Q.

1 In the era of globalization, existence of a trade union

is being challenged. What are the challenges being faced
by the trade unions?

Ans. Challenges to Trade Unionism in Liberalized India :-

The equation between labour and management has altered dramatically post
liberalization era. Strikes have declined steadily, especially after 19 Instead of
yielding to the pressure tactics employed by trade union managements preferred to
draw the shutters down. Unions are now fighting for 'their survival. The militancy,
which was almost synonymous with lab unions in the past, has, by and large,
declined. The entry of multinational companies has compelled virtually every local
company to focus more quality, customer service, and cost cutting. Under the
circumstances Unions are facing the following challenges:

1. Militancy does not pay: The employer will draw the shutters down if pushed to
the wall. The tactics like sloganeering has therefore, is to replaced by a pragmatic
approach like face-to-face meetings, wage freeze VRS schemes, selling mill
properties etc., instead of strikes and lockouts.

2. Political base and Public Support Disappearing: The fiercely competitive

scenario has made the political bosses realize the importance keeping a low profile
and distancing themselves from economic activities Without political patronage and
financial support from 'upstairs', unions finding it difficult to keep their spirits high
and fight out the issues management till the end. With the opening up of the
economy, government has acquired a greater degree of intolerance towards
militant and strong-arm tactics by the unions. This is especially true of the State
governments who now have to fiercely compete for investments. Even pro-labour
States such as Kerala and West Bengal, labour militancy is encouraged. Over the
years, labour as a constituency has shrunk in s· and its importance to politicians has
diminished considerably.

3. Vanishing of Jobs: Liberalization, which promised six million jobs every year,
has ended up as a job-destroyer. Companies have their own compelling reasons to
undertake cost-cutting measures. To compete globally, they have to raise labour
productivity, modernize operations and give undiluted attention to quality. With
encouraging signals from government (supporting VRS, modernization efforts, pro-
employer moves favouring drastic labour reforms), the employers have been giving
pink slips to people who have failed to keep pace with the time. Union leaders and
labour activists point out that many companies, mostly small ones, have simply
closed down without permission from the Government.
4. Shrinking Membership: Membership of unions has been declining over the
years. These shrinking numbers have reduced the popularity and influence of
unions in the present scenario. Given the harsh realities they are up against,
leading national trade unions avoid confrontation with establishment and rather
prefer integration and cooperation instead.

Q.2 Explain briefly, various steps involved in a disciplinary

procedure.

Ans. Disciplinary Procedure

The disciplinary procedure involves the following steps:

a) Preliminary Investigation: First of all, a preliminary inquiry should be held to

find out whether a prime facie case of misconduct exists.

b) Issue of a charge-sheet: Once the prima facie case of misconduct is

established, charge sheet is issued to the employee. Charge sheet is merely a
notice of the charge and provides the employee an opportunity to explain his
conduct. Therefore, charge sheet is generally known as a show cause notice.

In the charge sheet, each charge should be clearly specified. There should be a
separate charge for each allegation and charge should not relate to any matter
which has already been decided upon. The charges so framed should be
communicated to the individual along with the statement of allegations on which
the charges are based.
c) Suspension Pending Enquiry: Depending on the gravity of charges, an
employee may be suspended along with serving him the charge sheet. The various
circumstances which may warrant suspension of an individual are:

i) When disciplinary proceeding is pending or contemplated.

ii) When engaged in the activities prejudicial to the interest or security of the state.

iii) Where a case in respect of any criminal offence is under investigation, inquiry or
trial.

iv) Where continuance in office will prejudice investigation/ inquiry/trial.

v) When the presence of the employee in office is likely to affect discipline.

vi) When his continuous presence in office is against the wider public interest.

vii) Where a prima face case has been established as a result of criminal or
departmental proceedings leading to the conviction, revival, dismissal, etc.

viii) In case of the following acts of misconduct:

• Moral Turpitude
• Corruption, embezzlement
• Serious negligence in duty resulting in loss
• Desertion of duty
• Refusal or failure to carry out written orders

According to the Industrial Employment (Standing Orders) Act, 1946, the suspended
worker is to be paid subsistence allowance equal to one-half of his wages for the
first ninety days of suspension and three-fourths of the wages for the remaining
period of suspensions, if the delay in the completion of disciplinary proceedings is
not due to the worker’s own conduct.

a) Notice of Enquiry: In case the worker admits the charge, in his reply to the
charge sheet, without any qualification, the employer can go ahead in awarding
punishment without further inquiry. But if the worker does not admit the charge and
the charge merits major penalty, the employer must hold an enquiry to investigate
into the charges. Proper and sufficient advance notice should be given to the
employee indicating the date, time and venue of the enquiry so that the worker
may prepare his case.

