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Home Explore CU-BBA-Sem VI- INDUSTRIAL RELATIONS AND LABOUR LAW (1)

CU-BBA-Sem VI- INDUSTRIAL RELATIONS AND LABOUR LAW (1)

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9.4 SUMMARY  The International Labour Organization (ILO) is a United Nations (U.N.) agency.  The goal of the International Labour Organization (ILO) is to advance social and economic justice by setting international labor standards.  The conventions and protocols of the International Labour Organization (ILO) are a major contributor to international labor law. 9.4 KEYWORDS  9.5 LEARNING ACTIVITY 151 1. what are the objectives of ILO? 2. What are the role of ILO? CU IDOL SELF LEARNING MATERIAL (SLM)

3. What are the functions of ILO? 4. Explain the meaning of ILO? 5. Write note on ILO AND INDIA 9.6 UNITS AND QUESTIONS Descriptive questions: LONG ANSWERS: SHORT ANSWERS: MULTIPLE CHOICE QUESTIONS: 152 CU IDOL SELF LEARNING MATERIAL (SLM)

1) ANSWERS 9.7 REFERENCES 153 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT – 10 COLLECTIVE BARGAINING STRUCTURE 10.0 Learning Objectives 10.1 Introduction 10.2 Meaning 10.3 Characteristics 10.4 Importance 10.5 Summary 10.6 Keywords 10.7 Learning Activity 10.8 Unit End Questions 10.9 References 10.0 LEARNING OBJECTIVE At the end of this unit you will learn about:  Meaning of collective bargaining  Understand the characteristics of Collective bargaining 10.1 INTRODUCTION Collective bargaining is a procedure by which employment related disputes are resolved cordially, peacefully and voluntarily by settlement between labour unions and managements. The collective bargaining in India remained limited in its scope and restricted in its coverage by a well defined legal structure. In reality, the labour laws systematically promoted and keep in existence a duality of labour-formal sector workers enjoying better space for collective bargaining and informal ones with no scope for collective bargaining. 10.2 MEANING Industrial disputes between the employee and employer can also be settled by discussion and negotiation between these two parties in order to arrive at a decision.This is also commonly 154 CU IDOL SELF LEARNING MATERIAL (SLM)

known as collective bargaining as both the parties eventually agree to follow a decision that they arrive at after a lot of negotiation and discussion. According to Beach, “Collective Bargaining is concerned with the relations between unions reporting employees and employers (or their representatives). It involves the process of union organization of employees, negotiations administration and interpretation of collective agreements concerning wages, hours of work and other conditions of employees arguing in concerted economic actions dispute settlement procedures”. According to Flippo, “Collective Bargaining is a process in which the representatives of a labor organization and the representatives of business organization meet and attempt to negotiate a contract or agreement, which specifies the nature of employee-employer union relationship”. “Collective Bargaining is a mode of fixing the terms of employment by means of bargaining between organized body of employees and an employer or association of employees acting usually through authorized agents. The essence of Collective Bargaining is bargaining between interested parties and not from outside parties”. According to an ILO Manual in 1960, the Collective Bargaining is defined as: “Negotiations about working conditions and terms of employment between an employer, a group of employees or one or more employers organization on the other, with a view to reaching an agreement.” It is also asserted that “the terms of agreement serve as a code defining the rights and obligations of each party in their employment relations with one another, if fixes large number of detailed conditions of employees and during its validity none of the matters it deals with, internal circumstances give grounds for a dispute counseling and individual workers”. Collective Bargaining Involves: (i) Negotiations (ii) Drafting (iii) Administration (iv) Interpretation of documents written by employers, employees and the union representatives (v) Organizational Trade Unions with open mind. 10.3 CHARACTERISTIC 1. It is a Group Action: Collective bargaining is a group action as opposed to individual action. Both the parties of settlement are represented by their groups. Employer is represented by its delegates and, on the other side; employees are represented by their trade union. 2. It is a Continuous Process: 155 CU IDOL SELF LEARNING MATERIAL (SLM)

Collective bargaining is a continuous process and does not end with one agreement. It provides a mechanism for continuing and organised relationship between management and trade union. It is a process that goes on for 365 days of the year. 3. It is a Bipartite Process: Collective bargaining is a two party process. Both the parties—employers and employees— collectively take some action. There is no intervention of any third party. It is mutual given- and-take rather than take-it-or-leave-it method of arriving at the settlement of a dispute. ADVERTISEMENTS: 4. It is a Process: Collective bargaining is a process in the sense that it consists of a number of steps. The starting point is the presentation of charter of demands by the workers and the last step is the reaching of an agreement, or a contract which would serve as the basic law governing labour- management relations over a period of time in an enterprise. 5. It is Flexible and Mobile and not Fixed or Static: It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is reached. 6. It is Industrial Democracy at Work: Collective bargaining is based on the principle of industrial democracy where the labour union represents the workers in negotiations with the employer or employers. Industrial democracy is the government of labour with the consent of the governed—the workers. The principle of arbitrary unilateralism has given way to that of self-government in industry. Actually, collective bargaining is not a mere signing of an agreement granting seniority, vacations and wage increase, by sitting around a table. ADVERTISEMENTS: 7. It is Dynamic: It is relatively a new concept, and is growing, expanding and changing. In the past, it used to be emotional, turbulent and sentimental, but now it is scientific, factual and systematic. 8. It is a Complementary and not a Competitive Process: Collective bargaining is not a competitive process i.e., labour and management do not coopt while negotiating for the same object. It is essentially a complementary process i.e., each party needs something which the other party has, namely, labour can put greater productive effort and management has the capacity to pay for that effort and to organise and guide it for achieving the enterprise’s objectives. The behavioural scientists have made a good distinction between “distributive bargaining” and “integrative bargaining”. The former is the process of dividing up the cake which represents what has been produced by the joint efforts of management and labour. In this process, if one party wins something, the other party, to continue the metaphor of the cake, has a relatively smaller size of the cake. So it is a win-lose’ relationship. The integrative 156 CU IDOL SELF LEARNING MATERIAL (SLM)

bargaining, on the other hand, is the process where both the parties can win—each party contributing something for the benefit of the other party. ADVERTISEMENTS: 9. It is an Art: Collective bargaining is an art, an advanced form of human relations. Means of Collective Bargaining: Generally, there are four important methods of collective bargaining, namely, negotiation, mediation, conciliation and arbitration for the settlement of trade disputes. In this context R.F. Hoxie said that arbitration is often provided for in collective bargaining under certain contingencies and for certain purposes, especially when the parties cannot reach agreement, and in the interpretation of an agreement through negotiation. Conciliation is a term often applied to the art of collective bargaining, a term often applied to the action of the public board which attempts to induce collective bargaining. Mediation is the intervention usually uninvited, of some outside person of body with a view of getting conciliation or to force a settlement, compulsory arbitration is extreme mediation. All these things are aids or supplement to collective bargaining where it breaks down. They represent the intervention of outside parties. 10.3 IMPORTANCE The collective bargaining advances the mutual understanding between the two parties i.e., employees and employers. The role of collective bargaining may be evaluated from the following point of view: (1) From Management Point of View: The main object of the organisation is to get the work done by the employees at work at minimum cost and thus earn a high rate of profits. Maximum utilization of workers is a must for the effective management. For this purpose co-operation is required from the side of the employees and collective bargaining is a device to get and promote co-operation. The labour disputes are mostly attributable to certain direct or indirect causes and based on rumors, and misconceptions. Collective bargaining is the best remedial measure for maintaining the cordial relations. (2) From Labour and Trade Union Point of View: Labour has poor bargaining power. Individually a worker has no existence because labour is perishable and therefore, the employers succeed in exploiting the labourers. The working class in united form becomes a power to protect its interests against the exploitation of the employers through the process of collective bargaining. The collective bargaining imposes certain restrictions upon the employer. Unilateral action is prevented. All employees are treated on equal footings. The conditions of employment and rates of wages as specified in the agreement can be changed only through negotiations with labour. Employer is not free to make and enforce decisions at his will. 157 CU IDOL SELF LEARNING MATERIAL (SLM)

