union membership is one of the main reasons for the infrequency of collective bargaining. This is particularly true in many occupations in the industrially underdeveloped countries. Before recognizing a union, employers sometimes demand evidence that it has enough members to justify entering into collective bargaining with it. A frequently used test is the number of members who are in good sanding (i.e., who regularly pay their dues to the union). This test is applied where official recognition, carrying with it the right to bargain on behalf of the workers, is to be granted to a union. Rivalry between unions is often a cause of instability in workers’ organizations. Each of several unions recruits some of the workers, but no one union is really representative. Employers will often refuse to bargain while such issues are unresolved on the workers’ side, arguing that the workers must first put their own house in order before they can reasonably claim the right to bargain collectively.
4.
Recognition of Trade Unions: Even assuming that freedom of association exists and that the workers have established stable organizations, collective bargaining cannot begin until employers recognize the organizations for that purpose. Employers will give such recognition only if they believe it to be in their interest or if they are legally required to do so. Once a trade union is strong enough, employers may decide that it is in their interest to recognize it and negotiate with it; otherwise, they may be faced with strikes, and the ensuing financial losses m ay be far greater than the cost of any concessions on wages and conditions they may have to make in negotiations with the union.
The granting of recognition may also have the positive benefit of improving
industrial relations, and this may react favourably on production.
A group of employers or an employers’ organisation may find it to their advantage to recognize a trade union not only because recognition could be a means of avoiding losses from strikes, but also because any agreements negotiated would regulate conditions of employment for all the employers and thus safeguard all of them against competition by undercutting labour standards. 5.
Willingness to “Give And Take”: The fact of entering into negotiations implies that the differences between two parties can be adjusted by compromise and concession in the expectation that agreement can be reached. Obviously, if one or both sides merely make demands when they meet there can be no negotiation or agreement. Consequently, at the start each side normally puts forward claims which are intended to provide a basis for bargaining, and as the negotiations proceed one side will agree to reduce its demand on one item in return for some concession by the other side.
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The art of bargaining is for each side to probe the other to find out it’s strength and weakness. On some points one side may be unwilling to depart much from its starting position, whereas on others its attitude may be more flexible; the attitude of the other side is probably similar though the points on which it is relatively rigid or flexible may be different.
In these circumstances the two sides have
considerable room for man oeuvre and for “give and take”. Willingness to “give and take” during negotiations does not necessarily mean that concession made by one side will be matched by equal concessions from the other. One side may make greatly exaggerated demands which it will have to tone down considerably if agreement is to be reached. Also, depending on the relative strength of the two parties, economic conditions at the time and skill in negotiation, one side may win more concessions than the other. 5.
Avoidance of Unfair Labour Practices: Unfair practices in collective bargaining are sometimes resorted to both by employers and by trade unions. They are liable to hamper the development of collective bargaining and to embitter negotiations so much by the suspicion and distrust they cause as to make agreements difficult to reach. It cannot be sufficiently emphasized that only in an atmosphere of mutual recognition and respect collective bargaining will have a reasonable chance of success.
Collective bargaining is a process to reach a certain goal, and it is,
therefore, important to make sure that it is really a common goal. There must be the common objective of maintaining peace and discipline, improving work methods and working conditions, increasing earnings of employees as well as profits of the undertaking. That the management has the right to manage and the union has the right to organize itself and fight for justice must be fully recognized and accepted by both sides. Unless there is this basic unanimity of views collective bargaining is a mere trial of strength.
How Collective Bargaining Works? Where collective bargaining is carried on at the level of an undertaking the actual conduct of the collective bargaining process is very simple. Before the bargaining conference begins, each side fixes the composition of negotiating team, prepares for the negotiation and works out its strategy and tactics.
Negotiating Team On the company side the negotiating team may consist of the personnel manager, production manager and the company lawyer. The chairman of the company is usually kept out of the negotiating team for two reasons. First, if he is present on the bargaining team, he may be forced to given an instant yes or no on an issue that deserves more careful consideration.
Second, selecting someone other than the chairman of the company as
spokesman places the bargaining teams on an equal footing.
It is not essential for the
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number of representatives on the employer’s side and the workers’ sides to be equal, as deicions are not taken by majority vote. On any proposal the whole of the employer’s side, acting in unison, either accepts it or disagrees with it. Similarly, the workers’ representatives – if they all belong to the same union or if all the unions involved are pursuing a common line of action – act in unison.
On the workers’ side, where there is a single trade union, the negotiating team consists of the office-bearers if that unions, each claiming the exclusive right to represent all the workers including the non-members. The management then has a problem in deciding whom to accept as the bargaining agent. It may follow any one of the following courses: i.
Select the representative union by secret ballot;
ii.
Select through verification of membership by some government agency;
iii.
Bargain with a joint committee of all the major unions;
iv.
Bargain with a negotiating committee in which different unions would be represented in proportion of their verified membership;
v.
Bargain with a negotiating committee which consists of representative of every department of the organisation elected by secret ballot irrespective of their union allegiance.
Qualities and Attribute which Members of Negotiating Teams must possess: i.
They must have the Right Attitudes: It is obvious that unless the right attitudes are there, bargaining cannot make any progress. Right attitudes require the willingness to accept the legitimacy of the role and the function of the other party.
If the
management starts with the proposition that the union is a nuisance; it has no business to come and make demands on the management; it is only there to mislead the workers and to blackmail the management, then obviously the process of bargaining cannot get off to a very favourable start. Similarly, if the attitude of the union is that the management is selfish, autocratic; interested only in exploiting and humiliating the workers and trying to pay them a little as possible, find loopholes in the law, then again the right attitude will not be there.
ii.
They must Possess skill to Analyze Problems: the whole ranges of problems which come up for discussion during collective bargaining are often quite complicated and tricky.
Finding solutions to problems such as wages, bonus, manning, up
gradation, leave. Promotion etc., generally becomes difficult, first,
because the
financial stakes may be high and second, because different groups of interests may be involved and these interests may not always be easy to reconcile with each other. So, the members of the negotiating team must possess the skills of analyzing the problems and finding out which are the compelling parameters relevant to the two
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sides. In other words, this means trying to understand what the other side is saying and why it is saying it.
iii.
They must have an intimate knowledge of operations, working conditions, production normal and other relevant factors.
iv.
They must be Skilled in Adopting Tactics: The whole process of bargaining which involves narrowing the gap between the two side can become possible only if each side can be successively pinned down to certain positions. Sometimes what happens is that the side which is more clever tries to avoid getting itself committed to any position and tries to make the other side go on making concessions. Hence, the need to use tactics. (Read the section on ‘Bargaining Strategy and Tactics’ below).
v.
They must Have Credibility: People from both sides must have faith in members. Credibility, like virginity, once lost can never be regained.
Bargaining Power: Before the negotiations start, each side in collective bargaining weight its bargaining power and also determines the maximum concessions which it will give to the other side. This depends mainly on the estimated cost of the work stoppage (Strike or lockout) to the party concerned and also on its estimate of the other party’s cost arising out of the stoppage. The higher the expected cost of work stoppage to the management, the greater would be the concessions which it would offer to the other party. Some factors which determine the cost of stoppage are us under:
1.
Existing State of the Market:
The management should try to understand the
existing state of the market for its product or service and the cyclical or other changes in business expected in the near future. In a highly competitive market, management must avoid work stoppage by granting a little more concessions to the workers lest it may cause good deals of transfer of the demand to the competitors. The need to avoid work stoppage would be still higher, if the inventory of the product is small or the nature of the product is such as to exclude the possibility of inventory – holding. Any expected changes in the business cycle in the near future should also be analysis and anticipated carefully before collective bargaining starts.
The
management may adopt a more lenient attitude during a boom than during a recession.
2.
Availability of Labour: It is also necessary to analyse the relevant labour market situation in terms of availability of labour, wages in other concerns and other details. If substitution of labour is possible or if the production in the plant stopped by the
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strike can be transferred to another plant stopped by the strike can be transferred to another plant under the same organization, the management can adopt a stiff attitude.
3.
Financial Capacity to Pay: Management must also consider its financial capacity to pay as reflected in the expected sales incomes, its liquid cash position, the prospects of bank credit, the expected profits in future the minimum rate of return on equity capital, needs of investment and the total productivity of the unit concerned.
If
repeated credits are need from the banks a long-drawn out stoppage may prove harmful for the organisation.
The plea of ‘lack of ability to pay’ is, however, played down by labour unions. They reject this plea on the following grounds. i.
The data produced by the management are fake. The earnings have been understated.
ii.
There are several instances of management extravagance and inapt financial decisions.
iii. The work should get what he is entitled to get and not what the organisation is able to pay. In other words, the management must plan its revenue according to its expenditure and not vice versa. iv. Wage rise should be accepted by the management like any other rise in the cost of other inputs and the management should offset this cost rise by running business more efficiently.
4.
Technology Implications:
The management should carefully work out the
technological implications in terms of maintenance of the idle plant in case of a work stoppage, expected impact of the settlement on the technological operation of the company, and so on.
5.
Reactions of Shareholders and Directors: The management should anticipate the possible reactions of directors and shareholders to the stand taken by it in the course of collective bargaining.
6.
Union’s Strength: The management must also judge the financial strength of the union and the capacity of its leaders to carry the workers with them in a settlement or a showdown. With weak financial position a union would not be able to sustain a long-drawn strike and may accept even unfavourable terms.
7.
Government Laws and Attitude: The management must carefully think about the government’s industrial relations policy, the national wage policy, the economic
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situation in general and inflationary context in particular, for anticipating what would be the possible reaction of the government in this industrial dispute – whether it would remain apathetic or neutral, or would actively intervene to force a settlement. In the latter case, it should also judge whether the government would lean more in favour of management or labour.
Preparation for Negotiations A common cause of failure of collective bargaining is not really adverse attitudes nor even the unwillingness to accept each other’s bonafides, but failure to do sufficient homework which leads, first, to confused arguments and counter – arguments and, second, to prolongation of the whole process. The day to start preparations for negotiations on the next contract is the day present contract goes into effect. Everything that happens under the present contract may become a factor in next negotiations.
Any clause that causes
confusion, works unfairly, or proves unworkable probably should be revised at the next negotiation. But unless notes are made at the time the trouble occurs, it is to be forgotten by the time the next negotiations roll around. In many companies supervisors are asked to record situations which indicate the need for revision of any contract clause as and when they occur. In fact, no one knows the operating faults in labour contract better than a supervisor who is required to work under it daily.
Another continuing process in other preparation for contract negotiations is a study of the grievance records. Grievances repeatedly arising under the same contract clause give a clue to needed revisions.
Next comes the study of contracts of all other comparable companies. Each and every clause of these contracts should be well appraised as to its applicability to one’s own situation.
One can make a list of all such clauses which one would like to use during
negotiations to prove that such clauses have been agreed to elsewhere.
Next comes the study of wage picture of companies in one’s own community and industry.
The wages prevalent in companies which are ‘pattern setters’ should also be
studied. Figures should not be obsolete.
Then comes information about the union, its leadership, history, finance and demands. The impact of these demands on the company’s finances should be well studied. Finally, management should prepare a list of resource people in the company who are most likely to know or be to ascertain quickly the impact of proposed contract changes on the company’s operation sand costs.
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INDUSTRIAL MANAGEMENT Type of Negotiating Procedures: There can be three types negotiating procedures: Haggling – bargaining, Boulwarism and Continuous bargaining.
Haggling bargaining is the orthodox procedure of labour negotiations. This can be tow types: the piecemeal approach and the total approach. In the piecemeal approach issues are settled one by one in some order such as ‘easiest’ first or ‘from the beginning to the end’ of the draft demands. Each item arises as a separate issue, is argued out, disposed of and ticked away. Attention then turns to the next. In the total approach the issues are thought to be interrelated and interdependent. Therefore, no issue is settled independently. Each issue is discussed and laid aside as other are brought forward; but every issue remains open until suddenly the would complex is ready to crystallize into a total agreement.
Boulwarism, known after its originator, Lemuel Boulware, formerly a vice-president of the General Electric Company, differs from haggling – bargaining procedure in to respects. First, in this procedure the company refuses to play the haggling game. Instead of starting low and letting itself be dragged up to the final offer it perhaps had in mind from the start – a tactic that makes the union the hero and the company the villain in the eyes of may workers – the company makes its first offer a full and final one. Second, in addition to meeting with union representatives, the company conducts an extensive communication programme in which it tries to sell its offer directly to the employees and urges them to make their views known to their union official. There are several avowed objectives of this policy. By making a good offer from the beginning and explaining it directly to the workers, the company hopes to demonstrate that it ‘does right voluntarily’ by its employees and not because it is forced to do so by the union. Similarly, by refusing to alter its first and final offer the company wants to prove that it is soundly based on facts from the very beginning and there is no room for any change in the offer unless some new facts are brought to the knowledge of the management. Following is a brief description of this approach as followed by the G.E.C from 1946 to 1964 when it was given up on being declared as bad faith bargaining by the National Labour Relations Board.