b) Conduct of Enquiry: The enquiry should be conducted by an impartial and

responsible officer. He should proceed in a proper manner and examine witnesses.
Fair opportunity should be given to the worker to cross-examine the management
witnesses.
c) Recording the Findings: On the conclusion of the enquiry, the enquiry officer
must record his findings and the reasons thereof. As far as possible, he should
refrain from recommending punishment and leave it to the decision of the
appropriate authority.

d) Awarding Punishment: The management should decide the punishment

purely on the basis of findings of the enquiry, past record of the worker and gravity
of the misconduct.

e) Communicating Punishment: The punishment awarded to the worker should

be communicated to him in written and the earliest available opportunity. The letter
of communication should contain reference
to the charge sheet, the enquiry and the findings. The date from which the
punishment is to be effective should also be mentioned.

Q.3 Mr.Sanjay is the General Manager of Dream Sunshine

Pharmaceutical Company. He has to diversify his business.
He wants to assess the leadership style of some of his
Senior managers.
Manager 1- (Has a high consideration for people and Low for
structure)
Manager 2 – (Has a high consideration for people and also high for
structure)
Manager 3 – (Has a low consideration for people and high for
structure)
Manager 4 – (Has a low consideration for people and low for
structure)
Refer to the Grid approach and help Mr. Sanjay to clearly
understand the leadership styles for all the managers. Which style
is best according to you? Explain.

Ans. Grid Approach of Leadership (Blake – Mouton)

The grid approach to leadership has been developed by R.R. Blake and J.S. Mouton.
It was primarily developed for assessing the personality of a leader in terms of his
concern for task and concern for people, and later, attempting behavioural
modification in him through Managerial Grid training program. Since each axis of
the grid has 9 steps, a leader’s performance can be plotted anywhere on 81 small
boxes of grid by obtaining his score with the help of a questionnaire. However, for
the purposes of studying the styles of leadership the grid can be divided into five
main areas. These are shown in Figure Below:
Figure: Grid Approach of Leadership
i) Location 9, 1 Style (Task)
This style represents the task or mission oriented leader. He cares little about the
feelings of his group members. He believes in close supervision and proves
impatient about the slackness, delay or failure on the part of group members. This
type of behaviour of leader is suited for handling certain types of emergency
conditions.

ii) Location 9, 9 Style (Team)

This type of leader tries to integrate both mission accomplishment and welfare of
men. He helps the development of those members of his group who are committed
to the achievement of organizational goals. Such members, with their stake in the
organization’s purpose, co-operate with each other and work in an interdependent
manner. They trust and respect each other and that helps them in creating a
congenial work environment. This makes the task of the leader easy. He works with
conviction that ‘people support what they help to create’.

iii) Location 1, 9 Style (Country Club)

The leader belonging to this quadrant of the grid is also called the club manager.
The welfare of people is his sole aim. He is likely to fail in achieving organization’s
time bound objectives. Since his heart is full of compassion and he cannot see
people suffering. He lives with the idea that ‘a happy team produces the best
results’.

iv) Location 1, 1 Style (Impoverished)

This is the non-involved type of leader. He neither causes any event nor directs any
event taking place on its own. He considers that mission accomplishment and
welfare of people are conflicting goals. The best results are achieved if the
procedures established in the past are allowed to continue. An organization headed
by such a leader can consider itself lucky if it could just maintain the standards of
efficiency achieved under an earlier dynamic leader.

v) 5, 5 Style (Middle Road)

This is the leader who follows ‘middle-of-the-road’ policy. He thinks that by being
‘firm but fair’ he can achieve the best results. He is a compromiser. He strives to
achieve results without unduly upsetting the people. Such a leader is best suited to
play the role of a conciliator in the labor management conflicts.
Q.1 What are the various factors that can influence
strategic employee relations management?