Collective bargaining can be made only through the trade unions. Trade unions are the bargaining agents for the workers. The main function of the trade unions is to protect the economic and non- economic interests of workers through constructive programmes and collective bargaining is one of the devices to attain that objective through negotiations with the employers, Trade unions may negotiate with the employer for better employment opportunities and job security through collective bargaining. (3) From Government Point of View: Government is also concerned with the process of collective bargaining. Government passes and implements several labour legislations and desires it to be implemented in their true sense. If any person violates the rules and laws, it enforces them by force. Collective bargaining prevents the Government from using the force because an amicable agreement can be reached between employer and employees for implementing the legislative provisions. Labour problems shall be minimised through collective bargaining and industrial peace shall be promoted in the country without any force. Collective bargaining is a peaceful settlement of any dispute between worker and employers and therefore it promotes industrial peace and higher productivity resulting an increase in the Gross National Product or the national income of the country. Main Hindrances for Collective Bargaining: The main objective of developing collective bargaining technique is to improve the workers- management relations and thus maintain peace in industries. The technique has developed in India only after India got independence and got momentum since then. The success of collective bargaining lies in the attitude of both management and workers which is actually not consistent with the spirit of collective bargaining in India. There are certain problems which hinder the growth of collective bargaining in India. The following factors or activities act as hindrances to effective collective bargaining: (1) Competitive Process: Collective bargaining is generally becoming a competitive process, i.e., labour and management compete each other at negotiation table. A situation arises where the attainment of one party’s goal appears to be in conflict with the basic objectives of the other party. (2) Not Well-Equipped: Both the parties—management and workers—come to the negotiation table without doing their homework. Both the parties start negotiations without being fully equipped with the information, which can easily be collected from company’s records. To start with, there is often a kind of ritual, that of charges and counter charges, generally initiated by the trade union representatives. In the absence of requisite information, nothing concrete is achieved. (3) Time to Protest: The immediate objective of the workers’ representatives is always some kind of monetary or other gains, accrue when the economy is buoyant and the employer has capacity to pay. But in a period of recession, when demand of the product and the profits are falling, it is very 158 CU IDOL SELF LEARNING MATERIAL (SLM)

difficult for the employer to meet the demands of the workers, he might even resort to retrenchment or even closure collective bargaining is no answer to such a situation. (4) Where Prices are Fixed by the Government: In industries, where the prices of products are fixed by the Government, it becomes very difficult for the employer to meet the demands of workers which would inevitably lead to a rise in cost of the products produced. Whereas the supply price to the consumers cannot be increased. It will either reduce the profits of the firm or increase the loss. In other words, it will lead to closure of the works, which again is not in the interest of the workers. (5) Outside Leadership: Most of the Indian trade unions are led by outsiders who are not the employees of the concerned organisations. Leader’s interests are not necessarily to be identical with that of the workers. Even when his bonafides are beyond doubt, between him and the workers he leads, there cannot be the degree of understanding and communication as would enable him to speak on behalf of the workers with full confidence. Briefly, in the present situation, without strong political backing, a workers’ organisation cannot often bargain successfully with a strong employer. (6) Multiplicity of Trade Unions: One great weakness of collective bargaining is the multiplicity of trade unions. In a multiple trade union situation, even a well recognised, union with long standing, stable and generally positive relationship with the management, adopts a militant attitude as its deliberate strategy. In Indian situation, inter-union rivalries are also present. Even if the unions combine, as at times they do for the purpose of bargaining with the employer they make conflicting demands, which actually confuse employer and the employees. (7) Appointment of Low-Status Executive: One of the weaknesses of collective bargaining in India is that the management deputes a low-status executive for bargaining with the employees. Such executive has no authority to commit anything on behalf of the management. It clearly indicates that the management is not at all serious and the union leaders adopt other ways of settling disputes. (8) Statutory Provisions: The constraints are also imposed by the regulatory and participative provisions as contained in the Payment of Wages Act, the Minimum Wages Act, and Payment of Bonus Act etc. Such provisions are statutory and are not negotiable. (9) Fresh Demands at the Time of Fresh Agreement: At the time when the old agreement is near expiry or well before that, workers representatives come up with fresh demands. Such demands are pressed even when the industry is running into loss or even during the period of depression. If management accepts the demand of higher wages and other benefits, it would prefer to close down the works. (10) Agreements in Other Industrial Units: A prosperous industrial unit in the same region may agree with the trade unions to a substantial increase in wages and other benefits whereas a losing industry cannot do that. 159 CU IDOL SELF LEARNING MATERIAL (SLM)

There is always pressure on the losing industries to grant wages and benefits similar to those granted in other (relatively prosperous) units in the same region 10.5 SUMMARY  Collective bargaining broadly covers subjects and issues entering into the conditions and terms of employment.  It is also concerned with the development of procedures for settlement of disputes arising between the workers and management.  Collective Bargaining Involves:  Negotiations  Drafting  Administration  Interpretation of documents written by employers, employees and the union representatives  Organizational Trade Unions with open mind. 10.5 KEYWORD  10.6 LEARNING ACTIVITY 160 1. Define Collective Bargaining 2. Explain the meaning of Collective Bargaining. CU IDOL SELF LEARNING MATERIAL (SLM)

3. What are the various forms of collective bargaining? 4. What are the essential pre-requisites of collective bargaining? 5. What are the main features of collective bargaining? 10.7 UNIT END QUESTIONS DESCRIPTIVE QUESTIONS: LONG ANSWERS: 1. What are the constituents of Collective Bargaining? 2. Explain theories of Collective Bargaining? 3. Explain the importance of Collective Bargaining. 4. Evaluate the role of collective bargaining from the point of view of Management? 5. Evaluate the role of collective bargaining from the point of view of Labour 6. Evaluate the role of collective bargaining from the point of view of Trade Union 7. AEvaluate the role of collective bargaining from the point of view of Government. SHORT ANSWERS: 1. What are the main hindrances for collective bargaining? 2. Explain the scope of collective bargaining 3. Explain collective bargaining in Post-Independence period? 4. What are the issues involved in collective bargaining? 5. What are the reasons for the growth of collective bargaining? 6. Explain the Government policy to encourage collective bargaining? 7. Has Government discouraged collective bargaining MULTIPLE CHOICE QUESTIONS: 161 1. An employer’s refusal to provide work opportunities, is classified as? a. Grievance procedure CU IDOL SELF LEARNING MATERIAL (SLM)

b. Lock out c. Injunction d. Strike procedure 2. A combined refusal in buying the product of employers, union members as well as employees, known as? a. Boycott b. Impasse boycott c. Strike d. Picketing 3. The types of third party negotiation known as arbitration includes a. Non binding arbitration b. Interest arbitration c. Non binding arbitration d. All of the above 4. According to business perspective employee carrying sign language, in depicting their concerns, regarded as: a. Strike b. Picketing c. Boycott d. Impasse boycott 5. The kind of Union security in which organisations can hire current union members is classified as: a. Closed shop b. Union shop c. Agency shop d. Preferential shop ANSWERS: 1-b, 2-a, 3-d, 4-b, 5-a 162 CU IDOL SELF LEARNING MATERIAL (SLM)

10.8 REFERENCES www.legalservicesindia.com www.ilo.org blog.ipleaders.in Labour and Industrial Law- P.L. MALIK UNIT – 11 COLLECTIVE BARGAINING-1 STRUCTURE 11.0 Learning Objectives 11.1 Introduction 11.2 Process and causes for failure of collective bargaining 11.3 Summary 11.4 Learning Activity 11.5 Unit End Questions 11.6 Reference 163 CU IDOL SELF LEARNING MATERIAL (SLM)

11.0 LEARNING ACTIVITY At the end of this unit, you will understand: The Process and causes for failure of collective bargaining 11.1 INTRODUCTION Collective bargaining is a procedure by which employment related disputes are resolved cordially, peacefully and voluntarily by settlement between labour unions and managements. The collective bargaining in India remained limited in its scope and restricted in its coverage by a well defined legal structure. In reality, the labour laws systematically promoted and keep in existence a duality of labour-formal sector workers enjoying better space for collective bargaining and informal ones with no scope for collective bargaining. 11.2 PROCESS AND CAUSES FOR FAILURE OF COLLECTIVE BARGAINING The main objective of developing collective bargaining technique is to improve the workers- management relations and thus maintain peace in industries. The technique has developed in India only after India got independence and got momentum since then. The success of collective bargaining lies in the attitude of both management and workers which is actually not consistent with the spirit of collective bargaining in India. There are certain problems which hinder the growth of collective bargaining in India. The following factors or activities act as hindrances to effective collective bargaining: (1) Competitive Process: Collective bargaining is generally becoming a competitive process, i.e., labour and management compete each other at negotiation table. A situation arises where the attainment of one party’s goal appears to be in conflict with the basic objectives of the other party. (2) Not Well-Equipped: Both the parties—management and workers—come to the negotiation table without doing their homework. Both the parties start negotiations without being fully equipped with the information, which can easily be collected from company’s records. To start with, there is often a kind of ritual, that of charges and counter charges, generally initiated by the trade union representatives. In the absence of requisite information, nothing concrete is achieved. 164 CU IDOL SELF LEARNING MATERIAL (SLM)

