MS-24 Employment Relations Previous Exam Paper

MBA - Master of Business Administration

Note: This paper consists of two sections A and B. Attempt any three questions from Section A. Section B is compulsory. All questions carry equal marks.

1. Discuss the role of Indian Constitution in evolving labour policy. Identify the impact of ILO on industrial relations.

2. Briefly explain how internal affairs of the union are managed. Describe the new roles of trade unions.

3. Define collective bargaining. Describe the types of collective bargaining citing suitable organisation examples.

4. Define adjudication. Analyze the principles of industrial adjudication.

5. Write short notes on any three of the following :

(a) Red Hot Stove Rule
(b) Objectives of Workers' Participation in Management
(c) Activities of Managerial Unionism
(d) Conciliation
(e) Grievance procedure

SECTION B

Read the case given below and answer the questions given at the end of the case.

Norman (I) Limited

THE COMPANY

The first wall tile manufacturing plant in India was established by Kay Pee in 1963 at Thane in Mumbai under the name Norman Tiles. The company was using the brand name 'Norman', a leading international tile manufacturer, Norman International Limited and was paying royalty for the same. The Norman International Limited owned 49% equity in this venture since its inception. With growth in sight the company set up another manufacturing unit at Rampur in the state of Uttar Pradesh with an investment of Rs. 85 million in the year 1981. Initially, at Rampur unit the company was carrying out only partial operations with semi-finished products being supplied by Thane unit. It was only in 1984, that the company started carrying out full operations at the Rampur unit. Since the market for ceramic tiles started expanding, the company expanded its operations accordingly. The process of manufacturing wall tiles was such that it needed unskilled manpower barring few fitters and electricians. Accordingly, the company hired 400 workers mostly uneducated and unskilled from nearby villages. Few of them were taken for the fitter and mechanic positions. Apart from these, there were sixty staff members looking after the other support functions. The workers were paid low wages and were employed on temporary basis at the beginning and till1986 most of them were not made permanent. The human resource department was headed by R.C. Jain, who was an experienced professional and was with the firm since its inception.

THE GENESIS

In 1986 the company ventured into floor tile manufacturing and set up another facility at Rampur unit. This plant was semi-automatic as compared to the wall tile plant which needed manual operations. The machinery of floor tiles unit was bought from Italy and due to the nature of process some experienced workers were shifted from wall tile facility. Slowly, two distinct groups of workers emerged based on the nature of their job and subsequent skills required. First group was that of unskilled workers mostly associated with manual operations and the second group was that of skilled workers looking after technical operations. The second group was paid higher wages than the first group. This disparity led to discontentment among workers but in the absence of union, it never came out as an organised reaction. The first such organised attempt was made by workers in 1988, but a prompt and harsh action from management aborted the workers bid to form union. However, this event drew management's attention towards workers' grievances and management-helped workers to form a union in 1989. The union was named "Bhartiya Crystallization Mazdur Sangh". However, since most of the workers barring few technical ones were uneducated, they were unaware of roles and responsibilities of union.

The management started negotiations with the newly formed union and the first wage settlement agreement was signed on January 19, 1990. In this agreement, though the management agreed to increase wages to the extent of Rs. 250 per month, it linked wages to production targets. After three months of this agreement, the union leader left the organisation to join government service. The union was left leaderless. After some time the workers started voicing their concern about the Target - linked wages, but in the absence of a leader their concerns could not get a voice. It was at this point that some external labour leaders started inciting the workers. A gate meeting was organised to exploit the situation on September 21, 1990. After this incident the industrial relations situation further worsened and led to a go-slow movement by workers in January 1991. This affected the productivity of the plant severely. Due to the absence of union leadership, management too found it difficult to control the situation, since external leaders' influence was very much visible and company's HR manager R.C. Jain refused to talk to the outsiders. He remained adamant and left the job in March 1991 and the go-slow by the workers continued. In another development the incumbent HR manager Arun Joshi, who took over alter Jain left converted variable DA to a fixed DA rate. Since, at that time inflation was spiraling and the rate ot DA, elsewhere, was high, the workers refused to accept this provision. Ultimately, under pressure from external leaders as well as workers of the firm, Joshi withdrew the fixed DA and accepted the variable DA provision.

