Dhyuti Final

7/24/2019 Dhyuti Final

http://slidepdf.com/reader/full/dhyuti-final 1/36

Forum for Industrial Relations @ XLRI 1

DHYUTI 2015



Sumit Ragamayee Pragya Jojin Nayeera Ankit Varun

Anirudh Archit Suyash Aishwarya Arshnoor Sonali Sahil Naveen Hemanshu Mallika

Forum for Industrial Relations @ XLRI

The Team (2014-15)

Mission—

To bring about a greater level of interaction between students, faculty and the industry and to create

awareness and passion about the field of Industrial Relations and Labour Law.

About Us—

The Forum for Industrial Relations at XLRI (FIRE@X) is the committee for promotion of industrial rela-

tions at XLRI. It was founded as a discussion forum in 1996, which served as a platform for the dissemi-

nation of ideas and learning in the field of industrial relations, this advancing and satisfying the needs of

students. Over time, it took shape and has organized itself into a formal society that it is today.




DHYUTI 2015

Dear Readers,

I am delighted to present to you the 10th edition of Dhyuti, the flagship magazine of Industrial Relations at XLRI. Dhyuti is

one of the premier publications of Industrial Relations, brought to you by team Fire@x at XLRI and is sought after by both

institutions and industries alike. The magazine is an attempt by the students to explore into the real world IR issues with a

perspective of their own.

This issue features excerpts of the ILO conference held at XLRI, which witnessed insights on Industrial relations from es-

teemed speakers and guests from across the country. It also features articles from academicians and students on various

other issues the present industrial relations scenario faces, with a special focus on the recent labour reforms. The maga-

zine has been growing in its popularity over the years and I hope that the trend continues in the years to come. I wish the

Fire@x team all success in their future endeavours.

Warm Regards,

Fr. E. Abraham, S.J.

Director, XLRI

Message from The Director




DHYUTI 2015

Fire@x, The Forum for Industrial Relations at XLRI has been one of the principle forces behind propagating the knowledge

of Industrial Relations within and outside XLRI. Fire@x boasts of several initiatives round the year and one among them is

the annual magazine, Dhyuti. This edition of Dhyuti contains articles from academicians and students on various challeng-

es and opportunities in the industrial relations scenario, and on some of the burning issues in IR today, with a special focus

on the recent labour law reforms. It can be said that Dhyuti is a compilation of the views of some of the best and diverse

minds in the field of IR in India.

Dhyuti has been widely anticipated among professional circles primarily for the content that it brings out in the open. It

provokes young minds to think beyond conventions and voice their views in a changing environment. It is indeed a great

pleasure to see that Dhyuti delivers on all the above. It is crucial that team Fire@x continues their endeavor to promote IR

among all its stakeholders and tries to take Dhyuti and all their other initiatives to the next possible level.

I congratulate the team for the work done and wish them success in all their future endeavors.

Warm Regards,

Dr Pranabesh Ray

Dean, XLRI

Message from The Dean




DHYUTI 2015

It gives me immense pleasure to present Dhyuti, Fire@x's annual magazine. A heartfelt thanks to all our collaborators who

made the magazine possible.

Its been an eventful year in Industrial Relations. The Modi movement and a spate of labour reforms have put IR on the na-

tion's psyche. The ramifications of these changes are yet to be seen.

Fire@x too has had an eventful year. The ITC Munger trip, the Trial by Fire quizzing league, the Strike or Yield event and

the ILO conference in December have been successful. We have a lot to look forward to this year with the 7th national IR

Conference in January.

With utmost humility, I would like to express my gratitude to our faculty coordinators, Prof. Pranabesh Ray, Prof,

P.K.Padhi, Prof Shyam Sundar, Prof. Santanu Sarkar and Prof. Raman who have offered unconditional help in every initia-

tive of ours.

Happy reading!

Warm Regards,

Sumit Kumar

Message from The Secretary




DHYUTI 2015

The Right to Strike in Industrial Relations — Meanings and Modalities

Jerome Joseph

Are we IR Ready — A Cover Story

Anand Kolanukonda

Impact of Organization Behavior in Industrial Relations

Tejesvi Dhankhar

2014-15 : The Year That Was

Narendra Modi Labour Reforms and Their Impact

Swati Sinha

Make In India — More Than Just Labor Laws?

Sarthak Gupta and Anubhav Agrawal

Unionization In Private Sector

Ravi Bhargav S V

Make In India — Is Our IR Setup Ready?

Varun Kumar Y

Labour Reforms By Modi

Yashu Sharma

Table of Contents

………..07

………...10

………...16

………..20

………..22

………..26

………..28

………..33

………..30




DHYUTI 2015

The Right to Strike in Industrial Relations –

Meanings and Modalities

Dr Jerome Joseph, Professor,

Personnel and Industrial Relations, IIM Ahemdabad

The legal definition of the strike as in Sec.2(q) of the Industrial

Disputes Act 1947 suggests that the following elements deter-mine whether a labour action is a strike or not:

Cessation of work.

The cessation must be by a body of persons employed inany industry;

Those on strike must have been acting in combination;

Those on must be working in any establishment which canbe termed industry within the meaning of Section 2(j); or

There must be a concerted refusal; or Refusal under a common understanding of any number of

persons who are or have been so employed to continue to

work or to accept employment; They must stop work for some demands relating to em-

ployment, non-employment or the terms of employment

or the conditions of labour of the workmen.

The legal definition and the ingredients of a strike which flowfrom the definition are however subject to the vagaries of

interpretative semantics in the wold of industrial relations

praxis. Little wonder then that any discourse on the right tostrike not only conjures up negative images when strikes are

often perceived as “assaults” on organizations and also stirs

up strong emotions especially when depicted as delivering anunfair “punch’ on the benevolence of the employer and the

goodwill of the ultimate customer. Or even when more oftenthan not, the strike is seen and projected as an “incursion”

into the prerogatives of employers, managements and com-

mercial interests since employees when on strike “walk out”.“go slow”, “work-to-rule” thus disrupting production, harming

productivity and reducing profitability.

Just a casual perusal of the relevant law and the Thesaurus to figure out what the word ‘strike’ means yields the

following picture:

“Strike has been de fi ned in Sec on 2 (q) of the Industrial Disputes Act as under—“Strike means a cessa on of workby a body of persons employed in any industry ac ng in combina on, or a concerted refusal, or a refusal under a

common understanding, of any number of persons who are or have been so employed to con nue to work or to

accept employment.” (01)

The Thesaurus has the following interpreta ons of the word strike:

Raid, a ack, assault, incursion, collide with, crash into, smash into – these are one set of meanings of the word

strike….

Hit, beat, smack, sock, wallop, clobber, punch – these are yet another set of meanings for the term strike.

And of course on more familiar ground, the word strike also signi fi es walkout, work ‐to‐rule, go slow, industrial

ac on.

Interes ngly, there is another set of interpreta ons for the word strike – discover, uncover, unearth.”




DHYUTI 2015

Illustrative of this view of the strike as reported is the case of Ger-

man auto components giant Bosch and their experiences of industrial

relations turbulence in both their Bengaluru and Jaipur plants in2014. Bosch Group Chairman of the Board of Management VolkmarDenner had this observation on the situation faced by Bosch, "Today's

situation leads to low productivity, impacting competitiveness of our

plants. Our intention is to continue (investments) provided labour

conditions let us be competitive". (02) Not only is the concern withproductivity and competitiveness but there is also a veiled threat thatthe use of strikes by the labour force could lead to consequences for

continued investments. "Today in the world there are many free trade

zones and they will increase. That means a country like India has to

be competitive with other countries, especially in Asia." This again isa standard negotiations gambit of investors in today’s environmentwhere industrial relations issues and experiences are linked to the

competitive interests of nations jostling for foreign direct invest-ment. "We will keep investing in India but as I said with respect to

manufacturing everything rests on competitiveness as Bosch gener-ally has international manufacturing network so every location has tobe competitive," Denner said. (02) Such statements can be read as

an articulation of a concern but also interpreted as a veiled threat in

which investments are contingent on the curbing of industrial rela-

tions activism. However, the Bosch experience uses the German“codetermination” frame when Denner also adds. "In Germany also

we have strong unions and of course there are conflicting positions...This is very natural and needs to be accepted by both parties but it is

always, i think, with the common understanding that we have to reach

common solutions. And second, the solution has to be such the com-pany can still be competitive," (02) The approach is accommodative

but only so far as the accommodation does not impinge on the com-petitive dominance of the firm in the market place in terms of, quite

obviously, the uninhibited generation of surplus value. The industrial

relations strategy in this context is to deal with conflicts as a reality

to be acknowledged and confronted but by engaging unions within thedemarcated collective bargaining space, systems and substance.“Traditionally Bosch has very close and very good relations with the

employees. The current situation at Bangalore is a concern for us.

Taking into account that Bosch pays wages and benefits that belongto upper band of wage standards, our expectation is that we will find

an amicable solution soon." (03) The foundation of union-management relations is a form of “economism” which translates

into higher wages and benefits for workers relative to competition

with the management expectation that in return unions will be apoliti-

cal, non-confrontational and compliant.Yet another instance is that of a sit-in strike as reported online atAsti (AEIPL) which is a subsidiary of Asti Corp, Japan which produces

wiring harness, switches, controllers, and other automotive and elec-

tronics parts. It supplies to auto companies Suzuki Motorcycles,

Maruti Suzuki, Yamaha Motors, Omron Automotive, etc. with branchesin Japan, China, Vietnam and India. (03) The issues triggering theunrest related to the prevention of union registration, termination of

union leaders to prevent unionization, and other employment matters

like payment of minimum wages and intensification of work pressure.