The capacity itself seeks through extensive year round research into all pertinent facts to determine what is “right” for employees. Its research includes not only a study of business conditions, competitive factors, economic trends, and the like but the gathering of its won information as to its own information as to employee needs and desires through independent employee attitude surveys, comments made by employees at informative meeting, direct discussions by supervisor with employees; and statements in union publications. When bargaining, begins the company, as part of its overall research listens to the presentations made by all the unions with which it deals and evaluates the unions’ demand with the help of the facts it has on hand including those supplied by the unions.
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G.E. then makes an offer which includes everything it has found to be warranted without anything held back for later trading or compromising. G.E. does not initially present its offer on an avowed “take it or leave it” basis. It professes a willingness to make prompt adjustments in its offer but only when new information from any source or a significant change in facts indicates that its initial offer galls short of being right. But otherwise the company so declares that it will not change its offer at any cost and may even takes strike to any duration”. The third bargaining procedure has been dubbed “continuous bargaining” to contrast it with conventional dead line bargaining. Instead of postponing meaningful negotiations until the last few weeks or even the last few hours before a strike deadline, this approach calls for the parties to explore particularly bargaining problems in joint meetings over a long period of time, sometimes throughout the life of each contract. This negotiating procedure was first recommended in 1959 by James P. Mitchell the then Secretary of Labour in the U.S.A. In 1959 the Steel strikes in America continued for 116 days and so he warned against the antiquated practice of negotiating I n the last month of an expiring contract with tension, tempers and time tables in continuous bargaining runs the risk of being charged with becoming too friendly with management and may eventually lose his intraorganisational support and his union job.
Bargaining Strategy and Tactics If the negotiating procedure is of the haggling and bargaining type it becomes important for management to plan its strategy prior to entering the conference room. Strategy is concerned with mapping out the plan and basic policies to be followed in the bargaining process. Management may, for example, decide as a part of its strategy to keep its eyes on the entire package and its ultimate results rather than on immediate gains or losses. It may adopt a strategy of keeping the public and its own personnel informed of the issue, and so on.
Tactics are different from strategies. They are the particular actions that are taken while on the bargaining table objective being to bluff the other party. These are employed to create impressions of enhanced strength as well as to probe the other party to find out the level of its critical sticking points. Some common tactical devices are shouting and table pounding, getting up from the bargaining table in a huff, requesting a recess, conceding certain demands with some fight, tabling a troublesome clause, suggesting for negotiation matters of no real importance or causing one of the team members to pose as friendly and well-disposed to the other side, while the other member is actually hostile.
Of particular interest with respect to collective bargaining is the legal status of tactics. How far are they valid when the law requires collective bargaining to be done in good faith? It appears that only those tactics that result into the presentation of false information about
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INDUSTRIAL MANAGEMENT issues subject to bargaining (i.e., wages, hours, and conditions of employment) are a violation. Others are allowable.
Bargaining Conference The bargaining conference usually arranges for a chairman to conduct the proceedings. Sometimes it is agreed that each side in turn shall choose the chairman from among its members. In some conferences the two sides may agree that one of the members from the employer’s side shall be chairman, perhaps on account of his greater experience. When the negotiations take place at the industry level the law in some countries. (e.g., in Belgium and France) provides that the parties shall meet under an independent chairman.
Usually, at the first meeting one side submits a claim and there are opening statements by a leader from each side. This is followed by a general discussion or exchange of views. AT the start there may be quite a wide gap between the two sides, through each believes that the other can be induced to make concessions and thus make the margin narrower. In the course of discussion each side tries to find strong and weak points in the other’s defenses, and experienced negotiators acquire great skill in doing this. Often after discussions for some time the difference is narrowed down until it is not worth a dispute and after some further manoeuvring an agreement is reached.
Following are some important points to be remembered in the bargaining process. 1.
Parity of Bargaining Strength on the Two Sides: If one of the two sides is in so dominant a position that it can impose its will on the other side, then it is not a bargaining situation. It is situation of dictation in which it is extremely difficult for the dominant party to be judicious and discreet. Such party will always use its superior strength in indiscriminately maximizing its benefits.
2.
Problem-solving Approach: Neither party should adopt a win-lose attitude. The attitude should be to find a solution rather than to win an argument.
3.
Good Beginning: Well begun is half done. Hence, it is essential to put members in the right frame of mind before the talks begin. Probing into the cause of conflicts in the past, though necessary to avoid conflicts in future, should not be allowed to cloud the present views and attitudes of members.
4.
Continuity of Talks: The talks should never be allowed to reach a dead end. It may at times be necessary to leave controversial points alone for the time being and move to the next issue. As long as talks continue ultimate solutions will be possible for all issues. To keep the discussion fluid is, therefore, very important.
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The Collective Bargaining Agreement: The usual outcome of collective bargaining is the collective agreement or labour contract. This is the written statement of the terms and conditions arrived at by collective barging. It is the charter on which employers and unions agree. It usually consists of a preamble, a series of clauses and one or more appendices that list job classifications, wages rates, and other relevant details. In some countries, as in the United States and India these arrangements enjoy the status of a legal contract that can be enforced in a court of law. In Britain, on the other hand, the agreement is purely voluntary and not justiciable. The following list indicates some of the main items which are included in collective agreements: 1.
Wages, including time rates, piece rates and other incentive methods of payment, and procedure for increasing or decreasing wages in the event of changes in the cost of living.
2.
Hours of work, overtime and rates of pay for overtime; regulation of shifts and rest periods.
3.
Annual holidays and rates of pay for holidays.
4.
Sick leave and leave of absence for other reasons (for example, to enable a worker who has been elected as a trade union official to take part in union activities).
5.
Seniority rights with regard to laying off and rehiring.
6.
Dismissal for disciplinary offences.
7.
Number and training of apprentices.
8.
Fringe benefits
9.
Establishment of fair production standards, including satisfactory quality of output, and methods of increasing productivity and reducing waste.
10.
Joint consultation procedure
11.
Methods of settling grievances and disputes over the interpretation of the agreement.
12.
Prohibition of strikes and lockouts during the periods covered by the agreement.
13.
Duration of the agreement, its subsequent continuation unless notice of termination is given, and the length of such notice.
14.
Procedure for negotiating a new agreement.
Union-Security Clauses In some countries where national law and practice so permit the collective agreement may also include clauses on preference in recruitment for trade union members.
These are
known as ‘Union Security’ clauses and may be of 3 types: closed shop, union ship and maintenance of membership shop.
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Under the closed shop clause the employer undertakes to employ only union members. As soon as a worker ceases to be the member of the union his services are terminated. Under the union shop clause though the employer has the freedom to employ a non-union worker but the worker so employed must join the union later a specified period after terminated. Under the maintenance of membership shop clause the workers are given by the employer the option to become members within a certain period after employment. Those who decide to be the members are, however, not allowed to leave the union without losing their jobs.
The closed shop and the union ship clauses amount to compulsory trade unionism. Following are the merits and demerits of these clauses. Merits: 1.
There is no possibility of the non-unionists benefiting from the trade union activities of the unionists;
2.
There is no need to persuade workers to become members or to pay their membership dues;
3.
There is no risk of rivalry or jurisdictional disputes; and
4.
There is no fear of the union providing to be unrepresentative or unstable.
Demerits: 1.
The entire control over labour goes in the hands of the union;
2.
Workers are deprived of their freedom to join or not to join a union;
3.
Face-to-face contacts between union leaders and workers are reduced to the minimum; and
4.
Monopolistic conditions make union leaders complacent and inefficient. If anything is more important to collective bargaining than the agreement itself, it is
how the parties apply the agreement and live under it from day to day.
It is in the
implementation of the agreement that a number of grievances arise which need to be resolved every day. Disputes may arise over the interpretation of certain ambiguous clauses of the agreement or its applicability to non-union members who are not a party to the agreement (because a collective agreement in principle applies only to those workers on whose behalf it was signed).
Many agreements contain clauses specifying the procedure to be adopted for resolving such disputes.
All clauses of an agreement should be put in writing as clearly and concisely as possible. Legal terminology should be at a minimum because most of those who will use the contract are not lawyers. The agreement should then be signed by both the parties and communicated to those who will work by it.
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In India, a collective bargaining agreement is called a ‘settlement’ within the meaning of Section 2(p) of the Industrial Disputes (Central) Rules. As to the persons on whom a collective bargaining agreement is binding, Section 18(1) of the Industrial Disputes Act clearly lays down that “it shall be binding only on the parties to the agreement”. Thus, a collective bargaining agreement does not automatically extend to workers employed in the industrial establishment concerned who are not a party to the agreement even though they have obtained certain benefits under it.
Under Section 29 of the Industrial Disputes Act any person who commits a breach of any term of the settlement is punishable with imprisonment for a term which may extend to six months, or with fine, or with both (and where the breach is a continuing one, with a further fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first) and the court trying the offence, if it fines the offender, may direct that the whole or any part of the fine realized from him shall be paid by way of compensation, to any person who in its opinion has been injured by such breach.
Collective Bargaining in India Collective bargaining in India has passed through several important phases during the last few decades. It was during the 1960s that it began to show up in some pockets across the country due to two reasons.
One reason was that during this period large
industries will well-developed employers’ associations and trade union centers had come up in many big cities which facilitated collective bargaining. Examples were the cotton textile industry in Bombay, Ahmedabad, Coimbatore, Kanpur and Indore, the jute industry in Calcutta, the coir industry in Kerala and the plantations in southern and eastern India. The other reason was the encouragement for bilateralism which came from the public sector comprising the banking, coal, steel and railways.
Collective bargaining took a bank seat –as did industrial conflict – with the declaration of emergency in 1976.
With civil liberties suspended and the government bestowing
extraordinary powers upon itself, the environment became lest congenial for collective bargaining. But as soon as the emergency was lifted in 1977 a new chapter in collective bargaining began with unions making unprecedented demands on employers.
It was
Boulwarism in the reverse. The labour’s power was at its peak like never before. It was asking for all sorts of allowances from employers or faces a strike.
The above phase continued till the late 1980s when union power began to plateau. The pendulum had taken its swing from one end to the other. Now it was the employer’s turn to gain upper hand. Initially employers’ demands were for increased production – they were asking for greater volumes rather than increased efficiency or productivity. But they soon
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began to bargain for increased productivity through lockouts. Notable lockouts were at Bata and Wimco in West Bengal and at Hindustan Lever in Bombay. The four-month lockout at Bata compelled workers to accept sweeping changes in work methods and labour deployment. The sixteen-month lockout at Wimco forced workers to accept new production norms and the year-long lockout at Lever authorized management to modernize the plant and prune the work fore as it wanted.
AT present, there is a sea change in the environment. Unions which have been accustomed to making demands are now at the receiving end, with employers asking them to roll back wages and reduce benefits. Concession bargaining or the practice of employers asking labour to make concessions, has become commonplace. Managements have also been attracted by Japanese work practices which focus on multiskilling, flexible deployment, and greater worker involvement in improving productivity. The centrality of the two institutions – trade unions and collective bargaining – which all prior theories have upheld – is suddenly in doubt.
The strategic management approach to industrial relations is now demanding
productivity and performance from the system. Why has Collective Bargaining (bipartitism) not flourished in India? Collective bargaining is the ultimate in negotiations and is possible only when workers’ and employers’ organizations are equally strong, mature and conscious of their right s and duties. That is why in no country except Israel one finds unadulterated bipartitism. Even in the U.S.A. it is not practiced in its pure form/ State steps in certain situations. In India both bipartitism and tripartitism have co-existed but they generally operate at different levels. AT the unit level it is generally the bipartitism that has flourished where as at the industry and national levels it is the tripartitism that has prevailed.
Some reasons for
bipartitism not flourishing at the national level are that: 1.
labour is a concurrent subject;
2.
there are varying conditions of work and life in different parts of the country;
3.
there is absence of strong central unions and empolyers’ organisations who can represent country – wide interests; and
4.
there are a number of problems (e.g., layoffs and closures) which need to be looked at from the point of view of larger objectives of government policy. Hence in tackling such problems government’s participation at the national level becomes unavoidable.