Ans. Any organization, in order to attain its goals successfully, must always
endeavour to develop and maintain healthy employee relations. The framework for
such relations must be based on the following:

a) Integration: The needs of individuals, groups and the organization must be

seamlessly integrated. Such cross-matching of interests will invariably result in a
healthy organizational climate and promote creativity and productivity. It is a
management responsibility to initiate measures to create an atmosphere of mutual
trust and understanding so that the employees appreciate both organizational and
environmental constraints and support the company at all times.

b) Employee Participation: Supportive climate and mutual trust and confidence

can be created by involving workers and their groups in the decision-making
process. Management should be open to ideas and accept or reject an idea or
suggestion based on its merits and not on the source of the idea or suggestion. The
management must appreciate the problem of the employees and strive to resolve
these at the earliest. Communication channels must be kept open and the
employee must be given an opportunity to be heard. Such involvement not only
improves the quality of decisions but also leads to the satisfaction of ego needs of
employees. They feel recognized and their attitude is always positive. Joint
management councils or committees consisting of equal representative of workers
and management may be constituted. Frank and fair discussions/meetings help to
secure and preserve unity among workers and managers. Effective use of group
dynamics is a must.

c) Congenial Work Environment: Management must create a work environment

wherein workers can perform their jobs with a sense of security and camaraderie.
They must value the task they are performing. Simultaneously, the management
must ensure job security, a meaningful and challenging job, scope for opportunity
and advancement and satisfying interpersonal relationships for the employees.

d) Communication: Most of the employee relations problems arise due to lack of

communication or inadequate or a distorted communication. The desire to have
knowledge about the current situation, future prospects, company policies and
contemplated changes is one of the basic needs of an employee. Lack of
communication leads to fear, misunderstanding and distrust. Therefore,
management should maintain open channels of communication, particularly upward
communication. Employee handbooks, grievance procedures, suggestion schemes,
etc. enable management to understand the feelings, fears and aspirations of
employees. Informal communication or grapevine is generally used to supplement
and support the formal channels of communications. However, strict vigil on
rumours must be kept with all efforts to arrest them at the earliest.

e) Adaptive Leadership: Leadership style must be determined by the situation

and must be flexible. An effective leader is one who fully understands his
employees and adapts his approach to the requirements of the situation. In order to
develop healthy relations, managers should listen carefully, talk less and give
decision in the opportune time. Decision delayed is harmful to the organization as it
leads to mistrust. Managers must uphold the dignity of the individual employees
and must have a positive attitude. Orders must be clear and unambiguous.

f) Resolving Conflicts: Continuous efforts must be made to reduce and minimize

inter-personal and inter-group conflicts. The genesis of the conflict must be
identified and the solution must be such that it satisfies the interest of both parties
albeit not fully. Healthy employee relations can be developed through an integrative
and problem-solv1ng approach in which both the parties gain satisfaction of their
needs in a cooperative manner and not at the expense of one another. Such a
situation requires impartial, continuous and positive communication with the parties
concerned.

g) Conditioning Behaviour: Conditioning the behaviour of people is one of the

effective ways of building healthy employee relations at work. This involves the use
of positive and negative reinforcements. Rewards must be used to reinforce
desirable behaviour while punishment must be used to discourage undesirable
behaviour. The most important aspect being that the managers must themselves
have exemplary conduct.

h) Personnel Counseling: An ideal manager must have big ears to listen to all the
problems, a pair of big eyes to observe things, a big head to analyze and arrive at
an effective solution, a big tummy to keep things confidential and a small mouth to
speak less. Thus a manager must listen patiently and help expeditiously resolve the
problems faced by workers both inside and outside the organization. Counseling
reduces the build up of tension and improves their self-confidence. The employee
feels at home in the four walls of the factory or office.
Q.2 Explain the provisions of Payment of Gratuity Act,
1978.

Ans. An Act to provide for a Scheme for the payment of gratuity to

employees engaged in factories, mines, oilfields, plantations, ports, railway
companies, shops or other establishments and for matters connected therewith or
incidental thereto.

Important Definitions:-

(a) Appropriate Government means:-

(i) In relation to an establishment:-

• Belonging to, or under the control of, the Central Government.

• Having branches in more than one State.

• Of a factory belonging to, or under the control of, the Central

Government.

• Of a major port, oilfield, railway or mine company, the Central

Government.

• In any other case, the State Government.

(b) Completed Year of Service means continuous service for one year.

(c) Controlling authority means an authority appointed by the appropriate

Government under section 3.

(d) Employee means any person (other than an apprentice) employed on wages in
any establishment, factory, mine, oilfield, plantation, port, railway company or shop,
to do any skilled, semi- skilled, or unskilled, annual, supervisory, technical or clerical
work, whether the terms of - such employment are express or implied, 3*[and
whether or not such person is employed in a managerial or administrative capacity,
but does not include any such person who holds a post under the Central
Government or a State Government and is governed by any other Act by any rules
providing for payment of gratuity.

