Worker’s Participation in Worker’s Participation in ManagementManagement

in Indiain India

BY NISHATBY NISHATMBA 3MBA 3RDRD SEM SEM

WORKER’S PARTICIPATION IN WORKER’S PARTICIPATION IN MANAGEMENTMANAGEMENT

It is a mental and emotional involvement It is a mental and emotional involvement of a person in a group situation which of a person in a group situation which encourages him to contribute to goals and encourages him to contribute to goals and share responsibility with him.share responsibility with him.

workers’ participation in management workers’ participation in management means giving scope for workers to means giving scope for workers to influence the managerial decision making influence the managerial decision making process at different levels by various process at different levels by various forms in the organisation.forms in the organisation.

Evolution Evolution Evolution of participative management in Evolution of participative management in India:India:

In 1920In 1920 Mahatma Gandhi Mahatma Gandhi had suggested that had suggested that workers contributed labour and brains, while workers contributed labour and brains, while shareholders contributed money to enterprise, and shareholders contributed money to enterprise, and that both should, therefore share in its prosperity.that both should, therefore share in its prosperity.

The influence of The influence of Mahatma Gandhi Mahatma Gandhi bore fruit and for bore fruit and for the first time Joint Consultation was adopted in the the first time Joint Consultation was adopted in the Cotton Textile Industry.Cotton Textile Industry.

The first major step came during the enactment of The first major step came during the enactment of Industrial Disputes Act, 1947. Industrial Disputes Act, 1947.

The Industrial Policy Resolution had suggested that The Industrial Policy Resolution had suggested that labour should be consulted in all matter concerning labour should be consulted in all matter concerning industrial production.industrial production.

Further the scheme of Joint Management Council was Further the scheme of Joint Management Council was formulated in 1957.formulated in 1957.

Evolution in IndiaEvolution in IndiaA A Study Group on Workers Participation in Study Group on Workers Participation in ManagementManagement, consisting of representatives of the , consisting of representatives of the Government, employers and workers was set up in Government, employers and workers was set up in 1956, it favoured the system of Joint Management 1956, it favoured the system of Joint Management Councils and submitted its report in 1957 emphasising – Councils and submitted its report in 1957 emphasising – – In India, an education campaign should be launched so that In India, an education campaign should be launched so that

workers and managerial supervisory staff may realise the workers and managerial supervisory staff may realise the implications of such a schemeimplications of such a scheme

– The joint consultation should be The joint consultation should be “in-built”“in-built”– Importance should be given to reorientation of attitudes, strong Importance should be given to reorientation of attitudes, strong

self-confident trade unions and good industrial relationsself-confident trade unions and good industrial relations– No compulsion should be applied, only permissive legislation be No compulsion should be applied, only permissive legislation be

favoured in setting up the councilsfavoured in setting up the councils

View of Various Committees on WPMView of Various Committees on WPMSachar CommitteeSachar Committee – In June 1977, a high-powered expert – In June 1977, a high-powered expert committee on Companies and MRTP Acts was set up by the committee on Companies and MRTP Acts was set up by the Government of India under the chairmanship of Rajinder Government of India under the chairmanship of Rajinder Sachar. The terms of reference for the Committee were:Sachar. The terms of reference for the Committee were:

To consider the provisions of the Companies Act and MRTP ActTo consider the provisions of the Companies Act and MRTP Act

To suggest measures by which workers participation in the share To suggest measures by which workers participation in the share capital and management of companies can be brought about.capital and management of companies can be brought about.

Representation of Workers on Board of DirectorsRepresentation of Workers on Board of Directors

Workers participation in Share CapitalWorkers participation in Share Capital

Varma Committee – Varma Committee – Janata Government set up a committee in Janata Government set up a committee in September 1977, under the chairmanship of Ravindra Varma. September 1977, under the chairmanship of Ravindra Varma. This committee also emphasised on Representation of Workers This committee also emphasised on Representation of Workers in Management but equity participation was recommended as in Management but equity participation was recommended as optional.optional.

Objectives Objectives

In the words of second five year plan In the words of second five year plan

- to increase productivity for the - to increase productivity for the general benefit general benefit

- to give employees a better - to give employees a better understanding understanding

- to satisfy the worker’s urge for self - to satisfy the worker’s urge for self expression expression

The participation of worker in The participation of worker in Management Bill 1990 Management Bill 1990

In Rajya Sabha on 30 may, 1990 In Rajya Sabha on 30 may, 1990

The bill sought to provide for specific The bill sought to provide for specific and meaningful participation of and meaningful participation of workers in management from shop workers in management from shop floor to the board level in all floor to the board level in all industrial establishments defined industrial establishments defined under Industrial Disputes Act, 1947.under Industrial Disputes Act, 1947.

Forms of worker’s participation in Forms of worker’s participation in IndiaIndia

Works committees Works committees Joint management councilsJoint management councilsJoint councils Joint councils Unit councilsUnit councilsPlant councils Plant councils Shop councils Shop councils Worker’s representative on board of Worker’s representative on board of management management Worker’s participation in share capitalWorker’s participation in share capital

WORKS COMMITTEEWORKS COMMITTEE It consists of equal number of representatives of It consists of equal number of representatives of

both employers and workers. It meets frequently both employers and workers. It meets frequently for discussion on common problems of the for discussion on common problems of the workers and the management. After discussion, workers and the management. After discussion, joint decisions are taken and such decisions are joint decisions are taken and such decisions are binding on both the parties. Matters like wage binding on both the parties. Matters like wage payment, bonus, training, discipline etc are payment, bonus, training, discipline etc are discussed in such meetings.discussed in such meetings.

