A STUDY ON INDUSTRIAL RELATIONS

With Reference To

BHARAT HEAVY PLATES AND VESSELS LTD. Visakhapatnam.

A Project Report submitted to JNT University, in Partial fulfillment of the requirements for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY KANAKALA.VISHNUPRIYA Regd. No. 08991E0019 Under the esteemed guidance of

Mr. P. RAVI KUMAR

Head of the Department , M.B.A

ST.THERESSA INSTITUTE OF ENGINEERING AND TECHNOLOGY

(Affiliated to Jawaharlal Nehru Technological University) GARIVIDI, VIZIANAGARAM (2008-2010)

ACKNOWLEDGEMENT

I would like to forward my sincere thanks and gratitude to P.RAVI KUMAR for availing me the opportunity to do this project work. My deep gratitude also goes to Mr. RAJASEKHAR faculty member, who as patiently guided me to the successful completion of project work. I would like to express my sincere gratitude to SRI S.K.MISHRA Manager (TRAINING), HR department, BHPV for his valuable support and guidance during the entire course of the project work. I would also like to extend my gratitude to my parents and friends without whose help and advice this project would not have been possible.

DECLARATION

I here by declare that the project report titled INDUSTRIAL RELATIONS with reference to BHARAT HEAVY PLATES AND VESSELS LIMITED submitted by me to St.Theressa Inst. Of Engg. and Technology is genuine and bonafied work done by me and is not submitted to any other university or published anytime before. The project work is for the partial fulfillment of the requirement for the award of M.B.A, degree by the JNTU KAKINADA.

(S.K.MISHRA) SIGNATURE

Station: Visakhapatnam Date:

CERTIFICATE
This is to certify that Ms. KANAKALA VISHNUPRIYA Student of final year MBA bearing Regd. No.08991e0019 had submitted the project report entitled A STUDY ON

INDUSTRIAL RELATIONS with reference to BHARAT HEAVY PLATES AND VESSELS LIMITED,

Visakhapatnam, in partial fulfillment of the award of degree of MASTER OF BUSINESS MANAGEMENT in St.Theressa inst of engg& technology, Garividi.

SIGNATURE FACULTY MEMBER

Station: Visakhapatnam Date:

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INDEX
CHAPTER-I: INTRODUCTION CHAPTER-II: CHAPTER-III: CHAPTER-IV: CHAPTER-V: ANALYSIS & INTERPRETATION OF THE STUDY SUMMARY FINDINGS SUGGESTION BIBILIOGRAPHY THEORITICAL FRAMEWORK OF THE STUDY INDUSTRY PROFILE COMPANY PROFILE INTRODUCTION OBJECTIVES OF STUDY NEED FOR THE STUDY SCOPE OF THE STUDY METHODOLOGY LIMITATIONS

CHAPTER-1

INTRODUCTION

Out of all the Human Resources Management problems that have emerged on the cooperate forefront in recent times; the problem of Industrial Relations has achieved more prominence. The increased popularity of this aspect of Human Resource Management is due to one single factor that it deals with people who are the base of industry a class of people that makes things to happen. The term Industrial Relations refers to Industry and relations. According to ID act 1947 Industry means systematic activity carried on by cooperation between an employee and his workmen for the production of goods or services with a view to satisfy human wants or wishes(not for spiritual needs). Relations mean the relation that exists between the employee and his workmen .The term Industrial Relations mean that cooperative relationship which exists between the employee and the employees. According to I Henry Richardson Industrial Relations may be referred as an art of living together for purposes of production. Industrial Relations are that part of management which is concerned with the manpower of the

enterprise. Industrial relations have a very important concept of the science of management because it deals with the man power of enterprise.
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With Growing prosperity workers have organized their own trade and thus gained a bargaining power enabling their rights in the industrial society. Industrial Relations is concerned with the

relationship between management representing the holders of capital and trade unions representing the holders of harbor power regarding the employment, unemployment, conditions of employment & unemployment and conditions of work. These industrial relations differ from one country to other country .The type of Industrial Relations in a country depends upon the technological advancement, employment opportunities, type of trade unions ,Government legislations and economic conditions. Coming to India, which is rapidly transforming from the agrarian system to Industrial system. The country with its vast population has very less percentage of working class and out of this only one fourth is organized. But the relations that influence such a small segment of workers have a far reaching implication not only on the attitude of un-organized workers but on economy as a whole.

