EMERGING WORLD TRADE REGIME: Social clause and implications for employee relations management
Group 2 | Abhishek | Kunal | Nihit |Sanjay |Vaibhav S | Vaibhav K
Introduction Social realities, culture and organizations:
Global perspective (Country perspective) WTO regime and the social clause Centre- State vs State-State pulls Employment security Labor redundancy Wage Policy Social Security Contract Labor Child Labor
Agenda
Significant changes in social and corporate world due to WTO regime
Reforms impact upon all HR practices and trade unions
Intensity depended upon ownership, culture Indian context: Reforms treated with suspicion by working
class Political parties too interfering in the process
Introduction
Employee expectations: Provide education, training, and skill
development opportunities Provide education, training, and skill
development opportunities Involvement in decision making / empowerment Open communication, mentoring Challenging meaningful and interesting work Performance based compensation
New employment relationship
Employer expectations: Assume responsibility for developing and
maintaining skills Produce positive results and add
demonstrable value Understand the nature of employers/business Have customer focus Work in teams, and take initiatives Flexibility and commitment
New employment relationship
Japan: Submissive and adaptable nature because
of agri-centred society Work considered source of moral culture Work ethics weakened in post World War II
generation High educational level of workers Non-confrontational attitude and
industrial harmony
Social Realities, culture and organizations
Yugoslvia: Socialist self-management regime Workers’ Council elect top managers Success depends on efficiency of
business enterprises
Social Realities, culture and organizations
Indonesia: Three cultural levels:
Ethnic regional cultural level: tribal group culture Regional-national cultural level National-international cultural level: internalized
western values Top managers prefer paternalistic style of leadership Collectivistic, short-term oriented Need vision, less communication barriers Orientation towards- God, environment, and self
Social Realities, culture and organizations
Thailand Nine value orientations: Ego, grateful relationship, smooth interpersonal
relationship, Flexibility and adjustment, religio-physical
orientation Education and competence, interdependence Fun-pleasure, achievement-task Direct confrontations and criticism avoided Motivation by benevolent, paternalistic type
leader
Social Realities, culture and organizations
Hong Kong: Issue of cultural adaptation an issue where
management is not indigenous
South Africa: Institutionalized racial discrimination part of
organizations Inclusion of HR planning, career pathing,
continuous learning in HR agenda Strategically linked HRD needed to overcome
labor market segregation based on race
Social Realities, culture and organizations
China: Respect for age and hierarchy, face and harmony,
group orientation, personal relationships Confucian traditions and ethos applied to
integrations of labor force Tradition of thoroughness in work, strict discipline,
credibility, inclusivity of expectations Paternalism, personalism and defensiveness - a
socio-historical legacy
Social Realities, culture and organizations
Taiwan Four distinct managerial patterns: The Grassroots type and Mainlander type:
typical of Chinese values Grassroots type include Japanese features The Specialist type: includes western logic
of rationalism The Transitional type: includes both
western and Japanese managers
Social Realities, culture and organizations
India Three types of behavioral dispositions or
ethics: Personal ethic of helplessness Organizational ethic of personalized
relationships Idealized family-centered work ethic
Social Realities, culture and organizations
India Draws from the authoritarian practices in family Reward system based on negativity and uncertainty Family and religious traditionalism emphasis on past Joint family systems – need to meet obligatory
demands from relatives, friends etc. Nurturance, universalism, peer leadership enhances
member integration Synergic and exploitative cultures in large and small
organizations
Social Realities, culture and organizations
A mixed picture India being the founder member of the ILO,
contributed to the codification of international labor standards
India benefitted from framing its own labor framework on labor aspects
Indian constitution and labor laws uphold all the principles evolved in the eight core international labor standards
WTO regime in India
Social Clause Aspects Indian constitution/legislationFreedom of association and right to collective bargaining
The trade union of act, 1926
Abolition of forced labor in all its forms
Article 23 of the constitution and the bonded labour system (abolition) act, 1976.
Equal remuneration convention, 1951. The four underlying bases for determination of work of equal value are skills, efforts, responsibility and working condition
The equal remuneration act of 1926 seeks to provide equal remuneration for men and women
Discrimination convention which covers any discrimination, exclusion or preference
The constitute upholds equality, denounces discrimination and encourages preferential treatment to disadvantaged groups in the society
Minimum age for employment should ordinarily be 15 and 18 in dangerous occupations
The child labour prohibition act, 1986.