(3) Time to Protest: The immediate objective of the workers’ representatives is always some kind of monetary or other gains, accrue when the economy is buoyant and the employer has capacity to pay. But in a period of recession, when demand of the product and the profits are falling, it is very difficult for the employer to meet the demands of the workers, he might even resort to retrenchment or even closure collective bargaining is no answer to such a situation. (4) Where Prices are Fixed by the Government: In industries, where the prices of products are fixed by the Government, it becomes very difficult for the employer to meet the demands of workers which would inevitably lead to a rise in cost of the products produced. Whereas the supply price to the consumers cannot be increased. It will either reduce the profits of the firm or increase the loss. In other words, it will lead to closure of the works, which again is not in the interest of the workers. (5) Outside Leadership: Most of the Indian trade unions are led by outsiders who are not the employees of the concerned organisations. Leader’s interests are not necessarily to be identical with that of the workers. Even when his bonafides are beyond doubt, between him and the workers he leads, there cannot be the degree of understanding and communication as would enable him to speak on behalf of the workers with full confidence. Briefly, in the present situation, without strong political backing, a workers’ organisation cannot often bargain successfully with a strong employer. (6) Multiplicity of Trade Unions: One great weakness of collective bargaining is the multiplicity of trade unions. In a multiple trade union situation, even a well recognised, union with long standing, stable and generally positive relationship with the management, adopts a militant attitude as its deliberate strategy. In Indian situation, inter-union rivalries are also present. Even if the unions combine, as at times they do for the purpose of bargaining with the employer they make conflicting demands, which actually confuse employer and the employees. (7) Appointment of Low-Status Executive: One of the weaknesses of collective bargaining in India is that the management deputes a low-status executive for bargaining with the employees. Such executive has no authority to commit anything on behalf of the management. It clearly indicates that the management is not at all serious and the union leaders adopt other ways of settling disputes. (8) Statutory Provisions: 165 CU IDOL SELF LEARNING MATERIAL (SLM)

The constraints are also imposed by the regulatory and participative provisions as contained in the Payment of Wages Act, the Minimum Wages Act, and Payment of Bonus Act etc. Such provisions are statutory and are not negotiable. (9) Fresh Demands at the Time of Fresh Agreement: At the time when the old agreement is near expiry or well before that, workers representatives come up with fresh demands. Such demands are pressed even when the industry is running into loss or even during the period of depression. If management accepts the demand of higher wages and other benefits, it would prefer to close down the works. (10) Agreements in Other Industrial Units: A prosperous industrial unit in the same region may agree with the trade unions to a substantial increase in wages and other benefits whereas a losing industry cannot do that. There is always pressure on the losing industries to grant wages and benefits similar to those granted in other (relatively prosperous) units in the same region. Scope of Collective Bargaining: Collective bargaining broadly covers subjects and issues entering into the conditions and terms of employment. It is also concerned with the development of procedures for settlement of disputes arising between the workers and management. A few important issues around which collective bargaining enters in this developing country are as follows: “Recognition of the union has been an important issue in the absence of any compulsory recognition by law. In the under-developed countries in Asia, however, on account of the tradition concept of management functions and the immaturity of the industrialist class there is much resistance from the employers to recognise the status of the unions.” Bargaining upon wage problems to fight inflation or rising cost of living and to resist wage cuts during depression has resulted in several amicable agreements. But, no statistics are available for such amicable settlements. Therefore, Daya, points out, “It has been customary to view collective bargaining in a pattern of conflict; the competitively small number of strikes and lock-outs attract more attention than the many cases of peaceful settlement of differences.” Another issue on which bargaining takes place is seniority, but in India, it is of less importance than in western countries. But, in India, lay-off, retrenchment, dismissal, rationalisation and participation in the union activities have been important issues for collective bargaining. 166 CU IDOL SELF LEARNING MATERIAL (SLM)

Regarding bargaining on hours of work, it has recognized that “in one form or another subject of working time will continue to play an important part in collective bargaining; although the crucial battles may be well fought in the legislative halls.” Overtime work, holidays, leave for absence and retirement continue to be issues for bargaining in India, although they are not regarded as crucial. The union security has also been an issue for collective bargaining, but it could not acquire much importance in the country, although stray instances are found. The Tata Workers union bargained with M/s Tata Iron and Steel Co. Ltd., Jamshedpur, on certain issues, one of which was union security and in the resulting agreement some of the union security clauses were also included. The production norms, technical practices, details of working rules, standards of performance, allowance of fatigue, hiring and firing, protection of life and limb, compensation for overtime, hours of work, wage rates and methods of wage payments, recognition of unions, retrenchment, union security, holidays and competence of workmen form the subjects of negotiations and agreements through collective bargaining. Customary practices are evolving procedures to extend the area of collective bargaining. Collective bargaining has been giving official sanction to trade experiences and agreements. Collective bargaining, thus, covers the negotiation, administration, interpretation, application and enforcement of written agreement between employers and unions representing their employees setting forth joint understanding, as to policies and procedures governing wages, rates of pay, hours of work and other conditions of employment. Collective Bargaining in the Post- Independence Period: Before Independence, the collective bargaining as it was known and practised was virtually unknown in India. It was accepted, as a matter of principle, for usage in union management relations by the state. Though it was emphasised in the First Five Year Plan that the State would encourage mutual settlement, collective bargaining and voluntary arbitration; to the utmost extent and thereby reduce number of intervention of the state in union management relations. However, because of the imperatives of political and economic factors, the State was not prepared to encourage voluntary arbitrations and negotiations and the resulting show of strength by the parties. The State, therefore, armed itself with the legal powers which enabled it to refer disputes to an arbitrator or an adjudicator if the two parties fail to reach a mutually acceptable agreement. 167 CU IDOL SELF LEARNING MATERIAL (SLM)

This move of compulsory arbitration and adjudication was opposed by several labour leaders because they believed that this would destroy the picture of industrial relations in India. Dr. V.V. Giri expressed his views on this point at the Indian Labour Conference in 1952, “Compulsory arbitration” he declared, “has cut at the very root of trade union organisation…If the workers find that their interests are best promoted only by combining, no greater urge is needed to forge a band of strength and unity among them. But compulsory arbitration sees to it that such a band is not forged… It stands there is a policeman looking out for signs of discontent, and at the slightest provocation, takes the parties to the court for a dose of costly and not wholly satisfactory justice.” Despite this controversy, collective bargaining was introduced in India for the first time in 1952, and it gradually gained importance in the following years. The information, however, on the growth of collective bargaining process is very meager, and the progress made in this respect has not been very conspicuous, though not negligible. The data released by the Labour Bureau show that the practice of determining the rates of wages and conditions of employment has spread to most of the major segments of the national economy. A sample, study covering the period from 1956 to 1960 conducted by the Employer’s Federation of India has revealed that collective bargaining agreements have been arrived in respect of disputes ranging from 32 to 49 percent. Most of the collective bargaining agreements have been entered into at plant level. In this connection, the National Commission on Labour has thrown ample light on the progress of collective agreement. In its own words, “Most of the collective bargaining (agreements) has been at the plant level, though in important textile centres like Bombay and Ahmedabad industry level agreements have been (fairly) common… Such agreements are also to be found in the plantation industry in the South, and in Assam, and in the coal industry. Apart from these, in new industries— chemicals, petroleum, oil refining and distribution, aluminium and electrical equipment, automobile repairing—the arrangement for the settlement of disputes through voluntary agreements have become common in recent years. In the ports and docks, collective agreements have been the role at individual centres. On certain matters affecting all the ports, all India agreements have been reached. In the banking industry, after the series of awards, employers and unions have, in recent years, come closer to reach collective agreements. In the Life Insurance Corporation (LIC) with the exception of the Employer’s decision to introduce automation which has disturbed industrial harmony in some centres, there has been a fair measure of discussion across the table by the parties for the settlement of disputes.” The collective bargaining reached has been of three types: 168 CU IDOL SELF LEARNING MATERIAL (SLM)

(1) Agreement arrived at after voluntary direct negotiations between the parties concerned. Its implementation is purely voluntary; (2) Agreements between the two parties, though voluntary in nature, are compulsory when registered as settlement before a conciliator; and (3) Agreement which have legal status negotiated after successful discussion between the parties when the matter of dispute is under reference to industrial tribunal/courts. Many agreements are made voluntarily but compulsory agreements are not negligible. However, collective bargaining and voluntary agreements are not as prominent as they are in other industrially advanced countries. The practice of collective bargaining in India has shown much improvement after the passing of some legislation like The Industrial Disputes Act 1947 as amended from time to time. The Bombay Industrial Relations Act 1946 which provided for the rights of workers for collective bargaining. Since then, a number of collective bargaining agreements have been entered into. Issues Involved in Collective Agreements: A study conducted by the Employer’s Federation of India revealed that out of 109 agreements, ‘wages’ was the most prominent issue in 96 cases (88 percent) followed by dearness allowance (59 cases) retirement benefits (53 cases), bonus (50 cases) other issues involved were annual leave, paid holidays, casual leave, job classification, overtime, incentives, shift allowance, acting allowance, tiffin allowance, canteen and medical benefits. A study of various collective agreements entered into in India, certain trends in collective bargaining are noticeable. These are: (i) Most of the agreements are at plant level. However, some industry-level agreements are also there; (ii) The scope of agreements has been widening now and now includes matters relating to bonus, productivity, modernisation, standing orders, voluntary arbitration, incentive schemes, and job evaluation; (iii) Long term agreements ranging between 2 to 5 years, are on increase; (iv) Joint consultation in various forms has been provided for in a number of agreements; and feasible and effective. 169 CU IDOL SELF LEARNING MATERIAL (SLM)

