Employee Relations and Industrial Disputes

7/30/2019 Employee Relations and Industrial Disputes

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SHRM-3

Employee Relations

Reasons for disputes

Resolving resolving disputesTrade Unions and Recent Trends in Trade Unions


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Learning Objectives

To identify major organizational factors and processes that

adversely affect employee relations.

Understand the meaning of terms like discipline ,employee

grievance,job stress. Understand the nature of employment relations and the

place of Unions in the organizations.

Know the importance of Union recognition agreement and

the elements of Collective Bargaining (CB). Familiarize yourself with legal approaches to dealing with

problems of indiscipline and workplace harassment.


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Employee Relations

Relationship among employees provides the context in

which

Organizational roles assigned to members are performed

Team spirit inculcated

Expectations clarified

Conflicts resolved

Shared norms of behaviour developed.

If organizations have to move towards excellence,

maintenance of harmonious relationship among employees

across the vertical and horizontal levels of the organization

is a necessary condition.


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Employee RelationsHealthy ER Unhealthy ER

a. Open communication

channelsall directions.

b. Delegation

c. Autonomy

d. Participative

management

e. Self managed teams

f. Quality circles

g. Facilities at work place

a. No communication orOnly top downcommunication

b. Authoritative/Autocraticleadership

c. Only duties

d. Too much power at thetop

e. Unfriendly andunhealthy workenvironment

f. Lack of facilities


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Employee Relations

Reason for most industrial problems like strikes, grievances,

violence, disputesdue to pooremployee relations.

Managers must have good communication skills,knowledge of local cultureand language, empathy,knowledge of law, and counseling skills.


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krishna 6

Reasons for dispute

a. Wage demands- . Inflation

Agreement reached in another company. Includes bonusincentives and otherallowances,

Bonus

General validity of wage agreementsthree years

b. Union rivalry :

Multiple unions. Lead to inter-union rivalries. Power ofthe union and ego of the union leaders become the majorissue.

Resultno harmonylow productivitylossesclosedown.


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Reasons for dispute

c. Government interference Mandatoryto pay bonus.

Whom to hire???

d. Political interference- Major trade unions are affiliatedto political parties. When Trade Unions get politicized

Ideology and issues get divided on party lines.

Unions multiply causing Inter-Union rivalry.

Some Unions refuse to sign any agreementsand somelong term agreements.

Organization's objectives and goals take a backseat Political parties and leaders show their strength by

organizing bandhs / strikes and spreading fear.


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Reasons for dispute

e. Multiplicity of labour laws - About 108 acts- mostlabour legislated country- Result : confusion,ambiguity, contradictions.

f. Inter state/ religion / ethnic rivalry

g. Discipline/ Indiscipline- Conformity by the employees,to the expectations of management, in terms of standardsof behaviour and performance, code of conduct.

Desirable actions and behaviour made known to them

through formal, informal, written or verbalcommunication.

Disciplinary action


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Discipline, Grievances, and Dismissal

Discipline without PunishmentA multistage disciplinarytechnique.

(a) Oral reminders of the violated rule (b) written reminders paid one-day leave (d) if the behavior is not corrected,

dismissal.

Grievance - A complaint that an employee lodges against anemployer.

Regarding wages, work hours, or some condition ofemployment like supervisorybehaviour.
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Get the Facts

Obtain the Reason for the infraction

Audit the records

Pinpoint Consequences

Identify the Type of infraction before taking remedial

steps

FRACT Model

A multi-step procedure for assessing the need for

discipline:


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Disciplinary Action

Industrial Employment (standing orders) Act isapplicable. The punishment can be awarded accordingto the specification of the standing orders. Among the

penalties are:

A. Warning,Fine , Withholding increments

B. Demotion, Suspension , Dismissal


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Reasons for dispute

h. Unfair labour practices - Unwillingness/ attitude of themanagement to talk to workers representatives/TU or

refer to arbitration.

To recognize Trade Union. Not delegating or giving authority to managers to

negotiate with Trade Union.

Unfair /biased stand of the management representatives

during negotiations


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Industrial Disputes Act 1947Unfair labour Practices

Restraining, preventing, threatening workers fromorganizing, forming, joining unions or similar activities forcollective bargaining and protecting their rights.

Threatening a lockout or closure, if TU is organized.

Granting wage increase at crucial periodsto sabotage theUnity or Union plans.

To dominate, interfere, support or contribute to any TU.

To establish employer-sponsoredTU of workmen.

Favouring one TU when many Trade Unions are trying toorganize their workers.


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Industrial Disputes Act 1947unfair labour Practices

Victimization. To discharge , dismiss or discriminate - workers for

organizing fellow workers or joining the Union.

Changing seniority ratingDenying promotion for union

activities. To abolish work of regular natureTo give the work to

contractors to break the strike.

