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

The Department of Coal has claimed that NECL, SCL, NLCL, WCL, CCL, ECL and BOCL have implemented the scheme of workers’ participation in management. In the Department of Power, the National Hydro-Electrical Power Corporation and the National Thermal Power Corporation have implemented it. The Union Ministry of Industry has put the participative management scheme into operation in five units under the Department of Chemicals and Petro-chemicals and fifteen units under the Department of Industrial Development. The Ministry of Petroleum is also reported to be operating the participative management scheme in Madras Refinery, Oil and Natural Gas Commission and Indian Oil Blending Ltd., while the Ministry of Steel and Mines has claimed to have introduced the scheme in five companies under the Department of Mines and six under the Department of Steel. According to the Department of Surface Transport, six companies have introduced the schemes, including the Shipping Corporation of India, Hindustan Shipyard and the Delhi Transport Corporation (DTC). The Ministries of Welfare and Science and Technology, too, have one undertaking each where the scheme is in operation. A noteworthy achievement in this regard is that of the Textile Ministry. As many as eleven textile corporations in Andhra Pradesh, Bihar, Delhi, Gujarat, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal, and the Cotton Corporation India have implemented the scheme of workers’ participation in management. The Department of Public Enterprises has furnished a list of nine undertakings which have adopted the participative management culture. These include BHEL, Bharat Heavy Plates and Vessels, Bharat Pumps and Compressors, Tungabhadra Steel Products, Triveni Structural, HMT, Maruti Udyog and Burn Standard Co. Ltd. “The Labour Ministry claims that among the 94 public enterprises which have implemented the scheme, it is working quite smoothly at least in the coal fields. But according to some other sources, this claim is far from true. The sources say that in the last 10 years, when the Coal department introduced the participation forum in collieries to begin with, the experiment ended in a fiasco.” 201 CU IDOL SELF LEARNING MATERIAL (SLM)

Form # 7. Workers Representation on Board of Management: On the recommendations of the Administrative Reforms Commission made in its report on public sector undertakings, the Government of India accepted, in principle that representatives of workers should be taken on the Board of Directors of public sector enterprises. Functions under the Scheme: The employees’ representative/Worker Director participates in all the functions of the Board. Besides this, they also review the working of shop and plant councils and takes decisions on matters not settled by the Council. Working of Schemes in Indian Industries: A few public undertakings in the country have introduced the scheme on a somewhat experimental basis. A great enthusiasm has been shown by the banking industry. One director on the Board of each nationalised bank is appointed by the Central Government from among the employees of that bank, who is a worker and is chosen out of a panel of three employees furnished to the government by the representative union within the prescribed period. Workers’ representatives have been appointed on the Boards of Management of a few public undertakings on a trial basis in Hindustan Antibiotics Ltd., the Hindustan Organic Chemicals Ltd., the National Coal Mines Development Corporation has always had a nominated workers’ representative on the Board. In the Port Trusts, there have always been two workers’ representatives as Trustees or Commissioners, while on the Dock Labour Board, the number of workers’ representatives has been more. BHEL, National News Print and Papers Mills (Gujarat), National Textile Mills (South Maharashtra, West Bengal, Assam, Bihar and Orissa), and the Rashtriya Chemicals and Fertilizer Ltd., have trade union leaders on the Boards of Directors of these undertakings. For want of extensive empirical research in the working of the scheme, not much can be said about the effectiveness of this schemes. A great deal of evaluative theoretical writing on the subject has questioned the advantage of the implementation of the scheme. 202 CU IDOL SELF LEARNING MATERIAL (SLM)

It has been argued that when, in the absence of healthy Labour management relations, schemes such as the JMCs, WCs and shops councils have failed miserably it is futile to think of the scheme for the representation of workers on the Board of Management of an enterprise, which calls for a higher degree of participation. A study of the scheme in the nationalised banks conducted by the National Labour Institute has shown that it has failed in fostering a congenial relationship based on mutual trust, respect, understanding and co-operation. It has also been observed that it has had little impact on industrial relations or on decision making. Form # 8. Workers’ Participation in Share Capital: The Sachar Committee had, in its report to the government, observed- “Quite a majority (was) in favour of the suggestion that, in all their future issues of shares, the companies should reserve a portion of their new shares, say about 10% to 15%, exclusively for the workers, called the workers shares. These shares, in the first instance, must be offered to the employees of the company; failing that, they should be offered to the existing shareholders or the public. For that purpose, Section 81 of the Act should be suitably amended. Section 77 of the Act should also be amended, permitting companies to give to the employees a loan up to 12 months’ salary or wages, not exceeding Rs.12,000, for the purchase of the shares of the company.” This scheme, however, has not found favour with the industries in India. Form # 9. Participation through Quality Circles: Quality circle is an association of employees voluntarily formed to discuss with employer representatives, matters of interest to both the workers and employer. Each of the department in the company can have a QC where members are trained in problem solving techniques. These techniques include brain storing part to analysis, quality control, cause and effect analysis and other means. Quality circles have worked successfully in some organisations and the employer has benefited with valuable ideas and suggestions coming from the shop floor workers and directly from employees in improving methods of work, improving quality, cost savings, wastage reductions. 203 CU IDOL SELF LEARNING MATERIAL (SLM)