(e) Family in relation to an employee, shall be deemed to consist of: -

 (i) In the case of a male employee, himself, his wife, his children, whether
married or unmarried, his dependent parents and the dependent parents of his wife
and the widow] and children of his predeceased son, if any,

(ii) In the case of a female employee, herself, her husband, her children,
whether married or unmarried, her dependent parents and the dependent parents
of her husband and the widow and children of her predeceased son, if any.

(f) Retirement means termination of the service of an employee otherwise. an on

superannuation. Superannuation, in relation to an employee, means the attainment
by the employee of such age as is fixed in the contract or conditions of service as
the age on the attainment of which the employee shall vacate the employment.

(g) Wages means all emoluments which are earned by an employee while on duty
or on leave in accordance with the terms and conditions of his employment and
which are paid or are payable to him in cash and eludes dearness allowance but
does not include any bonus, mission, house rent allowance, overtime wages and
any other allowance.

(h) Continuous Service: For the purposes of this Act means: -

(i) An employee shall be said to be in continuous service for a period if he

has, for that period, been in uninterrupted service, including service which may be
interrupted on account of sickness, accident, leave, absence from duty without
leave (not being absence in respect of which an order treating the absence as break
in service has been passed in accordance with the standing orders, rules or
regulations governing the employees of the establishment), lay-off, strike or a lock-
out or cessation of work not due to any fault of the employee, whether such
uninterrupted or interrupted service was rendered before or after the
commencement of this Act.

(ii) Where an employee (not being an employee employed in a seasonal

establishment) is not in continuous service within the meaning of clause (1), for any
period of one year or six months, he shall be deemed to be in continuous service
under the employer: -

• For the said period of one year, if the employee during the period of twelve
calendar months preceding the date with reference to which calculation is to be
made, has actually worked under the employer for not less than one hundred and
ninety days, in the case of an employee employed below the ground in a mine or in
an establishment which works for less than six days in a week; aQd two hundred
and forty days, in any other case.
 • For the said period of six months, if the employee during the period of six
calendar months preceding the date with reference to which the calculation is to be
made, has actually worked under the employer for not less than ninety-five days, in
the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and one hundred and
twenty days, in any other case.

(i) Controlling Authority: The appropriate Government may, by notification,

appoint any officer to be a controlling authority, who shall be responsible for the
administration of this Act and different Controlling authorities may be appointed for
different areas.

Applicability

Every factory, mine, oil field, plantation, port, railways, company, shop,
establishment or educational institutions employing 10 or more employees.
Sec-1

Calculation Piece-rated Employee

@ 15 days wages for every completed year on an average of 3 months' wages.

Sec-1

Calculation Seasonal Employee

@ 7 days' wages for every completed year of service.

Sec-1

Employee

All employees irrespective of status or salary.

Entitlement

On completion of five years' service except in case of death or disablement.

Sec 2e

Qualifying Period

On rendering of 5 years' service, termination, resignation or retirement.

Sec 2e

Wages for Calculation

@ 15 days' wages for every completed year as if the month comprises of 26 days at
the last drawn wages.
Sec 2(s)

Display of Notice

On conspicuous place at the main entrance in English language or the language

understood by majority of employees of the factory, etc.
Rule 4

Maximum Ceiling

RS. 3, 50,000.
Sec 4(3)

Forfeiture of Gratuity

• On termination of an employee for moral turpitude or riotous or disorderly

behavior.

• Wholly or partially for willfully causing loss, destruction of property etc.

Sec4 (6)

Nomination

To be obtained by employer after expiry of one year's service, in Form 'F'.

Sec 6 Rule 6

Recovery of Gratuity

To apply within 30 days in Form I when not paid within 30 days.

Sec 8 Rule 8

Protection of Gratuity

Can't be attached in execution of any decree rule 13.

Penalties

• Imprisonment for 6 months or fine up to RS.10, 000 for avoiding making

payment by making false statement or representation.
 • Imprisonment for not less than 3 months and up to one year with fine on
default in complying with the provisions of Act of Rules.

Q.3 TechPro is a company dealing with the manufacturing

of UPS. It has more than 25 employees. The company was
established 4 years ago. The company owner wants to
keep in place all the legal implications. Will the
organization be covered in the Factories Act? What all
provisions need to be taken care of to abide by the
regulations?

Ans. Important Statutory Provisions in the Factories Act, 1948

1. Cleanliness
(a) Every factory shall be kept clean and free from effluvia arising from any drain,
privy or other nuisance.
(b) Accumulation of dirt and refuse shall be removed daily by some effective
method,
(c) The floor of every work room shall be cleaned at least once in every week by
washing, using disinfectant where necessary, or by some effective method,
(d) Where a floor is likely to become wet in course of any manufacturing process to
such an extent as is capable of being drained, effective means of drainage shall be
provided,
(e) Walls, partitions, ceilings, doors, windows. etc. shall be painted, varnished, white
colour washed in the prescribed manner.