To transfer workers under the guise of management policy.During legal strikes

(a) To insist on workers individually signing agreement

(b) To sign a good conduct bond as a precondition toresuming work.

Being partial to one set of workers.


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Industrial Disputes Act 1947unfair labour Practices

To keep workers in temporary pay rolls permanently.

To discriminate worker/s for filing charges or testifyingagainst an employer during enquiry proceedings.

To recruit workers during a legal strike.

To indulge in acts of force or violence.

To refuse to bargain collectively, in good faith withrecognized TUs.

Proposing or continuing a lockout deemed to be illegalunder IDA 1947.

Falsely implicating workers in criminal cases-concoctevidence

Appointing one sided committees/ commissions ofenquiry.


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Industrial Disputes Act 1947Unfair labour Practices

Failure to implement award, settlement or agreement.

To indulge in acts of violence or force.

Strike in Maruthi Udyog -2001- management got

undertaking of good behaviour from employees.Terminated the services of 59 employeesdid not paysalary to striking workers for 3 months.

Strike by TN Govt employees -2004-05

Striking work without giving sufficient notice to

employers. Stopping willing workers from carrying theirduties.- JJ made them sign good behaviour agreement sacked many.


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Unfair practices by labour / TU State Transport workers on flash strikeleaving

passengers and vehicles midway- causing traffic jams.

Power Corporation employeesflash strikedisconnecting powerHeavy damagescostly equipment,

people stuck in lifts and elevators, blood stored in blood

banks .

Municipal corporation workers.


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Result of Industrial Disputes

Loss due to low productivityaffects organization andnation.

Loss due to violence and destructionaffects organization,society and nation.

Loss of life , income and peaceaffects managementand employees

Animosity and strained relationship among management,society and employees- Affects all concerned and the

nation. Industrial disputes affect all stakeholdersManagement,

Employees, Economy, Society, Nation


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Resolving disputes

Collective bargaining

Code of discipline

Grievance procedure

Arbitration

Conciliation

Adjudication

Consultative machinery


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krishna 21The Bargaining Process: Overview

Good-Faith

Bargaining

Preparing forNegotiations

ConductingNegotiations


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Resolving disputes

Collective bargaining: Trade unions can maintain andimprove their members terms of employment

CB is a trade union initiated process.

Viewed as a tool for resolving industrial disputes.

Collective Bargaining

Helps increase economic strength of bargaining parties.

Minimizes re-occurrence of disputes.

Lays down rules and norms for dealing with labour.

Helps usher in democratic principles into industrialworld.


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CB - three perspectives.

1. CB as as a process of social change- Brings a change inbalance of power between employers and employees.Opens doors for better pay, welfare, security and liberty toindividual members.

2. CB as peace treaty- between the conflicting parties:Peace is temporary. Both parties would like to come forward

with new and previously unsatisfied demands.

3. As a system of industrial jurisprudence :Civil rights inthe industryManagement has to deal with labour by rules

than by arbitrary decisions. Basic interests of employees and employers are protected.

4. Participative management- Participation in decisions thataffect their work life - Improves job involvement and jobsatisfaction. Industrial democracy.


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Managers have to.

Interpret situations and decide when to open negotiations.

Know to prioritize issues.

Decide on right management representatives Ensurenegotiation team is a combination of organizing

skills , knowledge, human touch, integrity, tact andtoughness.

Examine possibility of a strike and ways of handling it.

Build inventory and ensure associates have adequate stock

Decide how closely they will follow the agreement.

.

C B--- Managers


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The Bargaining Process

1. Prepare for negotiations.

2. Develop strategies3. Conduct negotiations

4. Formalize agreement

Pressures on bargaining parties:

Legal requirementsStrikesForms of ProtestLockouts

Boycotts


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CB Process-1. Preparing for negotiations

A. From managements side :

Prepare specific proposals for alterations in contract.

Determine budget and size of economic package companywants to offer.

Prepare data and other necessary facts and figures. Prioritize itemsas per importance and urgency.

Identify suitable site for negotiation.

B. From employees / unions side :

Financial position of the company and its ability to pay. Attitude of mgmt towards various issues-information of

other companys attitudes and results.

Attitudes and desires of employees.

Identify suitable site for negotiation.


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CB process-Identifying Bargaining Issues

1. Wage related issues: basic wages, cost of livingadjustment, OT rates etc.

2. Supplementary economic benefits: pension plans, paidholidays, retrenchment pay etc

3. Institutional issues : rights and duties of employers,employees, Unions etc

4. Administrative issues : Seniority, discipline, training ,

job security etc


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CB Process.2. Negotiating Each side presents initial demandsnegotiations may go

on for days.

It is a Psychological war each one trying the others nerveand strength.

In spite of sincerity negotiations may break down. Restarting becomes more difficult.- Ideal to give some gap.