(03) The immediate trigger was the abusive behaviour towards somewomen workers by supervisory and managerial staff. (03) Policewere called in but management conceded some of the demands to

avert further deterioration of the strike action. (03) The Asti workerstrike is distinguishable from the Bosch experience since the depic-

tion has more explicit overtones of political consciousness where thedeployment of the strike is not only meant to redress worker griev-ances but also geared to raising political consciousness. This in-

stance is a manifestation of the strike phenomenon which in and

through the worker-management dialectical struggle “uncovers” and

“unearths” the underlying exploitative and extractive nature of work

organization, structures and processes. The strike is not just an in-

strument of “economism” but also a means for “conscientization” ofthe working classes towards emancipation from exploitative struc-tures and regimes. A similar strike action at Baxter on February 19th,

2014 was also related to the travails of union formation to redress

worker grievances, which was again met predictably with transfersand suspensions of union activists. (03) The resort to a strike while

addressing worker problems is also oriented to “unearthing” and“uncovering” implicit agendas of managements with the larger pur-




DHYUTI 2015

pose of developing political consciousness related to regimes found-

ed on exploitative regimes.

The Bajaj Chakan plant strike in June 2013 was also related to con-tract labour, wage parity between contract and regular workers,

work intensification, washroom breaks but the 50 day standoff didnot produce any outcomes except for management agreeing to open

negotiations. (04) This strike illustrates how militant management

practices like refusal to initiate talks, harassment of union activists,state-management nexus, use of contract employees to break strikes

all combine together to even neutralize a 50 day standoff without any

significant outcomes for workers and unions, thus weakening thecurrent and future potency of union strike capability and member

strike propensity. Leveraging strike capability for the power demon-strability of union leaders also gets eroded in the process due to the

combined industrial relations power wielded by the state-

management juggernaut. However, even when there is a setback likein the Chakan strike deployment case from the perspective of “trade

union consciousness” driven labour action, this can still further thedevelopment of political consciousness related to the workings of

exploitative- extractive regimes. Politically conscious leadership and

membership of unions are less likely to be demoralized by setbacksto worker demands than leaders and members informed by

“economism” driven by trade union consciousness. The potency ofthe strike in such a case appears to be in the mobilization for the

struggle rather than in the achievement of outcomes from such

struggles, although outcomes are important for the sustenance ofthe morale of the members characterized by trade union conscious-

ness. The transformational dialectics of the transformation of con-

sciousness from trade union economism to political conscientization

is the union leadership challenge in strike deployment capability to-wards political mobilization.

The four cases referred to in this discussion reiterate that strikes inindustrial relations are still a reality but that there are variations in

the meaning and modalities of the lived experience of the strike at the

point of engagement. The strike deployment capability of unions is afunction of two pursuits – one characterized by “economism” refer-

ring to the struggle for better wages, better benefits and betterterms and conditions; the other characterized by the thrust towards

political transformation. Trade union mobilization informed by

“economism” only needs trade union consciousness. Since this is ageneral condition of all workers who are constantly looking for bet-

tering their working conditions, there is the ever present potentialfor mobilization on these grounds. The use of the strike in this frame

revolves around the quest for economic gain realizable through insti-

tutional mechanisms like collective bargaining. However collectivemobilization for political transformation calls for the development of

political or social democratic consciousness for which economismand trade union consciousness are only entry points. The use of the

strike in this frame revolves around the conscientization of the work-

er collectives towards political mobilization in the search for alter-nate modes of development characterized by social equity and eco-

nomic justice.

References :

http://www.vakilno1.com/bareacts/industrialdisputesact/

industrialdisputesact.html

http://articles.economictimes.indiatimes.com/2014-10-30/news/55595686_1_bangalore-plant-labour-unrest-jaipur-plant

http://maoistroad.blogspot.in/2014/02/india-workers-strike-in

-various.html

http://column.global-labour-university.org/2014/04/workers-

unrest-in-automobile-plants-in.html

https://sg.news.yahoo.com/india-braces-nationwide-strike-210625779.html




DHYUTI 2015

ARE WE IR READY?

- A cover story

Anand Kolanukonda, XLRI

“While the implementations are yet to be assessed, the re-sponse to the sweeping labour reforms that were announcedthis past year could be best summed up as polarising. Industry

leaders lauded these provisions for providing relief from ahighly stringent regulatory regime, government has touted this

to be the stepping stone into the manufacturing haven “Make in

India” campaign promised to deliver; while labour watchdogshave cried foul, as many trade union leaders claimed that

these changes drastically undercut the bargaining power of

workers and have exempted a large portion of the organisedsector from even the most basic protections that were due to

them, which seem pretty ironic considering the fact that thecampaign is named “Shrameva Jayate”. Whatever be the argu-ments of each parties, one thing all do agree on is the fact that

some change was necessary. India needed to adopt serious

measures to remedy the dismal state of affairs of our labour

market, a highly unorganised sector where the labour laws,though stringent only benefit a small portion of the population.

Also the flexible global supply chains that have been created totake advantage of a liberalised economy and efficiencies of

production that are achieved by outsourcing of jobs to cheap-

er labour markets, have created a scenario where employ-ment flexibility and responsiveness to market change havebecome critical to success. To achieve this, changes are not

only required at policy level, but also in restructuring of the

various institutional mechanisms that are involved with the

labour market is also required. The basic aim should be tocreate more jobs by helping creation of new firms and in-crease in size of firms, but also ensuring inclusive growth by

bringing a bigger chunk of the workforce into the organisedsector. So in light of these, let us analyse the current state of

affairs, and how we should proceed forward. We will try to

analyse what is essential for functioning of these marketswithin the framework and how this, in addition to other socio-

economic factors will result in making the country better.

As liberalising labour reforms have been peddled as the pana-

cea to remedy the stagnating growth of the country, we needto understand the basic underlying assumptions for thesmooth functioning of such markets:

The market will be able to sustain in such a setting.

The resulting transactions in the market should be ac-

ceptable to all the players. All the players will have the necessary information and

capability to arrive at an amicable decision.

It is also an implied certainty that the market is regulated by

demand and supply factors. If the demand is greater than thesupply, then the labour rent will be competitively calculated;whereas when supply is more than demand, the market can be

cleared at very low prices, which might be detrimental to

As India gears up to become the manufacturing des na on in the world, we try to examine if our industrial rela ons

mechanisms, the impact of recent moves to deregulate the labour markets, and analyse its alignment with our coun‐

try’s strategic vision, and suggest some changes which might aid us in our cause.




DHYUTI 2015

the workers and affect sustainability of the market. In thiscase the intervention takes place in the form of regulators,legislators other intermediary authorities to help sustain themarket, in which case industrial relations becomes a majortool. The market operates within this HR-IR spectrum. In India

the labour market has been hugely IR driven for workers,which has been identified as being a hindrance to industrialgrowth. So to remedy these the government has made thefollowing changes.

Labour Laws : The Indian labour market has been largelybeen on the regulated side of the spectrum, with the systemin place being hugely Tripartite. As market has not been left toits own devices, the intermediary institutions play a very cru-cial role in deciding the fate of the market. This is especiallytrue in the case of India where our various laws have ensured

heavy regulatory, conciliatory powers are vested with thegovernment, as is evident from chapter V-B of the ID act,which states that no industry with more than 100 workers canretrench a worker without prior government permission. Theimpact that these effects can have on the economy can bemeasured by three effects:

The increase in cost of labour Increased rigidity in the system decreasing flexibility of

labour adjustment

The expropriation effect, or the holdup problems thatworkers can cause to appropriate employer’s investmentonce they are sunk in, for e.g. Industrial disputes.

Of the three factors our laws have increased the rigidity inthe system by increasing protection of workers’ interest andallows for high expropriation effects as well, as the disputeresolution, conciliation mechanisms are very place high ex-propriation costs on the employers both in the form of timeand money. The argument regarding our labour laws has been

that heavy restrictions have dissuaded companies from grow-ing, or have led them to circumvent such restrictions by re-sorting to quasi-judicial measures, like heavy usage of con-tract labour, a point that has been validated by statisticalresearch as well (Besley and Burgess). Indeed 84% of Indianindustries employ less than 50 workers, compared to 24% inchina. As a result the industry remained underdeveloped andlabour got in formalised. These are the very arguments thatwere used by the government as they increased threshold for

coverage of factories act from 10 to 20 workers in factorieswith power and 20 to 40 in case of without power. Also a sep-arate provision for similar exemptions for small scale indus-tries from up to 14 laws is being considered, and states havealso been encouraged to come up with similar initiatives to

cut down the red tapism, and reduce redundancies, and re-duce the various costs which are associated with the enact-ment of these laws. Also introduced were changes to the ap-prentices act, where employers can start training withoutwaiting for a government notification, and also the duration ofapprenticeship has also been increased.