Employees are involved in decision making which make it easier to implement accepted suggestions. These circles encourage the employees to participate and in arriving at conclusions, to be implemented at the worksite which result in improving productivity and quality. In Indian industries there are examples of such circles working satisfactorily and in some companies they have not produced desired results. On the positive side the workers feel confident that they are being recognised and on the negative side the unions feel that QCs are means of getting more work through the employees. These are voluntary associations and hence once employees participate, they make useful suggestions. Collective bargaining process confers on workers right to negotiate with the employers on most important matters like terms of employment contract, wage levels, gradation, working hours, welfare treasury facilities to be provided and levels of performance standards and benefits which employers can extend. In this process both the parties come together and negotiate appropriate terms including wages, leave, incentive bonus, welfare amenities (besides legal provisions) and other terms for employees. When relations with unions and workers are cordial this is an effective way of participation in creating mutual confidence and trust and understanding. Form # 10. Participation through Collective Bargaining: Collective bargaining process confers a workers right to negotiate with the employers on most important matters like terms of employment contract, wage levels, gradation, working house, welfare measuring facilities to be provided and levels of performance standards and benefits which employees can extend. In this process, both the parties come together and negotiate appropriate terms including welfare amenities (besides legal provisions) and other terms for employer when relations with unions, and workers are cordial this is effective way of participation in creating mutual confidence and trust and understanding. Evaluation of Workers’ Participation in Management Scheme: The progress of working of the scheme was reviewed by tripartite committee on workers’ participation in management in its meeting held on September 20, 1994. It remarked that 66 204 CU IDOL SELF LEARNING MATERIAL (SLM)

“out of 236 Central public sector undertakings which have been monitored, 108 enterprises have implemented the 1983 scheme or earlier schemes of the Ministry of Labour at the shop floor and plant levels, 63 enterprises have their own participative forums, 23 enterprises could not implement the scheme due to problems regarding method of representation of workers and 24 enterprises did not consider the scheme suitable as they have non- manufacturing units and employ only a few employees. The remaining 18 enterprises were in the process of being set up. The Committee also considered the provisions of the Participation of Workers in Management Bill, 1990 and the notices received for amendments to the Bill in the context pi the changes that have taken place in industrial, trade and economic policies.” In India though the concept of participative management is supported in principle by all the parties government, employees and employers no serious interest has been shown in it, except, of course, by the government. From time to time, the government has come out with a variety of schemes which best serve the national interest; but it is disheartening to note that all the schemes have failed miserably. This is evident from the following observations. “The workers’ representatives are more concerned with the enlargement of their amenities and facilities and with the redressal of grievances, higher wages, better conditions of work and security of service than with such larger problems as reducing the rate of absenteeism, increasing productivity, effecting economies in the operations of the enterprise and suggesting better methods for a more efficient utilisation of plant and equipment. In a majority of cases, the joint management councils are not functioning satisfactorily.” “Employers do not take the joint management councils into their confidence in regard to amendments of Standing Orders, the introduction of new and better methods of production and manufacturing processes, redeployment of men and machines, and reduction in, or cessation of, operations despite their agreement that they would do so. The communication with, or the practice of giving information to, the workers has not been adequately developed; and although the management has agreed to transfer some administrative responsibilities to joint management councils, there has been no such transfer in actual practice.” 205 CU IDOL SELF LEARNING MATERIAL (SLM)

A variety of factors that have contributed to the failure of the scheme have been discussed in the following paragraphs: I. Ideological Differences between Employees and Employers Regarding the Degree of Participation: There is a fundamental difference between employees and employers regarding the level of participation by workers. The employers are of the opinion that workers’ participation at the Board level should be introduced gradually in stages, while the employees feel that the scheme should be simultaneously introduced at all levels. The result is that the various schemes have been accepted half-heartedly. II. Failure to Imbibe the Spirit of Participation by the Parties: One of the major factors responsible for its failure is the inability of the parties to imbibe the spirit of participation. The employer looks upon bipartite bodies (the shop council, plant council and JMCs) as substitutes for trade unions, while employees regard it as their rival. This attitude has generated hostility, apathy, and at times even jealousy, among them, with the result that the spirit of participation has suffered death ab initio. III. Multiplicity of Participative Forms: The existence of a number of joint bodies the works committee, joint-management council, shop council, unit council, plant councils, canteen committee, safety committee, suggestion committee etc., each with an ill-defined role and functions has often created confusion, duplication of efforts and resulted in a waste of time and energy. The resultant effect has been the improper functioning of the scheme. IV. Lack of Strong Trade Unionism: In comparison to strong trade unionism in such developed countries as the USA, UK, Germany, Japan, etc., the trade union movement in our country is fragmented, poorly organised, raven by intense inter- union rivalry, and coloured and by various political philosophies. In such a state of affairs, it is futile to think of effective workers’ participation in management through their own elected representatives. V. Unhappy Industrial Relations: 206 CU IDOL SELF LEARNING MATERIAL (SLM)

At no point of time in the economic history of the country the industrial climate has been free from labour unrest. It is a pity that the government has imposed participative schemes on industries in such a climate where, for its anticipated result has been its total failure. In fact, the scheme has turned out be a fiasco from its very inception. VI. Illiteracy of Workers: The workers’ representatives on various participative bodies are, by and large, illiterate. In the absence of adequate knowledge on their part of the concept, rationale and benefit of the participative schemes, they are unable to actively participate meaningfully in their working. The result is that either they fail to arrive at any decision or bank on outsiders for guidance who invariably persuade them not to expect that forum to solve their problems. This fact is reflected in workers’ inability to accept the scheme. VII. Non-Co-Operative Attitude of the Working Class: The litigation-minded workers’ representatives on the various participative forums quite often raise those issues which are beyond the scope of those forums or bodies. This attitude tempts employers not to use the schemes while dealing with workers’ problems. This fact, therefore, has had a dampening effect on the working of the scheme. VIII. Delays in the Implementation of the Decisions of Participative Bodies: One of the major handicaps in the effective working of the participative scheme is that there are inordinate delays in the implementation of the decisions arrived at by the various participative forums. This often generates apathy or dissatisfaction and frustration among the workers a fact which invariably leads to their waning interest in the participative scheme. Conditions Necessary for Effective Working of the Scheme: Although the participative culture has taken root in some enterprises in the private and public sector, however, its overall progress is not very much encouraging. Therefore, attempts should be initiated to provide necessary momentum to the scheme. Herein a few measures are listed, which needs consideration in making the scheme more meaningful: 207 CU IDOL SELF LEARNING MATERIAL (SLM)

