You are on page 1of 39

Implementation of Labour Laws

Unit 4

Code of Discipline in Industry (June 1, 1958)

Government induced, self-imposed and mutual agreed voluntary principles of discipline and relations, between the Management and workers in industry.
Providing for voluntary and mutual settlement of disputes. Refrains from unilateral action Compels not to indulge in strikes and lockouts, without notice and without exploring the avenues. Constructive co-operation Enjoins upon the Management to take prompt action Any action against the spirit of the Code should be avoided. Government should rectify shortcomings in the machinery. Employers required to recognise union.

Criteria for Recognition of Trade Union

Where there are more than one union, should have been functioning for at least one year after registration. Cover at least 15%of the workers, who had paid their subscriptions for at least 3 months. Recognised as a representative union for an industry, if it has 25% of the workers of that industry. When recognized, no change in two years. Where several unions largest membership should be recognized Only unions, which observe Code of Discipline.

Rights of Recognized unions under the Code of Discipline

Freedom of speech and expression Collective bargaining and collective actions Conduct and functioning Miscellaneous rights

Fostering Discipline in Industry

A just recognition by employers and workers of the rights and responsibilities of either party A proper and willing discharge by either party of its obligations consequent on such recognition.

To ensure better Discipline in Industry

The Management and Union(s)Agree

No unilateral action Use existing machinery No strike or lockout without notice No recourse to
Coercion Intimidation Victimization Go slow

The Management Role The Union Role

Employee Discipline and Positive Discipline

Discipline is a procedure that corrects or punishes the subordinate because a rule of procedure has been violated.

Common Symptoms of indiscipline

Absenteeism Disobedience Theft Bribe Damaging Smoking Fighting Gambling Betting Sleeping Sexual harassment Assault

Objectives of disciplinary action

Enforce rules Punish the offender Serve as an example Ensure the smooth running Increase efficiency Maintain peace Improve relations and tolerance Working culture

Positive Discipline
Traditional or Legalistic Approach Positive or HRD Approach Holistic or Integrated Approach

Disciplinary Action Process

Authorities are laid by the organisations Disciplinary authority Appellate authority Reviewing authority

Standing Orders
The industrial employment (standing orders)Act, 1946 , mandates for all employers to formulate standing orders in conformity with the model standing orders and to submit them to the certifying officer for certification. Obligatory on workmen to work in conformity with certified standing orders

Object of the Act

To require employers and employees to define the conditions of work To bring about uniformity in terms and conditions of employment To minimise industrial conflicts To foster harmonious relations between employers and employees. To provide statutory sanctity and importance to standing orders

Scope and Application

Extends to the whole of India To every establishment wherein 100 or more workmen are employed It applies to all the
skilled or unskilled, manual, supervisory, technical, clerical workers, Including apprentices.

Matters to be contained in the Standing Orders
Classification of the workmen : temporary, casual, apprentices Manner of intimating to workmen Shift working Attendance and late coming Conditions of, procedure in applying for, and the authority which may grant leave and holidays Requirements to enter premises by certain gates and liability to search Closing and reopening of sections of the establishments, temporary stoppages Suspension or dismissal for misconduct Acts and omissions which constitute misconduct

Submission of Draft Standing Orders

Obligatory for employer to furnish 5 copies of the draft standing orders Copies to be given to the certifying officer Draft has to enclose the prescribed particulars of the workmen The status and name of the trade unions to be given.

Procedure for Certification of Standing Orders

Copy of draft standing orders to be sent to trade union/workmen Opportunity of hearing to trade union/workmen to be provided Certification Certified standing orders have the force of law and the violation of any provision shall be taken action Standing orders to be applicable to all present and future workmen Standing orders must confirm the model standing order

Conditions for certification of Standing Orders

Any employer, workman, trade union aggrieved by the order of the certifying officer may, with in 30 days

Date of Operation of the Act

On the expiry of 30 days of the certification Or After 7 days of the decision of appellate authority.

Any employer fails to submit draft standing orders or modifies it, shall be punishable with fine which may extend to Rs. 5000. In case of continuance of the above offence, fine up to Rs.200 per every day. Any contravention of Standing Orders is punishable by Rs. 100 fine .

Domestic Enquiry
A Domestic enquiry
internal hearing held by an employer to ascertain whether an employee is guilty of misconduct.

Judicial Intervention Show Cause Letter

Suspension during of Pending Enquiry - might intimidate or tamper evidence. Charge sheet duly signed by disciplinary. - Subsistence allowance
- during suspension as per rule 50 % for first 90 days 75 % for remaining period

Domestic Enquiry Proceedings

Read out and explain the chargesheet Explain to the delinquent employee Witness to be examined Opportunity to cross-examine Managements witnesses Allow to produce his own witness Signature with date of the charge-sheeted workman Ex-parte Enquiry- where employee does not turn up, ex-parte enquiry may be held. The Enquiry Report Contd...