SCOPE OF THE STUDY

Though the scope of field study is very vast, keeping in view the availability of resources and time factor, present work is confined to a single unit. The present study also specific in that, it aims at studying how industrial unit is organizing the manpower and administrating them towards achieving organizational goal. The present study aims at making an elaborate analysis of different functions in the area of personal administration and industrial relation. The scope of this study is confined to BHPV-Vishakapatnam.The data have been elucidated in the following areas: Organization structure and functions of the personnel

department industrial relations department.

Positive aspects of industrial relations, which broadly collect collective bargaining, and labour management co-operation.

Grievance handling and disciplinary actions. Trade unions and its relationship with management.

OBJECTIVES OF THE STUDY

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The study has two co-equal objectives:1. To have knowledge about practices of

organization in field of personnel management and industrial relations.

2.

To get overall experience of an organization, its day-to-day problem and the experience of a personal executive in a company. In a broader sense the present study enables the student to understand.

Organization structure and internal organizations of personal department.

Functions of industrial relation department. Functions and duties of personal department. Management culture and style. The causes consequences and techniques of solving disputes.
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Handling of day-to-day grievance of workers. Trade unionism & collective bargaining. Thus, both theoretical and practical knowledge will help

one to understand about the subject, the whole edifice of the organization in which the study has been conducted.

NEED FOR THE STUDY

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The development of any organization depends on good industrial relations, which involved both management and workers until and unless there is commitment from both sides good industrial relation cannot be achieved. Every organization faces a problem in maintaining good relations; this may due to man, money, machinery and material, labour unions, working environment, etc. Poor industrial relations adversely effects the industrial profile, labour, community in particular and eventually the nations economy. Coming to Bharat Heavy Plates & vessels a public sector unit, study of industrial relations at BHPV is very helpful to me to get experience on industrial relations.

METHODOLOGY OF THE STUDY

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For investigation and acquiring scientific knowledge about any problem situation or subject, the researcher has to make out the methodology of study, which refers to the body of methods or techniques using conducting the study. To make the present study more scientific the following methodology has been adopted.
METHOD OF DATA COLLECTION: For the present study the methods of research utilized are:

Historical method

Survey method In historical method it includes personal bulletins, personal policy book records and documents applied by them, but when in the case of survey method it includes that the data collected from schedules and questionnaires.

SOURCE OF DATA COLLECTION:

Source of data collections are generally two types.

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They are:

Primary sources of Data collection Secondary sources of Data collection

In primary sources the data should be collected from various resources like management representatives, union representatives and workers and random sampling bases and also questionnaires, asking questions. In secondary it includes the records and

documents applied by them. The tools and techniques used for data collection were with the help of structural scheduled questionnaires.

LIMITATIONS OF THE STUDY

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While conducting the research work the researcher has to face some or other difficulties. The present study does not escape from it. The limitations are as follows. The time allowed for data collection was about two months it is difficult to get all the information with in the short span of time.

BHPV-Vishakapatnam being a Heavy Plates & Vessels Manufacturing unit, most of the data are kept confidential as per official secret act 1923.

The hindrances before the researcher was most of the executives as well as the workers were busy with their normal work. Sometimes the executives opine from their own personal experiences while the workers, union office bearers gave information from their angle but not as per the demand of the study. Finally the company is big concern and has a huge records & data and the researcher has to carry out his study omitting many of the cases and records.