Even at the plant-level bipartitism has not made much headway in our country due to the following reasons: 1.
Excessive Dependence on Compulsory Adjudication for the Settlement of Industrial Disputes: There is not a single piece of legislation at the nation level which requires an employer to bargain or prescribes the method of identifying a bargaining agent. There is no law requiring voluntary agreements to be registered or giving any guarantee that a rival union will not raise a dispute on the very subjects
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already covered by the voluntary agreement. On the other hand, what the Industrial Disputes Act provides is a system of conciliation and compulsory adjudication which, therefore, have remained the main stay for ta large number of industrial organizations and trade unions in our country. 2.
Reduction in the Area of Collective Bargaining: The area of collective bargaining has gradually receded in recent years due to the emergence of several new institutions and modes such as wage boards, statutory fixation of minimum wages and payment of bonus, regulation of fines and deductions, working hours, over time payment, holidays, leave and other working and employment conditions including welfare and social security measures.
3.
Weak Trade Union Movement: Trade union movement still covers only a small portion to the total industrial employment.
Besides, the unions are too weak to
bargain collectively on account of their small membership, poor financial resources, their multiplicity, inter-union rivalry, politicization, poor leadership and absence of suitable legislative provisions for recognizing them as bargaining agents. If no unit, far less in an industry, do we have a union which is recognized and is recognizable as a representative union with which an employer can negotiate a settlement in the hope that it would be acceptable to all the endure for the stipulated period. And so far we have not evolved a fool-proof system to determine the majority union. 4.
Little Government Support: The government has shown little interest in collective bargaining because i.
It does not have confidence in the bargaining strength of our trade unions,
ii.
It has fear of strikes and lockouts.
iii.
It has fear of the communicates gaining in strength, and
iv.
It has apprehension of the planned economy being disrupted y inflation, etc.,
In a planned economy the overall industrial relations pattern is sought to be developed taking into account the overall objectives of the nation and government’s fiscal, monetary and industrial policies.
Hence unadulterated bilateral negotiations without the
state’s involvement are not possible.
Recommendations of NCL to make Collective Bargaining more Effective in India 1.
Compulsory adjudication of disputes should be used only as a last report
2.
Trade union should be strengthened both organizationally and financially by amending the Trade Unions Act to make registration of unions compulsory, enhance the union membership fee, reduce percentage of outsiders in the union executive and among the office bearers and increase the minimum number of members of union applying of registration of union.
3.
Legal provision may be made either by a separate legislation or by amending an existing enactment for
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Compulsory recognition of trade unions and certification of unions as bargaining agents
4.
ii.
Prohibition and penalization of unfair labour practice
iii.
Bargaining in good faith by both employers and union.
iv.
Conferring legal validity and legitimacy on collective agreements
Workers’ education should be intensified for building up internal union leaderships and making workers more knowledgeable and conscious about their rights and obligations.
5.
The idea of one union for one plant or one industry should be popularize
6.
The Government should declare its policy to allow and encourage the parties to settle their conflicts by bipartite consultation and negotiation consistent with public safety and interest of the society in general.
Other Suggestions 1.
Unions should be made strong so that they are able to honour the terms of collective agreements. They can be made strong in the following ways: i.
By Excluding Minority Unions from Industrial Relations Rights Such as Right to Bargain or right to Carry Labour Disputes to Conciliation or Industrial Tribunals. This will spur minority unions into expanding their membership. AT present many of them feel why they should exert themselves when a mere 5, 10 or 15 per cent membership gives them all the privileges of representation, conciliation and adjudication.
ii.
By Freeing Unions from Political Control and Building New Leadership. To achieve these ends there should be greater use of the local Indian language in the
matter
of
labour
correspondence, etc.
laws,
adjudication
proceedings,
employer-union
Face-to-face negotiations should take the place of
conciliators, tribunals and lawyers. A real complaints procedure for settling the daily small problems of the factory must develop and the union posts should be made whole time and salaried iii.
By making secret ballot vote rather than check-off membership the test of a union’s majority status.
2.
Adequate statutory provisions should be made to make an agreement cover all the workers. At presents, under Section 18(1) of the Industrial Disputes Act, a collective agreement binds only those workers who are a party to it. An agreement does not automatically extend to workers who were not a party to it even though they might have obtained certain benefits under it.
3.
On the failure of negotiations both parties should have equal right and freedom to strike work or to declare a lockout. It is totally unjust and inequitable to leave one
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INDUSTRIAL MANAGEMENT party absolutely free in the exercise of its right and to impose all sorts of curbs on the right of the other party. 4.
In addition to the existing authorities under the Industrial Disputes Act, one more authority should be constituted to promote collective bargaining. Its functions may include advising parties on various aspects of collective bargaining (such as procedure, content and form of agreement), helping parties in resolving jurisdictional disputes and registering agreements concluded by the parties..
5.
Each party should cultivate the right type of attitude towards the other party. If the management starts with the proposition that the union is a nuisance or that it must win and union lose, then obviously the process of bargaining cannot get off to a very favourable start.
Similarly, if the union starts with the proposition that the
management is selfish, autocratic and exploitative and the union must have the last word then the process of successful bargaining cannot begin. 6.
Each party should develop the skill to under stand the viewpoint of the other party. To acquire this skill a lot of homework is required which is helpful in analyzing a problem. Failure to do sufficient homework leads to confused arguments and counterarguments and delays the whole process of collective bargaining.
7.
A tradition of successful collective bargaining should be built. Every issue which is amicably settled through collective bargaining strengthens the possibility that future issues also will be similarly settled and vice versa.
8.
Collective bargaining should usually be resorted to in setting disputes concerning interests only.
Disputes concerning rights should not be magnified into collective
bargaining issues and should be better settled through grievance redressal machinery.
Collective Bargaining in Central Public Sector Undertakings Collective bargaining in central public sector undertakings is done according to the guidelines issued by the Department of Public Enterprises (earlier known as the guidelines issued by the Department of Public Enterprises (earlier known as the Bureau of Public Enterprises). This department gives the content and limits of financial commitments which public enterprise can make with the union during the course of bargaining. However, in many instances these limits are circumvented by the management by making gentleman’s promises with the unions on several issues outside the written agreement and implementing these promises over a period through administrative orders.
In core industries like steel, coal, ports and docks and banks, collective bargaining is done at the national level for the industry as a whole. Thus, in steel industry, one main collective agreement is entered into by the National Joint Committee comprising representatives of trade unions and the steel company’s management. This is followed by several supplementary agreements being entered into at the plant level to cover aspects not
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covered in the national level agreement. Such centralized bargaining has resulted in creating uniform wage structures and fringe benefit patterns in all public sector units irrespective of the nature of industry (labour or capital-intensive) and the paying capacity of a unit as determined by its financial performance. This is in sharp contrast to a private sector unit where its wages and firings benefits are more geared to its specific requirements and circumstances.
The Future of Collective Bargaining There has been a decline in the number of workers covered by collective bargaining in several industrialized nations. Bargaining coverage has declined from 70 to 47 percent of the employee force in the U.K., and from 26 to 18 percent in the U.S.A. in the course of a decade from 1980 to 1990. Many forces have combined to bring about this decline. Decline in trade union membership has been the fundamental force, followed by the preference of employers for individualized pay under the influence of HRM, strategies, the decline of centralized bargaining structures and the growth of enterprise level negotiations that tie benefits to the economic situation of the firm.
With collective bargaining, as with trade unions, adversaralism is acknowledged to be the root of the problem. There is general agreement that the future of collective bargaining lies in its ability to transform itself from an adversarial process to an integrative and problemsolving partnership between labour and capital.
TRADE UNION
Definition, Nature and Scope of a Trade Union Different authors have defined a trade union in different ways. Sydney and Beatrice webb have defined a trade union as “a continuous association of wage earners for the purpose of maintaining or improving the conditions of their working lives”.
According to
G.D.H. Cole, “a trade union means an association of workers in one or more occupations – am association carried on mainly for the purpose of protecting and advancing the members’ economic interests in connection with their daily work”. Lester defines a trade union as “an association of employees designed primarily to maintain or improve the condition of employment of its members”. Cunnison defines a trade union as “a monopolistic combination of wage earners who stand to the employers in a relation of dependence for the sale of their labour rand even fro its production; and that the general purpose of the association is in view of that dependence to strengthen their power to bargain with the employers”.
It should be noted that in none of the definitions cited above the employers’ associations or professional bodies have been mentioned as trade unions. This is because these bodies differ so much from the employees’ unions that it is difficult to group them with the latter. The employees’ unions are primarily concerned with the terms and conditions of
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INDUSTRIAL MANAGEMENT employment of their members (i.e., the terms of sale of their service).
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associations, on the other hand, are concerned, among other things, with influencing the terms of purchase of services in favour of their members. So the two should not be placed in one category. As regards the associations of professional men, it may be observed that they also differ fundamentally from employee’s unions. Professional associations include the selfemployed as well as the employees’ whereas trade unions consist only of the people who are employed by others. Therefore, the associations of professional men should also not be described as trade unions, although if any particular professional association consists only of people who are employees of others, for example, the School Teachers’ Association, it may be described as a trade union as it is wholly a union of employees. In India, however, the term trade union refers, besides employees’ organizations, to employers’ associations also. Similarly, in Britain, even the associations of professional people such as Artists’ Federation or Musicians’ Union are also recognized as trade unions.
Difference between Labour Movement and Trade Union Movement There is lot of confusion on the use of terms ‘labour movement’ and ‘trade union movement’. Often the two are used interchangeably. However, there is a slight distinction between the two.
The ‘labour movement’ is ‘for the worker’ whereas the ‘trade union
movement’ is ‘by the workers’. This distinction needs to be noticed all the more because till the workers organized themselves into trade unions, efforts were made mainly by the social reformers to improve the working and living conditions of labour. These efforts should be taken as forming a part of the labour movement and not that of the trade union movement. The labour movement thus conveys a higher degree of consciousness amongst workers than conveyed by mere trade union movement. In India, the labour movement started from 1875, when a number of measures through legislation, administration and welfare work, were taken by the Government, the social workers and the enlightened employers. The trade union movement, on the other hand, started after 1918, when the workers formed their associations to improve their conditions. It is, thus, a part of the ‘labour movement’ which is a much wider term.
Trade Union Theories Different answers are given to the question, “what factors lead to the origin of trade unions?” These answers are known as trade union theories or approaches to the origin of trade unions. Following is a brief description of some of these approaches:
1.
Social Psychological Approach of Robert Hoxie: According to Hoxie, trade unions grow out of the socio-psychological environment of the workers. Workers who are similarly situated economically and socially, closely associated and not very much divergent in temperament and training, tend to develop a common interpretation of their social situation and a common solution of their problems of living. This leads
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them to unite into a union. Thus differences of environment cause different unions to develop. Hoxie identified the following 4 types of unions on the basis of their aims and methods. i.
Business Unions: Also known as ‘Bread and Butter Unions’, these unions aim at bringing about improvement in the wages and working conditions of their members. Collective bargaining is the usual method followed by these unions with heavy reliance on strike as a weapon.
ii.
Friendly or Uplift Unions: These unions chiefly aim at elevating the moral, intellectual and social life of their members. To realize this aim these unions advocate the use of non-political methods such as setting up of co-operative enterprises, profit-sharing, mutual insurance, etc.
iii.
Revolutionary Unions: These unions aim at replacing the capitalist system by the socialistic system by political and violent means such as strikes, sabotage, boycott, etc. Collective bargaining is also used in so far as the main aim is not overlooked.
iv.
Predatory Unions: As their very name indicates, these unions are given to plundering benefits by whatever means they may lay their hands on. These unions do not subscribe to any legal or ethical ideology or code of conduct.
2.
Sociological Approach of Frank Tannenbaum: According to Tannenbaum, trade unions are the by-products of an industrial society in which automization has destroyed the old way of life and robbed the worker of his identity, purpose and creativity. Union are a reflection of the worker’s spontaneous urge to re-establish his identify. Trade unions help the worker in regaining his social life.
3.
Protest Approach of Kerr, Dunlop and others: According to these writers a trade union is a form of organized protest against the evils of industrialization. Besides bringing about a basic change in the relationship between man and his work and between man and his cultural setting, industrialization inevitably circumscribes worker’s freedom by imposing discipline. The worker often finds his work distasteful and his compensation never commensurate with this contribution. Formation of a union is one of the organized forms of protest – an expression of the worker’s resentment over the prevailing industrial system.
4.