Domestic Enquiry Proceedings

Final Decision of the Disciplinary Authority:
a. Minor punishments
a. b. c. Warning or Censure Fine Withholding of increment Demotion Discharge Dismissal


Major Punishmentsa. b. c.

Appeal Conclude Representations of a legal practitioner

Principles of Natural Justice

Operate where the law itself is silent. Meaning and Implication - a person whose civil rights are affected shall have
Reasonable notice of the case, Opportunity of being heard, Hearing by an impartial authority, Must act in good faith. Opportunity to rebut an evidence Proportionate punishment.

Criminal proceedings on domestic enquiry

No Disciplinary proceedings with criminal proceedings are on. The report of the domestic inquiry consists of the following:
The Charge (es). The facts of the case. The concise summary of the companys case. The concise summary of the employees case. Points for determination in the inquiry. This must be clear and specific. Mitigating factors, if any. The findings by the panel. Recommendation of the panel.

Collective Bargaining

Main features of collective bargaining

Collective Bargaining is a process in which the terms and conditions of employment are determined jointly by the employer and workers.
It generally represents the workers side , who bargain. Collective bargaining emanates from employment relationship. For determination of terms and conditions of employment May be related to a number of subjective terms of employment. Changeable and dynamic

Steps in Collective bargaining

Presentation Discussion Signing of a formal agreement.

Principles / Theories of Collective Bargaining

Four sub processes
Walton and McKersie theory

Distributive bargaining - union and Management goals are in conflict Integrative Bargaining - not necessarily in conflict Attitudinal Structuring - cultivate friendliness, trust, respect and cooperation. Intra-Organisational Bargaining - interaction between the union and Management.

Bargaining Range Theory

By AC Pigon Labour and Management establish upper and lower wage limits within which a final settlement is made.

Chamberlin Model:
Focus upon the determinants of bargaining power. Unions Bargaining Power (UBP) =
Managements cost of disagreeing (MCD) / Managements cost of agreeing (MCA)

Managements Bargaining Power (MBP) =

Unions cost of disagreeing (UCD) / Unions cost of agreeing (UCA)

Hicks Bargaining Model

Focuses on the length and costs of work stoppages, balance the cost and benefits of a work stoppage.

Issues of Consideration
i. ii. iii. iv. v. Employment relationship Wages Fringe benefits Working conditions Personnel matters.

Collective Agreements and their Implementation

Three types of agreements:
i. ii. iii. Voluntary agreements Settlements Consent award

Forms of Collective Bargaining

Distributive bargaining /conjunctive bargaining Integrative Bargaining / cooperative bargaining Attitudinal Structuring Intra-Organisational Bargaining Productivity Bargaining demanding increasing productivity Composite Bargaining - demanding increased work hours or work load Industry bargaining Enterprise bargaining Concession bargaining

Process of Collective Bargaining

Coordinating preparations - gathering and analyzing information Selection of a team members Reviewing previous negotiations Gathering data Formulate proposals and priorities Select a suitable site Organise the relevant information Notify opponent of the intent.

Strategy for Negotiation

Contending Accommodating Compromising Avoiding New Negotiating Style Dual Concerns Model
It Focuses On Collaboration

The Attitude of the Parties

Positive Prepared to give away something Observe and follow terms and conditions.

Collective Bargaining In INDIA

The Trade Dispute Act 1929 Bombay Industrial Relations Act 1946 Industrial Disputes Act 1947 Madhya Pradesh industrial Relation Act 1960

Recent Trends In Collective Bargaining The Issue Side

Emerging Approaches World Labour Report of ILO (1997-98) mentions
Collective bargaining as becoming weak with the state intervention playing a bigger role. Collective bargaining has shifted from the region / industry level to enterprise or even plant level.

Emerging issues in collective bargaining

Performance based wage bargaining Womens issue Job security/ job insecurity Productivity Quality of work life Managing change through collective bargaining.

Collective bargaining agreements at different levels

Plant level Industry level National level

Plant of Establishment Level

Local level Region/area level Industry level National level

National commission on labour for collective bargaining (1969)

Government intervention should be reduced Trade unions should be strengthened Legal provisions for
i. ii. iii. iv. Compulsory recognition Prohibition and penalisation Bargaining in good faith Conferring legal validity

Intensification of workers education One union for one plant Government should declare its policy to allow and encourage collective bargaining.