(i) One of the important factors in the success of the scheme is that the work environment must be congenial enough to motivate workers to give wholehearted co-operation with a view to ensuring its efficient operation. An environment of industrial conflicts flowing from bad interpersonal relations will generate frustration and alienation among workers, which will have a dampening effect on the working of system. Therefore, attempts be made to cultivate a healthy work environment. (ii) There must be total identity of approach on the part of both the parties to the working of schemes at different levels. There must be complete agreement on the manner in which the various participative schemes should function. Once the areas are clearly spelt out the side- tracking the main questions is avoided, the scheme can yield desirable results. (iii) Both the workers and management must have complete faith in the efficacy of the system and should pool their talents and resources, and demonstrate their will to work for the realisation of their goals. (iv) The concept of labour participation in management must be given a wide publicity so that the idea of participation may take root in the minds of those who are to implement the scheme. Necessary lectures, discussions, film shows, conferences, seminars and other methods of propaganda may be fruitfully employed to create enthusiasm about the scheme among the management personnel as well as the workers. (v) The participation should be real. The issues related to major strategies, product diversification; the evaluation of costs, the development of human resources and the expansion of markets should also be brought under the jurisdiction of the participating bodies. These bodies should meet frequently and their decisions should be strictly adhered to and implemented in time. (vi) The objectives to be achieved should not be unrealistically high, vague or ambiguous but be achievable, clear and thought to all focal participants. (vii) The form, coverage, extent and levels of participation should grow in response to specific environment capacity and interest of the parties concerned. (viii) The system of participation must be complementary to the collective bargaining process. 208 CU IDOL SELF LEARNING MATERIAL (SLM)

(ix) The participative schemes should be evolutionary. Therefore, to begin with, each should be introduced at the shop floor and plant levels. Till these schemes get going the scheme of workers’ involvement at the Board level should not be undertaken. (x) The workers’ participation scheme on order to be effective, must be based on mutual trust and confidence. Therefore, attempts to enforce it by law or compulsion would defeat its basic purpose. (xi) The trade union movement should be developed on sound lines, so that the workers may enjoy real involvement in the various participative forums. The proliferation of unions in industries should be restricted by legislative means. (xii) The programmes for training and education should be developed comprehensively. For this purpose, “labour education should be concerned with not the head alone, not the heart alone, not the hands alone, but with all the three- it should make workers think, feel and act.” Labour is to be educated to enable them to think, clearly, rationally and logically; to enable them to feel deeply and emotionally; and to enable them to act in a responsible way. The management at different levels also needs to be trained and oriented to give it a fresh thinking on the issues concerned. (xiii) There must be a free flow of information between labour and management throughout the enterprise. This will help both labour and management to work in co-operation and not at cross-purposes and constructively, too, in the attainment of enterprise goals, for distrust and suspicion, which often puts obstacles in the effective working of the participative scheme, will go by the board. (xiv) The decisions taken at different participatory forums must be sincerely carried out in a stipulated period of time so as to generate faith in the utility of the scheme. (xv) The management should design a proper system so that the effectiveness of the scheme may be assessed periodically, and, if required, the necessary changes may be made to make the scheme more beneficial for all the parties. Forms of Workers Participation: 209 CU IDOL SELF LEARNING MATERIAL (SLM)

The form or the way in which workers can and do participate in management varies a great deal. To some extent, this variation is related to the differences in management, the issues or areas on which participation is sought, and the pattern of labour-management relations. It may also vary from organisation to organisation, depending upon the level of power or authority enjoyed by managers at different levels in different types of organisations. The specific way in which different forms of participation may take place also varies from situation to situation. There may be formal organisational structures, such as the Works Committee, Plant Councils, Shop Councils, Production Committee, Safety Committee, Joint Management Council, Canteen Committee, P.F. Management Committee, etc. The participation may also take place through informal mechanisms and forums. A supervisor or a foreman may consult a worker before taking a particular decision in which the latter is interested, such sis granting or rejecting an application for leave, allotment of work on overtime, transfer from one section to another. If workers participate in management either through formal mechanisms or through informal procedures, it should be considered as an instance of participative management. Whatever form it may take, it is necessary, for the effective functioning, to promote the interests of both the parties’ management and labour. The managements’ primary interest lies in improving productivity, reducing cost, and thus improving profitability. The workers’ interest lies in improving their earnings. When earnings improve through sharing gains in productivity, apparently a harmony of interests is promoted. If participation is to be effective as a process or device, it should be integrated with a scheme of improving productivity and gain-sharing. The participation may be ascending participation, where workers are given an opportunity to influence managerial decisions at higher levels through their elected representatives to Work Councils or the Board of the Enterprise (i.e., integrated participation). In descending participation, they may be given more power to plan and make decisions about their own work (delegation and job enrichment). They may participate through collective bargaining (i.e., disjunctive participation). They may also participate informally when a 210 CU IDOL SELF LEARNING MATERIAL (SLM)

