INDUSTRIAL RELATIONS

ISSUES IN INDIA

Name : PROF SHAILENDRA NIGAM

 Changing Employment Relations

Shift s in Economic,
Politi cal and Social
Structures on an
Internati onal Scale
leading to….
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 More of part time,
contractual and female
workforce and a decrease
in the number of unionized
employees

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What is your take on it? 3
• If yes, then

 Is the workspace changing….

 Impact on employee attitudes….

 Issues for Unions and Managers….

 Legislative reforms….

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 Changing Workspace LABOUR AND EMPLOYMENT

Table 32.6: EMPLOYMENT IN FACTORIES- ADULTS, ADOLESCENTS AND CHILDREN ACCORDING TO SEX

No. of
Average daily number of workers
Year working
factories Total
Adults Adolescents Children
submitting (col 3 to 8)
returns Men Women Males Females Boys Girls
1 2 3 4 5 6 7 8 9
2000 45117 1984008 210461 38 - - - 2194507
2001 60749 2790114 474420 1860 5673 - - 3272067
2002 57021 2782091 542608 923 4745 - - 3330367
2003 35729 1903297 235590 239 409 - - 2139535
2004 59908 2909566 634965 1992 6408 750 340 3554021
2005 67324 3200219 640412 1401 6046 - - 3848078
2006 73876 3627960 730682 4478 9709 103 100 4373032
2007 44412 2739119 313878 547 394 24 25 3053987
2008 31098 2407010 220933 55 177 91 180 2628446
2009 37244 2467007 194096 717 178 253 156 2662407
2010 69226 3968585 737579 2379 5091 45 31 4713710
2011 70529 4159418 763955 3623 5058 - - 4932054
2012 65788 3330043 661028 5099 6090 .. .. 4002260
2013 17664 1170770 141511 66 79 - - 1312426
2014 39527 2726774 297150 1760 164 - - 3025848
Source: Labour Bureau Chandigarh, Ministry of Labour and Employment
Notes: i) Data relates to the States/Union Territories from where returns have been received.
ii) The information contained in this table may not tally with other tables as this table does not contain the
information relating to the factories which are not submitting returns.
(iii) - = nil
(iv) The Factories Act, 1948 ia not implemented in four States/Union Territories namely, Arunachal Pradesh, Lakshadweep, M izoram and Sikkim.
(v) Data is based on returns received.
(vi) .. = Not Available

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 TRADE UNIONS

Table 41.2- NUMBER OF REGISTERED TRADE UNIONS

Workers' Unions Employers' Unions All Unions

Year On Submitting On Submitting On Submitting
register returns register returns register returns
1 2 3 4 5 6 7
2000 41136 7231 409 22 41545 7253
2001 41563 6513 416 18 41984 6531
2002 37903 7734 189 78 38092 7812
2003 42207 7229 419 29 46215 7258
2004 30009 5217 382 25 30391 5242
2005 45842 8255 464 62 46306 8317
2006 42448 8411 469 60 42917 8471
2007 40235 7405 74 3 40249 7408
2008 27063 9702 74 7 27137 9709
2009 22250 3856 - - 22284 3861
2010 18602 2831 56 1 19376 2937
2011 10264 2769 - - 10264 2769
2012 16768 4785 - - 16768 4785
2013 11556 2534 - - 11556 2534
Source: Labour Bureau, Ministry of Labour and Employment
Notes:
1. The membership figures have been furnished up to thousands, so the totals may not necessarily tally.
2. Data is based on the returns received.
3 " Return not received; 4. - = NIL

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 Table 41.1-NUMBER,MEMBERSHIP,INCOME,EXPENDITURE AND FUNDS OF
REGISTERED TRADE UNIONS