Reasons for the Growth of Collective Bargaining: The growth of collective bargaining in India may be attributed to the following factors: (1) Statutory Provisions: Which have laid down certain principles of negotiations, procedure for collective agreements and the character of representation of the negotiating parties? (2) Voluntary Measures: Such as tripartite conferences, joint consultative boards, and industrial committees at the industry level have provided an ingenious mechanism for the promotion of collective bargaining practices. (3) Several Governments Measures: Like schemes for workers’ education, labour participation in management, the evolution of the code of Inter-union Harmony, the code of Efficiency and Welfare, the Code of Discipline, the formation of Joint Management Councils, Workers Committees and Shop Councils, and the formulations of grievances redressal procedure at the plant level— have encouraged the collective bargaining. (4) Amendments to the Industrial Disputes Act: The Amendments to the Industrial Disputes Act in 1964 provided for the termination of an award or a settlement only when a proper notice is given by the majority of workers. Agreements or settlements which are arrived at by a process of negotiation on conciliation cannot be terminated by a section of the workers. (5) Industrial Truce Resolution: The Industrial Truce Resolution of 1962 has also influenced the growth of collective bargaining. It provides that the management and the workers should strive for constructive cooperation in all possible ways and throws responsibility on them to resolve their differences through mutual discussion, conciliation and voluntary arbitration peacefully. Government Policy to Encourage Collective Bargaining: Ever since independence, it has been the declared policy of the Central Government to encourage trade unions development and the settlement of differences in industry by mutual agreement. Article 19 of the constitution guarantees for all citizens the right to form associations or unions, only by reserving to the state powers in the interest of public order to impose reasonable restrictions on the exercise of this right. 170 CU IDOL SELF LEARNING MATERIAL (SLM)

The Industrial policy Resolution of 1956 declared that, “in a socialist democracy labour is a partner in the common task of development”, thus following out the resolution of the Lok Sabha of 1954 which set India on the path towards a “‘socialistic pattern of society.” The Second Five Year Plan in 1956 was more specific and declared: “For the development of an undertaking or an industry, industrial peace is indispensable; obviously, this can best be achieved by the parties themselves. Labour legislation and the enforcement machinery set up for its implementation can only provide a suitable framework in which employees and workers can function.” Has Government Discouraged Collective Bargaining? It is obvious, that the declared policy of the government laid emphasis on the voluntary settlement of differences in industry. But industrial legislation since independence and government intervention to establish various standards of working conditions and machinery for compulsory arbitration of disputes have limited the scope of collective bargaining. The areas that are covered by labour legislation are mainly physical working conditions and terms of employment, and to the extent that these are prescribed by law the scope of collective bargaining is limited. The Industrial Employment (Standing Order) Act, 1948 makes compulsory the drawing up conditions of employment relating to methods of paying wages, hours of work, over time, shifts, holidays, termination of employment and disciplinary action, but not through joint negotiation. There is no statutory requirement that employer should discuss the draft standing orders with the union. The Minimum Wages Act, also passed in 1948, has given statutory power to appropriate government to fix minimum wages in certain scheduled employments. The object of this legislation was to secure a minimum in those occupations or industries where the worker were not sufficiently organised to be able to negotiate reasonable wages for themselves. If the government was committed to support the principle of collective bargaining, why no attempt was made to encourage it by legislation? The Trade Union Amendment Act, passed in 1947, did not in fact provide for the compulsory recognition by the employers of representative trade unions, but this act was never notified and so never came into force. It is arguable that some legislative action to compel recognition of the more stable unions might have helped to create a better climate for encouragement of voluntary settlement in industry. 171 CU IDOL SELF LEARNING MATERIAL (SLM)

The attitude of the management and unions was commonly “Let the issue go to the tribunal”, with the result that little real effort was made towards mutual settlement and conciliation officers found little response to their efforts at meditation. References to the adjudication piled up, the industrial tribunals were overwhelmed with cases, and lengthy delays and general frustration resulted. From the above facts, it looks that the Government has discouraged the Development of Collective Bargaining in India. But the truth is that, the Government intention has never been to discourage it. In fact, the labour in India is not very well organised and it is not expected that it would be able to get its due share through collective bargaining. Hence, the government has tried to protect in the interests of labour by passing the various acts such as the Factory Act of 1948. Employees State Insurance Act, 1948 and Minimum Wages Act. Hence, the cases involving industrial disputes should be to compulsory arbitration. Khandubhai Desai, the then Labour Minister, stated in July 1956 that voluntary agreement to refer questions to arbitration was the best solution. But he added complete laissez-faire is out of date. Society cannot allow workers or management to follow the law of jungle. Therefore, as a last resort, the government has taken powers to refer disputes to adjudication. It has, further, been argued that in a planned economy, the relations between the labour and management have also to be on planned basis. They cannot be allowed to upset the production target just because one of the parties would not like to settle the disputes in fair manner. Therefore, the Government of India under Industrial Disputes Act 1947 has created the following seven different authorities for the prevention and settlement of disputes: 1. Workers Committees. 2. Conciliation Officer. 3. Board of Conciliation. 4. Court of Enquiry. 5. Labour Courts. 6. Industrial Tribunals. 172 CU IDOL SELF LEARNING MATERIAL (SLM)

7. National Tribunals. The important characteristic of the above machinery for the prevention and settlement of disputes is that, there is full scope for the settlement of dispute through collective bargaining and if it is not settled by Works Committees, Conciliation Officer, Board of Conciliation, only then, it is referred to Court of Enquiry and Labour Courts. The decision of the Labour Courts, Industrial Tribunal and National Tribunal is binding on both the parties. 11.3 SUMMARY Collective bargaining broadly covers subjects and issues entering into the conditions and terms of employment. It is also concerned with the development of procedures for settlement of disputes arising between the workers and management. Collective Bargaining Involves: (i) Negotiations (ii) Drafting (iii) Administration (iv) Interpretation of documents written by employers, employees and the union representatives (v) Organizational Trade Unions with open mind. 173 CU IDOL SELF LEARNING MATERIAL (SLM)

11.4 LEARNING ACTIVITY 1. Has Government Discouraged Collective bargaining? 2. Explain the Government policy to encourage collective bargaining? 3. What are the reasons for the growth of collective bargaining? 4. What are the issues involved in collective bargaining? 5. Explain the three types of collective bargaining reached? 174 CU IDOL SELF LEARNING MATERIAL (SLM)

11.5 UNIT END QUESTIONS DESCRIPTIVE QUESTIONS: LONG ANSWERS: 1. Explain collective bargaining in Post-Independence period? 2. What are the reasons for the failure of collective bargaining in India? 3. What steps are taken by the Government in India with regard to Collective Bargaining 4. Explain the process of collective bargaining 5. How important is collective bargaining in a country like India with major workforce?  SHORT ANSWERS: 175 CU IDOL SELF LEARNING MATERIAL (SLM)

MULTIPLE CHOICE QUESTIONS 1. Absence of strikes and lockout is a indicator of? a. Peaceful Industrial relations b. Friendly Industrial relations c. Disturbed Industrial relations d. None of the above 2. An employer’s refusal to provide work opportunities, is classified as? a. Grievance procedure b. Lock out c. Injunction d. Strike procedure 3. A combined refusal in buying the product of employers, union members as well as employees, known as? a. Boycott b. Impasse boycott c. Strike d. Picketing 176 CU IDOL SELF LEARNING MATERIAL (SLM)

4. The types of third party negotiation known as arbitration includes a. Non binding arbitration b. Interest arbitration c. Non binding arbitration d. All of the above 5. According to business perspective employee carrying sign language, in depicting their concerns, regarded as: a. Strike b. Picketing c. Boycott d. Impasse boycott ANSWERS: 1-a,2-b, 3-a, 4-d, 5-b 177 CU IDOL SELF LEARNING MATERIAL (SLM)

11.6 REFERENCES www.legalservicesindia.com www.ilo.org blog.ipleaders.in Labour and Industrial Law- P.L. MALIK 178 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT – 12 WORKERS PARTICIPATION STRUCTURE 12.0 Learning Objectives 12.1 Introduction 12.2 Concept of workers’ participation in management in India and their evaluation 12.3 Summary 12.4 Keywords 12.5 Learning Activity 12.6 Unit End Questions 12.7 References 12.0 LEARNING OBJECTIVE After studying this lesson, the student is able to understand: * the concept of Workers’ Participation in Management, * the various forms of Workers’ Participation in Management * the present state of Workers’ Participation in Management in India 12.1 INTRODUCTION Workers’ Participation in Management is crucial for better results in an organisation . It helps in developing a technology to resolve conflict and to achieve constructive cooperation among 179 CU IDOL SELF LEARNING MATERIAL (SLM)

the partners of production. Workers’ Participation in Management will facilitate good channels of communication, give scope for personal identity and self respect, enhance employee morale, reduce the cost of labour turnover, promotes a sense of job security and social justice. Effective implementation of participative management is essential for achieving higher productivity and the industrial progress as well 12.2 CONCEPT OF WORKERS’ PARTICIPATION IN MANAGEMENT The term participation is variously understood by involved parties. For management it is a joint consultation prior to decision. Making for workers it means codetermination, while for government it is an association of labour with management without the final authority or responsibility in decision-making, participation is generally conceived as a way of reducing power difference and means to reduce power inequality. According to Keith Davis, participation refers to “the mental and emotional involvement of a person in a given situation which encourages him to contribute to group goals and share in responsibility of achieving them”. It is the process by which authority and responsibility of managing industry are shared with workers. In view of the different views it is difficult to define ‘workers’ participation’, it can be only described as a system of communication and consultation, either formal or informal, by which the employees of an organisation are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to management decisions. The following are the characteristics of workers’ participation: i) Participation has to be at different levels of management ii) Participation presupposes willing acceptance of responsibilities by workers iii) Participation means mental and emotional involvement rather than mere physical presence. It is more than consent or approval to managerial actions. iv) Workers’ participation in management may be formal or informal. It is a system of communication and contribution whereby employees express their opinions and contribute to managerial decision. v) The broad goal of participation is to change fundamentally the organisational aspect of production and transfer the management function entirely to the workers. vi) There can be four levels of participation - shop floor, plant, department and corporate levels. vii) There are four degrees of participation. a) Communication: It involves sharing information about all management decisions with workers. b) Consultation: Workers express their views on work related issues. Final decisions are taken by the management after consultations. c) Codetermination: Herein, managers and workers jointly take decisions. d) Self-Management: In it workers enjoy complete autonomy right from decision-making to execution. Workers’ participation in management is an essential ingredient of Industrial democracy. The concept of workers’ participation in management is based on Human Relations approach to 180 CU IDOL SELF LEARNING MATERIAL (SLM)