In the meantime, K.N. Trivedi took over as the unit head on May 5, 1991. Before joining this plant, he had served the Indian Air Force for seventeen years and was a strict disciplinarian. The organisational situation demanded quick action to stop go-slow because the company had market share of forty per cent in both the tile categories and the demand for tiles was still going up. The management did not want to lose a single day's production. In a calculated move the management suspended thirty-five workers who were on a go - slow. This was for the first time that any worker was suspended from the plant, which instilled a sense of fear in the minds of the workers. As a result of this, workers started working and the productivity of the plant started showing improvement.

Meanwhile, the management had terminated some of the suspended employees who later on moved to the labour court against management's action on the presumption that labour courts are generally sympathetic to the workers. At the same time, Trivedi started dialogue with the external leaders to end the stalemate. The external leaders put pressure on the management to reinstate the suspended workers. Management agreed to make permanent those employees who were working with the company since its inception and did it with immediate effect. Suspension of some of the workers was also cancelled. Though these efforts helped management in streamlining the production, the attitude of the workers could not be changed totally. The ownership spirit amongst workers could not be developed.

The situation took another ugly turn in February 1992 when the workers who were suspended earlier tried to create disturbances in the plant. The discontent was further fuelled by bad food provided to the workers in the unit's canteen in March 1992. Ultimately, this led to formation of a new union "Bhartiya Yuva Sanitary and Crystallization Mazdur Sangh". This union was not affiliated to any national labour union. However, the leaders were under the influence of Bhartiya Mazdur Sangh (BMS). This union submitted a chapter of demands to the management. The demands included grain loan, which was a contentious issue because the company had never given any grain loan to the workers. The demands were not accepted by the management. The workers gheraoed Trivedi but the management did not accede to the demands and called the police to intervene.

On March 17, 1992 the workers went on strike on the call of the union without giving any prior notice. The management terminated seventeen workers during the strike. The strike continued till May 5, 1992. The workers were not paid any wages during the strike period. Since the workers were low wage earners, they were unable to continue the strike for a longer period. The management used the situation to their advantage and accepted only minor demands of sanctioning an advance of Rs. 500 to the workers. The workers accepted the management decision and were willing to restart production. Management re-employed the suspended workforce gradually over a period of fifteen-twenty days. Since, the workers did not receive wages for the strike period, they had realised the importance of their employment.

In October 1993 the second agreement was signed between management and the union. Between October, 1993 and December 1996 the productivity and industrial relations were improved. In 1996 the organisation started receiving export orders for its products. The quality requirements for the export orders were stringent. Therefore, the organisation decided to go in for ISO 9000 certification for their Rampur plant. The management realising the importance of workers' involvement in ISO 9000 certification process started training workers on a continuous basis in June, 1996. The in-house training emphasised on house keeping, general hygiene of the workers, standard operation procedure and awareness about all kinds of losses. As a result of confirmed efforts, ISO 9002 certification was received by the plant in January, 1997. Meanwhile, the third wage agreement was signed between the management and the union for a period of three years in January 1997. To reinforce the training process, HRD cell with well-quipped in-house training tools was developed in January 1998. Training programmes focussed on shop-floor excellence and total productive maintenance (TPM). Quality manual for internal use was also developed. The goals for 2000-2001 for the plant were devised as under:

• Laying of natural gas pipeline
• ISO 14000 certification
• Control of losses
• Reduction in personnel expenditure
• Team building training

The Rampur plant of Norman had come a long way since its inception. In the words of Trivedi "despite all the bottlenecks we have achieved a satisfactory level of productivity. We still intend to continue doing so by various means. However, I want to build this plant as a community where each member's commitment with the plant remains high. This can only be achieved by inculcating the ownership value. We sincerely believe that this can only be developed by creating a community of Norman in which every member is ensured of a minimum standard of living with all basic amenities and worry free life away from work. We intend to do so by providing medical, educational and vocational training facilities for their families, thereby developing trust between the management and the workers".

Questions:

(a) Does formation of trade unions help organisations improve industrial relations?
(b) Was it a night strategy to nurture pro-management union leaders?
(c) The strategy to instill fear in the minds of workers to improve their productivity was in the interest of the organisation, Discuss.
(d) In your view, what action should have been taken by the management at various stages to improve labour-management relation?