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CHAPTER-2

INDUSTRY PROFILE
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BHARAT YANTRA NIGAM LIMITED :( Holding company)

Bharat Yantra Nigam Limited (BYNL) was incorporated in July, 1986 with corporate office at Allahabad (UP), with the main objective to integrate, monitor and coordinate the activities of the subsidiary companies with a view to secure optimum utilization of resources and to provide package and turnkey services to various core sectors. It has following 6 companies as its subsidiaries. 1. Bharat Heavy Plate & Vessels Limited, Visakhapatnam 2. Bharat Pumps & Compressors Limited, Naini, Allahabad. 3. Bridge & Roof Company (India) Limited, Calcutta. 4. Richardson & Cruddas (1972) Limited, Mumbai. 5. Tungabhadra Steel Products Limited, Hospet, Karnataka. 6. Triveni Structural Limited, Naini, Allahabad. The total production of all subsidiary companies during 1999-2000 is anticipated to be Rs.840 crore.
BHARAT HEAVY PLATES AND VESSELS LIMITED:

Bharat Heavy Plates & Vessels Limited, (BHPV) was set up in the year 1966 for catering to the requirement of equipments for core sectors, such is, Fertilizers, Oil Refineries, Petrochemicals, etc. The company has 3 product divisions namely, Process Plant Division, Cryogenics Division, and Boiler Division. The company is radually shifting its emphasis, from mere manufacturing and supply of equipment to system sales. The Company has entered into MOUs, on a case-to-case basis, with world renowned companies for transfer of technology.

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The production of the Company for the year 1999-2000 is anticipated to be Rs.255 crores.
BHARAT PUMPS & COMPRESSORS LIMITED:

Bharat Pumps & Compressors Limited, (BPCL) was incorporated in January, 1970 at Naini, Allahabad. The Company is catering to the needs of sectors like, oil, fertilizer, chemicals etc. For various types of pumps & compressors. The company became sick and was referred to BIFR. The companys BIFR sanctioned revival plan is under implementation involving fresh infusion of funds by Government to the extent of Rs. 15.75 crores with financial restructuring of Rs. 81 crores. The Company is likely to end the year 1999-2000 with a production of Rs. 45 crores.
BRIDGE AND ROOF COMPANY (INDIA) LIMITED:

Bridge & Roof Company (India) Limited (B&R) was initially a subsidiary of Blamer Lawry & Co. Ltd. Subsequently, Government of India directly invested additional equity capital of Rs.174 lakhs in December, 1978 and became a Government company. The administrative control of this company was transferred to this Department from Ministry of Petroleum in June, 1986. The companys operations cover fabrication of medium and heavy structures, civil engineering works in respect of buildings, concrete bridges, project civil works, cooling towers, mechanical erection of complete plants for refineries, fertilizers, chemical, steel, aluminum, etc.

The turnover of the company during the year 1999-2000 is anticipated to be Rs.370 crores.

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RICHARDSON & CRUDDAS (1972) LIMITED:

Richardson & Cruddas (1972) Limited (R&C) was taken over from private sector in 1972. It has four units two in Mumbai & one each in Chennai and Nagpur. The Company became a subsidiary of BYNL with effect from 2h1 April, 1987. The product profile of the Company covers steel structures, transmission line towers, industrial machinery, chemical machinery, refrigeration equipment, etc. The company became sick and was referred to BIFR. A revival plan sanctioned by BIER is under implementation involving financial restructuring of Rs. 110 crores. The company earned profit for the third successive year in 1998-99. Its production during the year 1999-2000 is likely to be Rs. 105 crores.
TRIVENI STRUCTURALS LIMITED:

Triveni Structurals Limited (TSL) was incorporated in July, 1965. The Company is primarily engaged in the manufacture of heavy steel structural products such as tall towers & mast for power transmission, communication and T.V. broadcasting, hydro mechanical equipment, pressure vessels, etc. The Company became a subsidiary of BYNL in April, 1987. The company became sick and was refered to B. B sanctioned revival plan is under implementation involving fresh infusion of funds by Government to the extent of Rs.29.22 crores with financial restructuring of Rs.47 crores. The progress of implementation of the sanctioned revival plan has been taken up for review by BIFR. The production during the year 1999-2000 is anticipated to be Rs.30 crores. SECTORS SERVED: Oil and gas Petroleum Petrochemical and refineries Steel coal and mining
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 Thermal hydel and nuclear power Civil Engineering and construction services Rail and road Bridges Mass transportation including Railways Highways and Roadways Chemicals and sugar plants Water and sewage treatment Communication and media Space Technology

Bharat yantra nigam ltd today is one of the most versatile engineering groups in the country. The services rendered by it ranges from concept to commissioning. It commands high-tech manufacturing facilities, backed by strong design and research and development systems. It is equally strong in project execution including construction and erection.over 30 collaborations with world market leaders give it a distinct technology edge.
INDUSTRY OVERVIEW: ENGINEERING

The engineering sector is the largest segment of the overall Indian industrial sector. India has a strong engineering and capital goods base. The important groups within the engineering industry include machinery & instruments, primary and semi finished iron & steel, steel bars & rods, nonferrous metals, electronic goods and project exports. The engineering sector employs over 4 million skilled and semi skilled workers (direct and indirect)

The sector can be categorized into heavy engineering and light engineering segments. Heavy engineering segments forms the majority of the engineering sector in India. In the year 2003-04, out of the total engineering production of

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US$ 22 billion, the heavy engineering market contributed over 80 percent with the light engineering segment accounting for the remaining. India has a well-developed and diversified industrial machinery/capital base capable of manufacturing the entire range of industrial machinery. The industry has also managed to successfully developed advanced manufacturing. The industry has also managed to successfully developed advanced manufacturing technology over the years. Among the developing countries, India is a major exporter of heavy and light engineering goods, producing a wide range of items. The bulk of capital goods required for power project, fertilizer, and cement, steel and petrochemical plants and mining equipment are made in India. The country also makes construction machinery, equipment for irrigation project, diesel engines, tractors, transport vehicles, cotton textile and sugar mill machinery. The performance of the engineering sector is linked to the performance of the end user industries for the sector. The user industries for engineering include power utilities, industrial majors (refining, automotive and textiles), government (public investment) and retail consumer (pumps and motors). The engineering sector has been growing, driven by growth in end user industries and the new projects being taken up in the power, railways, infrastructure development, private sector investment being taken up in the power, railways, infrastructure development, private sector investment fields etc. Many factors contribute to growth of engineering sector in India.

THE KEY GROWTH DRIVERS ARE:

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 The growth of the key end user sectors In India. For example, the

domestic sales of automobiles have growth at the compounded annual growth rate of around 14 percent over the past four years. Government emphasis on power and construction sector has increased for the past few years and thus increasing the demand for capital goods. Further, India is being preferred by global manufacturing companies as an outsourcing destination due to its lower labour cost and better designing capabilities. Engineering companies thus have a huge potential for direct exports and outsourcing. Among developing countries, India offers the best combination of low costs, availability and skills and capabilities of manpower for the engineering sector. In terms of availability and skills, India produces over 500 phds, 200,000 engineers, 300,000 non-engineering postgraduates and 2,100,000 other graduates each year, thereby ensuring a steady supply of qualified manpower for the sector. In order to leverage Indias intrinsic technology strengths and the vast pool of highly qualified software professionals, ABB has set up a global corporate R&D center in Bangalore, Which focuses on industrial IT development and deployment. It also helps maintain and support a rang of software intensive products and partners with ABB R&D centers as well as business areas within the group. This was the first such center to be established outside outside the US and Europe. The combination of ABBs global know-how and Indias qualified people enables the Indian subsidiary outdoor circuit breakers and magnetic actuators. It also exports several other products including transformers. The Indians engineering industry is highly competitive with a number of players in each segment. A large number of multinational companies such as Cummins, ABB and Alfa Laval have also entered the industry. The intense competition has led to Indian players developing improved capabilities that have made them more competitive.
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Heavy Engineering Granite machinery