Inspector Raj : Another important focus area of reform pro-posals was the end of inspector raj. Self-certification hasbeen introduced which has replaced nearly 16 forms. This has

drastically reduced the power of Employees’ Provident FundOrganisation (EPFO), the Employees’ State Insurance Corpora-tion (ESIC), the Labour Welfare Department and other en-forcement agencies. This has effectively brought an end to thesurprise checks, as they will be replaced by randomised com-puter checks, which will select an industry on the basis oftheir compliance with self-certification, and will require re-ports to be filed within 72 hours, and any action will be initiat-ed only after scrutiny by a central agency. The UAN schemehas been implemented which allows for portability of EPF ac-

counts which might be a big boon for people who are changinglocations.As is evident by the kind of changes that have been intro-duced, the ambit of all the proposals en masse can be seem tobe favouring employers. The laws are aimed at providing la-bour flexibility and also reducing the expropriation cost, alsoallows the companies to train the employees in new skills toprepare them for an ever changing job market, reducing thedependency on ITI’s and other such vocational training insti-tutes. The closer scrutiny of inspection procedures shouldreduce fishing expeditions and harassment by labour officials.But giving a closer look, these reforms though issued in goodfaith, seem a bit short sighted and underserving. There arelarge sections of workers that have been continually ignoredand were not provided any relief with the current set ofchanges as well. No protections or regulations have been putforward for contract labourers, who account for a huge chunkof our workforce. Amendments to CLRA which were proposedby the Indian labour conference, which is a tripartite body




DHYUTI 2015

went largely ignored even though promises were made by theUPA regime on this as well. Also in the unorganised sector,rural and women workers, who account for nearly 94% of ourworkforce, no changes were proposed. Even for schemebased women workers, who are largely responsible for the

implementation of various government schemes like An-ganwadi Worker and Helper of the ICDS [Integrated Child De-velopment Services] or the Accredited Social Health Activist[ASHA] of the NRHM [National Rural Health Management], theIKP [Indira Kranti Patham] or Grama Deepika workers of theNational Rural Livelihood Mission or the various ShikshaKarmis were not considered workers and thus were deniedthe benefits regular workers enjoyed such as PF, gratuity etc1.So now let’s look at the collective effect of the proposed re-forms:

The labour law reforms: the idea that stricter labour lawshave been the reason for stunted industrial growth, especiallyin the manufacturing sector, have arisen due to various em-pirical studies which have claimed that there is a direct cor-relation between the strictness of regulations in a particularstate (as labour is a concurrent item, individual states arefree to develop their own legislations), and the growth rate ofthe state6. Evidence has also been linked to the inclusion ofchapter V-B of the ID act, another factor in industries dis-suading from growth. But of late, many studies have found

that the empirical evidence suggesting a correlation betweenthe two are fragile at best5. The reason for this is that eventhough tightened job security legislations were introduced,the provisions were being circumvented as jobs were beingsub-contracted to smaller forms and large number of con-tract workers were being used, which allows companies toexpand as much as they want. Also, though companies havestated that labour laws are restrictive, according to an IIC-

World Bank survey, other infrastructural and institutionalfactors like availability of electricity, tax rates, corruptionhave been rated as being bigger constraints. Even other de-veloping countries, principally China, are considered to havestricter regulations when compared to India9.

Even if they are considered to have increases the cost, thedirect labour cost increase is very minimal. As pointed out,the minimum wages allowed are much less than China, andthe monetary penal provisions involved with non-complianceof the various laws is very small. Only in the case of retrench-ment is the cost a bit high as the employer has to give 3months/1 month notice or wages in lieu thereof, but compa-nies have already worked around that by hiring contract la-bourers.So what is it in our current gamut of labour laws that is in-

hibiting growth? Of the three factors pointed out earlier, therigidity and the expropriation effect been the major results ofthe labour laws currently in place in India. In regard with this,both workers and employers have agreed that greater flexi-bility and specialisation of skills is critical in the current jobmarket. So even the market wants lesser influence of thesefactors, but removing both don’t seem to be resolving theunderlying issue. Therefore, the problem lies in the underlyingstructure itself, i.e. the market. As government regulationshad created a market largely insulated from the supply de-

mand dynamics. So it had existed in an industrial relationsenvironment, but instead of the two parties directly interact-ing with each other, they have been mediated through variousgovernmental mechanisms. Due to this the bipartite mecha-nisms have largely remained underdeveloped. As the marketsstarted to deregulate, this has created huge institutionalvoids in the market. This model will correct itself when thereis a dearth of skills in the market and the employers are

Fig 1 Ranking of perception of constraints (normalized to 100 for electricity) tofirm growth by manufacturing firms, by firm size

Fig 2 Average ICA scores on perception of labor regulations




DHYUTI 2015

Willing to decide prices according to the market rate, as doeshappen in the software industry which saw a boom and wasthe major growth factor in the last two decades. But for theskills with an excess supply, such as manufacturing, textilesand other low skill jobs, the intermediary mechanisms are not

developed well enough to sustain in absence of regulations. Inthis scenario, the growth might not be inclusive for the work-ers at low skill levels. Also, doubts are cast over the employ-ment generation capacity of such changes, as since the mar-ket has already moved towards cheaper alternatives like con-tract labour, the employers do not have any incentives formoving to a more labour cost intensive system, when they canreplace it with technology and higher skilled labour in criticalprocesses and subcontracting the peripheral jobs. Historical-ly, job growth in organized manufacturing is a small fraction

of overall growth of manufacturing sector, a trend which will

continue with introduction of capital intensive methods ofproduction which will create a demand only for jobs with high-er skills, leaving unskilled workers vulnerable, which mightcause a move to the informal sector or self-employment, atrend clearly seen in the last two decades. Though it could be

argued that any growth of the sector will ensure huge expan-sion of overall employment of the sector and since saturationis not a near possibility so market consolidation is unlikely,even then most of the jobs would be for skilled workers, offer-ing no reprieve to unskilled workers, who comprise of thelarger chunk of the market. The labour absorption capacity ofmanufacturing sector is also questionable, as the historicallythe capital to labour ratio has been increasing for all sectors,a trend that may very well continue as firms have no incentiveto shift to labour intensive models now.

Fig 4 Capital Intensity of Production Fig 5 Percentage of registered factories inspected in India, 1986-2008

Fig 3a Increasing Contractualisation of Workforce over the decade Fig 3b Increasing Contractualisation of Workforce amongst Labour IncentiveIndustries




DHYUTI 2015

For the growth to remain inclusive, the government has tounderstand that any reduction in the regulatory authority ofthe government has to be balanced with a proportionate in-crease in the empowerment of workers in representing theirown rights, essentially a bipartite model. Social security pro-

visions, giving more power to trade unions to negotiate bipar-tite agreements with management, and changing the role ofthe various regulatory and conciliatory institutions to pro-mote the same will be a same in that direction. The regula-tions in this regard should be aimed at reducing the expropri-ation cost and rigidity, like amending chapter VB of the ID act,and at the same time providing laws to safeguard the bar-gaining power of workers, like ratifying ILO convention 87 and98, and the proposed amendments to CLRA Act which givesincreased power to negotiate with employers1. Bipartite nego-

tiations will also ensure mutually agreeable terms whichmight extend beyond monetary remunerations, and will givean incentive for employers to hire a larger workforce insteadof utilising technology intensive systems. This should logicallyfollow from the fact that since the government wants themarket to dictate the terms, all it should ensure is that bothparties are in a position to do so. Government needs to stopbeing a mediator, but only regulatory duties should be per-formed which should be limited to implementing safeguards tothe well-functioning of the system, like minimum wage provi-

sions, ensuring basic facilities being provided at the work-place, and enforcing the same which brings us to the issue ofinspection. Harassment by inspectors was identified as a major pain point within the industry and there were many whocame out in praise of the same. But yet again, the statisticsshow a different reality. The percentage of registered in-spected factories has declined steeply since 1986, from63.05% to 17.88% in 20087.

This can mean that either that officials are unable to performthe requisite inspections or they are not performing their

duties due to their rent seeking behaviour. But the number ofinspectors has been constantly falling. In 2012, 3171 inspectorswere available to inspect 7.7 million establishments, an aver-age of 2428 establishments per inspectors. Even at an aver-age of 20 workers per establishment, this number is lowerthan the minimum of 1:40,000 ratio of inspectors per workingpopulation in under developed countries, as specified by ILO7.So, the decision of government to move from this to a self-certification model seems ill thought, as they effectively ren-

der the existing inspection bodies redundant. This is evenscary considering that the number of industrial accidentshave been going up.

So even if inspections had led to corruption and didn’t actuallyencourage compliance, allowing third parties to regulate theprocedure and allowing for self-certification is hardly thesolution, especially when the mechanism is severely under-staffed to effectively fulfil its duties. Instead, the governmentshould try to staff its inspection authorities adequately, and incase harassment is being cited as an issue, they can random-ly allocate inspectors. Also a single inspection authority could

be created, as this is often identified as the biggest pain point.This may be a difficult task as specialists from various de-partments will be required, and the inspection mechanismsmust be free from any external interference, but an issue ascritical as this cannot be left to self-certification. Governmentshould look into other alternatives that increase ease of com-pliance for the industries, and at the same time also ensurethat the entire system is completely autonomous.