Social clause & Indian legislation
Centre – State vs State-State Pulls
Significant changes in labour laws by states i.e. trade unions act 1926 Secret ballot for trade union recognition Secret ballot through tripartite social dialogue Simplified labour inspection laws (Rajsthan) Kerala extended full rights to entrepreneurs
for hiring of labor
Implementation has been the weak link
Wage policy is main concern in the Indian context Dearness Allowance is based on the lowest basic
wage indexing which declines as the basic wage rises Bonus payment governed by the payment of bonus
act, 1965 Average real wage rate tends to decline when
inflation rate rises above certain level Revision of basic wages does not consider labor
productivity and profitability in organization Economic reforms lead to cost adjustment and wage
flexibility is an important tool
Wage policy
South Asia Multidisplinary Advisory Team (SAAT)
Reported by SAAT, government should have several objectives- Ensuring minimum level of living Creating condition for systematic growth of wages Sustaining appropriate wage productivity linkages Incorporating appropriate incentives structures Limiting income inequalities Minimum wage should be fixed at national level
SAAT, 1996
Employement Security & labour market flexibility
SAAT report indicates that, Indian employment security system is based on three premises
( Legislations : Industrial disputes Act 1947, Industrial employment Act 1946 )
Industrial workers – potential victims of exploitation Protection from exploitation – must come from government
regulations Income security follows from employment security
Retrenchment (except under certain conditions) in enterprise employing 100 or more workers requires prior permission from govt. authorities
Sizeable lot of redundant labour due to: Inapt handling of industrial sickness incidents Continuance of non-viable enterprises by the
Government for employment protection Over employment by public enterprises
Introduction of reforms aimed at: Development of institutions for efficient redeployment
of labour from organized to unorganized sectors Stimulation of growth of the unorganized sector Commitment of large resources on the part of
Government
Labour Redundancy
Measures Voluntary Retirement Schemes packaged
with programmes for counselling, retraining and redeployment
Transparency in the entire system Self employment: measures for
entrepreneurship training
Unorganised Labour Market Reforms aimed at income security and
social security
Labour Redundancy
Minimum wages set by Government for unorganised sector Variations in minimum real wage rates across states and across
occupations Minimum wage rates revised very infrequently Revised rates lower in real terms than pre-revision rates Statutory minimum wages below the poverty-line wages
Actual wages below the statutory wages Lack of proper indexation Irregular revisions and weak enforcements Setting different wages for organized and unorganized sector
Wage Policy
Recommendations for minimum wage
National minimum wage payable to all unskilled workers irrespective of age and sex
Fully indexed and above he poverty-line
States to derive minimum wages from this by using appropriate price indices
Wage Policy
Unorganized sector workers mostly covered under LIC, General Insurance Corporation of India, National Social Assistance Programmes and Annapurna
Frequent change in occupations : specific occupation based programmes rendered useless
Schemes like Annapurna failed due to administrative and operational problems
Thorough evaluation of schemes in their total structure
Social security partners need to be strengthened with respect to finance, human resource development, monitoring and evaluation
Social Security
Provisions for Abolition of contract labour in perennial and
permanent jobs Regulating the contract labour system
Suggested reforms New dispensations for the wages, safety and welfare
of contract labour Right to employees to go for contracting without any
restrictions Labourisation or workers’ financial participation as an
effective remedy
Contract Labor Act, 1970
India 11.28 million child labourers (1991 census) 40% of the world child labour force
Child Labour (Prohibition and Abolition) Act, 1986: hazardous industries and activities
Further implementation of national policy and more advanced reforms such as creation of Child Labour Cells in each state
Lack effective implementation Social initiatives and strenghtening of inspection
measures required
Child Labour
Pre WTO, employees enjoyed lifetime employment, company sponsored health programmes and retirement pensions
Post WTO, employees expected to work in multi faceted teams and update their skills continuously
Restructuring Feeling of job insecurity
Discussions
Acceleration of reforms required Role of Government important due to
legislative reforms falling under their purview Extensive controls, large Government sector
and many Government programmes bureaucracy leading to failure in implementation
Monitoring of reforms by independent regulatory bodies with greater transparency
Recommendations
Thank You