Industrial Democracy Approach of Webbs:
According to Sydney Webb and
Beatrice Webb trade unions are the means to achieve industrial democracy. They assert that political democracy alone cannot yield to the worker the fruits of freedom of contract, freedom of association, freedom of opportunity, etc., because the stands on an unequal footing vis-à-vis his employer. He can enjoy the fruits of political democracy only when he is granted industrial democracy which means that he is given say in running the industry. To achieve democratic administration of industry is the main aim of a trade union.
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Classless Society Approach of Kari Marx: In Marx’s view trade unions represent a prime instrument for destroying the capitalist class. He admits that although these unions by themselves cannot bring about a class-less society still they are important to carry on the economic struggle against the oppression and to bring about a revolutionary transformation of the working class.
6.
Sarvodaya Approach of Gandhi:
Gandhi considers trade unions as essentially
reformist organizations whose main functions to raise the moral and intellectual standards of labour.
They should also undertake programmes for teaching
supplementary occupations to their members so that uncertainty of employment during strike may be reduced to minimum. According to Gandhi, unions are not anticapitalist organizations. They are in the least degree political. Their main aim is to increase their internal strength, to work conscientiously and to take from the employer no more than what is rightfully due to the labourers. For the sake of simplicity we may subsume various trade union theories into three.
These are the classical theory, neo-classical theory and the revolutionary
theory. According to the classical theory, trade unionism is the organized expression of the needs, wishes, aspirations and attitudes of the working class.
A union
functions collectively to protect and promote the interests of its members within a given socio-economic system. The neo-classisists believe that a union’s function is not only to press for improvement in the living standards of its members but also to involve itself in various wider issues which indirectly affect workers’ living standards such as imposition of direct and indirect taxes, raising of bank rate, etc.
The
revolutionary theory believes that trade unions are a reaction to the bourgeois class and in order to displace this class and bring about true freedom of the working class trade unions must bring about order in the society by violence and sabotage.
Need for Trade Unions In earlier times when industry was on a small scale and the few apprentices and craftsmen whom the master craftsmen employed usually lived with him, conditions of employment and any grievances were easily discussed individually or in small groups and quickly settled. Modern industry is very difficult. It is organized on a large scale, and the maintenance of close direct relations between employers and workers for the settling of differences is difficult. It is organized on a large scale, and the maintenance of close direct relations between employers and workers for the settling of differences is difficult. The status and security which workers had in earlier communities have gone, and in their place they need the protection of trade unions. Labour is much more mobile than in former times. The machinery and other capital used in industry have become more and more costly, and there is usually a great gulf fixed between the owner of the capital and the workmen who operate the machines. Such conditions have led almost inevitably to the formation of organizations first
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by the workers and later by the employers, and to the working out of methods of securing workable agreements reconciling, a s far as possible the various interests involved. Some important reasons why workers organize themselves into a trade union are as follows: 1.
To Oppose Management: Workers often join unions in order to have a method of collectively resisting action of management. When employers cut wages or pay low wages; when working conditions are unsafe or too unpleasant; or when managers interfere in workers’ personal lives, workers may resist by joining unions. Through the union workers may petition management for changes and, if unsuccessful, they may resort to a concerted work stoppage – a strike.
2.
To Participate in Union Activities: Workers may join unions to obtain certain health or insurance benefits, to participate in educational programmes, or to learn about their own business and occupation.
They may also join to engage in social or
community activities. 3.
To Exercise Leadership:
Some workers join unions as an outlet for their own
ambitions. They may aspire to leadership and find that the union offers a convenient vehicle. They may hope to get ahead by obtaining an office of the union. 4.
To Fall in Line with Others:
Many workers join unions simply because other
workers urge them to do so. They may be made to feel that they re traitors if they do not join. 5.
To Get Employment: Sometimes workers join a union because it is precondition to their getting employment.
This is know as the ‘closed shop’ system and was
prevalent in America till 1947 when it was outlawed. All of these reasons can be summarized in the following generalization. The worker is motivated toward union membership to the degree that he thinks it will satisfy his wants to reduce his dissatisfaction. The ties are strong when the expected want satisfaction is strong, and vice versa.
Objectives of a Trade Union Three important objectives of a trade union today are as follows: 1. To defend or improve the wages and working conditions of workers and to bring about a change in the economic order 2. To overthrow capitalism and to bring about a revolutionary and fundamental change in the political order. 3. To replace managerial dictatorship by workers’ democracy and to bring about a change in the social order. It does not, however, imply that the trade unions in every country pursue the objectives stated above. In fact, the extent of industrial development and the political and social conditions of a country have an important bearing the development of trade unions and their objectives.
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Functions of Trade Unions For the attainment of the above objectives, trade unions perform two types of functions – militant and ministrant.
Militant functions are strikes, boycotts and gheraos.
Ministrant functions are to give financial support to members during strikes and lockout and to provide other benefits to them. Militant functions can again be either intramural or extramural. The former include those welfare efforts of unions which are made within the factory premises (e.g., improvement in working conditions, regulation of hours of work, provision of rest pauses, adequate wages, sanitation, safety etc). The latter include those welfare efforts of unions which are made outside the factory premises (e.g., provision of education, recreational and housing facilities to workers). We list below the various functions of a trade union under these four heads. 1. Functions relating to members; 2. Functions relating to organisation; 3. Functions relating to the union; and 4. Functions relating to the society.
I.
Functions Relating to Trade Union Members 1.
To safeguard workers against all sorts of exploitation by the employer, by union leader and by political parties.
2.
To protect workers from the atrocities and unfair labour practices of the management.
3.
To ensure healthy, safe and conductive working conditions.
4.
To exert pressure for enhancement of rewards associated within the work only after making a realistic assessment of its practical implications.
5.
To ensure a desirable standard of living by providing various types of social services – health, housing, educational, recreational, co-operative, etc., and by widening and consolidating social security measures.
6.
To guarantee a fair and square deal and social justice to workers.
7.
To remove the dissatisfaction and redress the day-to-day grievances and complaints of workers.
8.
To encourage workers’ participation in the management of industrial organisation and trade union, and to foster labour-management and leader-follower co-operation.
9.
To make the workers conscious of their rights and duties.
10.
To impress upon workers the need to exercise restraint in the use of rights and to enforce them after realistically ascertaining their practical implications.
11.
To stress the significance of settling disputes through negotiation, joint consultation and voluntary arbitrations, and not through adjudication.
12.
To raise the status of trade union members in the industrial organization and in the society at large.
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To highlight industrial organisation as a joint enterprise between workers and management and to promote identity of interests.
2.
To increase production quantitatively as well as qualitatively, by laying down the norms of production and ensuring their adequate observance.
3.
To help in the maintenance of discipline.
4.
To create opportunities for worker’s participation in management and to strengthen labour-management co-operation.
5.
To help in the removal of dissatisfaction and redressal of day-to-day grievances and complaints.
6.
To promote cordial and amicable relations between the workers and management by settling disputes through negotiation, joint consultation and voluntary arbitration, and by avoiding litigation.
7.
To create favourable opinion of the management towards trade unions and improve their status in industrial organisation.
8.
To exert pressure on the employer to enforce legislative provisions beneficial to the workers, to share the profits equitably, and to keep away from various types of unfair labour practices.
9.
To facilitate communication with the management.
10.
To impress upon the management the need to adopt reformative, and not punitive, approach towards workers’ faults.
III. Functions Relating to Trade Union Organisation 1.
To formulate policies and plans consistent with those of the industrial organisation and society at large.
2.
To improve financial position by fixing higher subscription, by realizing the union dues and by organizing special fund-raising campaigns
3.
To preserve and strengthen trade union democracy
4.
To train members to assume leadership position
5.
To improve the network of communication between trade union and its members.
6.
To curb inter-union rivalry and thereby to help in the creation of unified trade union movement.
7.
To resolve the problem of factionalism and promote unity and solidarity within the union.
8.
To eradicate various types of ‘isms’ like casteism, regionalism and linguism within the trade union movement.
9.
To keep away from advocating the adoption of unfair labour practice.
10.
To save the union organisation from the exploitation by vested interests – personal and political.
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To continuously review the relevance of union objectives in the context of social change, and to change them accordingly.
12.
To prepare and maintain the necessary records.
13.
To manage the trade union organizations on scientific lines.
14.
To publicize the trade union objectives and functions, to know people’s reaction towards them, and to make necessary modifications.
IV. Functions relating to society 1.
To render all sorts of constructive co-operation in the formulation and implementation of plans and policies relating to national development.
2.
To actively participate in the development of programmes of national development, e.g., family planning, afforestation, national integration, etc.
3.
To launch, special campaigns against the social evils of corruption, nepotism, communalism, casteism, regionalism, linguism, price rise, hoarding, black marketing, smuggling, sex inequality, dowry, untouchability, illiteracy, dirt and disease.
4.
To enable unorganized sector to organize itself.
5.
To create public opinion favourable to government’s policies and plans, and to mobilize people’s participation for their effective implementation.
6.
To create public opinion favourable to trade union sand thereby to raise their status.
7.
To exert pressure, after realistically ascertaining its practical implications, on the government to enact legislation conducive to the development of trade unions and their members.
Trade Unions Structure There may be three types of labour organisations. Viz., the craft union, industrial union and general union. 1.
A craft union is the simplest form of trade union. It is usually formed of workers belonging to the same craft, occupation or specialization no matter in what industry or trade they happen to be employed. Thus, electricians though working in different industries may form a union of electricians only. There may be separate unions for fitters, turners, carpenters, etc. The International Wood Carvers’ Association and the Indian Pilots’ Guild may be cited as examples of craft unions. A craft union has the following merits: i.
People belonging to the same craft or profession constitute a compact, wellknit, cohesive group. With their identical training and educational background these workers very soon develop similar perceptions and outlook and organising these workers in a group becomes relatively easier.
ii.
Craft union consisting of workers possessing some important skill enjoys superior bargaining position. strike.
Strike in
Their workers cannot be easily replaced in a
a craft union may paralyse the entire working of the
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organisation. Hence, craft unions generally succeed in securing more favourable terms and conditions for their members. The main weaknesses of a craft union are; i.
It is often easier for an employer to break this type of union. When several occupational groups in an industry are independently organised and each has its own agreement, the employer has only to break one organisation at a time. Joint action by all workers, because of different agreements with different craft workers, becomes difficult.
ii.
With the advancement in technology, the traditional distinction among various crafts disappears. This destroys the very basis of a craft union. This is one reason why craft unions are generally found to oppose technological advances.
iii.
The craft unions are not likely to have a clear perspective of the needs of the working class as a whole. Moreover, these unions undermine the solidarity of worker’s movement.
2.
An industrial union organises worker on the basis of industry rather than a craft. If the entire labour force of a cotton textile factory decides to form a union consisting of workers of different crafts, the union is called an industrial union. The Rashtriya Mill Mazdoor Sangh and the Girni Kamgar Union at Bombay belong to this type. The main strength of this type of union lies in the fact that it cuts across skill and craft distinctions of workers employed in an industry and attempts to vulcanize them into one union. This type of unions have the following merits: i.
They make negotiations easy. Employers are spared the trouble of bargaining separately with a number of unions established on a craft basis.
A single
agreement covers all workers of a particulars industry. ii.
They encourage workers’ solidarity. Industry – wide unions have a special appeal to the socialists and other radicals because by bringing both skilled and unskilled workers closer these unions make the task of solidifying the workers easy.
iii.
These unions are the need of the present times. In these days when mass production techniques have obliterated craft distinctions, industry – wide unions are the only logical answer. One important drawback of this type of union is that the skilled workers in it feel
that they are swamped by the unskilled workers and that in the negotiations with the employers their specific demands art not adequately taken care of. The result is that these dissatisfied workers soon form their separate union. 3.
A general union embraces all workers in its fold whatever their industry or craft may be. The jamshedpur Labour Union, whose membership includes worker engaged in different industries and crafts of Jamshedpur, is an example of a general union.
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Unions in different countries have developed on different lines, depending on social and economic compulsions of industrialization, political and historical factors and the institutional framework of respective societies.
For example, in the U.K.
where union s grew out of the guild system, craft became the basis of workers getting together for collective action. In the US and USSR workers are members of local industrial unions most of which are affiliated to national unions covering an occupation or an industry. Unions in France, Italy and Belgium are divided mainly on the basis of religion.
The trade unions though it is now moving towards craft
unionism.