Management which brought about a new set of values to labour and management. Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision-making process of the organization. Workers’ participation is also known as ‘labour participation’ or ‘employee participation’ in management. In Germany it is known as co-determination while in Yugoslavia it is known as self-management. The International Labour Organization has been encouraging member nations to promote the scheme of Workers’ Participation in Management. Workers’ participation in management implies mental and emotional involvement of workers in the management of Enterprise. It is considered as a mechanism where workers have a say in the decision-The philosophy underlying workers’ participation stresses: democratic participation in decision-making; maximum employer-employee collaboration; minimum state intervention; realisation of a greater measure of social justice; greater industrial efficiency; and higher level of organisational health and effectiveness. It has been varyingly understood and practised as a system of joint consultation in industry; as a form of labour management cooperation; as a recognition of the principle of co- partnership, and as an instrument of industrial democracy. Consequently, participation has assumed different forms, varying from mere voluntary sharing of information by management with the workers to formal participation by the latter in actual decision-making process of management. Article 43A of the Constitution of India deals with 'Participation of workers in management of industries' and falls under Part IV - Directive Principles of State Policy. 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 organisations engaged in any industry. This article was inserted by the Constitution (Forty-second Amendment) Act, 1976, s. 9 (w.e.f. 3-1-1977). The High-powered Expert Committee on Companies and MRTP Acts headed by Justice Rajinder Sachar of the Delhi High Court has also made certain recommendations about provisions to be made for workers' participation in management of companies. (Vide paragraphs 18.127 to 18.143 of the Report). Parliament may take early steps to implement some of the recommendations made by the said Committee. It is significant that there is no recommendation made even in this Report about the right of trade unions to contest winding-up petitions. If the workers are issued shares then they would no doubt be entitled to participate in the winding-up proceedings as contributories. This may be one way of solving the problem by legislative means. 181 CU IDOL SELF LEARNING MATERIAL (SLM)

Definitions: The concept of WPM is a broad and complex one. Depending on the socio-political environment and cultural conditions, the scope and contents of participation change. International Institute of Labour Studies: WPM is the participation resulting from the practices which increase the scope for employees’ share of influence in decision-making at different tiers of organizational hierarchy with concomitant (related) assumption of responsibility. ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and their representatives with the decision-making process, ranging from exchange of information, consultations, decisions and negotiations, to more institutionalized forms such as the presence of workers’ member on management or supervisory boards or even management by workers themselves (as practiced in Yugoslavia). The main implications of workers’ participation in management as summarized by ILO: Workers have ideas which can be useful; Workers may work more intelligently if they are informed about the reasons for and then intention of decisions that are taken in a participative atmosphere According to Keith Davis, Participation refers to the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share the responsibility of achievement. According to Walpole, Participation in Management gives the worker a sense of importance, pride and accomplishment; it gives him the freedom of opportunity for self-expression; a feeling of belongingness with the place of work and a sense of workmanship and creativity. Clegg says, “It implies a situation where workers representatives are, to some extent, involved in the process of management decision making, but where the ultimate power is in the hands of the management”. According to Dr. Davis, “it is a mental and emotional involvement of a person in a group situation which encourages him to contribute to goals and share responsibilities in them”. Objectives of Workers Participation in Management The objectives of workers’ participation in management are as follows: To raise level of motivation of workers by closer involvement. To provide opportunity for expression and to provide a sense of importance to workers. To develop ties of understanding leading to better effort and harmony. To act on a device to counter-balance powers of managers. To act on a panacea for solving industrial relation problems. 182 CU IDOL SELF LEARNING MATERIAL (SLM)

KamdarSahakari Mandal ... vs Ramkrishna Mills Ltd. on 7 April, 1994 The provisions of article 43A intended to herald industrial democracy and in the words of Krishna Iyer J., it marks the \"end of industrial bonded labour\". The Constitutional mandate is, therefore, clear that, the management of the enterprises should not be left entirely in the hands of suppliers of capital, but the workers should also be entitled to participate in it because in a socialist pattern of society the enterprise, which is the centre of economic area, should be controlled not only by suppliers of capital but also by labour, The workers, therefore, have a special place in a socialist pattern of society. They are not mere vendors of toil. They are not a marketable commodity to be purchased by the owners of capital. They are producers of wealth as much as capital. They supply labour without which the capital would be impeded and they are at the least equal partners with capital in the enterprise. It is in the light of the aforesaid Constitutional philosophy, that the scheme which is put forward by the society of workers is required to be approached. Specific of Purpose of Workers' Participation 1. It helps in managing resistance to change which is inevitable. For the growth and development of industry, changes have to be welcomed, otherwise the organization will stagnate and be left behind. If the need for change is jointly felt by all partners of production its acceptance can be high. Workers' participation in change strategy can facilitate acceptable solutions with a view to secure effective and smooth implementations of decisions. 2. Workers' participation can encourage communication at all levels. Since both partners of production are involved in the decision-making there will be fewer changes of distortion and/ or failure in communicating the decision. 3. Joint decision- making ensures the there will be minimum industrial conflict an economic growth can be free form distracting strife. 4. Workers' participation at the plant level can be seen as the first step to establishing democratic values in society at large. Objectives of Workers’ Participation in Management: The concept of Workers’ participation in management has its prime objectives such as economic, psychological, social, ethical and political. Economic objective is to increase workers productively, psychological objective aims at raise workers level of motivation, social objective is mutual respect and understanding among principal groups leading to better effort, while ethical objective is to make workers conscious of their democratic rights on their work place. The following are the objectives in detail. i) Increasing productivity of labour by improving cooperation between employer and employees. Principles of Personnel Management 18.3 Workers’ Participation in Management Productivity is sought to be increased by improving job satisfaction and industrial relations. ii) Purpose of participation is to ensure human dignity and to get the workers’ a respectable status in the society. iii) 183 CU IDOL SELF LEARNING MATERIAL (SLM)

Participation in management seeks to bring a change in the attitude of workers. Through participation they will consider themselves as an integral part of the industry. iv) Participation provides the employees an opportunity to express themselves and a sense of belonging, pride and accomplishment. In addition to the realisation of the objectives stated above, effective participation by workers will also result in: * a sense of involvement among workers in organisational purpose and activities. * a sense of inducement to contribute their best with a sense of commonness. * a sense of commitment to decisions to which they have a party Workers’ Participation Need and Importance: Workers’ participation in managerial is a highly complex and dynamic concept in both developed and developing countries. In modern days, due to the growth of large-scale enterprises, increase in work force, paternalistic philosophy and practice of information consultation, the importance of workers’ participation in management has increased gradually over a period of years. The growth of professionalism in industry, advent of democracy and the principle of social justice, transformation of traditional labour management relations have added new dimension to the concept of participative management. The following are the benefits of workers’ participation in management. i) It will facilitate better understanding and mutual trust between employer and workers. ii) Through participation, workers learn the problems of the industry and they can better understand their role. Participation results into better employee satisfaction and motivation. iii) It helps to reduce industrial disputes and promotes peace in industry. iv) People in general express resistance to change. It is due to fear of economic and social loss. But workers’ participation in management is a good to convence people about the need for change and get their acceptance for change. v) Participation of workers in management helps to promote industrial democracy, which is necessary for political democracy. vi) Participation in decision making helps the workers to think and take initiative. Workers talent and ability can be identified. Worker’s urge for self-expression is satisfied. Collective Bargaining: Collective bargaining is done periodically or on a continuing basis between management andworkers’ representatives on issues over which the interests of both parties are competitive, such as wage rates, bonus rates, working hours and number of holidays. The agreements arrived at are normally binding on both parties. The system of collective bargaining depends on the principle of balance of power, managements and the unions representing the workers are regarded as two separate power blocks that jointly negotiate the varied terms of employment with each other. 2. Works Committees: Under the Industrial Disputes Act 1947, every establishment employing 100 or more workers is required to constitute a works committee. Such a committee consists of equal number of representatives of employer and workers. The main purpose of works committees is to provide measures for securing and preserving amity and good relations between the employer and employees. 3. Joint Management Councils (JMCs): These are joint bodies consisting of the representatives of management and employees. The functions of JMCs may range from 184 CU IDOL SELF LEARNING MATERIAL (SLM)