manager adopts a participative style of supervision, or when workers employ unofficial restrictive practices. The important forms in which workers can participate in management are- collective bargaining, joint administration, joint decision-making, consultation and information sharing. The issues over which the interests of workers and management are competitive, such as employment conditions, wage rates, working hours, and the number of holidays, are the usual areas for collective bargaining. On the other hand, the issues over which the parties are equally concerned, such as the efficient management of provident fund money, canteen, annual sports, workers’ welfare facilities, etc., may form the subject of joint administration, joint decision-making or consultation. The difference between joint administration, joint decision-making and consultation is important, but narrow. In joint administration, workers and management share the responsibility and power of execution. In joint decision-making, even though two groups participate in deciding the policies, execution is generally effected by the management. In the joint consultative form, the management only consults workers their desires, opinions, ideas, suggestions; but retains to itself the authority and responsibility of making decisions and executing them. Forms of Worker’s Participation – 11 Forms of Workers Participation at Different Levels There are eleven forms of workers participation in corporates. We detail them as under: 1. Participation at the Board Level: A representation of workers on the board would, usher in industrial democracy, ensure improved employee-employer relations, and guarantee better productivity. It can also play a useful role in safeguarding the interests of workers’ representatives can serve a control element and guide the management in its exercise of personnel and social functions, along with on matters of investment in employee benefit scheme like housing, 211 CU IDOL SELF LEARNING MATERIAL (SLM)

schools for children, paid holidays with reimbursement of leave travel of the family members, running of hospitals etc. But the participation of workers at the Board is not without its problems. The Board is primarily concerned with problems like raising funds / utilisation of resources and ensuring capital growth of the enterprise personnel matters (in which workers representatives are primarily concerned) do not receive equal attention at the Board Level. Hence the problems are: (i) Do not substantially enhance the role of workers (ii) After assumption of directorship the workers’ representative, the communication between workers and representative suffers (iii) Through, the worker-direction may enjoy the status and privileges of the other members of the Board, his / her culture / education / behaviour and manners may make him/her inferior to the other members (iv) The nomination of one or two workers’ representatives on the Board, places them in a MINORITY and the decisions of the Board are arrived at, on the basis of majority vote. 2. Participation through Ownership: Workers may become more involved in industries by making them shareholders of the company. This may be done by inducing them to buy equity shares on payment being made in installments, or by giving loans or financial assistance (as sundry debtors advances, without interest and recoverable in monthly installments). Every year the shares are revalued and prices are announced. Employees are given option to redeem their shares (after initial locking period of 3 years) or sale in the stock exchange. Participation through ownership was extended in its logical end when the Supreme Court of India, in its judgement in Navneet R. Kumar vs. R. R. Kaman (1984) allowed workers to take over a sick unit, Kamani Tubes, New Central Jute Mills, Kamani Metals and Alloys etc. which were taken over by respective workers co-operatives. 3. Participation through Complete Control: Workers acquire complete control through elected Boards. It is based on self-management It gives control to workers to manage directly all aspects of industries through their 212 CU IDOL SELF LEARNING MATERIAL (SLM)

representatives. It also ensures complete identification of workers with their organisation Industrial disputes disappears when workers develop loyalty to the organisation. But it is not an answer to the problem of participation because the workers do not evince interest in management decisions. 4. Participation through Works Councils: The members of the council are elected by the employees of the respective sections. The councils have different functions in the management of enterprises from eliciting information on the management intentions to full share in decision-making. But they are not successful, because of the fear expressed by trade union leaders that being mainly workers bodies’ staff or works council, may erode their power and prestige. 5. Participation through Joint Committee: Joint Councils or committees are bodies comprising representative of employers and employees. The functions of these bodies many range from decision making on some issues to merely advisory the management as consultative bodies. Being a consultative body the joint committees indicate loose type of participation because their suggestions are not binding on the management. It is a simply a platform to both employers and employees, where they may give free vent to their complaints and grievances, without making any attempt to find remedies and solutions. The opinion of the most of the managers about the committee is that they have only a nuisance value. 6. Participation through Collective Bargaining: The principle of collective bargaining confers on the management and the workers, the right to lay down certain rules for the formulation and termination of the contract of employment, as well as the conditions or service, in are establishment. Such agreements are normally binding on parties, and have the force of low collective bargaining is no-substitute for workers participation in management. Participation brings both the parties together and develops appropriate mutual understanding and brings about a mature and responsible relationship. Collective bargaining on the contrary 213 CU IDOL SELF LEARNING MATERIAL (SLM)

is based on the crude concept of power and its exercise for sectional bargaining, which many end up in mistrust, with holding of information and use of pressure tactics 7. Participation through Job Enlargement: Job enrichment job enlargement means expanding the job content, adding task elements horizontally. Job enrichment means that additional motivators are added to the job, so that it is more rewarding. The purpose of job enrichment and job enlargement is to relieve the boredom of the worker which flows from excessive specialisation in Mass Production Industries, so that the job may be a source of self-satisfaction. Both job enrichment and enlargement do provide workers participation, because they offer freedom and scope to them to use their judgement. However, the form of participation, provides only limited freedom to a worker, concerning the method of performing his / her job, but does not have any say in vital questions, where he / she is interested such income security / welfare schemes / and other policy decisions. 8. Participation through Suggestions Schemes: Employees’ views on matters like machine utilisation/waste management, energy conservation and safety measures are invited, and reward is given for the best suggestion. The suggestions schemes are increasingly used by programme management. The rewards to the employees are commensurate with the benefits derived from the suggestions. Aviva Insurance CO had instituted. “I save campaign” in November 2008 to recognise a team or an employee for ideas on savings or even innovating of making things to manage company experiences. 9. Participation through Quality Circles: QC are credited with producing quick, concrete, and impressive result when correctly implemented. In QCs employees are involved in decision-making and for improving the efficiency at the workplace. Savings to cost- ratios are generally higher than those achieved, with other productivity improvement programme. The real cost effectiveness of QCs is questioned. The fact that QC members take time-off to attend meetings (one hour earlier than scheduled closing time) and also the fact that the suggestions for quality improvement are only cosmetic. 214 CU IDOL SELF LEARNING MATERIAL (SLM)