WORKER PARTICIPATION IN MANAGEMENT Meaning: Worker participation in management is a concept shrouded with so much vagueness that for different people it has different meanings. For management it is joint consultation prior to decision-making; for workers it is co-decision-making or co-determination; for trade union leaders it is the ushering in of a new era of social relationship and for administrators it is merely the association of workers with management without assigning them any authority or responsibility. Now with standing these different views on worker participation, all agree that it is an essential step involving redistribution of power between the management and workers in the direction of industrial democracy. It should be remembered that the worker participation in management is not the same thing as participative management.
While worker participation in management refers to
Institutional and formal arrangements resulting into the creation of various participative forums to associate workers’ representatives with management, participative management refers to a manager’s specific style in which he interacts with his people. It is his leadership pattern. Similarly, worker participation in management is not the same thing as collective bargaining. What distinguishes worker participation from collective bargaining is the element of mutual trust and information-sharing.
Collective bargaining is typically base on power
dynamics, pressure tactics and to some extent on non-sharing of information whereas worker participation in management is based on trust, information-sharing and mutual problemsolving. However, if collective bargaining refers to productivity bargaining and productivity agreements, one may regard it as a form of worker participation in management.
Origin and Growth The origin of the concept of worker participation in management can be traced back to the writings of Fabian Socialists headed by Sydney Webb who highlighted that economic and social disorders of industrially developing countries and stressed the need for unity and co-operation among partners of production. The concept received further impetus from the origin and growth of political democracy in many parts of the world. It came to be believed that political democracy could not survive unless economic and industrial democracies were
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also achieved. Many writers advocated that just as people should have the right to choose their governments, the workers too should have the right to influence the managerial decisions, if not the right to choose the management.
Many writers in the field of
management emphasised the human side of enterprise and came to be collectively designated as the behaviouralists. In India, Mahatma Gandhi mooted the idea of worker participation in management through his concept of trusteeship. It was during the days of the First World War that the concept found its first practical application.
Faced by the twin problems of maintaining industrial peace and improving
productivity, the governments in many belligerent countries (such as Germany, Great Britain and France) persuaded management to establish joint committees for expeditiously resolving these problems through consultation. In the United Kingdom following the recommendations of the Whitely Committee a well-knit consultative system came into being. It consisted of works committees at the plant level, district councils at the district level and the joint industrial councils at the industry level. However, with the cessation of hostilities in 1918 and the onset of economic depression in 1921 the idea of joint consultation received a setback. The interest of the working class now shifted toward nationalization and centralized planning because these were considered to be the most appropriate remedies for economic stagnation and unemployment. Interest in joint consultation was again revived during the Second World War. The post-war period also proved favourable for the growth of this idea. Many countries (such as Federal Republic of Germany, Yugoslavia, France, Belgium, Bulgaria, etc.) passed laws to put their war-time consultative bodies on a permanent footing with the objective of expediting the task of reconstruction of their war-ravaged economies.
In some countries such as
Denmark, Sweden, Norway, etc., agreements were signed between the apex organisation of workers and employers to revive consultative bodies.
The idea gripped many hitherto
colonical countries also which on gaining independence impatiently sought to increase their productivity. It should be remembered that this widespread interest in the schemes of worker participation was to some extent the result of I.L.O.’s efforts also. In this context, three of its Recommendations adopted in 1952, 1976 need special mention. The 1952 Recommendation urged member – states to take steps to promote the process of consultation at the enterprise level either through voluntary agreements between the parties or through legislation or a combination of these methods. The 1960 Recommendation called on member – States to promote effective co-operation and consultation t the industry or nation al level. By the 1976 Recommendation the I.L.O.
urged member-States to establish a tripartite machinery for
consultations on various matters such as consideration of Government replies to International Labour Conference questionnaires, formulations of proposals to be made to various authorities, implementation of international labour standards, etc Today, the idea of worker’s participation has become institutionalized in several countries of the world. The schemes, however, widely vary form one country to another in
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respect of range of subjects handled by participation machinery, in the degree of authority exercised with regard to these subjects, and in the methods of selection of workers’ representatives. Thus we have co-determination in Federal Republic of Germany at one extreme and mere joint consultation in Great Britain and India at the other extreme.
Objectives of Worker Participation The scheme has economic, psychological, social, ethical and political objectives. Its economic objective is to increase worker’s productivity. This is possible only through fullest co-operation between labour and management, for poor labour-management relations do not encourage the workers to give more than the minimum necessary to retain the job and that, in many cases, is all he gives. The psychological objective of the scheme is to raise workers’ level of motivation. This is made possible under the scheme through the satisfaction of his non-economic needs. Participation provides the workers with a sense of importance, pride and accomplishment, freedom and opportunity for expression, a feeling of belonging to the place of work and a sense of workmanship and creativity. Socially, the need for participation arises because modern industry is a social institution with the interest of the capital owner, the employer, the community and the workers equally vested in it. Participation forges ties of understanding between the two principal groups leading to better effort and harmony all round and its absence introduces a sullenness in behaviour which ultimately may flare up into a conflict with consequential suffering and inconvenience to the society in general. The ethical objective of participation is to develop workers’ free personality and to recognize human dignity.
The political objective of participation is to make the workers conscious of their
democratic rights on their work place and thus bring about industrial democracy as an adjunct to political democracy.
Factor Influencing Participation Several research studies have shown that the intensity of participation depends of four factors: i. The subject-matter of participation ii. The level of participation iii. The personal characteristics of the individuals who are asked to participate in the decisions-making, and iv. The extent of participation. 1.
Subject-matter of Participation: By and large, the workers’ interest in participation varies with the nature of issues involved in participation. Broadly speaking, there can be two types of issues: work-related and interest-related. Examples of work-related issues are safety, welfare, such as canteen, sports, water-supply, housing, etc. These are the simplest issues. Examples of interest-related issues are wages and sharing of productivity gains.
These are the most difficult issues. Workers show
greatest interest in the second type of issues.
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Level of Participation: Level of participation is another factor which determines the interests of workers in participation as such. Participation can take place at 3 levels in an enterprise – floor level, plant level and corporate level. In big enterprise there may be a fourth level also, i.e., the departnemtnal level, in between the shop-floor and the plant. Studies have revealed that most workers desire participation at the shop-floor level and not at higher levels because they feel that with their knowledge of the work place they can contribute best at that level only.
3.
Personal Characteristics: Workers’ interest in participation is also influenced by certain personal or group characteristics.
For example, several research studies
have shown that both very low and very high levels of task-relevant maturity discourage participation.
Participation by extremely immature workers is like the
billing leading the blind. It is pooling of ignorance. On the other hand, extremely mature workers rarely participate. They resist “group think” because they prefer only the expert in an area to make the decisions. Thus, the effectiveness of workers’ participation in management increases as one moves from low to moderate levels of maturity and then begins to plateau and finally to decline as workers become high in task-relevant maturity. This is illustrated in the following figure.
(HIGH)
(LOW)
4.
Extent of Participation:
MATURITY
(HIGH)
There are four degree of participation. These are
as
follows: i.
Communication, i.e., sharing of information with the management about all decisions taken it.
ii.
Consultation, i.e., exchanging the opinion and the views with the management before the decision are taken.
iii.
Co-determination, i.e., taking joint decisions with the management
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Self-Management, i.e., enjoying complete autonomy right from decisionmaking to execution.
Worker Participation in Management in India There is now a growing realisation in several countries of the world that management is too important to be left to managers alone and that workers also should be allowed to participate in the field. In India, worker participation in management is one of the Directive Principles of State Policy embodied in Article 43-A of our Constitution. This Article which was inserted in the Constitution by the Constitution (42 Amendment) provides: The State shall take steps, by suitable legislation, or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry. Several experiments have been made fro time to time to give effect to this constitutional imperative. A brief description of these experiments I their chronological order is given below.
Works Committee (1947) The first experiment began in 1947 when the Industrial Disputes Act was passed. The Act provides that in the case of an industrial establishment in which 100 or more workers are employed on any day in the preceding 12 months, the appropriate government may be general or special order require the employer to constitute in the prescribed manner a works committee consisting of representatives of employer and workmen engaged in the establishment, so, however, that the number of representatives of the workmen on the committee shall not be less than the number of representatives of the employer. The employers’ representatives should be nominated by the employers and be those who are connected with the undertaking and have day-to-day contact with workmen. The workers’ representative ought to be elected in the prescribed manner from among the workmen engaged in that undertaking in consultation with their trade union. If any, registered under the Trade Unions Act, 1926.
The procedure for election in the case of Central
Government has been laid down in the Industrial Disputes (Central) Rules, 1957. The main function of the Works Committee is to promote measures for securing and preserving amity and good relations between the employers and workmen and to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters. The works committees are normally concerned with problems of day-to-day working of the undertaking and are not intended to supplant or supersede the union for the purpose of collective bargaining.
They are not
entitled to consider real or substantial changes in the conditions of service. Their task is only to smooth away friction that might arise between the workmen and management in the dayto-day work. The Committee constituted by the Indian Labour Conference in 1959 has drawn the following illustrative list of items which these Works Committees can deal with:
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Conditions of work such as ventilation, lighting, temperature and sanitation including latrines and urinals;
2.
Amenities such as drinking water, canteens, dining rooms, medical and health services.
3.
Safety and accident prevention, occupational diseases and protective equipment;
4.
Adjustment of festival and national holidays;
5.
Educational and recreational activities;
6.
Administration of welfare and fine funds;
7.
Promotion of thrift and savings; and
8.
Implementation and review of decision arrived at in the meetings of works committees.
The items excluded from the purview of the committees are: wages and allowances, bonus and profit-sharing, rationalization and work-load, fixation of a standard labour force, programmes of planning and development, retrenchment and lay-off, victimization for trade union activities, retirement benefits, provident fund and gratuity, quantum of leave and holidays, incentive schemes and housing and transport services. Through at the end of 1996, 876 Works Committees covering 8.65 lakh workers (as against the required number of 1248) were operating in the central sphere, their number was extremely low in some States such as Gujarat, Kerala and Orissa.
Position of Works Committees in Some States Required to be formed
Actually formed
No. of establishments
No. of establishments
Gujarat
307
48
Haryana
792
146
Kerala
257
20
Maharashtra
661
340
Orissa
151
1
Punjab
317
265
Rajasthan
256
125
Central Sphere
1248
876
State
It is generally conceded that these committees have failed to deliver the goods. There are many factors which have led to the failure of these committees. These are as under:
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There is lace of interest among workers due to assignment of minor functions to the works committees and exclusion of issues such a wages and allowances, bonus, rationalization, retrenchment, lay-off etc, from the purview of these committees.
2.
There is lack of competence shown by the workers’ representatives on these committees.
3.
Some employers consider these committees as substitutes for collective bargaining and, therefore, bypass the unions. Hence the unions view these committees as a threat to their very existence and in such apprehension lose every interest in their constitution.
4.
Some employers insist upon their prerogatives and consider it below dignity to sit on these committees with their employees.
5.
Inter-union rivalries, absence of provision to hold the election of representatives by secret ballot or to recall a member who forfeits the confidence of the workers in general are also reasons responsible for the ineffectiveness of these committees.
6.
The recommendations of these committees are advisory in nature and there is mostly delay in their implementation. There is no machinery to enforce the decisions of these committees. This also dampens the enthusiasm of the workers to make works committees successful.
The National Commission on Labour suggested the following measures for the successful functioning of the works committees: 1.
a more responsive attitude on the part of management,
2.
adequate support from unions,
3.
proper appreciation of the scope and functions of the works committees
4.
whole-hearted implementation of the recommendations of the works committees, and
5.
proper coordination of the functions of the multiple bipartite institutions at the plant level now in vogue The Commission added: “Even at the risk of repeating the obvious, we mention a vital point which requires to
be recognized. It is the creation of an atmosphere of trust on both sides. Unions should feel that management is not side tracking the effective union through a works committee. Management should equally realize that some of their known prerogatives are meant to be parted with. Basic to the success of such unit level committees is union recognition”.
Joint Management Council (1958) The second experiment in participative management began in 1958 with the establishment of joint management councils. These came into existence as a result of our acceptance of the socialistic pattern of society as the goal (1954); Indian Labour Conference recommendation to encourage participation of workers in industry (1955); the Industrial Policy Resolution statement that in a socialist democracy “labour is a partner in the common task of
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development and should participate in it with enthusiasm” (1956); and the Second Five-Year Plan’s observation that for the successful implementation of the Plan “increased association of labour with management is necessary”. The immediate cause was the report of a Tripartite Study Group which was sent by the Government of India to some European countries in 1957 to study worker participation schemes in those countries. The Study Group recommended the setting up of Joint Management Councils in selected enterprises on a voluntary basis. th
The Indian Labour Conference approved this recommendation in its 15 session in 1957. It was decided that the joint management councils should consist of an equal number of representatives of the management and employees, not exceeding 12. The employees’ representatives should be nominated by the recognized trade unions. Further, the councils should be set up at the plant level on a voluntary basis is selected Industrial units. The criteria laid down for the selection of industrial units were; (i) the undertaking should employ at least 500 workers, (ii) it should have a well-established, strong and representative workers’ union affiliated to some central organisation, and (iii) the undertaking must be one with a good record of industrial relations. The essential functions of a joint management council are as under: 1.