Also in addition to these, there are other major sectors of

labour market where reform is desperately needed. In theunorganised sector, the workers hardly have any job securitymeasures provided to them by law, a segment which accountsfor 94% of the workforce. Rural workforce, especially ruralwomen who work in scheme based jobs are denied any socialsecurity benefits. A big chunk of the workforce in the organ-ised sector, the contract labourers, are also in need of somebasic job and wage security measures as the contract work-ers at lower levels of skills are getting increasingly marginal-

Fig 6 Number of fatal injuries per one lakh work days worked in the manufactur-

ing sector in India, 1980-2009.




DHYUTI 2015

-ised. Provisions for them to be paid similar wages to regularworkers or other similar provisions might go a long way inproviding them relief. It would benefit the rural workers andcontract workers if unions were allowed increasing powersfor collective bargaining, as these are the people who stand

more to gain from it. Presence of craft unions for rural work-ers might be a model which has greater chances of workingthan the typical vertical unions, as difficulty in assembling andtaking collective action is a detriment to unionization here,and necessary legal amendments to accommodate the samecould be made (currently craft unions generally work as as-sociations and are not registered as trade unions.)

These provisions en masse, seems to be a gamble for thegovernment which, though will generate jobs, will be dispro-portionate to the highly skilled workforce and will not benefit

the lower end of the market, which is where the majority ofthe labour supply lies. To ensure inclusive growth, where theolder workforce is not left marginalised and untouched by theplethora of new opportunities, government has to also trainthe unskilled workers, and also retrain the current skilledworkers as well, so that their skills stay relevant in a technol-ogy driven environment as well. It will also be a deterrent inhiring contract labour as the level of specialisation requiredwill be high. Of course, none of these work in isolation. Majorinfrastructural reforms need to be in place as they are identi-

fied as the principal deterrent to growth. Issues of corruption,good governance and bureaucratic complacency will alsoneed to be resolved to be resolved for companies to operateunhindered. If government can take into account these fac-tors, and can provide benefits for the lowermost level ofworkers, inclusive growth can still be achieved, and will defi-nitely help in delivering a truly developed, global India.

References:

http://www.frontline.in/cover-story/labour-under-attack/article6540729.ece

http://www.epw.in/web-exclusives/myth-inspector-raj-

india.html http://en.wikipedia.org/wiki/Indian_labour_law

http://www.crisil.com/pdf/corporate/EmploymentInsight_CRISILResearch_Aug2011.pdf

Bhattacharjea, A. 2006. “Labour market regulation andindustrial performance in India: A critical review of theempirical evidence.” The Indian Journal of Labour Eco-nomics, 49(2): 211-32.

Besley, T. and R. Burgess. 2004. “Can regulation hindereconomic performance? Evidence from India.” QuarterlyJournal of Economics, 119(1): 91-134.

http://www.foreignaffairs.com/articles/67874/michael-spence/globalization-and-unemployment

CONTRACT WORKERS: THE NEED FOR ‘COMMUNITY OF IN-TEREST’ PERSPECTIVE K.R. Shyam Sundar*

HELPING OR HURTING WORKERS?: ASSESSING THE EF-FECTS OF DE JURE AND DE FACTO LABOR REGULATION IN

INDIA AHMAD AHSAN and CARMEN PAGÉS*

Chetan Agrawal.2013."The Effects of Liberalization on theIndian Economy-A Labour Force Perspective"




DHYUTI 2015

T‘O-B’ or not T‘O-B’ in Industrial Relations

Impact of Organization Behavior in IR

Tejesvi Dhankhar, XLRI

If I consider myself a warrior in the war of the Business world

then my ‘Trisul’ would include Human Resources (HR), Industri-

al Relations (IR) and Organizational Behavior (OB). All 3 ofthem are core courses that help an HR manager provide thebest to his/her company. A common myth is that IR includes

the hard skills while OB includes the soft skills. I am more in-

terested in exploring the concoction that these two subjectsproduce. Can we understand the IR of an industry using OB

theories? Let us find out…

The purpose of existence of Trade Unions clearly follows hu-

man psychology. The moral and ethical role is derived frompositive psychology. It talks about Compassion for the unfortu-nate. Trade Unions (TU) exist because workers feel that the

troubles that evoke their feelings towards fellow workers areserious, they think that the sufferers' troubles are not self-

inflicted, and can picture themselves with the same problems.

The psychological/ defensive purpose is reflected in Maslow’s

Hierarchy of Needs. Each human being has the strong urge to

fulfill their Safety and Belongingness Needs.

Being a part of a TU gives workers a feeling of protection fromany possible exploitation from the employer. The various actsand the constant support of the TU leader give the worker the

confidence that there exists a structure solely for their well-

being.Being a part of this structure also gives them a sense of be-

longingness. They feel appreciated and important for being apart of a TU and can constructively contribute towards the

welfare of their peers. It might also boost up a worker’s self-

esteem because they get a chance to ‘recover their lost moor-ings due to industrialization’.

Another needs theory of OB can also explain the existence of a

TU.




DHYUTI 2015

McClelland’s Motivational Needs theory talks about the Needfor Power. Being a part of a TU may make a person feel that

their personal as well as social power has increased. Withincreased power TUs can fulfill their political motives and also

be revolutionary in creating social change. With power comes

confidence, this confidence can eventually help the workerselevate their status in the company and society. It also feeds

into their need for achievement. As they feel powerful theyare motivated to achieve. Being affiliated to a TU brings them

all three: power, achievements and affiliation.

Whatever the reasons for a TU Existence, they are an im-portant part of the Indian industry. Naturally due to the nature

of the management and TU structure there are conflicts that

occur and need fast resolution.

Conflicts in Industrial Relations are explained using the HumanRelations Theory. It propagates that Conflict is an aberrationof human society. Total elimination of conflict is not possible

but it is possible to contain conflict within the broader frame-

work of consensus and harmony. Conflicts occur because theIndustrial society treats workers as an isolated individual and

deprives them of all control over their environment. This lossof mooring and control is a major source of conflict.

Organization behavior also talks about the wide range of con-

flicts people experience in organizations. These conflicts canoccur due to goal incompatibility, differences over interpreta-

tions of facts, & disagreements based on behavior expecta-tions. The Runde-Flanigan model illustrates the conflict reso-

lution strategies.

The chief parameters of defining conflict management strate-

gies are whether they are active, passive, constructive ordestructive. In this model, even if avoidance has its place, it

is typically a destructive behavior.Collective Bargaining is an active & constructive strategy. The

contract / agreement after a successful CB leads to proce-

dural justice. CB can be looked at as rituals of negotiation thatprovide a cathartic effect on pent up tensions of both the

management and the union. The process is a joint responsibil-ity in the form of Workers participation in Management.

Many more phenomenon in IR can be explained using OB con-

cepts. The trick is in resolving and handling IR issues usingthese concepts.

A trade union becomes obsolete if the management can effi-

ciently provide for the needs of the workers. Empowering

workers and giving them a role in Decision Making will makethem feel power. This can be successfully attainted throughworkers participation in management. Applauding workers

efforts in improving productivity of the organization goes a

long way in feeding their need for affiliation. Recognition andappreciating workers will make them feel as an integral part

of the organization. They don’t need a TU because they belongto the organization. Promoting self-managed teams on the

shop floor versus mirco-management will also increase the

sense of belongingness. As the workers feel empowered andan integral part of the organization their performance will

greatly improve. This improvement will fulfill their need forachievement. All this can be achieved if the management is

cooperative and willing to give workers their due credit. Then

a worker should not feel the need to be a part of a TU.If a trade union still exists, Healthy collective bargaining will

ensure fairness in the organization. The TU and the manage-ment can work together. They should not be seen as warring

entities but as representatives of two different cadres ofemployees. Management education can help all of us coordi-nate our knowledge and create innovative solutions to age old

issues. All we have to do is keep an open mind and be willingto change. I would like to end with my IR professor’s (Dr.

Pranabesh Ray) quote, “Ultimately it is all about employees

DIGNITY.”




DHYUTI 2015

References

Maslow, A.H. (1943). A theory of human motivation. Psy-

chological Review 50 (4) 370–96. Retrieved from http://psychclassics.yorku.ca/Maslow/motivation.htm

David McClelland’s Three Motivational Needs. Retrieved

from https:/ managementpocke-

books.wordpress.com/2012/11/20/david-mcclellands-three-motivational-needs/

Craig Runde and Tim Flanagan. Becoming a Conflict Com-petent Leader: How You and Your Organization Can Man-

age Conflict Effectively.

Professor Pranabesh Ray’s IR Lectures.

Quiz o Mania

The field of industrial relations (also called labour relations) looks at the relationship between ________ and work-

ers, particularly groups of workers represented by a union.

The system of resolution of Industrial Disputes prevalent in India is ______________ Labour relation is an important factor in analysing "varieties of ________", such as neocorporatism, social de-

mocracy, and neoliberalism.

A process in which a trade union and an employer negotiate, in good faith, the rights and obligations of a firstcollective agreement or the renewal of a previous agreement.

Which Act of Parliament defines a `trade union’ and governs much of the law on industrial relations?

A form of union security agreement under which the employer agrees to hire union members only, and employees

must remain members of the union at all times in order to remain employed or an agreement requiring all em-

ployees to join the union if they are not already members. What is the minimum number of members, a prerequisite, to register a trade union.

Which frame of reference views the natural state of organisations as one of harmony and cooperation?

