RE-EMERGENCE of INDUSTRIAL RELATIONS IN ORGANIZATIONS

Dr. Rajen Mehrotra*

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Academic Institutes, professional bodies, chambers of commerce, trade
associations, employer organizations, and also enterprises in India every year
organize an annual conference on topics mostly dealing with Human Resource
Development (HRD), as this has been considered an important area for the
success and growth of business / enterprise. The violent industrial strife at
Manesar, Haryana in August 2012 which led to the death of Awinash Kumar Dev,
General Manager (HR) of Maruti Suzuki India Ltd has presently resulted in most
of these organizers choosing the theme of Re- Emergence of Industrial
Relations for their annual conference. In the last three months (i.e. Sept to Nov
2012) I had opportunity to participate in some of them as a speaker.
Occurrence of violence is not new. Three executives of Everest Industries in
Nashik were stabbed on 24 August 2012, by a group of workmen on strike
demanding increase in wages and reinstatement of dismissed workmen. Regency
Ceramics workers in Puducherry, in early 2012 killed the Company President K C
Chandrasekhar. Korean company, Hyundai Motor Ltd., at its Chennai Plant in Dec
2009 had violence when it sacked 87 workers. Japanese company, Honda Motors
in Manesar,Haryana in Sept 2009 and also in 2005 witnessed violence by the
workers. Roy George, Head of HR of Pricol Ltd., an instrument panel
manufacturing company was killed by the workers in Sept. 2009 on issue of
wage freeze. In Rico Auto Industries in Haryana in 2009, a worker was beaten to
death by people believed to be associated with the company management.
Italian Oerlikon Corporations, manufacturing unit Graziano Trasmissioni Chief
Executive, Kishore Chaudhary was killed in September 2008 by the workers over
a wage freeze issue. These are some of the incidents of violence, though there
are others which have not been covered by me.
Apart from these cases of industrial violence cited above, we have had cases of
violence in sectors such as Coal, Forest, Construction and Real Estate, where it is
well known that the contractor mafia has a major role in the operation of the
business. In 2003 Satyendra Dubey, project director with the National Highways
Authority of India was murdered, because he tried exposing the contractor mafia
involvement in the construction of a section of the Golden Quadrilateral project
to the Prime Ministers office.
When I started my corporate career in 1970 in Mumbai I recollect incidents of
industrial violence taking place in Mumbai, Pune and Nasik industrial belt in
certain enterprises when the management failed to reach a settlement / agree to
the wage increase demands of the workmen made by the unions led by R J
Mehta in the 1960s and 1970s and by Dr. Datta Samant in the 1970s, 1980s,
and part of 1990s.We did witness a trend of violence/ militancy during this

period, hence quite many organizations under fear of being impacted by violence
agreed to recognize their union leadership and also sign settlement of wage
increase, which were much more than the industry cum region norm or
compared to their earlier settlement. Hence, the approach of violence / militancy
did bring dividend / reward to the workmen during that phase in the Mumbai,
Pune and Nasik industrial belt. There were also enterprises in Mumbai, Pune and
Nasik industrial belt which were not prepared to be pressurized by threat of
violence and unilateral demand of these two trade union leaders and fought
them and their demand, which did lead to strikes or lockouts, and these cases
also got resolved with absence of their leadership. However the enterprises
which decided to fight also suffered financial losses, some of their employees got
assaulted due to the approach of violence adopted by the leadership and also
the striking workmen lost wages and in some cases also their jobs. I had an
experience of witnessing this situation in 1980s when I was a member of the
management team that was involved in handling the 13 month lockout cum
strike led by Dr.Datta Samants union at Mukand Iron & Steel Works Ltd (now
called Mukand Ltd.) factory located at Kalwe, Thane. Most are aware of the Strike
in the Textile Mills of Mumbai in the 1980s under the leadership of Dr Datta
Samant, which ultimately led to over 100,000 workers losing their jobs and
finally closure of most of the textile mills. During these periods many executives
of enterprises in West Bengal and some other states also experienced Gheraos.
However, the 1990s and 2000s in the country saw a decline of violence and
militancy after the new economic policy of 1991, when most enterprises both in
manufacturing and service sector reduced their workforce through Voluntary
Retirement Schemes (VRS). It is true that 2010s is once again seeing signs
of industrial violence and militancy in various parts of the country.
Presently industrial violence occurrences get flashed on electronic media
immediately as news coverage of the incident, and there is limited coverage on
the analysis. Each of these occurrences has two sides and a history of earlier
actions that lead to the final incident. The killing of Awinash Kumar Dev, General
Manager (HR) of Maruti Suzuki India Ltd in August 2012 is not the only incident of
violence in this country, though this incident has generated a lot of debate not
only in the personnel professional fraternity but also in other professions.
Resorting to violence, as a methodology of resolving disputes adopted
by anybody in any area needs to be condemned and is an uncivilised
method of pressurizing and power play to achieve the end objectives. The
individuals involved in violence need to be expeditiously punished, as per the law
of the land. The legal process in our country is time consuming and quite often
the individuals involved in violence succeed in not being punished due to lack /
absence of evidence.
The International Labour Organization (ILO) which was born in 1919, as a
tripartite organization has always propagated Social Dialogue to resolve
industrial disputes. The ILO has a convention C 144 on Social Dialogue which
has been ratified by India in 1978. Social Dialogue refers to All types of
negotiation, consultation or simply exchange of information between or amongst

