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. The previous settlement had expired on 31st of March 2002. The Union had demanded a wage increase of Rs. 2000 per month per workman. The Management had told the Union Committee Members that it was not in a position to pay such a hefty increase since the Company was facing a financial crunch on account of competition arising out of the recession that was prevailing in the market. The Management however told the Union that it was prepared to give an increase of Rs.800 per month per workman for which they would have to give an overall improvement in productivity of 10%. The Union did not accept the offer of the Management. It told the Management that their minimum expectation is Rs. 1500 per month per workman without any condition of improvement in productivity. They can think of improvement in productivity for any offer above Rs.1500 per month. This led to a stalemate. The Workmen under the instructions of the Union resorted to a slowdown in work. They were found loitering about here and there having informal meetings and on many occasions refused to carry out the lawful and reasonable orders of the superiors. The productivity of the Factory had fallen down to 50% and it became difficult for the Management to carry out the activities in such a tense atmosphere. The Managing Director of this Company is very much upset with the way the things are going on in the Factory. He tells the Chief Personnel Manager of the Company to chalk out a plan of action to deal with the situation. As the Chief Personnel Manager of this Company chalk out a plan of action you feel suitable to deal with the situation.