Membership at the end of Income incl. Expen- Balance

Number of trade unions the year ('000) balance diture of funds
________________________________ _ _______________________________carried over (` Mn.) at the
Year Registered Submiting Percent- Workers' Employ- All from prev- close of
returns age Unions ers' Unions ious year the year
response Unions (` Million) (` Mn.)
(Col. 8-9)
1 2 3 4 5 6 7 8 9 10
2000 41545 7253 17.4 5416 4 5420 1391 596 795
2001 41984 6531 15.6 5871 3 5874 1522 532 990
2002 38092 7812 20.5 6924 50 6974 1225 568 657
2003 46215 7258 15.7 6272 5 6277 2021 676 1345
2004 30391 5242 17.3 3391 5 3396 1863 567 1296
2005 46306 8317 18.0 8711 12 8722 2854 889 1965
2006 42917 8471 19.7 8951 11 8962 2784 956 1828
2007 40249 7408 18.4 7872 5 7877 856 310 549
2008 27137 9709 35.8 9573 7 9580 2241 813 1429
2009 22284 3861 17.3 6481 - 6480 765 387 466
2010 19376 2937 15.2 5097 * 5097 569 342 177
2011 10264 2769 27.0 7421 - 7421 743 404 339
2012 16712 4785 28.6 9182 - 9182 1152 628 525
2013 11556 2534 21.9 3231 - 3231 590 261 329
Source ; Labour Bureau, Ministy of Labour and Employment
- not reported
* less than thousand
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 Impact on Employee Attitudes
• As employee relationships are in transition, the demise of
employee loyalty and the need for employees to take care
of themselves are touted as a sign of the times.
• Contracts are the foundation of employment relationships,
establishing the inducements and contributions basic to
membership in organizations
• There are three types of contracts within organizations:
– Formal Contracts
– Implied Contracts
– Psychological Contracts
• At a minimum level we need to understand the implications
of organizational changes with respect to the potential
costs associated with violating employee’s contracts
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 Issues for Unions And Managers

 Managing Blue collar stress at Work

 Changing managers Attitude towards occupational

health and safety

 Union – member relations: Loyalty, Instrumentality and

Alienation

 Developing Union Commitment

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 LABOUR AND EMPLOYMENT

Table 32.17: INDUSTRIAL DISPUTES

No. of No. of workers No. of mandays

Year
disputes involved lost
1 2 3 4
2002 579 1079434 26585919
2003 552 1815945 30255911
2004 477 2072221 23866367
2005 456 2913601 29664999
2006 430 1810348 20324378
2007 389 724574 27166752
2008 421 1579298 17433721
2009 345 1867204 17622055
2010 371 1074473 23130527
2011 370 734763 14458038
2012 318 1307454 12936795
2013 258 1838160 12645371
2014 287 1158770 11095370
2015(P) 128 743788 3063130
2016(P) 102 579033 1271552
Source: Labour Bureau Shilma, Ministry of Labour and Employment
Note: i) The figures relate to disputes resulting in work-stoppages involving 10 or more workers.
ii) (P)=Provisional

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 Legislative Reforms

• Industrial Disputes Act 1947

• Factories Act 1948

• Trade Union Act 1926

• Contract labour Act 1970

• Employment Standing Order Act 1946

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 MARUTI SUZUKI

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 FACT SHEET
MSIL Indian subsidiary of
SMC Japan incorporated in
1981 as MUL a 100% govt.
owned company
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In 1992 GOI allowed SMC to
SMC joined as joint venture
raise its stake to 50%. In
partner with 26% equity in
2007 SMC’s share rose to
1982, which later increased
54.2% making it the majority
to 40% in 1987.
shareholder
Subsequently the name of
the company was changed
The company went public in
from MUL to MSIL. MSIL
2003and was listed at BSE
soon adopted Japanese
and NSE
management practices and
techniques
13
 Contd…
Gurgaon facility spread across
MSIL have two production
300 acres having three fully
facilities in Haryana. One at
integrated plants which
Gurgaon and other at nearby
churned out @9,00,000 units
Manesar
annually.
In 2010/11, MSIL sold 1.27
million cars a growth of
@24.8% over the previous
year.
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Manesar facility launched in
2007 have a vehicle assembly
plant with capacity of
@5,50,000 units/year and a
diesel engine plant with
annual capacity of @3,00,000
engines
The production facilities
collectively employed 9,000
people. Of all the 15 models
produced, Swift, Swift Dzire, A-
star, and SX4 were
manufactured at Manesar
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 Trade Unions at MSIL
• Since inception MUL had a trade union MUEU which was
patronized by INTUC
• In 1987 the union ended its affiliation with INTUC and
remained politically neutral with no office bearers from
outside.
• In October, 2000 MUEU declared a strike on the issue of
production incentives. It lasted for 90 days and ended with
the termination of 39 employees and the remaining signing a
good conduct bond and accepting managements incentive
scheme.
• MUL derecognized MUEU and replaced it by another union
MUKU. The new union was also not affiliated with any
political party and had no external office bearers.
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 Manesar Plant
• Highly automated plant inaugurated in Feb 2007
• Employees mostly from the state of Haryana, with an
average age of less than 25 years.
• Most workers were unmarried and had started as
trainees in 2007 and were regularized in 2010 after
completing three years of traineeship.
• Trainees were paid between 13K-14K/month, whereas
the contract workers ranged from 4.5K-12K depending
on the skills.
• Essential qualification for becoming regular included
matriculation certificate with ITI diploma