In which year was the Minimum Wages Act was formulated?

Which is the approach which assumes that voluntary negotiations between employers and employees are a means

of settling disputes?

Which organisation has developed a voluntary code of practice relating to the use of disciplinary and grievance

procedures? Which is a specific form of protest organized with the intention to prevent or dissuade the non-striking employees

from attending to their work during the strike period?

A n s w e r s ( n o t i n o r d e r ) — C a p i t a l i s m , C o l l e c t i v e B a r g a i n i n g , M a n a g e m e n t , T h e T r a d e U n i o n a n d L a b o r R e l a t i o n s ( C o n s o l i d a t i o n ) A c t 1 9 9 2 , S e v e n ,

1 9 4 8 , A C A S , P i c k e t i n g , T r i p a r t i t e s y s t e m , C l o s e d S h o p , G i r i A p p r o a c h , U n i t a r i s m P e r s p e c t i v e




DHYUTI 2015

Word Search

Union with Sardar Vallabhbhai Patel as their first president.

System of settlement followed in India. Any person who supplies workers to other organisation.

________ refers to the cessation of work in order to get a bargaining position. _________ refers to a type of strike action in which the strikers call in sick.

A system whereby an employer regularly deducts a portion of an employee's wages to pay union

dues or initiation fees. First organisation in India to introduce 8 hours working system.

Industrial ___________ is a governmental judiciary body which rules on labor or employment-related matters and disputes.

A union of unions is called a ________________ The largest trade union federation in the world is based in ___________

Q J L M E T U O K C I S P M A

H F I O B U S C Y L Z N B A O

W E M K N L C Z K E A S R X J

C H E C K O F F I T K O R E S

D P I C A G I E J A T I T T L

P B N D A S L T S C K I R X E

C J T E T H H R A D T H S T S

I O U P A K G R X R F F F A S

U A C V T A T V A D E J V C U

T H T L V N L P Z Z O D A E R

R Z O G O C I E A J Y B E A B

F Z Q Y M R N K I P H F S F A

R W A S T R I B U N A L H I F

C A R E T D Y X Q G T I U R O




DHYUTI 2015

2014-2015 : The Year That Was

Fire@x, The Forum for Industrial Relations at XLRI has been at the helm at organizing various activities all year round

aimed at promoting the interest for Industrial Relations among the students of XLRI and the other top MBA schoolsacross India. The year 2014-15 began with the guest lecture by Mr.Amit Malik, CHRO, Aviva Life Insurance India Ltd. The

agenda of the lecture was to equip the students with expert knowledge about Industrial Relations in the Service sector.

The students were exposed to a variety of case studies which consisted of our expert’s real-life experiences and

workplace dilemmas.

XLRI Jamshedpur and Fire@x also conducted the first ever seminar which was in collaboration with the International

Labour Organization. The seminar was based on the theme of Labor Laws and Governance Reforms in India in the era of

globalization. The seminar saw participation from some very eminent personalities, belonging to fields as diverse as

Academicians, Trade Union Representatives and Representatives from ILO apart from the student community. Some of

these guests included Mr. Raghwan, Asia Pacific Desk Officer, ILO ACTRAV, Bureau for Workers’ Activities, Geneva,

Professor Dev Nathan, Dr. Pravin Sinha from Indian Industrial Relations Associations, Professor Praveen Kumar Jha

from Centre for Informal sector & labour, Mr. Chandrashekhar Prakash Singh and Mr. Shyam Sundar Sharma, both

Trade Union representatives, Ms. Ramapriya Gopalkrishnan from Madras High Court, Ms. Christine Nathan from ILO

ACTRAV, Bangkok and several other guests and delegates. The seminar also saw an extremely lively interactive ses-

sion where members of the audience, including the future managers of tomorrow pose some extremely relevant ques-

tions to the panelists. All in all, the seminar marked a first of its kind association between two very well established

bodies, namely XLRI and ILO.

The second visit to ITC Munger (450 km from Jamshedpur) was organized successfully on 6th November 2014. Thevisit was conducted for the second year in succession and is now becoming one of the most sought after events for

XLRI students. The students got to witness the life in ITC’s tobacco factory and also got to interact with several Trade

Union leaders. The management also shared its best practices and organized several games between ITC employees

and the XLRI students. The event was a perfect mix of learning and fun for the students.

Fire@x also conducted the first management quiz league, a series of 3 quizzes over the course of 2 months. The quiz-

zes were in the form of crossword, Build the connect and trivia pertaining to Industrial Relations. The event witnessed

participation from top 30 B schools in India and was a widely appreciated.

Among other events of Fire@x were the events conducted during Ensemble 2014. Apollo, the new simulation event wasa first of its kind event where students had bargain among themselves. Strike or Yield, the flagship event witnessed

participation from top 20 B schools in India. Fire@x continued with its regulars such as the icebreaker event, monthly

IR magazine Samhita and the yearly magazine Dhyuti.




DHYUTI 2015

Glimpses : Year 2014-2015




DHYUTI 2015

Narendra Modi’s Labour Reforms

and Their Impact

Swati Sinha, XIMB

Abstract

Mr. Narendra Modi launched a series of labour reforms as a part of his “Make in India” campaign. Primarily, amendment has

been made to three labour laws namely, the Factories Act, 1948; Apprentices Act, 1961; and the Labour Laws (exemption fromfurnishing returns and maintaining registers by certain establishments) Act, 1988. His major labour reforms include UniversalAccount Number scheme for all provident fund contributors that would allow portability and online tracking of provident fund

benefits; “Shram Suvidha” online portal that would allow employers to file a self-certified single compliance report for 16 Cen-

tral labour laws; end of Inspector Raj wherein units for inspection would be picked by a computer lottery from the database;apprentice Protsahan Yojana and Rashtriya Swasthya Bima Yojna. With the new reforms, industrial regulations would become

more automated and transparent. They would help in streamlining the cumbersome compliance process, make the inspectionsystem more transparent and data driven and address the issue of skill gap faced by many Indian enterprises currently. The

new reforms aim to create a conducive environment to do business. It would also encourage setting up of new factories there-

by creating more jobs.. The reforms would make a dent in the complex bureaucratic web of Labour Laws implementation in In-dia. They can be seen as a “jolt to an otherwise complacent trade unionism that has evolved in an unscientific, haphazard and

defiant manner over decades.” There is still a need of some big ticket changes in labour laws primarily related to Industrial

Disputes Act, 1947; Contract Labour Act, 1970; and the Trade Union Act, 1926. With the wind of change blowing in the form ofcurrent and prospective reforms by Mr. Narendra Modi, these can be considered as small steps towards the changing dynam-

ics within IR.

Narendra Modi’s Labour Reforms and Their Impact

As a part of his ‘Make in India’ Campaign, Mr. Narendra Modirolled out a series of labour reforms during the Deen Dayal

Upadhyaya Shramev Jayate Karyakram organized by the Minis-try of labour and employment. Primarily, amendment has been

made to three labour laws namely, the Factories Act, 1948;

Apprentices Act, 1961; and the Labour Laws (exemption fromfurnishing returns and maintaining registers by certain estab-

lishments) Act, 1988. His major labour reforms include:1. UAN (Universal Account Number) scheme – UAN would

be provided to all provident fund contributors that wouldallow portability and online tracking of provident fund ben-

efits.

2. Single window compliance - Mr. Narendra Modi launched




DHYUTI 2015

an online portal named “Shram Suvidha” that would allowemployers to file a self-certified single compliance report for

16 Central labour laws. This would facilitate a common windowfor online registration of units, filing of annual returns, re-

porting of inspections, and redressal of grievances. A unique

labour identification number or LIN would be allotted to eachemployer after registration.

3. End of Inspector Raj – The Prime Minister aims to replace

the “Inspector Raj system” with a system based on “trust andresponsibility”. Once an employer registers his/her unit on

the online portal, a computer lottery would pick up the units

for inspection from the database. A Central Analysis and Intel-ligence Unit would be set up to analyze data to decide the

units for inspection. The area of inspection would be divided

into three parts: mandatory (extreme situation), optional(system-generated) and compliance-based. Labour inspec-

tions by four central agencies; EPFO, Employees’ State Insur-ance Corporation, Central Labour Commissioner and Director

General of Mines’ Safety; would be based on this list.. After

inspection, the inspectors would have to upload their reportswithin 72 hours with the reports not being allowed to be modi-

fied later.4. Apprentice Protsahan Yojana - To support the youth who

undergo vocational training after completing class 10th andgraduating from Industrial Training Institutes across India,

the labour ministry would reimburse manufacturing units, 50percent of the stipend paid to them during first two years of

their training. The government in august 2014 passed the Ap-prentice (Amendment) bill in Lok Sabha to amend the Appren-

tice Act, 1961 so as to increase its span to more number of

trades.5. Rashtriya Swasthya Bima Yojna – Smart cards of the

workers in unorganized sector would be linked to two socialsecurity schemes.The pilot programs would be launched in central agencies and

PSUs.

Critical Analysis

The Provident Fund scheme has about 80 million members.