decision-making on some issues to simply advising the management as consultative bodies. The decisions of these councils are advisory in nature through employers often implement the unanimous decisions of them. Working conditions, accident, prevention, indiscipline, absenteeism, training are the important matters before joint management councils. 4. Board Level: The basic function of the board is to ensure the growth of enterprise capital. If there is workers representative in the board, the capital formation and growth will be of secondary importance to him. His pre-occupation will be one of the negotiating workers special interest with the other members of the board. In India in Port Trust, Docklabour Boards etc, have workers representatives. The effectiveness of workers representatives at the Board depends upon his ability to participate in decision-making and his knowledge of the company affairs. 5. Workers’ Ownership in Enterprise: This method refers to complete control of management by workers through an elected Board and Workers’ Council. This system prevails in Yugoslavia. In this system two different sets of persons perform two district managerial and operative functions. Though workers have the option of influencing the decisions taken at the top level, yet, in actual practice, the Board and the top management team assume a really independent role in taking major policy decisions for the enterprises. 6. Suggestions Scheme: Under this method, workers’ are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed in the organisation. Workers can write their suggestions and put into the box. Periodically all the suggestions and put into the box. Periodically all the suggestions are scrutined by the suggestion committee and good suggestions are accepted for implementation and suitable rewards are given to the concerned workers. Workers’ Participation in India: Since Independence various schemes have been formulated by the Government of India to encourage workers’ participation in management. Elements of Participation The term “participation” has different meanings for different purposes in different situations. McGregor is of the view that participation is one of the most misunderstood idea that has emerged from the field of human relations. Keith Davis has defined the term “participation” as the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share responsibilities in them. This definition envisages three important elements in participation. Firstly, it means mental and emotional involvement rather than mere physical activity; secondly, participation must motivate a person to contribute to a specific situation to invest his own resources, such as initiative, knowledge, creativity and ingenuity in the objectives of the organisation; and thirdly, it encourages people to share responsibility for a decision or activity. Sharing of responsibility commits people to ensure the success of the decision or activity. Forms of Participation Different forms of participation are discussed below: 185 CU IDOL SELF LEARNING MATERIAL (SLM)

Collective Bargaining: Collective bargaining results in collective agreements which lay down certain rules and conditions of service in an establishment. Such agreements are normally binding on the parties. Theoretically, collective bargaining is based on the principle of balance of power, but, in actual practice, each party tries to outbid the other and get maximum advantage by using, if necessary, threats and counterthreats like; strikes, lockouts and other direct actions. Joint consultation, on the other hand, is a particular technique which is intended to achieve a greater degree of harmony and cooperation by emphasising matters of common interest. Workers prefer to use the instrument of collective bargaining rather than ask for a share in management. Workers’ participation in the U.S.A has been ensured almost exclusively by means of collective agreements and their application and interpretation rather than by way of labour representation in management. Works Councils: These are exclusive bodies of employees, assigned with different functions in the management of an enterprise. In West Germany, the works councils have various decision- making functions. In some countries, their role is limited only to receiving information about the enterprise. In Yugoslavia, these councils have wider decision-making powers in an enterprise like; appointment, promotion, salary fixation and also major investment decisions. Joint Management Councils and Committees: Mainly these bodies are consultative and advisory, with decision-making being left to the top management. This system of participation is prevalent in many countries, including Britain and India. As they are consultative and advisory, neither the managements nor the workers take them seriously. Board Representation: The role of a worker representative in the board of directors is essentially one of negotiating the worker’s interest with the other members of the board. At times, this may result in tension and friction inside the board room. The effectiveness of workers’ representative at the board depend upon his ability to participate in decision-making, his knowledge of the company affairs, his educational background, his level of understanding and also on the number of worker representatives in the Board. Workers Ownership of Enterprise: Social self-management in Yugoslavia is an example of complete control of management by workers through an elected board and workers council. Even in such a system, there exist two distinct managerial and operative functions with different sets of persons to perform them. Though workers have the option to influence all the decisions taken at the top level, in actual practice, the board and the top management team assume a fairly independent role in taking major policy decisions for the enterprises, especially in economic matters. Levels of Participation 186 CU IDOL SELF LEARNING MATERIAL (SLM)

Workers’ participation is possible at all levels of management; the only difference is that of degree and nature of application. For instance, it may be vigorous at lower level and faint at top level. Broadly speaking there is following five levels of participation: 1. Information participation: It ensures that employees are able to receive information and express their views pertaining to the matters of general economic importance. 2. Consultative participation: Here works are consulted on the matters of employee welfare such as work, safety and health. However, final decision always rests at the option of management and employees’ views are only of advisory nature. 3. Associative participation: It is extension of consultative participation as management here is under moral obligation to accept and implement the unanimous decisions of employees. 4. Administrative participation: It ensure greater share of works in discharge of managerial functions. Here, decision already taken by the management come to employees, preferably with alternatives for administration and employees have to select the best from those for implementation. 5. Decisive participation: Highest level of participation where decisions are jointly taken on the matters relation to production, welfare etc. is called decisive participation. Pre-requisites for Effective Participation The pre-requisites for the success of any scheme of participative management are the following: Firstly, there should be a strong, democratic and representative unionism for the success of participative management. Secondly, there should be mutually-agreed and clearly-formulated objectives for participation to succeed. Thirdly, there should be a feeling of participation at all levels. Fourthly, there should be effective consultation of the workers by the management. Fifthly, both the management and the workers must have full faith in the soundness of the philosophy underlying the concept of labour participation. Sixthly, till the participative structure is fully accepted by the parties, legislative support is necessary to ensure that rights of each other are recognised and protected. Seventhly, education and training make a significant contribution to the purposeful working of participative management. Lastly, forums of participation, areas of participation and guidelines for implementation of decisions should be specific and there should be prompt follow-up action and feedback. 187 CU IDOL SELF LEARNING MATERIAL (SLM)

12.3 SUMMARY  Workers’ participation in management is an essential ingredient of Industrial democracy. The concept of workers’ participation in management is based on Human Relations approach to Management which brought about a new set of values to labour and management.  Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision-making process of the organization.  Workers’ participation is also known as ‘labour participation’ or ‘employee participation’ in management. In Germany it is known as co-determination while in Yugoslavia it is known as self-management.  The International Labour Organization has been encouraging member nations to promote the scheme of Workers’ Participation in Management 12.4 KEYWORDS  Trade Union: “Trade Union” means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions: Provided that this Act shall not affect— (i) any agreement between partners as to their own business; (ii) any agreement between an employer and those employed by him as to such employment; or (iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft. 188 CU IDOL SELF LEARNING MATERIAL (SLM)

 Collective Bargaining: Collective bargaining is a procedure by which employment related disputes are resolved cordially, peacefully and voluntarily by settlement between labour unions and managements.  Collective Agreement: A collective agreement is an agreement between an employer or an employer’s organisation and an employees’ organisations, made and submitted for registration under this Law, concerning all or any of the following matters: the engagement of employees and the termination of employment, terms of employment, labour relations, and the rights and obligations of the organisations which are parties to the agreement. 12.5 LEARNING ACTIVITY 1. What does Workers’ Participation in Management mean? 2. Define WPM. 3. What are the pre-requisites for Effective Participation? 4. Explain the levels of participation. 5. What is collective Bargaining? 12.6 UNIT END QUESTIONS DESCRIPTIVE QUESTIONS: LONG ANSWERS: 1. Explain the different forms of participation 2. What are the elements of Participation? 3. State the Objectives of Workers’ Participation in Management: 4. State the specific purpose of workers’ participation. 5. What are the Objectives of workers’ participation in Management. 6. State the main implications of workers’ participation in management as summarized by ILO 7. Explain the concept of workers’ participation in Management? SHORT ANSWERS: 1. What is the role of Work Councils? 189 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Explain the role of Joint Management Councils and Committees 3. Explain Informative Participation 4. Explain Consultative Participation 5. Explain Associative Participation 6. Explain Administrative Participation 7. Explain Decisive participation. MULTIPLE CHOICE QUESTIONS: 1. Which of the following is not a mode of Workers’ Participation in Management? (A) Works Committee (B) Employee Stock Option Plan (C) Joint Management Council (D) Joint Committee for Policy Formulation 2. Which of the following is not a bipartite body? (A) Works Committee (B) Canteen Committee (C) Safety Committee (D) Standing Labour Committee Which one of the following is not a tripartite body? (A) Indian Labour Conference (B) Standing Labour Committee (C) Joint Management Council (D) Minimum Wages Advisory Board Under whose regime as Union Labour Minister, majority of codes were evolved by the Central Government? (A) V.V. Giri (B) Guljarilal Nanda (C) Khandubhai Desai (D) Bindheswari Dubey During whose tenure as Prime Minister, the Economic Reforms in India were initiated? (A) Smt. Indira Gandhi (B) Rajiv Gandhi (C) Dr. Manmohan Singh (D) Dr. P.V. Narasimha Rao 190 CU IDOL SELF LEARNING MATERIAL (SLM)