The council is to be consulted by the management on administration of standing order, introduction of new methods of production and closure, reduction in or cessation of production
2.
The council has the right to receive information, discuss and give suggestions on general economic situation, state of the market, production and sales programmes, organisation and general running of the concern, methods of manufacture and work, annual balance sheet and profit and loss statement and long-term plans for expansion, redeployment, etc.
3.
The council is to be entrusted with responsibility in respect of administration of welfare measure, supervision of safety measures, vocational training, apprenticeship schemes, schedules of working hours, breaks and holidays and rewards for suggestions.
Issues relating to wages, bonus, etc., which are subjects for collective bargaining, are excluded from the scope of the councils. Individual grievances are also excluded from the purview of the discussion. Despite the useful purpose the joint management councils could serve, in many cases they are reported to be ineffective and their functioning unsatisfactory. The scheme is voluntary and has been adopted by only a limited number of undertakings in the public and private sectors. The reasons for their unsatisfactory working are as under:
1.
Workers’ representatives on these councils feel dissatisfied with their role as decision-makers in respect of welfare activities only. They want to be given authority to share decisions on more important subjects of collective bargaining like wages and
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bonus in which they say the worker are most keenly interested. To be asked to invest time and energy in discussing trivial matters, while important issues are forbidden, is infuriating. 2.
Trade unions fear that the joint management councils by becoming alternative channels for articulating workers interests would weaken unions’ hold over the workers.
3.
There is also an apprehension that the workers, not having the expertise for management, are likely to be at disadvantage vis-à-vis the management when complex matters are discussed
4.
Management is often not prepared to give as much information to the workers as they need for proper decision-making.
5.
Middle management and supervisions are generally hostile to workers participation because they resent their actions being questioned on the shop floor. The fact that the management sometimes sides with the workers’ representatives and reprimands the supervisors weakens their authority.
6.
Employers who already have the system of consultation with the workers in the form of works committees and the recognized unions find the joint management councils in their present form quite superfluous.
7.
There is inherent contradiction between the role of union leaders at the bargaining table where they can put all kinds of pressure on management and their role is members of a joint council when they must subordinate their sectional interests to those of an undertaking as a whole.
8.
The absence of a representative union has made it difficult for the councils to work smoothly.
The majority view of the National Commission on Labour was that these joint management councils were yet another bipartite consultative forum at the plant level which served no useful purpose and therefore their functions could be amalgamated with the functions of works committees. disagreed with this view.
The INTUC members of the Commission, however,
They argued that whole the works committee was a statutory
requirement which was confined to minor problems of day-to-day nature arising in the course of working of a plant, joint management council was a voluntary arrangement and functioned on a much higher level with a far wider scope and higher objectives, beyond the reach of the works committee. They asserted that the upland of the joint management council is not just one more bipartite committee – statutory or otherwise. It represents a concrete agency to work out the basic philosophy (of trusteeship) propounded by Mahatma Gandhi,” they pointed out.
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Workers’ Directors (1970) Yet another experiment in participative management began in 1970 with the launching of a scheme for the appointment of workers’ representatives on the board of directors of nationalized banks. The Nationalized Bank (Management and Miscellaneous Provisions) Scheme, 1970 was passed which required each nationalized bank to have one workers’ director on its board. He was to be appointed by the Central Government from out of a panel of 3 employees to be furnished by the representative union of that bank.
The
qualifications laid down for the workers’ representative directors were that he should have been in continuous service of one or more nationalized banks for a period of five years and should not reach superannuation age during his term of office as director which was to be 3 years. But a study of the working of this scheme in 1981 revealed that the scheme had not proved a success. In many cases workers’ directors were ill equipped to understand and deal with the intricacies of Board level matters or were in conflict with the board chairman. Their insignificant position on boards often reminded one of the following nursery rhyme: There was an ox, there was a flea, She was as small as small can be, And he was large, but gentle he, He ploughed, while on his ear sat she. A little bird looked on. Quoth he: “What are you doing, my little flea? She said, “We plough the fields. You see This is our job – the ox and me”.
The workers’ directors like the flea sat atop the management but how real their participation was one could easily guess. In fact, participation between two unequal could not succeed. Management never liked to share its privilege with the workers. It believed that the worker – director on the board meant losing a good worker and getting a bad manager. As a result, the Ministry of Finance, by a notification, removed these directors from the boards of all nationalized banks”.
Worker Participation Scheme (1975) The fourth experiment in participative management began on October 30, 1975 when the Central Government adopted through a resolution a new scheme of worker participation in management. This scheme was also voluntary like the 1958 scheme. The scheme covered all manufacturing and mining industries (whether in public, private or co-operative sector, including departmentally – run enterprises) employing 500 or more persons. The scheme provided for the setting up of shop councils at the shop and floor level and joint councils at the plant level.
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INDUSTRIAL MANAGEMENT Shop Councils The main features of the shop councils were as follows: 1.
Whether a joint management council already exists or not there shall be a shop council for each department or shop, or one council for more than one department or shop, considering the number of workmen employed in different departments or shops;
2.
(i) Each council shall consist of an equal number of representatives of employers and workers; (ii) The employers’ representatives shall be nominated by the management and must consist of persons from the unit concerned. (iii) All the representatives of workmen shall be from among; the workers actually engaged in the department or the shop concerned;
3.
The employer shall decide, in consultation with the recognized union or the various registered trade unions or with workers, as the case may be, in the manner best suited to local conditions, the number of shop councils and departments to be attached to each council of the undertaking or the establishment�.
4.
The number of members of each council or registered unions of workers in the manner best suited to local conditions obtaining in the until; the total number of members may not generally exceed 12.
5.
All decisions of a shop council shall be on the basis of consensus and not by a process of voting, provided that either party may refer the unsettled matters to the joint council for consideration;
6.
Every decision of a shop council shall be implemented by the parties concerned within a period of one month, unless otherwise stated in the decision itself and compliance report shall be submitted to the council;
7.
Such decision of a shop council which have a bearing on another shop, or the undertaking or establishment as a whole will be referred to the joint council for consideration and decision.
8.
A shop council, once formed, shall function for a period of two years. Any member nominated or elected to the council in the mid-term to fill a casual vacancy shall continue to be a member of the council for the unexpired portion of the term of the council.
9.
The council shall meet as frequently as is necessary and at least once in a month;
10.
The chairman of the shop council shall be a nominee of the management; the workermembers of the council shall elect a vice-chairman from amongst themselves.
Functions of the Shop Councils The shop councils were to attend to the following matters: 1.
Assistance to management in achieving monthly / yearly production targets;
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INDUSTRIAL MANAGEMENT 2.
Improvement of production, productivity and efficiency, including elimination of wastage and optimum utilization of machine capacity and manpower;
3.
Identification areas of low productivity and taking of necessary corrective steps at shop level to eliminate relevant contributing factors;
4.
Study of absenteeism in the shops / departments and recommending steps to reduce them;
5.
Safety measures;
6.
Assistance in maintaining general discipline in the shop / department;
7.
Physical conditions of working, such as, lighting, ventilation, noise, dust, etc., and reduction of fatigue;
8.
Welfare and health measures to be adopted for efficient running of the shop / department; and
9.
Ensuring proper flow of adequate two-way communication between the management and the workers, particularly on matters relating to production figures, production schedules and progress in achieving the targets.
Joint Council In every industrial unit employing 500 or more workers, there was to be a joint council for the whole unit. The main features of the scheme of joint council were as follows: 1.
Only such persons who are actually engaged in the unit shall be members of the joint council;
2.
The council shall function for a period of two years;
3.
The chief executive of the unit shall be the chairman of the joint council. There shall be a vice-chairman who will be nominated by worker-members of the council;
4.
The joint council shall appoint one of the members of the council as its Secretary. Necessary facilities for the efficient discharge of functions by the discharge of functions by the Secretary shall be provided within the premises of the undertaking / establishment.
5.
The term of the council, once formed, shall be for a period of two year; if, however, a member is nominated in the mid-term of the council to fill a casual vacancy, the member is nominated in such vacancy shall continue in office for the remaining period of the term of the council;
6.
The joint council shall meet at least once in a quarter;
7.
Every decision o the joint council shall be on the basis of consensus and not by a process of voting and shall be binding on employers and workmen and shall be implemented within one month unless otherwise stated in the decision itself.
Functions of Joint Council The joint council was to deal with matters relating to: 1.
optimum production efficiency and fixation of productivity norms of man and machine for the unit as a whole;
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84
functions of a shop council which have a bearing on another shop or the unit as a whole;
3.
matters emanating from shop councils which remain unresolved;
4.
work planning and achieving production targets, more specifically, tasks assigned to a shop council at the shop / department level but relevant to the unit as a whole;
5.
the development of skill of workmen and adequate facilities for training;
6.
the preparation of schedules of working hours and of holidays;
7.
awarding of rewards for valuable and creative suggestions received from workers;
8.
optimum use of raw materials and quality of finished products, and
9.
general health, welfare and safety measures for the unit or the plant.
The works committees, as prescribed under the Industrial Disputes Act, were to continue to function in addition to this scheme.
In 1977 this scheme was extended to commercial and service organizations in the public sector having 100 or more employees.
It was thought that this scheme was an
improvement over the 1958 scheme in the following respects: 1.
It provided for two-tier participation structure – shop councils at the floor level and joint councils at the enterprise level.
2.
The decisions of the shop council were mandatory and not merely advisory.
3.
Functions of shop council were clearly defined eliminating the earlier confusion.
4.
The scheme had the merit of flexibility because it could be adapted to local conditions.
This time also the success of the scheme was not very noteworthy. The scheme was found to suffer from the following drawbacks: 1.
The scheme did not provide for participation at the middle levels. Hence it was not suitable for large multi-product companies whose organisation structures consisted of several levels of management.
2.
There was considerable overlapping in the functions of joint councils and works committees.
For example, both of them were to deal with safety measures and
holidays. 3.
It was not clear what these two bodies were supposed to do in their respective areas i.e., whether they had to make decisions, give suggestions, share information or assist management in implementing its decisions.
4.
It was impractical to make the decisions of the shop council binding on management because sometimes it might not e possible for the management to implement them. For example, how could the management of a company carry out the decision of its shop council to install costly machinery for improving productivity if the resource position of the company was not good?
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The scheme provided an upper hand to the management in the matters of determination of the number of shop councils and their composition. The unions / workers were only to be “consulted�.
New Scheme on Worker Participation (14983) In December 1983 the Government of India introduced a new comprehensive scheme of worker participation in management. The broad features of this scheme are as follows: 1.
The operation of this scheme has been restricted to central public sector undertakings only. Departmentally-run undertakings have been excluded from the new scheme. This is because Joint Consultative Machinery is expected to function in their case.
The Central Government has, however, addressed various State
Governments also to introduce the scheme in their State undertakings and to encourage the private sector to implement it. 2.
The scheme is to operate at the shop floor and plant levels. It provides for equal representation to both the parties at both levels. There is provision for Board-level participation also.
3.
Different categories of workers such as skilled, unskilled, technical and non-technical, supervisory (foreman, charge man, etc) and non-supervisory are to be represented at both shop floor and plant levels. Managerial personnel are to be excluded.
4.
The exact number of representatives is to depend on the size of the work force and is to be arrived at by the management in consultation with trade union leaders. The mode of representation of workers is to be determined through consensus.
5.
Representation is to be given to women workers where they constitute 10% or more of the total work force.
6.
The scheme has universal applicability irrespective of the number for workers employed. (Works committees envisaged 100 workers, JMCS 500, 1975 scheme 500 and 1977 Scheme 100).
7.
The functions of participative forums at various levels have been made more elaborate. The forum at the shop floor level is to look into a wide range of functions such as production facilities, storage facilities, material economy, wastage control, hazard and safety problems, cleanliness, welfare measures and so on. The forum at the plant level is to look into the following functions:
Operational Areas Evolution of productivity schemes taking into account the local conditions; planning; implementation and review of monthly targets and schedules; materials supply and its shortfall;
storage
and
inventories;
house
keeping;
improvements
in
productivity,
encouragement to and consideration of suggestions; quality and technological improvements;
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INDUSTRIAL MANAGEMENT machine utilization and development of new products; matters not resolved at the shop level or concerning more than one shop; review of the working of the shop level bodies.