UAN scheme would help in automation of PF contributions andclaim settlements. Thus, when the employees change job, it

would make movement of social security funds easy. Today,more than Rs. 27,000 crores is lying unclaimed in PF ac-

counts because of complex bureaucratic procedures. UAN

scheme would address this issue by facilitating online track-ing. However, the scheme does not take care of the vulnera-

bility of the contract and casual workers in this regard whoare uncertain about their PF dues and even suffer from non-

delivery of the dues. Another issue is that there is a need of a

well designed and structured IT infrastructure to facilitate e-transactions.

The single window system would reduce the unnecessary bur-

den on the employers by streamlining the cumbersome com-

pliance process. Under the current system, the employershad to manually file the return which was time consuming.This system would also reduce the duplicity in records. E.g. –

Currently, the labour law compliance aid is being provided to

1.3 million companies but after incorporation of the new sys-tem this figure is expected to reduce to 70,000-80,000.

It would also make the inspection system more transparentand data driven. Currently, units for inspection were selected

arbitrarily by the inspectors, without any objective criteria,

allowing inspectors to harass unit owners and even exploitthem in cases of violation of rules. This scheme would curb

the bullying power of the inspectors and would also addressthe issue of false complaints made by union and workers.

Lack of adequate manpower in the labour departments made

conducting inspections very difficult. E.g. – Haryana govern-ment has 11 inspectors for over 1200 units. At present 175,000

inspections are carried out by 8,000 inspectors in a year.Also, inspection rates (proportion of registered factories that

have been inspected) have declined from 63% in 1986 to 18%in 2008. The new inspection system would help the labourdepartment in better management of the affairs thereby in-

creasing their efficiency.The onus of this scheme would lie on the citizens thereby

bringing in accountability. However, there is a flip side to this

story also. By misusing the provision of self certification,




DHYUTI 2015

Industries may certify without complying which may go un-checked for a long time until the lottery picks up the non com-

plying unit for inspection. Moreover, if labour inspectionswere centralized with the visits being controlled in any man-

ner, including control over visit timings, it would directly

violate ILO Labour Inspection convention 81. According to thisconvention, the ratifying countries (which India is) would cre-

ate a labour inspection system free of external influenceswherein inspections could be held at any time and any place.

The apprentice scheme is aimed to address the issue of skill

gap faced by many Indian enterprises currently. The schemewould increase apprenticeship coverage to 2.3 million from

the present 490,000. The scheme would support 100,000

apprentices up to March 2017. In the wake of amendments

being made to this act, the unions fear legitimization of exploi-tation of the apprentices by the employers. Under the newamendments, penalty for violation of the act has been re-

duced. Also, employers are empowered to start training in a

new trade without waiting for a government notification. Un-ion’ contention is that this would lead to trainees being em-

ployed for long durations on amount less than the minimumwages.

The trade unions are even opposed to certain amendments in

the Factories Act. E.g. – the amendment bill proposes to raisethe number of workers for the purpose of applicability of this

act from 10 to 20 in factories operating with the aid of powerand from 20 to 40 for those operating without aid of power.

Union’s contention is that because of this a lot of workers

would be excluded from the purview of the act.

Changing IR environment

According to World Bank,

India has one of the world’smost rigid labour markets.

India needs fewer and sim-

pler laws. The Archaic la-bour laws, instead of pro-

tecting the welfare ofworkers have actually hurt them by leading to lesser job cre-

ation in the organized sector. The new reforms aim to createa conducive environment to do business. It would also encour-

age setting up of new factories thereby creating more jobs.Industrial regulations would become more automated and

transparent. The reforms would make a dent in the complex

bureaucratic web of Labour Laws implementation in India.There would be reduction in paper work, cumbersome pro-

cesses which in turn would increase the efficiency and func-tioning of the labour department as well as the industries.

However, better implementation of the schemes is very im-

portant.Some experts are of the view that since the current reforms

have been rolled out without consulting the trade unions, it is

a dilution of tripartite mechanism. But this can be seen as a

“jolt to an otherwise complacent trade unionism that hasevolved in an unscientific, haphazard and defiant manner overdecades.”

There is a need of some big ticket changes in labour laws

primarily related to Industrial Disputes Act, 1947; ContractLabour Act, 1970; and the Trade Union Act, 1926. E.g. – Chapter

5B of ID act makes lay off and retrenchment of the workersnearly impossible even though the company is nearly bank-

rupt. There are several such redundant clauses and provi-

sions in various acts which hinder smooth and free function-ing of the enterprises. These have to be addressed. The gov-

ernment has announced that work was in progress on re-forms in the area of child labour and the micro, small and

medium enterprises sector. With the wind of change blowing

in the form of current and prospective reforms by Mr. Naren-dra Modi, these can be considered as small steps towards the

changing dynamics within IR.

References:

Paper titled “Indian Trade Unions – On the Brink of Ex-

tinction?” by Dr. E.M Rao, published in Personnel Today,

Vol.19, July-September, 1998 Article “PM Narendra Modi announces labour reforms to

boost ease of business”, by Somesh Jha, Business stand-ard




DHYUTI 2015

Article “Narendra Modi to launch three key labour reforminitiatives”, by Prashant K Nanda, http://

www.livemint.com/Politics/DM4LuIBfnYMIuRgVjbFk7O/Narendra-Modi-to-launch-three-key-labour-reform-

initiatives.html Article “Labour under attack”, by T.K Rajalakshmi, Front-

line Article “Modi rolls out labour reforms”, The Hindu

Rise of Individualism IR Concept

hp://labourbureau.nic.in/idtab.htm

Based on provisional data sourced for January‐April over the period 2013‐15.




DHYUTI 2015

MAKE IN INDIA: MORE THAN JUST

LABOUR LAWS?

Sarthak Gupta & Anubhav Agrawal, XLRI

With the Modi Government working on making India a manufacturing hub, is the focus on the field of la-

bour law sufficient, or is a conscious decision required to make it an all-inclusive movement?

India is dreaming big and ambitiously. With the launch of the“Make in India” campaign, it has set its eye on becoming a

manufacturing superpower to fulfil the aspirations of its hugeworking population. It is expected that the campaign will cre-

ate 9 crore jobs in the next decade and raise the contribution

of manufacturing sector from 15% to 25% of GDP. However,the success of this initiative is dependent on many factors,

one of the most critical being the way in which the foreigncapital can be attracted to the Indian market. The Central

Government plans to create an air of confidence for the for-

eign investors through effective governance, faster decisionmaking, tax reforms and better policy environment.

In a plan to directly target these issues, the Union Govern-ment plans to overhaul the archaic labour laws of the country.

With labour being the most important factor, it will take muchmore than fancy campaigns and slogans like “Shramev

Jayate” to turn the tables in favour of the campaign. Indian

labour laws are extremely restrictive as they lay out rigidprovisions for Government approval in cases of hiring and

firing and closure of industrial establishments employingmore than 100 workers. Even with case of contract labour,

CLRA requires a prior 21 day notice for changing nature of

work. These restrictions act as a big hurdle and deterrent forinvestors to deploy new technology or dismiss workers. This

has forced the employers to try and circumvent the written

law and heavily rely on contract labour. An important point is

raised as to how much at the ground level tweaking labourlaws would favour investments. For example, Chapter V-B ofthe ID act requiring government permission on lay-offs, re-

trenchment and closure applies to only about 2.4% of employ-

ees as a stunning majority is in unorganized sector and majority firms exist below the 100 mark figure.




DHYUTI 2015

The Centre has taken key initiatives – like easing the compli-ance burden through self-certification on Shram Suvidha

Portal and attacking the “inspector raj” by introducing IT in-frastructure for greater accountability and transparency.

Much has also been said about the government deciding to

make its stance clear by concentrating on worker welfare byfixing a minimum pension under Employees’ Pension Scheme,

making Provident and Pension Funds portable; and increasingthe maximum work hours in Factories Act to raise productivi-

ty.

The ongoing hype about the labour laws, however, is just thetip of the iceberg. It is widely believed that not only does India

need to work on these laws, but also needs to bring down the

cost of investment and tax burden in the country, needs to

develop the right infrastructure and also develop skilled laborforce to be able to support the growth that will be broughtabout by this project. Delay in clearances owing to environ-

mental issues, high interest and land acquisition costs can

spoil the party sooner than later. The Indian Government hastaken serious efforts in this direction by working towards the

amendments of certain acts.On the tax front, India is optimistically looking forward to im-

plement GST by 2016 which is poised to solve the issues of tax

leakages and cascading impact of taxes. The move to reducecorporate tax to 25% over the next four years and relaxation

of custom duties on major raw materials has been commend-able. The cost of capital is expected to come down with easing

inflation and RBIs acknowledgement of the same as seen in

the two subsequent rate cuts in 2015. This has been wellcomplemented by Government’s bold measure to amend and

undo the land acquisition act. With the Lok Sabha passing theApprentices (Amendment) Bill, 2014, the way has been paved

for an increase in the availability of better skilled workforce.The industry has been given greater flexibility in hiring of ap-prentices and the apprentices themselves have been given an

elevated status by linking their wages with those of the semi-skilled industrial workers and providing them with better

leave benefits that are similar to the regular workers in the

organized sector. Allowing the industries to hire non-engineer

apprentices as per nature of the job is another step that em-powers the sector. Finance Minister Arun Jaitley in the budget

2015-16 went all out to boost this by launching the NationalSkills Mission, allocating funds to improve employability and

setting up institutes to enhance reach.