ANSWERS: 1-B, 2-D, 3-C, 4-B. 5-D 12.7 REFERENCES www.articlelibrary.com www.blogipleaders.in www.lawsikho.com WORKERS PARTICIPATION IN MANAGEMENT- CH. S. DURGA PRASAD. UNIT – 13 SCHEMES STRUCTURE 13 Learning Objectives 13.7 Introduction 13.8 Schemes of workers’ participation in management in India and their evaluation 13.9 Summary 13.10 Keywords 13.11 Learning Activity 13.12 Unit End Questions 13.13 References 13.0 LEARNING OBJECTIVE 191 After studying this lesson, the student is able to understand: * the concept of Workers’ Participation in Management, * the various forms of Workers’ Participation in Management * the present state of Workers’ Participation in Management in India CU IDOL SELF LEARNING MATERIAL (SLM)

13.1 INTRODUCTION Workers’ Participation in Management is crucial for better results in an organization. It helps in developing a technology to resolve conflict and to achieve constructive cooperation among the partners of production. Workers’ Participation in Management will facilitate good channels of communication, give scope for personal identity and self respect, enhance employee morale, reduce the cost of labour turnover, promotes a sense of job security and social justice. Effective implementation of participative management is essential for achieving higher productivity and the industrial progress as well.13.2 schemes of workers’ participation in management in india and their evaluation WPM is the mental and emotional involvement of workers in a good situation which encourage them to identify themselves with group goals and share responsibilities for them. ‘Workers’ participation in management’ offers a decent and respectable platform for workers to share the decision-making powers with management. It helps workers to look at the arena from a place of pride and importance. It helps them to know more about things that affect their daily lives. It empowers them to see the ‘big picture’ in a better manner. Workers Participation in Management (WPM) of an enterprise is undertaken with a view to ensure increased productivity for the larger benefit of the enterprise, the employees and the community, to give the workers a better understanding of their role in the working and of the process of production and to satisfy the workers’ demand for self-expression, leading to industrial peace, better relations and increased production. Some of the forms of workers participation prevalent in India are:- 1. Works committees 2. Joint management councils 3. Joint councils 4. Unit councils 5. Plant councils 6. Shop councils 7. Workers’ representative on the Board of Management 8. Workers’ participation in share capital 9. Participation through quality circles 10. Participation through Collective Bargaining. Additionally, there are eleven forms of workers participation in corporates:- 1. Participation at the Board Level 2. Participation through Ownership 3. Participation through Complete Control 4. Participation through Works Councils 5. Participation through Joint Committee 6. Participation through Collective Bargaining 7. Participation through Job Enlargement 8. Participation through Suggestions Schemes 9. Participation through Quality Circles 10. Empowering Teams 11. Total Quality Management (TQM). Forms of Workers Participation in Management (with Prevalent Schemes in India) Forms of Workers Participation – Prevalent in India In the country the workers’ participation in management scheme is vogue in three forms, viz.: 192 CU IDOL SELF LEARNING MATERIAL (SLM)

(i) The works committees (set up under the Industrial Disputes Act, 1947); (ii) The joint management councils (set up as a result of the Labour- Management Co- operation Seminar, 1958); and (iii) The scheme for workers’ Representative on the Board of Management (under the Management and Miscellaneous Scheme, 1970) on some public and private sector enterprises, including industrial undertakings and nationalised banks. Since July 1975, a two-tier participation model, namely, the shop council at the shop level and to joint council at the enterprise level, were introduced. On 7th January 1977, a new scheme of workers’ participation in management in commercial and service organisations in public sector undertakings was launched with the setting up of unit councils. On 30th December 1983, a comprehensive scheme for workers’ participation in public undertakings was introduced. It was decided that workers would be allowed to participate at the shop level, the plant level and the board level. As the scheme of shop council and workers’ representation on the board of directors were already functioning, greater emphasis was placed on the setting up of unit councils. At present the following participative forms are prevalent in India: 1. Works committees, suggestion schemes; 2. Joint management councils; 3. Joint councils; 4. Unit councils; 5. Plant councils; 6. Shop councils; 7. Workers’ representative on the Board of Management; 8. Workers’ participation in share capital; 9. Participation through quality circles; 10. Participation through Collective Bargaining. Form # 1. Work Committees: The Industrial Disputes Act, 1949 provides for the setting up of works committees as a scheme of workers’ participation in management which consist of representatives of employers and employees. The Act provides for these bodies in every undertaking employing 100 or more workmen. The aim of setting up of these bodies is to promote measures for maintaining harmonious relations in the work place and to sort out differences of opinion in respect of matters of common interest to employers and employees. The Bombay Industrial Relations Act, 1946 also provides for these bodies, but under the provisions of this Act they can be set up only in units which have a recognised union and they are called joint committees. The workers directly elect their representatives where there is no union. Functions: 193 CU IDOL SELF LEARNING MATERIAL (SLM)

These works committees/joint committees are consultative bodies. Their functions include discussion of conditions of work like lighting, ventilation, temperature, sanitation etc., and amenities like water supply for drinking purposes, provision of canteens, medical services, safe working conditions, administration of welfare funds, educational and recreational activities, and encouragement of thrift and savings. It shall be the duty of the works committee to promote measures for securing and preserving amity and good relations between the employers and workmen and to comment upon matters of their common interest or concern and endeavour to reconcile any material difference of opinion in respect of such matters. Structure: The works committees have, as office bearers, a President, a Vice-President, a Secretary and a Joint Secretary. The President is a nominee of the employer and the Vice-President is the Workers’ representative. The tenure of these bodies is two years. The total strength of these bodies should not exceed 20. The employees’ representatives have to be chosen by the employees. These committees functioned actively in some organisations like Tata Iron and Steel Company, Indian Aluminium Works at Belur, and Hindustan Lever. In all these, the managements have evolved joint committees independently of the statutory requirements. Suggestions Scheme: Allows employees to express their views and suggestions on improving productivity, reduce wastages, energy saving, safely measures. Rewards are given for accepted suggestions. This procedure enables the management, to involve workers in active cooperation on matters of mutual interests and builds a relationship. Form # 2. Joint Management Councils (JMCs): The Second Five Year Plan recommended the setting up of joint councils of management consisting of representatives of workers and management. The Government of India deputed a study group (1957) to study the schemes of workers participation in management in countries like U.K., France, Belgium and Yugoslavia. The report of the study group was considered by the Indian Labour Conference (ILC) in its 15th session in 1957 and it made certain recommendations: (1) That workers’ participation in management schemes should be set up in selected undertakings on a voluntary basis. (2) A sub-committee consisting of representatives of employers, workers and government should be set up for considering the details of workers’ participation in management schemes. This committee should select the undertakings where workers’ participation in management schemes would be introduced in the first stage on an experimental basis. Objectives: The objectives of Joint Management Councils are as follows: (i) To increase the association of employers and employee thereby promoting cordial industrial relations; 194 CU IDOL SELF LEARNING MATERIAL (SLM)

(ii) To improve the operational efficiency of the workers; (iii) To provide welfare facilities to them; (iv) To educate workers so that they are well equipped to participate in these schemes; and (v) To satisfy the psychological needs of workers. A tripartite sub-committee was set up as per the recommendations of Indian Labour Conference which laid down certain criteria for selection of enterprises where the JMCs could be introduced. They are: (i) The unit must have 500 or more employees; (ii) It should have a fair record of industrial relations; (iii) It should have a well organised trade union; (iv) The management and the workers should agree to establish JMCs; (v) Employers (in case of private sector) should be members of the leading employers’ organisation; and (vi) Trade unions should be affiliated to one of the Central federations. It was observed by the sub-committee that if the workers and employers mutually agree they can set up JMCs even if these conditions are not met. The sub-committee also made recommendations regarding their composition, procedure for nominating workers’ representatives, the membership of JMCs etc. The details of these aspects have to be worked out by the parties themselves. A draft model was drawn up regarding the establishment of JMQs. The sub-committee was later reconstituted as the “Committee on Labour-Management Co-operation” to advice on all matters pertaining to the Scheme. Form # 3. Joint Councils: At every division/region/zonal level, or, as may be considered necessary in a particular branch of an organisation/service employing 100 or more people, there shall be a joint council. The main feature of the joint council shall be: (i) Each organisation/service shall decide the number of councils to be set up for different types of services rendered by it in consultation with the recognised unions or workers as the case may be, in the manner best suited to the local conditions. (ii) Only such persons who are actually engaged in the organisation/service shall be members of the joint council. Each organisation/service may decide the number of members in the manner suggested in item(s) but the membership should not be unwieldy. (iii) The tenure of the council shall be two years. If, however, a member is nominated in the mid-term of council to fill a casual vacancy, the member nominated shall continue in office for the remaining period of the council’s tenure. (iv) The chief executive of the organisation/service or of its divisional/ regional/ zonal branch, as the case may be, shall be the chairman of the joint council. There shall be a vice- chairman who will be chosen by the worker- members of the council. 195 CU IDOL SELF LEARNING MATERIAL (SLM)

