XLRI, Jamshedpur

August 19th, 2011 Volume II, Issue 2

INDUSTRIAL RELATIONS IN SERVICE SECTOR

Most research in the area of industrial relations is based on the secondary sector of the economy, namely the manufacturing sector. Since the time of Adam Smith and Karl Marx, service sector was considered unproductive and hence not much attention was paid to it. However, since the last five-six decades, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in developed as well as developing nations across the world. The tertiary sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector in the rest of the world. It is difficult to make generalizations about the nature of service-sector employment and careers, as the jobs vary widely. For example, while average wages in service-sector jobs are lower than average wages in manufacturing, the wage differential between the best and the worst jobs in services is also larger than the comparable differential in manufacturing. There are several IR issues prevailing in the service sector too which are often not dealt with. Some of the service sector areas where prominent IR issues arise are the banking, transport, IT, entertainment, hospitality and even in the area of sports. In this article we shall throw light on some of these issues. INSIDE THIS ISSUE IR in service sector ....... 1 IR in banking sector ..... 2 You said it! ..................... 3 IR in ICT sector ............. 3 IR in hospitality sector...4 Crossword puzzle .......... 5 Did you know? ............... 6 About FIRE@X..6

IR in the banking sector IR has been a part of Indian Banking Industry since the mid-40s. The All India Bank Employees was formed in 1946 as a reaction to issues like low wages, poor work conditions and job insecurity. Post-Independence several bipartite agreements were reached between the employees and owners leading to the improvement of employee-employer relationship. However, the 1970s saw a series of private banks saddled with bad debts and the bank unions forcing Mrs. Indira Gandhi to

nationalize the banking sector and changed its class banking face to a mass banking one. With the government becoming owners, wage bargaining started becoming tough. Several other unions came into existence including the All India Bank Officers Association in 1979. In some cases the unions adopted a militant nature. Multiplicity of trade unions increased, as did the perennial conflicts among them. The management tried to use the divide between the unions to their advantage, but could not achieve desired affects due to the militant nature of the unions.

The study of industrial relations may be described as a study of the institutions of job regulation - Flanders

Over a period of time, the unions enjoyed unhindered power at the expense of the management and even its own members. The major unions did not play the role of improving productivity while simultaneously protecting the legitimate rights of the employees. Despite inter-union and intra-union issues, liberalization policies of P.V.Narsimha Rao Government in 1999 led to the emergence of United Forum of Bank Unions. The UFBU was formed as a result of protest against the liberalization measures in India. All the nine unions having all-India presence in the Banking Industry five Workmens Unions and four Officers Unions representing almost 100% of the workforce in the Industry joined hands to form UFBU against the reforms. Privatization, efforts to reduce the Governments equity in PSBs, eagerness to allow more FDI in banking sector, handing over retail and rural lending to private contract agencies, etc. have brought the unions and government at loggerheads. Since 1991, the Bank employees have undertaken, apart from other forms of struggle-programmes, around 19 one-day strike and 3 two-day strike programmes. An instance of this discontent among the bank workers can be seen in the form of recent nationwide strike by UFBU on August 5th, in which around 10 Lakh employees participated. The strike was against the Governments move to privatize public sector banks, reduction of Government's equity in PSBs, merger of banks, availing World Bank loans to capitalize PSBs and unrestricted entry of foreign capital in the banking sector.

RECENT IR HAPPENINGS ACROSS THE GLOBE

1. Hosni Mubarak's puppet trade union federation dismantled - An Egyptian trade union federation that was used by the government to repress labour activism has been dissolved, dismantling another powerful component of Hosni Mubarak's dictatorship. 2. Three day taxi strike shakes Hangzhou, China The Hangzhou strike is the latest example of unrest, especially among migrant workers struggling with rising costs and a squeeze on real earnings. 3. Wage deals/talks in South African mining sector The National Union of Mine Workers has improved its wage offer to avert a strike which could hit production at the worlds second largest producer of Platinum. The deals reached are with gold, coal and diamond mining companies. 4. Strikes intensify as 1,00,000 cleaners down tools More than 1,00,000 contract cleaning workers in South Africa embark on strike following failed negotiations with their employers. 5. Social workers to join Southampton, UK strikes Over 450 Southampton council workers in social work set to strike against bosses or employers forcing through 5% pay cuts.

You said it !