It is difficult to demonstrate cost effectiveness of QCs. Further motives of employees’, who volunteer to be members of a QC, are not clear. Do they want to have a break from routine assembly work (or dosing day work at the bank’s branch level)? Do they really take the concept seriously, and offer genuine suggestions? 10. Empowering Teams: Empowering refers to passing on authority and responsibility. Empowerment occurs when power goes to employees, who then experience a sense of ownership and control over their jobs. Empowered individuals know that their jobs belong to them, when they feel responsible they show more initiative in their work, get more done and enjoy the work more. Empowerment is facilitated by a combination of factors including values leadership actions, job structure and reward systems. Self-directed teams are another name for Empowered Teams have the following distinct features: (a) Empowered to share various management and leadership functions (b) Plan control and improve their own work processes (c) Set their own goals and inspect their own work (d) Create their own schedules and review their performance as a group (e) Prepare their own budgets and co-ordinate their work with other departments (f) Usually order materials, keep inventories and deal with suppliers (g) Responsible for acquiring any new training they might need (h) Have their own replacement or assume responsibility for disciplining their own members (i) Others outside the team, do not take responsibility for quality of their products or services 11. Total Quality Management (TQM): TQM refers to the deep commitment of the organisation to quality. Quality of products and services is an obsession and every step in the company’s process is subjected to intense and regular scrutiny, for ways to improve it. Almost every issue is subject to exploration and the process is a continuing one. Employees are provided with extensive training in problem solving, group decision-making and statistical methods 215 CU IDOL SELF LEARNING MATERIAL (SLM)

TQM replaces traditional beliefs about quality with a new set of principles. Traditional beliefs which are discarded include: (a) High quality costs more (b) Quality can be improved by inspection (c) Defects cannot be eliminated completely (d) Quality is the job of the quality control personnel While the new principle of TQM are: (a) Meet the customer’s requirements in time (b) Strive to error-free work (c) Manage by prevention, not by correction (d) Measure the cost of quality TQM is considered as a participative method because every employee in the organisation is involved, and is expected to take responsibility for improving quality, every day. It is a formal programme, which involves direct participation by all employees. 12. Financial Participation: Financial participation enhances employee commitment to the organisation by linking the performance of the company to that of the employee. There are many schemes of financial participation. But the more prominent of them, are the profit linked pay, profit sharing and employee stock option scheme, workers co-operatives, management buyouts, wage earners funds etc. Forms of Workers Participation in Management in India – The Works Committees, Joint Management Councils, Shop Councils, Joint Councils and Co-Determination The workers participation in management is not new even though it got encouragement only after independence. In 1920 Mahatma Gandhi, observed Employees should not regard themselves as sole owners of mills and factories of which they may be legal owners. They should regard themselves trustees. Forms of Workers Participation in Management: 1. The Works Committees 2. Joint Management Councils 216 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Shop Councils 4. Joint Councils 5. Co-determination Form # 1. The Works Committees: The first labour management association started in 1947 with the passing Industrial Disputes Act. The Act provides that in the case of any industrial establishment, in which 100 or more workers are employed on any day in the preceding twelve months, the appropriate government may be general or social order require the employees to constitute in the prescribed manner a Works Committee in the establishment. The committee was expected to discuss matters of common interest and to maintain cordial relations between workers and employees. The response to works committees was encouraging in the beginning but, in spite of their large number the experience of these committees was not very fruitful. Reasons for Failure of Works Committees: (i) The workers were not satisfied with the functions assigned to the committees, (ii) The tendency of employers taking some matters to these committees just to bypass trade unions created a suspicion in the minds of workers leaders, (iii) Inter unions rivalries were also responsible for the failure of these committees, (iv) The casual approach of employees towards these committees made them ineffective, (v) The recommendations of these committees are advisory in nature, (vi) The workers show less interest in the working of these committees. Form # 2. Joint Management Councils: Joint Management council is a voluntary body. Its introduction was left solely to the discretion of employers and employees. These councils will consist of equal number of representation of workers and management will not exceed twelve. The Criterion for Selecting Industrial Units: (i) The unit must employ at least 500 workers, (ii) It should have an established and representative workers union, (iii) The unit must be with a record of good industrial relations. 217 CU IDOL SELF LEARNING MATERIAL (SLM)

The Councils functions- The council has the right to receive information, discuss and give suggestions on general economic situation, market production, general running of the unit, etc. (i) Information sharing, (ii) Consultative, (iii) Administrative. Lacunas in the Councils: (i) The workers representatives were not satisfied with their role in councils, (ii) Management is not prepared to supply sufficient information to councils, (iii) The trade union leaders feel that council would weaken their hold over workers, (iv) The absence of representative unions made it difficult for the councils to work smoothly. Form # 3. Shop Councils: A new scheme for workers participation in management was adopted in October 1975. The scheme was voluntary in nature. It covered all manufacturing and mining industries employing 500 or more persons. The scheme provided for setting up of shops councils at the plant level. Features of Shop Councils: i. There will be a shop for each department or one council for more departments considering the number of workers employed there, ii. The representatives of employees will be nominated by the management and must be from the unit concerned. iii. The number of members in the council may be decided by management in consultation with recognised unions, iv. All decisions of the council must be based on consensus, v. The term of shop council will be two years. vi. The chairman of the council will be the nominee of management and vice-chairman shall be elected by working members amongst themselves. Functions of Shop Councils: (i) Assist management in achieving monthly/yearly targets. 218 CU IDOL SELF LEARNING MATERIAL (SLM)