JOINT MANAGEMENT JOINT MANAGEMENT COUNCILCOUNCIL

It involves setting up of joint committees It involves setting up of joint committees represented by the workers and the management represented by the workers and the management to discuss and give suggestions for improvement to discuss and give suggestions for improvement with regard to matters of mutual interest. The with regard to matters of mutual interest. The decisions of such committees are not binding on decisions of such committees are not binding on either party, yet they are implemented as they either party, yet they are implemented as they are arrived at by mutual consultations. The are arrived at by mutual consultations. The subject-matter of joint consultations includes subject-matter of joint consultations includes such problem areas as labour welfare, safety such problem areas as labour welfare, safety measures, grievance redressal, training, working measures, grievance redressal, training, working hours, etc. hours, etc.

Joint CouncilsJoint CouncilsFeatures Features ––

- Each organization/ service shall decide the - Each organization/ service shall decide the no. of councils.no. of councils.

- Only engaged persons are members Only engaged persons are members - The tenure of the councils should be 2 years The tenure of the councils should be 2 years - Chief executive shall be the chairmanChief executive shall be the chairman- Secretary should be appointedSecretary should be appointed- Meeting at least ones in a quarterMeeting at least ones in a quarter- Decisions based on consensus not by voting Decisions based on consensus not by voting

Functions –Functions –- Settlements of matters Settlements of matters - Review of working of the unit level Review of working of the unit level - Unit level matters having bearing on Unit level matters having bearing on

in other branches or on enterprisein other branches or on enterprise- Development of skills Development of skills - Improvement of general conditions of Improvement of general conditions of

workwork- Preparation of schedules of working Preparation of schedules of working

hours and holidays hours and holidays - Proper recognition and appreciation Proper recognition and appreciation

of useful suggestions of workersof useful suggestions of workers

Unit CouncilsUnit CouncilsFeatures –Features –

- A unit level councilA unit level council- Equal no. of representatives of management and Equal no. of representatives of management and

workers workers - Management representative should be nominated by Management representative should be nominated by

management and should consist of persons from management and should consist of persons from concerned unit concerned unit

- Implemented within a month Implemented within a month - Secretary appointment Secretary appointment - Decisions should have bearing on other unit of the Decisions should have bearing on other unit of the

organization organization - The council once formed should work for three yearsThe council once formed should work for three years- Meeting at least once in a monthMeeting at least once in a month- Chairman from management, vice chairman from Chairman from management, vice chairman from

workers workers

Plant CouncilsPlant Councils Formed in pursuance of the recommendations of Formed in pursuance of the recommendations of

the second meeting of the Group on labor at New the second meeting of the Group on labor at New Delhi on 23 Sep, 1985.Delhi on 23 Sep, 1985.

Features –Features – - One plant council for the whole unit One plant council for the whole unit - Member not less than 6 and not more than 18Member not less than 6 and not more than 18- Member should be engaged in the unitMember should be engaged in the unit- Tenure is 3 years Tenure is 3 years - The chief executive of the unit shall be the The chief executive of the unit shall be the

chairman of the plant councilchairman of the plant council- Secretary should be appointed Secretary should be appointed - Meeting at least once in a quarterMeeting at least once in a quarter- Decisions should be based on consensus Decisions should be based on consensus

Function of Plant CouncilFunction of Plant Council

Operational areasOperational areas

Economic and financial areaEconomic and financial area

Personnel matters Personnel matters

Welfare areas Welfare areas

Environmental areasEnvironmental areas

Shop Councils Shop Councils Features –Features –

- For every unit of 500 or more workers For every unit of 500 or more workers - Equal no. of representatives of employers and Equal no. of representatives of employers and

workersworkers- All the members should be concerned with unitAll the members should be concerned with unit- Total no. of members may not exceed by 12Total no. of members may not exceed by 12- Decisions based on consensusDecisions based on consensus- Implement within a monthImplement within a month- Meeting within a monthMeeting within a month- Tenure is 3 yearsTenure is 3 years- Chairman from management and vice chairman Chairman from management and vice chairman

from workersfrom workers

Function -Function -- To assist in production target To assist in production target - To improve working To improve working - Corrective steps Corrective steps - To study absenteeism and reduced itTo study absenteeism and reduced it- To suggest safety measures To suggest safety measures - To assist in maintaining general disciplineTo assist in maintaining general discipline- To suggest improvement in physical To suggest improvement in physical

working conditionsworking conditions- To suggest welfare and measuresTo suggest welfare and measures- To ensure two way communication To ensure two way communication - To suggest technological innovationTo suggest technological innovation- To assist in implementation of cost To assist in implementation of cost

reduction programreduction program

Worker’s Representation on Worker’s Representation on Board of ManagementBoard of Management

On the recommendations of the Administrative Reforms Commissionmade in its report on public sector undertakings, the Government ofIndia accepted, in principle, that representatives of workers shouldbe taken on the Board of Directors of Public Sector enterprises.

Features – Participation should be limited to companies which employ1000 or moreThe Worker Director shall be elected through a secret ballotPresence of Worker Director on the Board shall not lead toany breach in the confidentiality of the information required

Functions – The Worker Director participates in all the functions of theBoard, beside they also review the working of shop and plantcouncil

Conclusion Conclusion Scheme should be made to work at Scheme should be made to work at least in the field of increasing the least in the field of increasing the production and productivity of labor. production and productivity of labor. Workers may get reasonable Workers may get reasonable opportunity to show his work in opportunity to show his work in contributing to production targets.contributing to production targets.Management should have a Management should have a constructive attitude and should constructive attitude and should regard trade unions as a highly regard trade unions as a highly valuable and powerful struments.valuable and powerful struments.

Both employers and unions should Both employers and unions should have proper sprit.have proper sprit.

The govt. should take responsibility The govt. should take responsibility for workers education programs.for workers education programs.