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 Background of Problem
• FY 2008/09 was disappointing. But, 2009/10 experienced
an upswing of demand with domestic sales increasing by
20.5% and exports by 100%.
• To augment production MSIL introduced several initiatives,
which increased output by 40% at Manesar and 17% at
Gurgaon plants.
• To achieve this outcome, the minimum required shift was
eight hours with a 30 minute lunch break and two tea
breaks of 7.5 minutes each. Some workers found these
breaks insufficient.
• Some workers complained of misbehavior by supervisors.
• Incentives were offered to motivate but deductions were
incurred for absenteeism.
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 To negotiate with MSIL
management on these issues,
the Manesar workers
demanded a Union
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• The workers first approach MUKU at the Gurgaon plant,
but were told that work practices at Manesar are routine.
• The Manesar workers than demanded a separate union.
• The preparation started in Dec 2010 for a separate
union. The management agreed for accommodating
Manesar workers in April 2011 MUKU elections, which
finally were announced for July 2011 with Manesar
Chapter.
• The Manesar workers decided to field Sonu Gujjar a
27yrs old awardee welder as their candidate for
president of the union.

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• On June 3, 2011, the Manesar workers filed an application
for separate union by the name of MSEU
• As per workers, same day the company started asking for
written assurances in the form of affidavit regarding their
satisfaction with MUKU and do not require new union.
• On June 4, 2011 2000 workers went on a first strike in a
decade demanding recognition of new union, better wages
and better working conditions without giving any notice.
• Management suggested that the workers should give up
strike and participate in the forthcoming elections.
• Sensing unrest, the state government deployed a police
force

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• On June 6, 2011 workers including office bearers for the
proposed union were suspended by the management, and
the application for registration of MSEU was rejected by the
labour office on multiple grounds
• Soon this strike caught interest of national level unions and
on June 8, 2011 a joint action committee was formed by
AITUC, CITU, HMS, UTUC and INTUC to support the strike.
• On June 9, workers from other factories were rallied by the
committee in front of the Manesar plant
• On June 14, the management accepted the demand for a
new union.
• The strike continued for 13 days and ended on June 17,
2011

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 Situation in Manesar

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 Labor was unhappy

Rural population was unhappy

Business was suffering

HSIIDC had a really bad reputation

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 Industrial Model Town (IMT)-
Manesar Key Facts
• Project conceptualized as a JV between Government of
India, State Government of Haryana & Government of Japan

• Project taken over by Haryana State Industrial Infrastructure

Development Company (HSIIDC) in 1997
– HSIIDC is a company incorporated in 1967 and is wholly
owned by the Government of Haryana

• Total area: 3,180 acres

• 600 acres: Maruti Udyog Limited
• 2,580 acres: 2500 plots (across industries)

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 Project Performance since 1997

16 years since HSIIDC

took over IMT Manesar
• Total operational
factories: 500
• Total land utilization:
36%. 2000 Acres of total
land remained unused
by industrialists.

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*All figures quoted are from MIWA Manesar sources and need to by verified/ validated 25
Challenges Faced by Industrialists

• Lack of skilled/ dedicated labor

• Extremely high labor attrition rate in factories

• HSIIDC
• Lack of basic facilities and amenities
• Inefficient working systems

• Lack of related and supporting industries

• High cost of transportation (goods and manpower)

• High crime rate

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 Challenges Faced by Labor

• High cost of living- rent, food and home supplies-

they are forced to pay double for everything by
local villagers/ land-lords

• Unfavorable environment to live with families

• Unsafe living environment- high burglary/ crime rate

• Lack of transportation facilities, high cost of

transportation

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 Challenges Faced by Rural
Population

• Unethical land acquisition

• Low standard of living

• Lack of civic amenities- healthcare, education, sanitation

• Lack of employment opportunities and skill

enhancement/ training facilities

• Inefficient farming practices

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 Key Issues
• The protest’s lack of direction
• The prominent demand for improvement in working conditions
being overshadowed by demand for a separate trade union.
• The failure to focus on worker’s original demands
• The role of Haryana government in the tripartite negotiations
in the industrial unrest between the workers and the
management
• Management’s response to the series of strikes at MSIL
• The resulting loss estimated at US $400 million
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 Key learning's
• The impact of a foreign parent company on the work culture of
the local subsidiary
• The dilemma faced by state governments due to a mismatch
between the regulatory framework governing the industrial
relations and the economic realities of globalization.
• The fundamental rights guaranteed to every citizen under the
Indian constitution, including the right to form a union.
• The concept that the denial of recognizing trade unions is
equivalent to unfair labour practices.
• The impact of critical management decisions on all the
aligned areas of organizational operations.

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