Ratification ( confirming )of the agreement : Bothparties go back to their people take a consent.

All agreements and contracts have to be written andlegalized.

Administration of the agreement : Agreements have tobe implemented and within the time frame.


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CB Process.2. Negotiating

Dos.

Do seek more (or offerless ) than you plan toreceive and give.

Negotiate in private. Create a win-win situation

Start with easy issuesappear it is only give

and no take situation. Keep alternatives ready

and open.

Help of police/govt if astrike seems likely

Use good PR

Donts Dont open allyour cards (offer ) first.

Say no unless you are100% sure.

Violate confidence.

Settle too quickly.

Let union go straight totop and/or

let top management come tonegotiations table.

Rush to media for help orwith statements.


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Environmental Factors affect CB.

1. The type of bargaining structure

One company dealing with a single union

Several companies dealing with a single union.

Several unions with one company Several companies with several unions

2. Union management relationships.

May be co-operative or non co-operative Cooperative spirit facilitates collective bargaining.

Non -cooperative spirit slows down or affects theprocess.


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Grievances

Grievance is employees dissatisfaction or feeling ofinjustice relating to her/his employment relationship.

Conditions that give rise to grievances Violations of the terms and conditions of employment

Violation of law -Violation of company rules

Change in working conditions or practices

Violation of health / safety standards. When employee files a grievance it has to be resolved as

per procedure.


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Arbitration

Third-party( neutral) who resolves a labor dispute by issuing

a final decision in the disagreement

Arbritator/sstudies the situation, listens to both parties andmakes recommendations that are binding on both parties.

Arbitration is effective as it results in settlement.

If one party feels arbitrator was heavy handed may

accept decision but conflict will resurface.


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Arbitration

Merits

Established by the parties &

decision is acceptable to

both.

Delays are cut down and

decisions are quick.

Number of disputes are few-

Decisions are well studied

and just.

Demerits

Expensive.

Expenses need to be shared

by labour and Mgmt.

Selection of arbitrator has to

be done carefully- may go

wrong.

Tendency torush forarbitrationis not healthy

sign of IR


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Procedures for arbitration

Arbitration & Industrial Disputes Act 1947- Section -10

If both parties agree to refer it to arbitration - they do so inwritten agreement.

Generally Labour Union takes the initiative and notifiesthe management.

Select the arbitrator jointly - study previous decisions.

After arbitrator agrees venue and date is decided.

Sufficient time given to both parties to prepare.

Proper data and information/ evidence given to arbitrator.

After hearing sufficient time for arbitrator to study andgive decisions.


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Resolving disputes

Mediator: Third party in a labor dispute . Meets

with one party and then the other

To suggest compromise solutions OR

To recommend concessions from each side that will lead toan agreement

Conciliator : ( Mediator ) - Parties brought together beforea third party to persuade them to arrive at an agreement.

Allowed by IDA 1947Section 4 .

Conciliation can be by one person or group of two or three.

Government can appoint the person/s.


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Resolving disputes -Duties of Conciliation officer

To

Mediate and bring about fair settlement between parties.

Hold conciliatory proceedings. Investigate disputes.

Send reports and memorandum of settlement to appropriateGovt bodies.

Report to Govt bodies (within 14 days from the date ofstarting the proceedings). Informing the steps takenincase no settlement is arrived.

No strike or lockout when conciliation is in progress.

Conciliator has no power to forceany party.

Can work separately with parties, explain positions to eachand help in search of solutions.


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Resolving disputes-Adjudication Adjudication- Mandatory settlement of an industrial

dispute by a labour court or tribunal .

The verdict is binding on both parties.

Section 10 of the Industrial Disputes Act 1947 - reference

to Labour court or tribunal. Lays down rules regarding thecomposition and powers of labour courts and tribunals.

Problems Time taken for (delay) in decisions.

Expensive for individual worker.

Verdicts make parties involved too strong or too weakduring future disputes.

Deprives Trade Unions of their strengths.


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Resolving disputes- Consultative Machinery

Consultative Machinery Set by Government to resolve conflicts.

To bring parties together for mutual settlement in a spiritof co-operation and goodwill.

Operates at plant, industry, state and national level. Labour Advisory Boardsat State and National level.

Indian Labour Conference ( ILC)

Standing Labour Committee ( SLC )

These are tripartite in naturerepresenting GovernmentLabour and Management.


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Trade Unions


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Why union growth has suffered

Demographics

Jobs: location/industry/occupation

Wage premium grew in 1970s

Increase in Education/knowledge levels Globalization

Lack of worker interest

Lack of trust in union leaders and their organizing efforts


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Recent Trends in TU

ChangingRelationships

Management

LaborCooperation

ConcessionaryBargaining

New Forms ofCooperation

Documents

Employee Relations and Industrial Disputes