(ii) Elimination of wastage and optimum utilization of machine capacity and manpower, (iii) To study the causes of absenteeism in the department and suggest measures to eliminate it. (iv) Safety measures. (v) Assistance in maintaining general discipline in the department. (vi) Physical conditions of work such as lighting, ventilation, noise, dust, etc. reduction of fatigue, (vii) Welfare measures to be adopted for sufficient running of department/shop, (viii) Ensure proper communication between management and workers. Form # 4. Joint Councils: Provision of a joint council is made for every unit employing 500 or more workers. Features of Joint Councils: (i) The members of the council must be actually engaged in the unit, (ii) The term of the council will be two years. (iii) The chief executive of the unit will be the chairman of and vice-chairman will be nominated by worker members, (iv) It shall meet at least once in a quarter. (v) The decisions of the council will be based on consensus and not on voting, (vi) The decisions will be binding on both parties and will be implemented within one month. Functions of Joint Councils: (i) Optimum production, efficiency and function of productivity norms of man and machine for the unit as a whole. (ii) Functions of a shop council which has a bearing on another shop or the unit as a whole, (iii) Matters remaining unresolved by shop council. (iv) The development of skill of workmen and adequate facilities for training, (v) Preparation of schedules of working hours and of holidays, (vi) Awarding of rewards for valuables and creative suggestions received from workers, (vii) Optimum use of raw materials and quality of finished products. Reasons for the Failure: 219 CU IDOL SELF LEARNING MATERIAL (SLM)

(i) The management have been to the view that workers are not competent to take decisions, (ii) It was difficult for workers representatives to play the role of management and union leaders. (iii) The scheme of workers participation was inspired by the government without any initiative from management. (iv) The active association of union leaders with political parties was only responsible for the failure of this scheme. (v) The workers participation is mainly emphasized at top level management. (vi) The workers in India do not feel motivated to participate in decision making because their lower needs too (vii) Remain unsatisfied. Form # 5. Co-Determination: Arrangement in which worker representatives are appointed to a firm’s board of directors for participation in the firm’s decision making process. Co-determination is a practice whereby the employees have a role in management of a company. Co-determination is a type of workers participation in management. Co-determination was started in Germany in 1945. Methods of Co-Determination: i. Works councils ii. Workers participative on the supervisory Board iii. The management Board 220 CU IDOL SELF LEARNING MATERIAL (SLM)

13.3 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 13.4 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 221 CU IDOL SELF LEARNING MATERIAL (SLM)

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.  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 13.5 LEARNING ACTIVITY 1. What is Co-Determination? 2. What are the methods of Co-Determination? 3. Explain Joint Council 4. What are the functions of Joint Council? 5. What are the reasons for the failure of Joint Council? 13.6 UNIT END QUESTIONS 222 DESCRIPTIVE QUESTIONS: LONG ANSWERS: 1.Explain Shop Councils. Features of Shop Councils. 2. What are the functions of Shop Councils 3. What is Joint Management Councils CU IDOL SELF LEARNING MATERIAL (SLM)

4. What is the criterion for selecting Industrial Units. 5. Explain the role of Works Committee. 6. Explain Total Quality Management. 7. What are the forms of workers’ participation at different levels. SHORT ANSWERS: 1.What are the different forms of worker’s participation? 2. What are the variety of factors that have contributed to the failure of the scheme ? 3. Explain Worker’s Participation in Share Capital 4. What are the working of schemes in Indian Industry? 5. Explain Forms of Workers Participation- prevalent in India. MULTIPLE CHOICE QUESTIONS: 1.Which of the following is not a part of the Scheme of Workers’ Participation in Management in India? A. Industrial Level Councils B. Shop Level Councils C. Joint Level Councils D. Unit Level Councils 2. Which of the following practices lead to democracy in trade unions? 223 (A) Regular meeting (B) Fair and timely elections (C) Audit of accounts of union (D) All the above CU IDOL SELF LEARNING MATERIAL (SLM)

3. The trusteeship approach to industrial relations was advocated by: (A) Karl Marx (B) Max Weber (C) Allan Flanders (D) Mahatma Gandhi 4. Which one of the following is not a principle of labour legislation? (A) Principle of Protection (B) Principle of Social Justice (C) Principle of Social Security and Welfare (D) Principle of Reasonable Standard of Living 5. Which part of the Indian Constitution divides jurisdiction for enactment of Labour Legislations? (A) Distribution of Legislative Power (B) Directive Principles of State Policy (C) Fundamental Rights (D) None of the above ANSWERS: 1-A, 2-D, 3-D, 4-D, 5-A 13.7 REFERENCES www.articlelibrary.com www.blogipleaders.in www.lawsikho.com WORKERS PARTICIPATION IN MANAGEMENT- CH. S. DURGA PRASAD. 224 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT – 14 EMPLOYEE GRIEVANCE AND 225 DISCIPLINE STRUCTURE 14 Learning Objectives 14.7 Introduction 14.8 Meaning 14.9 Approaches 14.10 Causes 14.11 Effects 14.12 Summary 14.13 Keywords 14.14 Learning Activity 14.15 Unit End Questions 14.16 References 14.0 LEARNING OBJECTIVE After studying this unit, you should be able to: ● define the term grievance ● discuss the grievance handling procedure ● identify the essentials of a sound grievance procedure ● make distinction between discipline and indiscipline ● describe the disciplinary action procedure CU IDOL SELF LEARNING MATERIAL (SLM)