representatives of Governments, Employers and Workers, on issues of common

interest to economic and social policy.
When I started my corporate career in 1970, Industrial Relations were an integral
part of Personnel & Works Management. Also the factory work force consisted of
permanent, temporary, and badli workmen with few supervisors and officers.
Those days contract workmen engaged in the factory through a contractor /
service provider was negligible. My apprenticeship in works management in
those days made me learn how to deal fairly and firmly with both blue collar and
white collar employees including the internal trade union leaders on works
management and personnel management issues involving input material
consumption, wastage/ rejection, shift output (good, defective, rework, rejected
pieces), safe handling of the machine including the tooling along with the jigs
and fixtures, productivity, safety, absenteeism and discipline. In most large size
manufacturing organizations there were one / two social workers and also
one/two labour welfare officers. These persons regularly interacted with the blue
collar and white collar employees, visited the residence of some of them and met
the families. These interactions and visits facilitated in understanding the
problems and grievances of the workmen by the management and in finding
solutions to the problems. These channels of communication did help in building
relationships where in the employees perceived that their seniors were fair and
firm. There were industrial disputes which at times did lead to go slow, work to
rule, slogan shouting at the factory gate and also at times to a strike , but they
did not lead to an industrial violence, as both sides knew that they can resolve
the issues through dialogue or at times by arbitration. I was fortunate to learn
the practical aspects of industrial relations as a part of works management in my
employment with Mukand Iron & Steel Works Ltd. (now called Mukand Ltd.)
because of the regular interaction on the shop floor with the workers, the internal
and external trade union leaders and with the persons working in the personnel
management department. This learning and experience helped me in handling
all the areas under personnel management when I headed the personnel
management function with Novartis India Ltd and ACC Ltd
A Professor Friend of mine teaching human resource management subject in a
leading management institute in India in a recent interaction said to me :The
Human Resource Management Department of enterprises in India in the last two
decades has divorced Industrial Relations hence we are seeing industrial
violence. I replied to him Human Resource Management Department of
enterprises in India never married Industrial Relations, so where is the
question of a divorce. When I started my corporate career in 1970 there was
a Personnel Management Department and Industrial Relations function was an
integral part of that Department. In the 1990s most enterprises both in
manufacturing and service sector not only changed the name of Personnel
Management Department to Human Resource Management Department, but
took an approach that they will mostly employ officers, avoid employing blue
collar and white collar workers, deal in a very limited manner with trade unions
and hence forgot that there is something called industrial relations and labour
laws. With the new economic policy of 1991, most enterprises in manufacturing

and in service sector reduced their work force through Voluntary Retirement
Scheme (VRS) {also referred to as Compulsory Resignation Scheme (CRS) by
trade unions}, froze recruitment of employees who would be covered under the
Industrial Disputes Act, modified the business model by outsourcing and also
engaging contractors / service providers who through their employees perform
the noncore and in some cases also the core activities, and upgraded most jobs
so that they are done by employees who were designated as officers. Also the
service sector which grew at a very fast pace also had mainly officers as
employees and engaged contractors / service providers who in turn employed
workers , and the Human Resource Management Department of these
organizations firmly believed that they had nothing to do with industrial relations
. It is true that the profile and expectations of employees in the service sector
from the Personnel Management Department is quite different from employees in
the manufacturing sector. Most of these service sector enterprises have built up
an effective personnel management systems in dealing with individual
employees who are predominantly knowledge workers and employed as
executives / officers. I do visualize that these knowledge worker employees and
contract employees engaged by service sectors initially in IT / ITeS , retail ,
insurance and later in others will form trade unions / associations to protect their
interests and collectively negotiate with the employer. In most service sector
enterprises the personnel management professionals engage the services of
consultants to deal with the application for permissions ,filing of forms /returns
with the Government Labor Department, as they consider these as transactional
activity and claim that their role is predominantly strategic. Reality of the
situation is that many of these personnel management / human resource
professionals, including those working at senior levels in service sector
organizations have limited knowledge and experience in dealing with collective
issues coming up in industrial relations involving the Government labor
department, external and internal trade unions and the labour laws of the
country.
The situation today is that in most enterprises the wages received by the
contract workforce provided by the contractors / service providers both in
manufacturing and service sector is much lower than the wages of permanent
employees in the enterprise. This disparity which is very high compared to the
1970s, 1980s and 1990s does create a lot of dissatisfaction amongst these
workers, and the trade unions demand increase in wages to have parity with the
permanent workers. Managements argue that the contract employees are
engaged as per the Contract Labour (Regulation and Abolition) Act, also the jobs
are not permanent and the business needs flexibility because of fluctuations in
demand. In quite many cases where the contract labour works, the jobs are of a
perennial nature and it is purely a strategy of cost reduction, as contract
employees are mostly paid the statutory minimum wage or marginally higher
and have been working for a very long time and at times with artificial breaks.
An analysis of cases where industrial violence occurred will indicate that these
could be because of non recognition of trade union, inter union rivalry, contract
workers desiring permanent jobs with the principal employer, large wage and