IR in ICT sector Traditionally Unions have had zero existence in knowledge industries like IT. When the Satyam scandal rocked the country, the suave, high flying techies of the company realized the need of an association that would protect their interests and the Radical Democratic Corporate Employees Congress for the corporate employees in general. NASSCOM, the apex body of IT industries in India bargains on behalf of the IT companies to the government on a bipartite level. The ICT industry is more susceptible to Unionism because of volatility of the sector in terms of job security, low wages in a bid to save costs, increased working hours and total loss of work-life balance. Remember we are considering the BPO and call center employees too in the process. Industrial Relations is already a major subject in the American and European ICT industries and India is not very far from catching up. was formed. Though formed particularly for the Satyam issue, the union vowed to fight

IR in hospitality sector Hospitality sector is growing at a very fast rate in India. The sector is growing at a rate of approximately 8%. This sector can be classified into hotel industry, travel and tourism, restaurants, pubs, clubs and bars, contract catering, and aviation. The key workforce issues that need to be addressed in the hospitality industry are: perceptions about the industry; levels of manpower attrition; education; competencies and skill development; work environment and compensation; opening up of diverse opportunities for the workforce. These have a strong bearing on the firms growth and consequently industry's growth and contribution to the economy. An example in this case would be of the Air India strike which has had a profound effect on IR scenario. Jet Airways saw a similar strike a few years back. Very recently British Airways employees went on a ten day strike on various demands paralyzing the whole of Englands aviation sector. Reforms in the hospitality sector have got the workers worried about the impact that changes in management structure could have on employment and industrial relations. A major workers concern relates to growing employment insecurity. Performance demands call for flexibility, and this in turn may lead to outsourcing or restructuring to cut costs. Workers also fear that values and mission statements articulated by global chains are often not transferred into practical application in the workplaces. Also, globalization has caused lesser and lesser participation of employees in decision making other than that at the local level.

But we should realize that ownership changes in hospitality industry might not automatically lead to changes in the workplace. Continuous recognition of existing collective bargaining agreements and trade union involvement in the restructuring of the workplace can optimize the changes and turn them into positive outcomes, such as maintaining jobs and ensuring employee welfare. Conclusion The article tries to highlight the growing importance of IR in the service sector especially in the Indian scenario. The fact that a company like Amazon has already set up an IR department in its India arm, which is soon going to be the biggest hub of Amazon in the world, corroborates the fact that IR is no longer an insignificant matter in the IT industry. The strikes in banks, locally as well globally, the frequent strikes in the airlines, entertainment and hospitality sectors stand as a testimony to the same. There have been various reasons behind these strikes including right to collective bargaining, job losses due to outsourcing, better wage issues and better employment terms and conditions to name a few. With increased pressure on work force across the world due to various economic and noneconomic factors, and on organizations to survive in a ruthless environment, IR is definitely becoming more strategic in importance.

Kriti Jain Suvrodip Banerjee

CROSSWORD PUZZLE

IRS is a network of rules which governs workplace and community - Dunlop

ACROSS 3. 5. current IR scenario- power of the state IR is a network of rules governing the workplace- suggested by ? 7. procedure to be listed as a union as per established law 8. general apathy among workers - collective action 9. 91.5% of total work force in the country 10. a method of membership fee collection DOWN 1. 2. relation with bigger federations ? third party required for recognition in this approach

DID YOU KNOW ?

John R Commons created the first academic industrial relations program at the university of Wisconsin in 1920 The first strike in India was called in the year 1877 at Empress Mills in Nagpur for increase in wage s. The tagline for International Labour Organization (ILO) is Promoting jobs, protecting people. Wagner Act is a 1935 United States Federal Law that limits the means with which employers may react to workers in the private sector who create labour unions. The first trade union in India was formed in 1920, named as All India Trade Union. It comprised of 107 unions.

ABOUT FIRE@X

Forum for Industrial Relations at XLRI (FIRE@X) helps the students foray into the lutions, dynamic world bargaining and of industrial disputes, resoagreements. FIRE@X organizes acclaimed events throughout the academic year at XLRI School of Business and Human Resources such as industry interface, live projects/ case studies, intra college events, e-newsletter.

TEAM FIRE@X :
Kakunuri Bhargavi Avilash Panda Amit Kumar Anoop Maithani Chandan Dash Suvrodip Banerjee Kriti Jain Vikrant Chaplot Abin Sarkar Abhishek Anand Dwaipayan Gupta Praneeth P.

Contact Team Fire@x for any information at : fire@xlri.ac.in Visit us at : www.facebook.com/pages/FIREX/10150103421460383