● explain the term employee exit and exit interview 14.1 INTRODUCTION Every employee of any Organization will certainly have some expectations from the Organization in which he/she is working. When the Organizations fail to fulfill the expectations, the employee develops a feeling of discontent and dissatisfaction. When an employee feels that something is unfair in the Organization, he/ he is said to have a grievance. When grievances are not addressed by the Management, it leads to indiscipline which ultimately affects the efficiency of the employees and productivity of the Organization. Disciplinary and grievance procedures provide a clear and transparent framework to deal with difficulties which may arise as part of working relationship from either the employer’s or employee’s perspective. In this unit, you will learn about grievance handling procedure and disciplinary action procedure. You will further learn about the concept of employee exit and exit interview. 14.2 MEANING In every Organization, employees do get dissatisfied with various aspects of working which may be with the attitude of the manager, policy of the Company, working conditions, or behaviour of colleagues. Employers try to ignore or suppress grievances. It may not be possible to suppress grievances for long. Grievance is any dissatisfaction or feeling of injustice in connection with one’s employment situation that is brought to the attention of management. It is any discontent or dissatisfaction whether expressed or not, whether valid or not, arising out of anything connected with the Company that an employee thinks, believes or even feels, is unfair, unjust or inequitable. Grievance becomes a complaint if not resolved or attended to. Majority of complaints are due to unresolved Grievances. Hence Grievance handling is more important part of HRM to minimize, if not completely eradicate the complaints. The National Commission on Labour Observed that “Complaints affecting one or more individual workers in respect of their wage payments, over time, leave, transfer promotion, seniority, and work assignment and discharges constitute Grievances” 226 CU IDOL SELF LEARNING MATERIAL (SLM)

14.3 APPROACHES The code of the Discipline adopted by the Indian Labour Conference in 1957 laid down that the management and unions should establish, upon a mutually agreed basis, grievance procedure which would ensure a speedy and full investigation leading to a settlement. At present the Model grievance procedure in India provides for five successive time bound steps, each leading to the next in case the aggrieved employee prefers an appeal. These steps are: 1) An arrived employee shall first present his grievance verbally in person to the officer designated by the management for this purpose. The response shall be given by the officer within 48 hours of the presentation of the complaint. If the worker is not satisfied with the decision of the officer or fails to receive the answer within 48 hours, he will either in person or accompanied by departmental head, present his grievance to the head of the department. ii) The head of the department shall give his answer within 3 days or if action cannot be taken within this period, the reason for delay should be 95 Employee Grievance and Discipline recorded. If the worker is dissatisfied with the decision of the department all head, he may request that his grievance be forwarded to the Grievance Committee. iii) The Grievance Committee shall make its recommendation to the manager within 7 days if the workers request. If decision cannot be given within this period, reason should be recorded. Unanimous decision of the committee shall be implemented by the management. If there are differences of opinion among the members of the committee, the matter shall be referred to the manager along with the views of the members and the relevant papers for final decision. (iv) In either case, the final decision of the manger shall be communicated to the employee within three days from the receipt of the Grievance Committee’s recommendations. (v) If the worker is not satisfied even with the final decision of the manager, he may have the right to appeal to the manager for revision. In making this appeal he may take a union official with him to facilitate discussion with the management. The management will communicate the decision within 7 days of workman’s revision petition. (vi) If worker is still not satisfied, the mater may be referred to voluntary arbitration. (vii) Where a worker has taken a grievance for redressal under the grievance procedure the formal conciliation machinery shall not interview till all steps in the procedure have exhausted. A grievance shall be presumed to assume the form of a dispute only when the final decision of top management is turned down by the worker. The Grievance Committee shall consist of 4 to 6 members. 227 CU IDOL SELF LEARNING MATERIAL (SLM)

14.4 CAUSES Grievances may occur for a number of reasons: a) Economic: Wage fixation, overtime, bonus, wage revision, etc. Employees may feel that they are paid less when compared to others. b) Work Environment: Poor physical conditions of workplace, tight production norms, defective tools and equipment, poor quality of materials, unfair rules, lack of recognition, etc. c) Supervision: Relates to the attitudes of the supervisor towards the employee such as perceived notions of bias, favouritism, nepotism, caste affiliations, regional feelings, etc. d) Work group: Employee is unable to adjust with his colleagues; suffers from feelings of neglect, victimisation and becomes an object of ridicule and humiliation, etc. e) Miscellaneous: These include issues relating to certain violations in respect of promotions, safety methods, transfer, disciplinary rules, fines, granting leave, medical facilities, etc. The following Table describes the classification and causes of grievances. Table 1: Classification and Causes of Grievances Classification Causes 1) Wage grievances - demand for individual wage adjustment - complaint about job classification - complaint about incentive system - miscellaneous 2) Supervision - complaint against discipline/administration - complaint against behaviour of supervisor - objection to the method of supervision 3) Working conditions - safety and health - violation of rules and regulations - miscellaneous 4) Seniority and promotion - loss of seniority and transfers - calculation/interpretation of seniority - promotion - denial or delay - transfer or change of shifts 5) Discipline - discharge/dismissal/layoffs - alcoholism, absenteeism and accidents - harshness of punishment and penalty 6) Collective bargaining - violation of contract/award/agreement - interpretation of contract/award/agreement - settlement of grievances 7) Union management - recognition of union relations - harassment of union bearers - soldiering / go-slow tactics 61 Grievance Handling and Discipline Jackson (p.5) traces the causes of grievances as arising from the following issues: l working environment e.g., light, space, heat. l use of equipment, e.g., tools that have not been properly maintained. l supervisory practices, e.g., workload allocation. l personality clashes and other inter-employee disputes (work-related or otherwise). l behaviour exhibited by managers or other employees, e.g. allocation of ‘perks’ such as Sunday overtime working, and harassment, victimisation, and bullying incidents. l refused requests, e.g., annual leave, shift changes. l problems with pay: e.g. late bonus, payments, adjustments to overtime pay perceived inequalities in treatment: e.g., claims for equal pay, appeals against performance related pay awards. l organisational change, e.g., the implementation of revised company policies or new working practices. The authors stress 228 CU IDOL SELF LEARNING MATERIAL (SLM)