benefits disparity between contract workers and permanent workers, ineffective

neutralization of inflation, harsh working conditions, wage freeze , frustration of
no signs of settlement in a long drawn out strike, demand for reinstatement of
dismissed workmen / union leaders , vested interest of contractors / service
providers not to be replaced , mafia / militant external / internal trade union
leaders . Each case of industrial violence is unique, it has a demand desired to be
fulfilled by the parties, along with a history and profile of the two constituents i.e.
management, employees / trade unions. There is a need for the two constituents
to build a relationship of trust with each other, so that the issues involved can be
discussed and resolved and even if there are unresolved issues the parties agree
to disagree and move forward and violence in any form is avoided.
There are quite many MNCs that have commenced operations in India after
1991 and most of them have been wanting the right to retrench the workforce
based on business exigencies and hence desire an exit policy, which the labour
law of India does not presently permit. Most of these enterprises on the
recommendations of the Indian managers are engaging the services of
contractors / service providers to provide the blue collar, white collar and at
times gold collar workforce. Hence the number of contract employees working in
the enterprises is much higher than the permanent workforce. At the same time
the wages and benefits of the contract employees is much lower than the
permanent workforce. Also the trade unions at times take an aggressive stand
with MNCs and recently some of the industrial violence was in the MNC
manufacturing enterprises. There is also a need for the ex-pat MNC executives to
understand the cultural and legal differences in dealing with employees while
working in India and also for the Indian executives to explain the situation to the
MNC expats plus the senior executives of the parent company of the implications
of their decisions on the operations. A better understanding will help in
preventing occurrence and resolving industrial disputes both in the interest of
the enterprise and the employees.
Post 1991, many of the personnel professionals totally ignored the relationship
part of the job, started using fashionable jargons and terminologies in the arena
of human resource. Also such personnel professionals became the darlings of
the top management, and they were considered as 'forward looking. Also Top
Managements in many enterprises became 'business-like , totally disregarding
the 'human angle of relationship ' of dealing with employees even if they were
engaged through a contractor / service provider . Those personnel professionals
who were talking about 'relationship factor ' were considered as 'outdated'. This
was at least true in the manufacturing sector.
Industrial Relations need to be an integral part of Human Resource Management
Department in each enterprise, as it was when we had the Personnel
Management Department till the 1980s. Enterprises posts 1991 are increasingly
depending on outsourcing in the supply and distribution chain, continuing to
increasingly engage contract employees through contractor / service provider.
This business model is bound to lead to a situation of disputes being raised by
employees and / or their unions. Enterprises need personnel professionals who

can analyze and understand the situation, have the art of building relationship
not only with their employees but also with the employees engaged through
contractors / service providers and unions, along with the ability of amicably
settling the disputes / differences in the interest of the organization and the
employees associated with the enterprise.
The occurrence of violence in certain enterprises, leading to loss of life, has
presently resulted in the top management of enterprises desiring to understand
the reason for such incidents and the need to take corrective action where
required. There is a realization of the need to build relationships and the reemergence of industrial relations in the enterprise in dealing with all employees
including those engaged through a contractor / service provider. Top
management of certain enterprises has started reviewing the need of having
personnel professionals in their employment, who have the experience and
competence of effectively handling the industrial relations role.
When businesses are growing and doing well it is easy to deal with employees at
all levels including the contract workforce , but when the business is not doing
well, one also needs to know the art of resolving issues involving a shrinking pie.
*President

Industrial Relations Institute of India (IRII), Former Sr. Specialist on Employers Activities for South
Asia with International Labour Organization (ILO) and Former Corporate Head of HR of ACC Ltd. and Novartis
India Ltd., E-Mail:rajenmehrotra@gmail.com