(v) The joint council shall appoint one of its members as its Secretary who will prepare the agenda, record the minutes of the meetings and report on the implementation of the decisions arrived at every meeting. The management shall provide the necessary facilities within the premises of the organisation/ service for the efficient discharge of his functions by the secretary. (vi) The joint council shall meet whenever considered necessary, but at least once in a quarter. Every meeting shall review the action taken on the decisions of earlier meetings for an effective follow-up action. (vii) Every decision of the joint council shall be on the basis of consensus and not by a process of voting; it shall be binding on the management and workers and shall be implemented within one month, unless otherwise stated in the decision. Functions of the Joint Councils: The following shall be functions of the joint council: (i) The settlement of matters which remain unresolved by unit level councils and arranging joint meetings for resolving inter-council problems. (ii) Review of the working of the unit level council for improvement in the customer service and evolving for the best way of handling of goods traffic, accounts, etc. (iii) Unit level matters which have a bearing on other branches or on the enterprise as a whole. (iv) Development of skills of workers and adequate facilities for trading. (v) Improvement in the general conditions of work. (vi) Preparation of schedules of working hours and holidays. (vii) Proper recognition and appreciation of useful suggestions received from workers through a system of rewards. (viii) Discussion on any matter having a bearing on the improvement of performance of the organisation/service with a view to ensuring better customer service. Form # 4. Unit Councils: Encouraged by the success of the Joint Councils scheme in manufacturing and mining units, a new scheme of workers’ participation in management in commercial and service organisations in the public sector, having large-scale public dealings, was announced on 5th January 1977. The scheme envisaged the setting-up of unit councils in units employing at least 100 persons. The organisations include hotels, restaurants, hospitals, air, sea, railway and road transport services, ports and docks, ration shops, schools, research institutions, provident fund and pension organisations, municipal and milk distribution services, trust organisations, all financial institutions, banks, insurance companies, posts and telegraph offices, the Food Corporation, State Electricity Boards, Central Warehousing, State Warehousing Corporations, State Trading Corporation, Mines and Minerals Trading Corporation, irrigation systems, tourists organisations, establishments of public amusement and training organisations of Central and state governments. 196 CU IDOL SELF LEARNING MATERIAL (SLM)

Features of the Scheme: The main features of the scheme are: (i) A unit level council, consisting of representatives of workers and management of the organisation/service, employing 100 or more workers, may be formed in each unit to discuss day-to-day problems and find solutions; but, wherever necessary a composite council may be formed to serve more than one unit, or a council may be formed department-wise to suit the particular needs of an organisation/service. (ii) Every unit council shall consist of an equal number of representatives of the management and workers. The actual number of members should be determined by the management in consultation with the recognised union, registered unions or workers in the manner best suited to the local conditions obtaining in a unit or an organisation; but their total number may not exceed 12. It would be necessary to nominate suitable and experienced workers from various departments, irrespective of their cadre, affiliation or status, and not trade union functionaries who may not be actually working in the unit. (iii) The management’s representatives should be nominated by the management and should consist of persons from the unit concerned. (iv) The management shall, in consultation with the recognised union or the registered union or workers as the case may be, determine in the manner best suited to local conditions, the number of unit councils and the departments to be attached to each council of the organisation/service. (v) All the decisions of a unit 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. (vi) Every decision of a unit council shall be implemented by the parties concerned within a month, unless otherwise stated in the decisions itself. (vii) The management shall make suitable arrangements for the recording and maintenance of minutes of meetings and designate one of its representatives as a secretary for this purpose, who shall also report on the action taken on the decisions at subsequent meetings of the council. (viii) Such decisions of a unit council as have a bearing on another unit of the organisation/service as a whole shall be referred to the joint council for consideration and decision. (ix) A unit council once formed shall function for a period of three 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 period of the term of the council. (x) The council shall meet as frequently as is necessary but at least once a month. (xi) The chairman of the council shall be a nominee of the management. The worker members of the council shall elect a vice-chairman from amongst themselves. Functions of Unit Council: 197 CU IDOL SELF LEARNING MATERIAL (SLM)

The main functions of the unit councils are: (i) To create conditions for achieving optimum efficiency, better customer service in areas where there is direct and immediate contact between workers at the operational level and the consumer, higher productivity and output, including elimination of wastage and idle time, and optimum utilisation of manpower by joint involvement in improving the work system; (ii) To identify areas of chronically bad, inadequate or inferior service and to take necessary corrective steps to eliminate the contributing factors and evolve improved methods of operation; (iii) To study absenteeism problem and recommend steps to reduce it; (iv) To eliminate pilferage and all forms of corruption and to institute a system of rewards for this purpose; (v) To suggest improvements in the physical conditions of work, such as lighting, ventilation, dust, noise, cleanliness, internal layout, and the setting up of customers’ service points; (vi) To ensure a proper flow of two-way communication between management and workers, particularly about matters relating to the services to be rendered, fixation of targets of output and the progress made in achieving these targets; (vii) To recommend and improve safety, health and welfare measures to ensure efficient running of the unit; (viii) To discuss any other matters which may have a bearing on the improvement of performance in the unit for ensuring better customer service. Form # 5. Plant Council: The plant council is formed in pursuance of the recommendations of the second meeting of the Group on Labour at New Delhi on 23rd September 1985. The scheme is applicable to all Central public sector undertakings, except those which are given specific exemption from the operation of the scheme by the government. Functions of Plant Council: The plant council shall normally deal with the following matters: (a) Operational Areas: (i) Determination of productivity schemes taking into consideration the local conditions; (ii) Planning, implementation, and attainment and review of monthly targets and schedules; (iii) Material supply and preventing its shortfall; (iv) Housekeeping activities; (v) Improvement in productivity in general and in critical areas in particular; (vi) Quality and technological improvements; (vii) Machine utilisation, knowledge and development of new products; (viii) Operational performance figures; (ix) Encouragement to and consideration of the suggestion system; (x) Matters/problems not sorted out at the shop floor level or those that concern more than one shop; and 198 CU IDOL SELF LEARNING MATERIAL (SLM)

(xi) Review of the working of shop level bodies. (b) Economic and Financial Areas: (i) Profit and loss statements, balance sheet; (ii) Review of operating expenses, financial results, and cost of sales; (iii) Enterprise performance in financial terms, labour and managerial cost, and market conditions, etc. (c) Personnel Matters: (i) Matters relating to absenteeism; (ii) Special problems of women workers; and (iii) Initiation and administration of workers’ programmes. (d) Welfare Areas: (i) Implementation of welfare schemes, such as medical benefits, housing and transport facilities; (ii) Safety measures; (iii) Township administration; and (iv) Control of the habits of gambling, drinking and indebtedness among the workers. (e) Environmental Areas: (i) Environmental protection; and (ii) Extension activities and community development projects. Form # 6. Shop Councils: Functions of Shop Councils: To achieve increased production, productivity and over-all efficiency of the shop department, the shop council should attend to the following matters: (i) To assist management in achieving monthly/yearly production targets; (ii) To improve production, productivity and efficiency, including elimination of wastage and optimum utilisation of machine capacity and manpower; (iii) To specially identify areas of low productivity and take the necessary corrective steps at shop level to eliminate relevant contributory factors; (iv) To study absenteeism in the shop/department and recommend steps to reduce it; 199 CU IDOL SELF LEARNING MATERIAL (SLM)

(v) To suggest safety measures; (vi) To assist in maintaining general discipline in the shop/department; (vii) Suggest improvements in physical conditions of working — lighting ventilation, noise, dust, etc., and reduction of fatigue; (viii) Suggest welfare and measures to be adopted for efficient running of the shop/department; (ix) To ensure proper flow of adequate two-way communication between the management and the workers, particularly on matters relating to production schedules and progress in achieving the targets that have been set; (x) Suggest technological innovations in the shop; (xi) To assist in the formulation and implementation of qualify improvement programme; (xii) To determine and implement the work system design; (xiii) To formulate plans for multiple skill development programme; (xiv) To assist in the implementation of cost reduction programme; (xv) To supervise the group working system; (xvi) To ensure a periodic review of the utilisation of the critical machines; A report of the Ministry of Labour indicates that the scheme of workers participation in management is in operation in as many as 162 Central public sector undertakings. Some of these have claimed that participative management is “working smoothly” at the shop floor level. These undertakings include the Steel Authority of India Ltd. (SAIL), the Rourkela Steel Plant, Bharat Heavy Bectricals Ltd. (BHEL), Cement Corporation of India, Mineral Exploration Corporation, Hindustan Photofilms Manufacturing Company, and Bharat Gold Mines, Oil India and the National Textile Corporation. One undertaking under the Department of Agriculture and Co-operation, five under the Department of Fertilizers, two under the Department of Atomic Energy, two under the Ministry of Commerce, two under the Department of Communications, and eight under the Department of Defense Production are reported to have claimed that they have implemented the participative management scheme either at the shop floor or plant level. 200 CU IDOL SELF LEARNING MATERIAL (SLM)


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