2. Disposal of Wastes and Effluents

a) Effective arrangements shall be made in every factory for the treatment of
wastes and effluents due to manufacturing process carried on therein, so as to
render them innocuous and for their disposal.

3. Ventilation and Temperature

(a) Effective and suitable provision shall be made in every factory for securing and
maintaining in every workroom the circulation of fresh air and such a temperature
as will secure to workers therein reasonable conditions of comfort and prevent
injury to health,
(b) The walls and roofs shall not be exceeded but kept as low as practicable,
(c) The process which produces high temperatures shall be separated from the
workroom by insulating the hot parts or by other effective means.

4. Dust and Fumes

(a) Where dust or fumes or impurity of such a nature as is likely to be injurious or
offensive to the workers is given off as a result of the manufacturing process being
carried on in a factory, effective measures shall be taken in the factory for
prevention of inhalation or accumulation of dust and fumes in workrooms. If for such
a purpose any exhaust appliance is necessary it shall be applied as near as possible
to the point of origin of the dust, fumes or other impurity and such point shall be
enclosed so far as possible,
(b) A stationary internal combustion engine shall not be operated unless the
exhaust is conducted into the open air. Other internal combustion engines shall not
be operated in any room unless effective measures have been taken to prevent
accumulation of fumes there from which are injurious.

5. Artificial Humidification
In any factory in which the humidity of the air is artificially increased, the water
used for the purpose shall be taken from a public supply or other source of drinking
water or shall be effectively purified before it is so used.

6. Over-crowding
There shall be in every work-room of a factory at least 9.9 cubic metres (for the
factories existing before this Act) and 14.2 cubic metres for factories built after this
Act) and 14.2 cubic metres (for factories built after this Act) of space for every
worker. In calculating such space, no account shall be taken of any space which is
more than 4.2 metres above the level of the room’s floor.

7. Lighting
a) In every part of the factory where workers are working or
passing there shall be provided and maintained sufficient and suitable lighting,
natural or artificial or both,
b) All glazed windows and sky lights used for lighting shall be kept clean and free
from obstruction,
c) Effective provision shall be made to prevent glaze and the formation of shadows.

8. Drinking Water
(a) In every factory, effective arrangements shall be made to provide and
maintain at suitable points conveniently situated for all workers employed therein a
sufficient supply of wholesome drinking water,
(b) All such points shall be legibly marked ‘drinking water’ in a language
understood by a majority of the workers employed in the factory. No such points
shall be situated within six metres of any washing place, urinal, latrine, spittoon,
open drain carrying effluent or any other sources of contamination unless a shorter
distance is approved in writing by the Chief Inspector,
(c) In every factory wherein more than 250 workers are ordinarily employed,
provision shall be made for cooling drinking water during hot weather by effective
means and for distribution thereof.

9. Latrines and Urinals

(a) In every factory:
(i) Sufficient latrine and urinal accommodation of prescribed types shall be
provided conveniently situated and accessible to workers at the time while they are
at the factory;
(ii) Separate enclosed accommodation shall be provided for male and female
workers;
(iii) Such accommodation shall be adequately lighted and ventilated and no latrine
or urinal shall unless specially exempted in writing by the Chief Inspector,
communicate with any work-room except through an intervening open space or
ventilated passage;
(iv) All such accommodations shall be maintained in a clean and sanitary condition
at all times;
(v) Sweepers shall be employed whose primary duty would be to keep clean
latrines, urinals and washing places.
(b) In every factory wherein more than two hundred and fifty workers are
ordinarily employed:
(i) All latrine and urinal accommodation shall be of prescribed sanitary types;
(ii) The floors and internal walks, up to a height of 90 centimeters, of the latrines
and urinals and the sanitary block shall be laid in glazed tiles or otherwise finished
to provide a smooth polished impervious surface;
(iii) The floors, portions of the walls or blocks so laid or finished and the sanitary
pans of latrines and urinals shall be thoroughly washed and cleaned at least once in
every seven days with suitable detergents or disinfectants or with both.

10. Spittoons
(a) In every factory, there shall be provided a sufficient number spittoons at
convenient places and they shall be maintained in a clean and hygienic condition.
(b )No person shall spit within the premises of a factory except in the spittoons
provided for the purpose. A notice containing the provision of spittoons in the
factory and the penalty for spitting any where except in the spittoons shall be
prominently displayed at suitable places in the premises.