Economic and Financial Areas Profit and Loss statement, balance sheets, review of operating expenses, financial results, plant performance in financial terms etc.
Personnel Matters Absenteeism, special problems of women workers, initiation and supervision of workers’ training programmes, administration of social security schemes, etc.
Welfare Areas Implementation of welfare schemes, medical benefits and transport facilities, safely measure, sports and games, housing, township administration, canteen, control of gambling, drinking, indebtedness etc.
Environmental Areas Extension activities and community development projects, pollution control.
Both the shop and the plant levels forums will attempt to arrive at a decision by consensus; but where no consensus emerges, they will refer the matter to the next higher forum. AT the Board level the workers’ representatives will participate in all the functions of the Board. One of the special functions assigned to the Board would be to review the work of the shop and plant levels forums. This scheme also has failed to make much headway due to two important reasons, viz., (a) lack of consensus among union leader on the mode of representation, and (b) tendency of workers to discuss subjects which are outside the scope of a participatory forum, e.g., pay scales and wages.
Worker – Shareholders One more method of involvement of workers in industries is to make them shareholders in the company.
The workers are allowed to pay the purchase money in
convenient installments and are even granted loan for this purpose. It is, however, doubtful whether this type of scheme creates in the workers any sense of belonging or co-partnership. Experience of the working of the Payment of Bonus Act has shown that the payment of bonus to the workers has neither reduced industrial unrest nor has it created in the workers any sense of belonging. The trade unions in India do not seem to favour this scheme; while answering the questionnaire issued by the National commission on Labour, INTUC expressed its disapproval of the scheme thus: “Even if the workers are given some shares in the
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company they will not be able to have any effective voice or participation in the management of the concern”.
AITUC said: “Such a scheme has no validity at all in public sector
undertakings where the shares are entirely owned by the State.
In the private sector, a
nominal shareholding by the workers cannot give them any say in management”.
Quality Circles A quality circle is a small group of 5 to 10 workers who volunteer ot meet regularly to solve problems affecting their work, e.g., how to improve quality, reduce production costs, raise productivity, improve safety, and so on. Typically, the group itself identifies a problem, analyses it, develops solution and presents the same to management. Management has the right to accept or reject the suggestion. The quality circle usually meets during company time once a week. The circle is given recognition for those of its suggestions which have been successfully implemented. A quality circle is distinct form other forms of participation which come from above either as a part of legislation or as a government or management scheme and are, therefore, resisted or given lip-service. This is what has happened to most of our earlier forms of participation. A quality circle is a voluntary participatory form. This means that if workers are not interested they are not forced to join. Quality circles were first developed in Japan in the early sixties (the first circle was registered in 1962). Today, these circles have spread to many other countries including India. Some organizations are attracted to these circles because they attribute Japanese success to them.
Some other organizations have gone in for these circles because they symbolize
modern participative management and this organisation swat to look modern. There are very few organizations in which these circles have been started because of their philosophy.
Worker Participation in Management in Tata Steel While it is too simple to say that worker participation is directly responsible for increase in productivity, it is true that it does that it does help in improving work culture and work output. Tata Steel provides a refreshing example of this. The company has a three-tier set-up: Joint Department Councils (JDCs) for each department of the works, Joint Works Council (JWC) for the entire works and Joint Consultative Council of Management (JCCM) at the apex. JDCs which meet twice a month study at their departmental levels several issues such as increase in productivity, elimination of waste, reduction of cost, promotion of welfare and safety, and so on. JWC reviews every month the working of JDCs. JCCM meets once in a quarter and considers questions referred to it by the JWC and advises management on economic and financial matters. As a result of this scheme the company has been able to achieve: (i)
plant performance of over 100% rated capacity consistently since 1976 – 77;
(ii)
a ready-made forum for cross – fertilization and fast communication of ideas;3
(iii)
a unique distinction of more than 50 years of harmonious industrial relations;
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emergence of a carder of well-informed and enlightened trade union leaders from the grassroots level;
(v)
spirit of brotherhood and a high sense of commitment.
Some Issues for Consideration 1.
Integrated Scheme: From what has been said above it is now clear that there are at present several schemes of worker participation in management operating concurrently.
They are the works committees, joint management councils, the
schemes introduced in 1975 and 1977 and the scheme introduced in 1983. It is, therefore, necessary to ensure that these schemes do not overlap and that if one scheme is working satisfactorily it should be allowed to continue not withstanding the fact that a new scheme has been introduced. 2.
Mode of Representation:
Deciding the mechanism through which workers’
representative should be sent to various forums has been probably the most critical difficulty in the implementation of participation. Some people advocate nomination of workers’ representative by trade union functioning in an enterprise, some others advocate election by secret ballot. Former demand has come to be known as the single channel’ theory. The single channel argument is that the union constitutes the only possible channel for articulating workers’ interests, and that all employment relationships have therefore to be routed through the union.
Any form of direct
participation with employees is seen as an attempt to subvert the union. Thus Indian trade unions see the threat to their power not in participation per se but in the proposal that worker representatives to various forms be elected directly. 3.
Coverage: How wide a segment of industry should be brought within the purview of workers’ participation? Till now our schemes have been made applicable on the basis of a minimum number of workers. Should we continue the same? Or should we for the time being make the scheme applicable only to large organizations? We also need to keep in mind that with technological improvement organizations are reducing manpower wherever possible. Or, do we think of different schemes for different sizes of organizations?
4.
Voluntarism or Legislation: We have seen that so far all schemes, other than the works committees and bank employee directors, have been based on the principle of voluntary implementation. Some people, however, feel that the implementation of this scheme should not be voluntary. It should be made compulsory legislation for all enterprises. But will this not run counter to the logic and culture of participation? Will legislation succeed in changing the attitudes?
5.
Scope of the Forums: We have seen that so far the various participative forums under various schemes have been assigned only work-related issues to deal with. Interest-related issues have been kept outside their purview. This has adversely affected the functioning of these forums.
It is unrealistic to assume that any
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meaningful discussion on work-related issues can take place without giving the workers’ representatives an opportunity to discuss their interest-related problems as well. We must also remember that the workers’ participation in management is a process that follows a cycle consisting of stages, such as information-sharing, consulting, joint decision-making and finally self-managing.
The objectives of
workers’ participation can be realized only by adopting the total process and not by limiting workers’ participation to one or two stages of the process. The reason is very clear. Each preceding stage raises expectations among workers to get entry into the succeeding stage. If workers are not granted entry into the succeeding stage their initial enthusiasm starts fading and they begin viewing participation as an act of manipulation. In the light of the above discussion it seems advisable to start with workrelated issues, follow the full process, i.e., information-sharing, consultation, joint decision-making and self-managemet and then expand the scope to include interestrelated issues. On the other hand, it is not easy to do so because both trade unions and employers tend to resist any attempt which threatens to usurp any of their functions. 6. Levels and Support-System: We have seen above that participation can take place at 3 levels – floor level, plant level and corporate level. These 3 levels are arranged in a system of hierarchy. Hence participation attempted at any one level is bound to effect the other levels also.
Theoretically,
therefore, participation cannot be restricted to any particular level. It has been the common experience in several enterprises that when participation was introduced only at the corporate and shop-floor levels, the middle management got alienated and tried to sabotage the scheme. In view of this it is imperative to introduce participation at all levels with well-knit functional linkages in between. In addition to these linkages there should also be other support systems such as quality circles, suggestion schemes, grievance settlement machinery and so on.
These systems provide everybody in
general an opportunity to give vent to his latent urge for creativity and innovation and strengthen the participation scheme.
Grievance: According to Michael J.JUCIUS, the term “grievance” means “any discontent or dissatisfaction, whether expressed or not and whether valid or not, arising out of anything connected with the company that an employee thinks, believes or even feels, is unfair, unjust or inequitable.”
“Grievance is any dissatisfaction or feeling of injustice in connection with one’s employment situation that is brought to the attention of management.
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INDUSTRIAL MANAGEMENT ” A Grievance is a feeling of dissatisfaction among the workers, working in an organisation a grievance may be expressed individually or collectively. “Grievance is simply a complaint which has been formally pressured in writing to a mgt representative or to union official in the language of labour relations from mgt angle”.
Explain the sources (or) Causes of Grievances:Grievances are caused by the behaviour and attitude of the employees:(I)Causes of Grievances of employees: 1) Causes of Grievance: - (a) Grievances of mistake in the calculation of wages of an individual employee. - (b) Grievances of rate of wages and salary not according to the job. - (c) Grievances in relation to financial incentives. - (d) Grievances in relating to the rate of bonus. - (e) Time of payment of wages.
(2)Causes of Grievance, related with working condition: •
(a)Non-availability of required material properties.
•
(b) Quality of material related grievance.
•
(c) Related with machines and equipments.
•
(d) Related with safety and security measures.
•
(e) Related with medical and health facilities.
•
(f) Related with general working conditions on the work.
•
(g) Grievance related with job classification.
(3)Causes of Grievances related with supervision: Related with •
(a) Method of supervision.
•
(b) Behavior of foreman or supervisors.
•
(c) Attitude or partiality.
•
(d) Page lists the disciplinary action.
(4) Causes of Grievances: Related with seniority, transfer, promotion and retirement. •
(a) Mistake of calculation of seniority’s order.
•
(b) Partiality in transfer.
•
(c) Partiality in promotions.
•
(d) Lay off.
•
(e) Related with retirement.
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INDUSTRIAL MANAGEMENT •
(f) Delay payment of retirement benefits, such as Provident fund and Gratuity, etc.
(5) Causes of Grievances: Related with collective bargaining: •
(a) Related in implementing the agreement of collective bargaining.
•
(b) Grievance of the violation of terms and conditions of such agreement.
•
(c) Grievance of wrong interpretation
•
(d) Grievance such as inability to solve the problems under the provisions of such agreement.
(6) Other causes of Grievances: •
(a) Grievances against the plans and policies of mgt.
•
(b) Grievance related with the rules regarding leave.
•
(c) Grievance of lack of co-ordination among different departs of the enterprise.
•
(d) Grievance of lack of co-ordination
•
(e) Grievance against the declaration of lack out by management.
II. Causes of Grievances of employers and management: They are also having complaints against their employees. (1) Causes of Grievances: Grievances against a particular employee. •
(a) Violation of the rules, discipline.
•
(b) Disobediences of orders.
•
(c) Absence from duty without any information.
•
(d) Misbehaviors.
•
(e) Non-co operation.
•
(f) Misbehaviors with other employees.
•
(g) Non-co-operation with other employees.
•
(h) Low poverty.
•
(i) Low quality of production.
•
(j) Wastages of leave the work incompletes.
•
(k) Lo leave the work incomplete.
•
(l) Not to handle machines and equipments properly.
•
(m) To waste the time.
•
(n) To inspire and motivate the other employees against management.
(2) Causes of Grievances related with the activities of labour.
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INDUSTRIAL MANAGEMENT •
Non-fulfillment of commitments by labour unions.
•
To cause disturbances in the functions of management.
•
To Claim the employees and management.
•
To inspire employees against them get.
•
Disturbances in the disciplines.
•
Mal-practices.
•
To hold agitations against mgt.
•
No to co-operate in the settlements of Grievances.
CAUSES OF GRIEVANCE: I. GRIEVANCE RESULTING FROM WORKING CONDITIONS a) Improper matching of the worker with the job b) Changes in schedules or procedures c) Non-availability of proper tools, machines and equipment for doing the job d) Tight production standards. e) Bad physical conditions of workplace f)
Failure to maintain proper discipline
g) Poor relationship with the supervisor 2. Grievance resulting from management policy a) Wages payment and job rates b) Leave c) Overtime d) Seniority e) Transfer f)
Promotion, demotion and discharges
g) Hostility toward a labour union h) Lack of career planning 3. Grievance resulting from alleged violation of a) Collective bargaining agreement b) Central or state laws c) Past practice d) Company rules e) Management responsibility 4. Grievance resulting from personal maladjustment a) Over-ambition b) Excessive self-esteem c) Impractical attitude to life
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INDUSTRIAL MANAGEMENT HOW TO KNOW ABOUT GRIEVANCES? EXIT INTERVIEW Employees usually quit organizations due to dissatisfaction or better prospect elsewhere, exit interviews, if conducted carefully, can provide important information about employees’ grievances. GRIPE BOXES These are boxes in which the employees can drop their anonymous complaints. They are different from the suggestion boxes in which employees drop their named suggestions with an intention to receive rewards. OPINION SURVEYS Group meeting, periodical interviews with employees, collective bargaining sessions, are some other means through which one can get information about employees’ dissatisfaction before it turns into a grievance. OPEN DOOR POLICY Some organizations extend a general invitation their employees to informally drop in the manager’s room any time and talk over their grievances. EXPLAIN THE NEED OF GRIEVANCE PROCEDURE: Without an analysis of their nature and pattern, the causes of employee dissatisfaction cannot be removed. The per, mgr help the top management and line managers, particularly foremen and supervisors, in the formulation and implementation of the policies, programmes and procedures which would best enable them to hold employee grievances.
