Changing role of trade unions

The curtain has at last come down on one of the most famous marquees in the motorcar
industry, with MG Rover finally shutting down production earlier this month.
A company that once employed 40,000 people in the British Midlands, with an equal number
employed in the factories of suppliers, had been forced to scale down its operations over the
years.
But even seletal operations with 4,000 people has now ceased. !t is an example of what
destructive trade unionism can do to an industry.
Arthur "cargil in the #$%0s set out to destroy industry in the Midlands with his brand of
militant and destructive trade unionism. &inally Mrs. 'hatcher stood up to him and showed
him the limits to which trade unions could push industry.
"he privatised industries and "cargil lost his power base, which was mainly in public sector
heavy industries. "uccessive governments in Britain after Mrs. 'hatcher have refused to bail
out public sector undertaings with subsidies and grants.
'his has resulted in Britain transforming itself from being the sic man of (urope to one of
the more dynamic economies in the )est.
!n !ndia too we have had e*amples of the Arthur "cargil brand of trade unionism. What Datta
Samant did to the cotton textile and engineering industries in Mumbai was eually
devastating.
Almost all the te*tile mills in the city closed because of the unreasonable demands made by
trade unions under +atta "amant. !ndia has the advantages of ,a- growing both long staple
and short staple cotton and ,b- a huge domestic maret.
)e could have been the cotton te*tile source for the whole world. But battling militant trade
unions, on the one hand, while coping with price controls imposed by unimaginative
governments and te*tile quotas imposed by foreign governments, on the other, proved too
much for our te*tile industry.
!t did not have the necessary financial and managerial resources, and it failed to modernise
and remain competitive in terms of quality and cost. "o it declined and became terminally ill.
'rade unions are a legitimate system for organising worers and to voice their rights and
grievances. )ithout them companies would become either too paternalistic or too dictatorial.
.esponsible unions help to create a middle path in the relationship between management
and labour while maintaining the responsibilities of the former and the dignity of the latter.
)here things go wrong is when the management becomes authoritarian, especially in
owner/family0managed companies, or when a trade union leader allows emotion and ego to
overcome reason.
!ortunately today" wor#ers have become better informed and aware of the economic
forces that impact their industry. The media has helped to create much greater
economic awareness.
"o it is not so easy to mislead them. Managements too have become more sensitive and
s#illed in handling relationships with employees. 'his is true of even family0owned and
managed businesses.
'1" in the "outh is a prime e*ample of how a large family0managed industrial group has
successfully managed its relationship with employees through enlightened management.
'here are more such e*amples in other parts of the country.
2erhaps the labour departments of governments at the state and the Centre should sponsor
the institutes of management to do case studies of companies that have built up such
successful relationships. !nstead of merely administering rules and labour laws, these
government departments could also act as apostles of good practices in the field.
$s the s#ill levels and educational ualifications of employees advance" the role and
significance of trade unions tend to diminish. 'his is because ,a- employees are able to
represent their own case and ,b- managements are more sensitive to the needs of individual
employees, whose intellectual sills become almost uniquely valuable.
'his is already happening in the sunrise industries based on brainpower such as !' and
telecommunications. Another phenomenon in these modern industries is that employees
have greater opportunity and tendency to move from one company to another, not only
because of better terms of employment but also because of their yearning to learn new sills.
'his appetite for learning is something remarable, especially in the !' industry. !n fact,
people in that industry are more bothered about what they can learn in a company than
about how much they earn.
'his phenomenon is facilitated by the fact that there are plenty of employment opportunities
in !' and it is a young industry. 'hat is why one does not notice any union flags in the "ilicon
1alley of !ndia/Bangalore3s (lectronic City.
'rade unions have declined in their importance even in the 45, the original home of trade
unions. 'he 453s 6abour 2arty was formed by socialist leaders of trade unions.
Today" Tony %lair does not have to depend on trade unions as much as his
predecessors had to do in the &'()s and ')s. 'he 6abour 2arty3s appeal to the public is
based on ey policy issues such as spending on the 7ational 8ealth "ervice and the
education system, rather than anything to do with labour policy.
*n the +S" trade unions are powerful in negotiations with individual employers" but
have no significant political clout although they generally support the Democratic
,arty.
The same is the case in -apan. .ven in Germany" !rance" and *taly" the role of trade
unions has become more focused on negotiations with employers rather than on
politics.
'he privatisation or corporatisation of many public services such as electricity and water
supply has accelerated this shift. 8opefully the same shift in the character and role of trade
unions will happen in !ndia 00 even in places lie 5erala and Bengal, as employment starts to
move to more intellect0based activities and public sector industries are privatised.
.esponsible trade union leaders with a long0term vision will adapt their policies to suit the
new realities.
/orrespondingly" there has also been a change in the attitude of management" even in
family0managed companies. They are now better educated and many of them have
been exposed to international education and international mar#ets.
They realise the dignity of human beings more than their previous generation and
therefore are less prone to treat employees in a scurvy manner. More and more companies
are investing in management training and development.
'his has also helped to create much better awareness of the aspirations of wormen, among
the managers.
9et the last vestiges of negative union practices continue to persist in monopolistic public
services lie the state transport undertaings, state electricity boards, etc.
'he only way to correct this is to corporatise or privatise these undertaings or open them up
to competition. A prime e*ample of the change that is possible is what has happened in
aviation.
:nce airline services were opened up to competition, the whole scene changed. !nstead of
treating passengers with the indifference typical of a public sector employee, !ndian Airlines
staff learnt even to smile while greeting passengers.
!n addition, we have created some world0class private carriers in the domestic maret who
are now set to tae wing on international routes. (ven the railways can be privatised.
'he rail trac in each region can be owned and operated by a company, which then allows
competing companies to run their trains on these tracs. "imilarly, there is no reason why
urban bus services cannot be made more efficient by opening them up to competition.
'oday they are run as monopolies due to pressure from unionised labour. &or e*ample,
in Mumbai the urban bus service is cross0subsidised by B("' (lectric "upply services.
'he important point is that unionised labour accounts for only a small portion of the total
worforce. !t should not stand in the way of policies that generate employment for the larger
group outside trade union control. !n the end, that is what will benefit everyone.
,"ource; .ediff.com, April <<, <00=-
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