Apart from this, the Government needs to bolster infrastruc-ture including transportation, power, water and land like Chi-

na with no scope for any delays on account of lethargic bu-reaucracy or ministry clearances especially environment. The

Government has to rely on private investments in railways,

power generation and roadways to ensure hassle free opera-tions to the industry. With Prime Minister Narendra Modi him-

self spearheading the campaign and leaving no stone un-

turned to showcase to the world India’s prospects, the future

for the “Make in India” campaign looks bright.The Modi Government has taken serious efforts in its endeav-our towards transforming India into a manufacturing hub but

a lot remains to be done. The initiative would require serious

commitment, disciplined approach and crucial support fromall stakeholders including political parties, trade unions and

the industry. It urgently needs to address the key issues oflabor laws, tax reforms, infrastructure and skilled manpower

simultaneously and comprehensively before the campaign

loses momentum and falls prey to skepticism and populism.

References:

http://articles.economictimes.indiatimes.com/2014-09-

25/news/54317795_1_pm-narendra-modi-growth-pmo-india

http://www.eastasiaforum.org/2014/11/12/no-easy-task-for-indias-labour-reforms/

http://en.wikipedia.org/wiki/Make_in_India http://www.financialexpress.com/article/economy/bjp-

ruled-goa-slams-centres-move-to-dilute-factories-

act/40517/ http://indiabudget.nic.in/budget.asp




DHYUTI 2015

UNIONISATION IN PRIVATE SECTOR

Ravi Bhargav S V, XLRI

In light of the retrenchment in TCS, should the government be a stakeholder in the redressal mecha-

nisms of the service sector?

Unions have asked retrenched employees from the IT sector toconsider forming unions in light of pink slips being handed over

to many.This was amidst news reports that TCS was retrenching about

25,000 employees in the designation of Assistant Consultant

and above to pave way for approximately 35,000 freshers as

part of its cost-cutting measure.A group of retrenched employees from TCS had formed Welfare

Association of IT Employees (WAIT) and had been called by theDeputy Labour Commissioner, Telangana for a conciliatory

meeting in this regard. The latter had acknowledged that IT isnot exempted from the Industrial Disputes Act, 1947, which

implied that all retrenched employees have a right to raise anindustrial dispute in case of retrenchment without notice

served.

While terminating an employee is a prerogative of the company,absence of a regulating mechanism makes one fear victimiza-

tion. Traditionally Trade Unions have been viewed as ‘problem-creators’ by managements in various companies. While Article

19 1 (c ) of the Indian Constitution gives one the right to form

associations and unions, the service sector has always prideditself as a place where effective grievance redressal mecha-

nisms are in place, eliminating the need for government inter-

vention. But a retrenchment on such an allegedly massivescale, is bound to raise eyebrows. Especially when Ajoyendra

Mukherjee, TCS EVP & Global Head – HR commented that the

hiring target was 35,000 for the fiscal year ending March 31,2015, the reality was camouflaged.

A worker is defined as “one who is employed to perform anymanual, skilled, unskilled, technical, operational, clerical or

supervisory work for hire or reward….but does not include…one who being employed in a supervisory capacity, draws




DHYUTI 2015

wages exceeding 10,000 rupees per mensem “ according to

the Industrial Disputes Act, 1947. So does this imply that entrylevel engineers in companies like TCS fall under the definition

of “workman”?

The act was formulated to protect against victimization of

labourers in mines, factories and other public utility servicesand offer a legitimate conduit for grievance redressal. Thismakes the “appropriate government” (State or central) a

stakeholder in any employee-related decision made by the

managements of those companies. This led to resentmentamong industry leaders who felt that there was no space for

free decision making as the government’s permission had tobe sought for laying off or retrenchment. Such decisions were

made mostly based on industry dynamics and hence the tedi-

ous process was slightly irksome.

The Rajasthan government’s amendment to the ID Act to in-

crease the limit to 300 workers from 100 was welcomed by

the industry but the trade unions, predictably opposed it. Un-der this amendment, companies can close down units where

the number of workers employed is less than 300, without

seeking government’s permission. Previously, permission wasnot granted by the government on the grounds of public inter-

est and fear of being termed ‘unpopular’. Caveats to preventmisuse could be introduced so that interests of all stakehold-

ers are taken into account.

One solution could be to increase the number of posts of con-

ciliation officers to cater to the rise in disputes. Also the con-ciliation officer’s views could be taken as a reference for

further processes like those in an Industrial Tribunal or La-bour Court. A deadline for disposal of cases must be enforced

along with mandatory adjudication if the parties are unhappy

with the system and awards. Attention must be paid to theservice sector as it employs the maximum number of people

in today’s world.

References

http://www.thehindubusinessline.com/features/

smartbuy/tech-news/tcs-retrenchment-labour-dept-

meets-sacked-staff/article6861426.ece

http://www.thehindubusinessline.com/features/smartbuy/tech-news/court-stays-termination-of-tcs-staff/article6785746.ece?ref=relatedNews

Taxmann’s Labour Laws 2014 edition

http://knowledge.wharton.upenn.edu/article/india-modi

-government-labor-law-reform/




DHYUTI 2015

Make in India: Is Our IR Setup Ready?

Varun Kumar. Y, XLRI

P r i m e

Min ister

NarendraModi hasp i t c h e d

the ambi-

t i o u s‘Make in

I n d i a ’campaign

to trans-

form India into a manufacturing hub for the world, on the linesof what China has achieved over the last two decades. It

hopes to create much needed jobs in a country with morethan 65% below the age of 35. By 2020 the average age is

expected to be 29. So such initiatives, especially in the manu-

facturing sector are welcome, since the sector has largelyregistered little to no growth in recent decades. The fiscal

2013/14 was one of the worst years in terms of manufactur-ing growth in more than 14 years. The recently published Eco-

nomic Survey, 2014-15, by the Finance Ministry more or lessconfirms this fact, with many of the major industries likesteel, cement and refinery production posting lower growth

than the previous years.So the scenario seems ideal to push for rapid regulatory re-

forms to enable investors to setup ventures in the country.

While the economic logic behind projecting India as a manu-

facturing exporter for the world in the current global scenar-

io has been under the spotlight, there are other deep lying

issues regarding our labour scenario that need probing.Firstly there is the issue of labour reforms that have beenhinted at by the government and asked for by the industry, to

free up the rigid labour market and make it more flexible.

Admittedly some aspects of our labour law framework aredense and anachronistic with lack of uniformity, many of them

carried over from the British rule. Some sections like theinfamous Chapter - VB of the Industrial Disputes Act, have

been enforced during the darkest phases of our democracy.

The entire idea behind the push for righting such perceivedwrongs is to generate more investments into our industrial

sector, which will create more jobs.While these might appear to be stifling the entrepreneurial

instincts of would be employers or detriments to growth

among SMEs, we have to look at the day-to-day workings of anestablishment to see if these laws need reforms so badly. The

premise being here is that these laws are actually enforced,that employers and employees stick to the laws and diligently

report any mishaps. But the evidence suggests otherwise.The proportion of inspected factories has steadily declinedover the last 30 years, from about 63% in 1986 to 17% in

2008. This could be attributed to our poor data collection to




DHYUTI 2015

some extent, but it does paint a telling picture about the waythings work in the field. The last couple of years have seen

over 50 strikes with many of them concerned with trying tostymie the scourge of contract labour and the various com-

plexities it entails. Employment of contract labour, though

sanctioned by law, the ways it is carried out in our industriesis barely legal and almost unethical. Any expansion in our

manufacturing sector is bound to bring in more unorganised/contract labour into it. Though the official figures peg the

proportion of informal labour at about 63% of our workforce

(World Bank Development Report, 2010), experts estimate it tobe at least 90%. This brings in further complexities, since our

existing labour laws do not concern themselves with the

rights and welfare of these employees.

One of the major strike notice in recent times has been theCoal India strike of late 2014 which was called off on its sec-ond day in January, 2015. The issue was with the sale of gov-

ernment stake in Coal India to private investors. Their fear is

with job security, since there might be a restructuring thatmight follow such a shake-up. A point to note here is that Coal

India workers are among the least productive in similar firmsin China and the USA. Part of it could be attributed to techno-

logical advances. But it is questionable as to why this issue

rarely comes in to the picture during such negotiations. The‘Make in India’ does call for the skilling of our workforce to be

on par with the rest of the workforce. How justified then, are

the unions in calling for a strike on frivolous grounds, ground-ing the entire organisation with a permanent workforce of

286,196, and about 65,000 contract workers?Is this the approach that would transform India into a manu-

facturing hub for the world? China which is the current such

hub of the world, has been experiencing troubles over the last5 years with its labour force. Concerned with the pitiful hu-

man exploitation that routinely takes place in its factories, theChinese government imposed stricter regulations on employ-

ers in the country, with sweeping laws ranging from minimum

wage to settlements of disputes back in 2007. It has beenconsistently making these regulations tighter towards the

goal of making the life of a worker easier. Many social securi-

ty obligations have been imposed on foreign employers. Simi-

larly in the USA, many social commentators are calling forgreater Union participation in determining employment terms,after a quiet 40 years. While the rest of the world is waking up

to the importance of labour relations, we seem to be going

behind.It is clear that though reforms are needed in areas of labourlaw, our policy makers might be going about it in the wrongway. India is among the countries that spend least on socialservices and security. We need greater social security obliga-

tions on our employers to ensure human development, notlesser.