The grievance procedure is a problem salving, dispute, settling machinery which has been set up following an agreement to that effect or an employee makes and processes his claim that there has been a violation of the labour management by the company.
The grievance redressal procedure is a device by which grievance are settled, generally to the satisfaction of the trade union or employees and the mgt. This is important for labour relations. It is essential, whether a plant is an organized one or not. It enables mgt to detect any defects or flows in the working conditions or in labour relations and under take suitable is maintained, improve work honesty. Plan schedules would be shattered and the movable of the employees would be irretrievably impaired.
Improve uniformity- [Systematic grievance handling].
Explain the Grievance procedure model: In 1958-Indian Labour Conference was can held at this conference grievance procedure model was accepted.
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INDUSTRIAL MANAGEMENT Grievances should be presented to the immediate officer: Aggrieved employee should present his grievance to his immediate officer either in writing or orally. Such officer will take decision within 48 hours. If not the employee meets the HOD. Grievances should be presented to departmental held: He should take action within 3 days. If not the grievance is forwarded to grievances committee. Grievance should be presented to the Grievance committee: The committee should take decision within 7 days. If not the grievance is forwarded to grievances committee. Grievance should be presented to the mgt: Through labour union or himself within 7 days mgt should give suggestion. If not the grievance is forwarded to grievances committee. Grievance should be presented before arbitrations: They enquire collect both views after a careful examination of the problem, they give their decision, and the decision of arbitrators is binding upon both the parties. Formal agreement procedure created. Follow-up decision. Appeal before the suspending authority. If an employee grievance is related to suspension, he has a right to appeal the same incuse. Authority within 7 days of suspension including the leave days.
GHP = GRIEVANCE HANDLING PROCEDURE Meaning of GHP: •
A satisfactory procedure must be adopted in all the enterprises to deal with these grievances a system and a procedure evolved to settle the grievance, in a organization is known as GHP.
•
The personnel mgr should take necessary steps to solve these grievances; per dept can be supplement and not a substitute system of Grievance Handling.
GHP: The following factors should be considered by the mgt while preparing the GHP:
(1) Various levels of mgt should be determined for the principles of handling grievances. (2) Size of grievance handling committee should be small. (3) Simple process and procedure. (4) GH amended from time to time according to the needs and requirements. (5) As possible, grievance should be settled at the last level of mgt. (6) Grievance should be presented before the competent authority who may take decision on the problem. (7) Settled at the per list.
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INDUSTRIAL MANAGEMENT GHP: 1) Preparation of grievance at lst level: Presented to the nearest head. 2) Second level to GHP, fifth and last level.
Explain the importance of GHP (or) advantages or merits or essentials or need of GHP: 1.
Method of bargaining out frustration or dissatisfaction employees. (GHP reduces the frustration and dissatisfaction.
2.
Upward communication system in the enterprise: Thus mgrs of the enterprise get an opportunity to know the difficulties, problems, reactions and dissatisfaction of employees. Solve ego problems too.
3.
Effective control: This procedure protects the employees against their exploitation by supervisors or managers.
4.
Increase the morale: They feel that the supervisors and the mgrs are their guides and not the dictators.
5.
Improvement in policies, programmes and strategies: The settlement of grievances helps in improving the plans and mangers come to know the defect of these plans and programmes. Thus, earliest settlement of grievance is essential of an enterprise. It is useful in improving the production and productivity of the enterprise by providing maximum satisfaction to the employees.
Describe in brief the principles of Grievance Redressal procedure. How will you measure the success of GRP? GRP (1) Principle of interviewing: •
The mgt should interview the employees in order collect the facts with regards to the grievances.
•
The interview should be confidential
•
Convenient atmosphere
•
Quite informal
•
Patient listening behaviors of employees
•
Mgr should adopt a flexible attitudes to the employees
•
Grievance should be noted
•
Inter should be closed in a cordial atmosphere
•
Mgrs should prepare a report on findings on the basis of interview.
GRP (2) Attitude on mgt towards employees: •
It should be encouraging so that the feeling of faith and trust may be developed among employees,
•
Factors of faith and trust may be developed among employees,
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INDUSTRIAL MANAGEMENT •
Factors the mgt should be the listen the problems
•
Create +ve attitude
•
Should apply jurisdiction
•
Should take all possible measures to settle these grievances at the earliest.
GRP (3) Responsibility of management: •
The settlement of problems is a primary responsibility
•
Mgt should find whether the problems is real, or imaginary
•
Routine nature.
•
Greeting trust among employees.
GRP (4) Long run principle: •
The mgt should consider long run interests of the enterprise which enterprising into an agreement with workers for the settlement of their problems. Some times short run case may create a problem in the long run.
•
So the decisions must be taken according to the long run needs of enterprise.
Measurement to express the Grievance Procedures: •
Encouragement to express the Grievance.
•
Level of settlement of Grievance.
•
Acceptability of Grievance.
•
Number of appeals.
•
Increase in the morale of employees.
•
Increase in respect of officers.
REDRESSAL COMMITTEES
GRIEVANCE PROCEDURE / REDRESSAL OF GRIEVANCE PROCEDURE: Grievance procedure can be broadly classified under the following three broad categories •
Three steps procedure
•
Four steps procedure
•
Five steps procedure
Three steps procedure: Step 1: aggrieved worker with shop representative of the union take up the grievance with the shop supervisor. Step – 2: if the step no. 1 has failed the worker approaches the general manager along with plant representative of union.
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Step-3: if step no.2 has also failed the matter is referred to arbitration by an independent agency
Four and five step procedure: Similar steps are used in 4 steps and 5 steps methods, additional steps to take care of more number of persons and several plants incase of larger firms. S.no
Steps
3-steps procedure
4- steps procedure
5 steps procedure
1
Step no: 1
Worker
Worker with shop rep.
Worker with shop rep of
rep. Of union
Of union
union
Vs
Vs
Vs
Shop supervisor
Shop supervisor
Shop supervisor
Union rep. Of plant
Work committee
Union rep of plant
Vs
Vs
Vs
G.M or owner
Manager
Manager IR
Local union leaders
Grievance committee
Vs chief executive
Vs
2
3
Step 2
Step 3
with
Arbitration
shop
by
independent authority 4
Step 4
Director Arbitration
Regional rep union Vs Chief executive
5
Step 5
Arbitration
Model grievance procedure: a) Aggrieved worker present his complaint to officer designated by the; management and the case must be disposed off within 48 hours b) If the complaint is not disposed or the worker is not satisfied he can approach HOD and present his case by the representative of his department. HOD has to dispose the cases within 3 days c) If he is not satisfied he is free to request the HOD to forward his grievance to the grievance committee. The decision should be taken by the management with in 3 days d) If the decision is not satisfactory or not communicated within specified period he can appeal for revision with the help of union rep for decision within 7 days. e) If the worker still remained aggrieved management may refer the case to voluntary arbitration and the decision of the arbitrator is final.
Causes of indiscipline 1. Ineffective leadership, which cannot control, coordinates and motivates workers.
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INDUSTRIAL MANAGEMENT 2. Low wages and poor working conditions 3. Lack of promotional opportunities 4. Absence of any code of conduct to regulate behavior 5. Lack of timely redressal of worker grievances 6. Unfair management practices 7. Drunkenness and family problems 8. Excessive work pressure.
Types of discipline Positive or self-discipline: This refers to an organizational atmosphere in which subordinates willingly abide by rules, which they consider fair. The techniques followed by the management to achieve this type of discipline include positive motivational activities such as praise, participation and incentive pay. Negative or punitive discipline: It is one in which management has to exert pressure or hold out that threat by imposing penalties on wrongdoers. When this pressure becomes increasingly severe each time a man is disciplined, it is called corrective discipline. ARGUMENTS AGAINST PUNISHMENTS It wastes lot of managerial time and effort They only temporarily suppress undesirable responses. They have undesirable side effects.
ESSENTIAL OF A GOOD DISCIPLINARY SYSTEM: KNOWLEDGE OF RULES: The employee must be informed clearly about what constitutes good behavior and the rewards that may emanate from it. All instructions should be clear and understandable. It is common sense that an employee will obey an instruction more readily if he understands it. The supervisor himself must know all the rules. PROMPT ACTION. All and misconducts- big or small – should be promptly enquired into. For example, a supervisor is most unwise to wait until lunch break before rebuking a worker for arriving late. Beat the iron when it is hot. FAIR ACTION An action in order to be fair must possess the following characteristics: 1. All violation – big or small – must be duly punished. 2. All individuals – big or small – should receive equal punishment for equal indiscipline. 3. Discipline must be uniformly enforced at all times. 4. All alleged violation should be fully inquired into.
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5. The employee should always be given an opportunity to explain his action. WELL-DEFINED PROCEDURE. The procedure to be followed to reach to a penalty decision should be carefully laid down. The appropriateness of a disciplinary action should be decided in terms of its effectiveness in correcting the employee. The accused employee should have the right to appeal to higher authorities. CONSTRUCTIVE HANDLING OF DISCIPLINARY ACTION Immediate supervisor should carry it out It should be taken in private After the disciplinary action has been taken the supervisor must assume a normal attitude towards the employee.
Kinds of punishment Punishments
Minor Punishments
Oral reprimand Written reprimand Loss of privileges Fines Punitive suspension
Major Punishments
Withholding of increments Demotion Discharge Dismissal
ORAL REPRIMAND: THIS IS THE MILDEST FORM OF DISCIPLINARY ACTION IN WHICH THE SUPERIOR MAKES IT CLEAR TO HIS SUBORDINATE THAT HE DOES NOT APPROVE OF THE SUBORDINATES BEHAVIOR.
WRITTEN REPRIMAND: A WRITTEN REPRIMAND MAY STATE THAT CERTAIN PRIVILEGES WOULD WITHHOLD OR WITHDRAWN IF THE SUBORDINATE CONTINUES WITH HIS PRESENT CONDUCT. IN SOME ENTERPRISES THE RECORDS OF AN EMPLOYEE MAY BE MARKED AND THE EMPLOYEE SHOWN A COPY OF THE NOTATION TO SERVE AS A WARNING.
LOSS OF PRIVILEGES: FOR SUCH OFFENCES AS TARDINESS OR LEAVING WORK WITHOUT PERMISSION, THE EMPLOYEE MAY BE PUT TO LOSS OF VARIOUS PRIVILEGES SUCH AS GOOD JOB ASSIGNMENTS, RIGHT TO SELECT MACHINE ETC.
Fines fine means deduction from the remuneration of the employee by way of punishment. PUNITIVE SUSPENSION: UNDER PUNITIVE SUSPENSION AN EMPLOYEE IS PROHIBITED FROM PERFORMING THE DUTIES ASSIGNED TO HIM AND HIS WAGES ARE WITHHELD FOR SO LONG AS THE PROHIBITION SUBSISTS.
WITH HOLDING OF INCREMENTS: WITHHOLDING OF ANNUAL INCREMENT OF AN EMPLOYEE IN A GRADED SCALE IS A MAJOR PUNISHMENT.
THE ACTS OF PUNISHMENT MAY BE AWARDED ARE THE
SAME AS THOSE FOR WHICH THE EXTREME PUNISHMENT OF DISMISSAL MAY BE AWARDED.
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DEMOTION: DEMOTION SHOULD BE USED ONLY IN A CASE WHEN AN EMPLOYEE DOES NOT MEET PRESENT JOB REQUIREMENT OR IN THE EVENT OF A CUTBACK IN THE WORK PLACE.
DISCHARGE: IN COMMON LAW, IF BOTH PARTIES TO AN AGREEMENT HAVE PERFORMED WHAT THEY HAVE AGREED TO DO, THE CONTRACT IS DISCHARGED.
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