that all these causes should be investigated to achieve the following twin objectives: l redress the grievances of the complainant. l initiate remedial steps to prevent recurrence of similar grievances in the future. Different aspects of grievance are as follows: 1) Organisational aspects: Organisational structure, policy plans and procedure. 2) Informational aspects: Ignorance about company rules, regulations, promotion policies, career prospects, transferability etc. 3) Human aspects: A variety of reasons, the major ones being poor mental health and attention. 14.4 EFFECTS Grievances, if they are not identified and redressed, may affect adversely the workers, managers and the organisation. The effects are: 1) On production include: l Low quality of production. l Low quality of production and productivity. l Increase in the wastage of material, spoilage/leakage of machinery. l Increase in the cost of production per unit. 2) On the employees: l Increases the rate of absenteeism and turnover. l Reduces the level of commitment, sincerity and punctuality. l Increases the incidence of accidents. l Reduces the level of employee morale. 3) On the managers: l Strains the superior-subordinate relations. l Increases the degree of supervision, control and follow up. l Increases in discipline cases. l Increase in unrest and thereby machinery to maintain industrial peace. Employer-Employee Relations Beach also refers to several reasons why there should be a formal procedure to handle grievances: l All employee complaints and grievances are in actual practice not settled satisfactorily by the first level supervisor, due to lack of necessary human relations skills or authority to act. l It serves as a medium of upward communication, whereby the management becomes aware of employee frustrations, problems and expectations. l It operates like a pressure release valve on a steam boiler, providing the employees with an outlet to send out their frustrations, discontents and grips. l It also reduces the likelihood of arbitrary action by supervision, since the supervisors know that the employees are able to protest such behaviour and make their protests heard by higher manager. l The very fact that employees have a right to be heard and actually heard helps to improve morale. 14.5 SUMMARY o In every Organization, employees do get dissatisfied with various aspects of working which may be with the attitude of the manager, policy of the 229 CU IDOL SELF LEARNING MATERIAL (SLM)

Company, working conditions, or behaviour of colleagues. When an employee feels that something is unfair in the Organization, he/ he is said to have a grievance. When grievances are not addressed by the Management, it leads to indiscipline which 101 Employee Grievance and Discipline ultimately affects the efficiency of the employees and productivity of the Organization. Grievance procedures provide a clear and transparent framework to deal with difficulties which may arise as part of working relationship from either the employer’s or employee’s perspective. Model grievance procedure in India provides for five successive time bound steps, each leading to the next in case the aggrieved employee prefers an appeal. o Therefore, sound grievance procedure assumes greater importance and it must contain the following features: legal sanctity, acceptability, simplicity, promptness, training and followup. Presence of discipline in any organisation is must. It is the orderly conduct of affairs by the members of an Organisation who adhere to its necessary regulations because they desire to cooperate harmoniously. Discipline is of two type- positive discipline and negative discipline. On the other hand indiscipline refers to the nonconformity to formal and informal rules and regulations. It often leads to strikes, go-slows, and absenteeism, resulting in loss of production, profits and wages. o The common causes of indiscipline are: wage discrimination, defective handlings of grievances, payment of low wages, creating low quality work life etc. Therefore, it is necessary to develop a disciplinary process to address these issues amicably. Disciplinary process includes - issue of charge sheet, consideration of explanation, suspension pending enquiry, holding of enquiry and order of punishment. Employee exit is yet another issue that demands special attention. When employees leave the Organization for better pay, benefits, better experience, and for better career, it is called employee exit. Whatever be the reason for the exit, the employee leaving the Organization should move out with positive feelings on the company. o Managers should plan for conducting exit interviews to get feedback from these employees who may provide useful information for correcting the policies and processes and also for the growth and development of the Organization. Exit interview is a meeting between at least one representative from a company’s human resources department and a departing employee 230 CU IDOL SELF LEARNING MATERIAL (SLM)

14.6 KEYWORDS  Grievance: Discontent or dissatisfaction arising out of anything connected with the company that an employee thinks, believes, or even feels as unfair, unjust, or inequitable  Grievance procedure: A mechanism devised by an Organization to handle and settle employees’ grievances  Exit interview: a meeting between at least one representative from a company’s human resources department and a departing employee  Discipline: the regulation and modulation of human activities to produce a controlled performance  Indiscipline: the absence of discipline that indicates the existence of nonconformity to formal and informal rules and regulations 14.7 LEARNING ACTIVITY 1.What do you mean by the term ‘Discipline”? 2.What is meant by Indiscipline? 3.Define the term “Employee Exit’ 4.What is ‘Exit Interview’? 14.8 UNIT END QUESTIONS DESCRIPTIVE QUESTIONS: LONG ANSWERS: 1. What is meant by discipline? Explain the procedure for taking disciplinary action. 2. Define grievance. Why do grievances arise? 3. Explain the procedure for redressal of grievances. 4. “A sound grievance procedure must contain some essentials features.” Explain. 5. Describe the grievance redressal procedure prescribed by law in India. 6. Write a short note on the following: i) Employee Exit ii) Exit Interview iii) Discipline 7. Discuss the principles to be followed to maintain discipline. 231 CU IDOL SELF LEARNING MATERIAL (SLM)

8. Mention briefly the practice of disciplinary action procedure in your organization SHORT ANSWERS: MULTIPLE CHOICE QUESTIONS: 232 CU IDOL SELF LEARNING MATERIAL (SLM)

14.9 REFERENCES www.egyanjosh.in www.nou.ac.in www.labourlawshcm.com Labour Laws- Taxxmann 233 CU IDOL SELF LEARNING MATERIAL (SLM)