Source: http://www.china-briefing.com/news/2014/06/03/china-asean-wage-comparisons-70-production-capacity-benchmark.html




DHYUTI 2015

We cannot shirk from such responsibility and take care of thesocial and income security of the existing workforce beforedelving into labour market reforms. We need open social dia-logue among all the constituents to identify necessary chang-es, not behind-the-curtain followed by unilateral declarations.

The last couple of years have opened our eyes to rising dis-content among workers in various plants of the country,

which was largely ignored over the last two decades. Very

recently the knowledge sector has also taken to the roads todemand justice, in the case of the late 2014 layoff of TCS em-

ployees. If we do not concern ourselves with much neededdiscussion over our regulatory framework governing our

labour relations, what might have been the perfect recipe for

turning around our economy, could end up being a recipe for

disaster.Dr. Vivek Patwardhan, recently wrote in his blog, questioningthe need for reforms when the original laws themselves do so

little to stop employers from doing away with them. With the

expected change in the ID act, raising the threshold for per-mission to close down to 300, many ER experts believe thatthere will be a spate of closures. Doesn’t it run counter to the

whole logic of creating more employment?A single cycle of reforms or amendments will not solve theproblem. There is no silver bullet solution to an issue as deeprunning and institutionalised as this. In the past, reforms havetaken place in a sporadic and episodic manner, reflecting

crises and divergent responses of individuals to policy prob-lems. A key objective for any future policy should be to institu-tionalise the process of institutional change, so that a contin-uous process of improvement of institutions takes place at alltimes – regardless of whether there is a short-term crisisand regardless of the persons making decisions.

References:

Dr. Vivek Patwardhan http://hrblog.vivekvsp.com/2014/12/labour-law-reforms-have-already.html, accessed on 07-03-2015

K R Shyam Sundar (2014), The Myth of Inspector-Raj inIndia, Economic and Political Weekly, Vol - XLIX No. 42,

October 18, 2014

http://in.reuters.com/article/2015/01/07/coal-india-strike-idINKBN0KG1SV20150107 accessed on 07-03-2015




DHYUTI 2015

LABOUR REFORMS BY MODI

Yashu Sharma, XLRI

“Finally a push for labour reforms” reported The Hindu Busi-

ness Line on October 23, 2014. The much anticipated & talked

about reforms brought programs like Apprentice ProtsahanYojna, Revamped Rashtriya Swasthya Bima Yojna etc. Under

the umbrella of ‘Shramev Jayate’ (work alone triumphs). In aneffort to add fuel to the march to make ‘Make in India’ a suc-

cess, the government launched these reforms, promising to

end the ‘inspector raj’ and increase the ease of doing busi-ness in India.

Shram Suvidha Portal, created by the Ministry of Labour &Employment, is a unified portal which will support primarily 4

organizations under its tutelage; Office of Chief Labour Com-missioner, Directorate General of Mines Safety, Employees’Provident Fund Organization & Employees’ State Insurance

Corporation. The portal will provide Unique Labour Identifica-tion Number (LIN) aiding online registration. The same portal

will also be facilitating transparent central labour inspection

scheme for random inspection of units. The generation of listof inspections would be computerized centered on risk-based

objective criteria with the mandatory uploading of reports on

the portal within 72 hours. In all, the government aims toreach up to 6 lakh firms & simplify the compliance process by

allowing them to file online compliance for almost 40% oflabour laws. Further, Apprentice Protsahan Yojna is expected

to impact existing 28,500 establishments nationwide whichare covered under Apprentices Act 1961 and more important-

ly, bring a greater number of establishments & youth under

the umbrella of this act. The government plans to do so by

sharing 50% of the stipend of as many as 100,000 apprentic-

es covered under Apprentices Act 1961 spread over two and ahalf years. More steps include a Universal Account Number

scheme to enable hassle free access to Provident Fund &revamped Rashtriya Swasthya Bima Yojna for workers in the

unorganized sector.

This push for reforms is primarily a drive to create a moreenabling atmosphere to do business in India. Center for its

part, is vying for greater speed and transparency in the sys-tem, however the impact of these reforms depends signifi-

cantly on the initiatives of the state government. Being a con-current issue, the success of these reforms hangs in balanceas it’s the states that have to ensure the percolation of these

reforms to the bottom of the pyramid. The government wantsto encourage a healthy competition between the states which

would push them to come up with reforms in the legislature

on their own, which has been the case with Rajasthan & Madh-ya Pradesh, who recently introduced their own set of re-

forms by relaxing ID Act, Factories Act and CLRA. Uttar Pra-

desh, Himachal Pradesh, Haryana & Maharashtra are all con-templating the introduction of similar reforms. According to

Modi, this will be followed by an era of “cooperative – compet-itive federalism” as the states will race to increase industrial-

ization & investments which will give impetus to the growth ofthe state. The idea is that such a system allows for flexible &

need-based reforms.




DHYUTI 2015

As the time passes & BJP gets a hold over greater number ofstates, one can expect more pro-activeness from states &

increased sync between centre & state policy formulation.The industry has shown its concern for the simplification of

procedures for some time now. Multiplicity of labour laws has

always been a thorn in the growth of industry and the problemis further compounded with ‘red tape’ & ‘inspector raj’. Indus-

trial federations argue that due to increasing competition,they must continuously innovate and improve for which they

need control over hiring & the firing of their employees. Small

and me-d i u m

e n t e r -

prises, in

particu-lar, havebeen the

relieved

with theadvent of

these reforms as the reform will lift considerable weight ofcompliances on them allowing them to compete better in the

market.

Measures like self-certification in some areas, restrictions onpowers of labour inspectors & modernization of labour laws

are aimed at improving the ease of setting up new businessesand the operating & exiting concerns. Incremental measures

on such fronts is expected to improve the ease of doing the

business in the country. It’s a well-established fact that Chinahas been a warmer destination for business establishments

due to its flexible & friendly labour laws. Whereas India hasbeen tagged with restrictive labour laws which not only deter

the entry of industries, but also their expansion.However, such claims have been widely refuted by trade un-ions. They are arguing that in a campaign to simplify the pro-cedures, these reforms have rendered 40 central & nearly150 state laws redundant. The basis of argument is that thesereforms are aimed at making hiring & firing easier for estab-lishments depleting the strength of labour. While the govern-ment is moving all guns blazing for making the environmentconducive for establishments, they have been ignorant to-

wards long standing demands of trade unions like ratificationof ILO conventions 87 & 98 or mandatory recognition. Also,their demands pertaining to simplification of laws for small &medium enterprises have been ignored. The negative re-sponse to the reforms from trade unions has been unani-

mous, including trade unions, which have ideological affilia-tions with BJP. Regarding the Apprentices Act, unions claimthat establishments would abuse students fresh out of ITIswhile paying them bare minimum wages. The problems withthe reforms are further compounded as unions complain lackof consultation with them & little consideration to their de-mands. Another pain point has been rights of women, particu-larly in unorganized sector being left out of the ambit of dis-cussion. The rights of both men & women working in unor-ganized sector have clearly been ignored. Unorganized sector

is perhaps the most exploited segments of labour and due tolack of unionization, is rarely represented.

The reforms, despite opposition are a step in a positive direc-

tion. Being a labour surplus country with demographic divi-

dend, government ought to make policies that allow its peopleto exploit their strengths. The Indian service industry has

been booming for some time now, but it’s time that the manu-facturing sector picks up the pace for which an impetus from

government is much needed. However, despite the positives,

the government has been ignorant towards issues which des-perately need its attention. While the government embarked

on a movement to make the environment more compatible forestablishments, the rights of the unorganized labour should

have been a talking point for the government. After-all, lives &

rights of the voiceless must not be lost in the noise of propa-ganda.

References:

http://www.thehindubusinessline.com/opinion/finally-a-

push-for-labour-reforms/article6528145.ece. h t t p : / / l a b o u r . g o v . i n / c o n t e n t / e K r a n t i /

inspection_units.php. http://www.bbc.com/news/world-asia-india-31274460. http://www.thehindubusinessline.com/opinion/finally-a-

push-for-labour-reforms/article6528145.ece.

http://www.frontline.in/cover-story/labour-under-attack/article6540729.ece.



& Present

NATIONAL

IR CONFERENCE 2016

Event theme:Changing Labour Market and Industrial Relations,

Changing times: Make in India and Ensuing Labour Reforms

The National Level Industrial Relations conference conducted by FIRE@X, will be hosted this year at XLRI, Asia’s premier

institute for Personnel management and Industrial relations. A premier student organised event in the field of work and

employment relations in the Indian academic event calendar, this conference provides a common platform for stalwarts

from various managerial roles in Industry, legal practitioners, renowned academicians and students from some of the best

institutions of higher learning across India to discuss and explore the various challenges and opportunities presented bythe changing industrial and employment relations landscape in India and beyond. The thematic conference, scale IR event in

the country , will consist of paper presentations, panel discussion forums and speaker sessions by some illustrious per-

sonalities in the field.

Glimpses from the 6th National IR Conference



DHYUTI 2015

Date post:	22-Feb-2018
Category:	Documents
Upload:	rishabh01234
View:	218 times
Download:	0 times

Dhyuti Final

Documents