Crushers induction furnaces Tea processing machinery Tobacco threshing Air pollution Milling equipment Portable generator sets Lifts Injection molding Diesel engines Compressors Gas turbines Steam turbines Fork lifts Chemical tanks Earth moving equipment Material handling equipment Hydro power equipment Farm implants Crushers

Industry and services

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Heavy Industry Heavy Industry in India comprises of the heavy engineering industry, machine tool industry, heavy electrical industry, industrial machinery and auto-industry. These industries provide goods and services for almost all sectors of the economy, including power, rail and road services for almost all sectors of the economy, including power, rail and road transport. The machine building industry caters the requirements of equipment for basic industries such as steel, nonferrous metals, fertilizers, refineries, petrochemicals, shipping, paper, cement, sugar, etc. Heavy Electrical Industry Heavy electrical Industry encompasses important industry sectors including power generation transformers, switchgears and relays. The performance of this industry is closely linked to the programme of the country. The government of India has an ambitious mission of power for all 2002. As per working group on power for 11th plan, a capacity addition of 72000 MW is required. To reach wheel power, an expansion of the regional transmission network and inter regional capacity to transmit power would be essential. This will stimulate demand for heavy electrical equipments. There is a strong manufacturing base for the manufacture of heavy electrical equipment in the country. The technology available in India is almost at par with that in the International market barring few areas of high voltage lines. However, items like CRGO steel and amorphous cores for low loss transformers are imported. The present buoyancy in the India economy would create demand for electrical products through industrial growth and general economic development. The power sector reforms will create large business for power sector equipment manufacturers and service providers. In the current favorable market scenario, the electrical industry can certainly look forward to growth.
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Turbines and generator sets The capacity established for manufacture of various kinds of turbines, such as steam and hydro turbines including industrial turbines, is more than 7000 MW per annum. Apart from BHEL which has largest installed capacity, there are other units in the private sector who are manufacturing turbines for power generation and industrial use. The manufacturing range of BHEL includes steam turbines, Boilers, generators up to 500 MW for utility and commercial cycle application and is capable of manufacturing steam turbines with super critical steam cycle parameters and matching generators up to 660 MW size. Facilities are also available for 1000 MW unit size. BHEL has the capacity to manufacture gas turbines up to 260 MW. The A.c.generator industry in India is adequately catering to the alternative power requirement of large and small industries, commercial establishments and domestic sector. Domestic manufacturers in India are capable of manufacturing AC generator right from 0.5 KVA to 25000 KVA and above with specified voltage rating. The export and import figures for the years 2006-2007 were around Rs.2100 crores respectively. Boilers Boiler is a pressurized system in which water is vaporized to steam, the desired end product, by heat transferred from a source of higher temperature, usually the products of combustion from burning fuels. Steam thus generated May be used directly as a heating medium, or as the working fluid in a prime mover to convert thermal energy to mechanical work, which in turn may be converted to electrical energy. Although other fluids are sometimes used for these purposes, water is by the most common. BHEL is the largest manufacturing of boilers in the country accounting for around two thirds of market share. It has the capacity to manufacture different types of boilers including super thermal boilers, utility
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boilers and other industrial boilers. The export and import figures for the year 2006-07 were Rs.395 crores and Rs. 98 crores respectively.

Transformers A transformer is a voltage changer. The health of transformer Industry depends largely on the power generation and transmission sector. The major user of the industry is the state electricity Boards and industries. The transformer Industry In India has developed for over 50 years and has a well matured technology base. It has the technology to manufacture wide range of power transformers, distribution transformers and special transformers for welding, traction and furnances etc. Energy efficient transformers with low noise level are also being developed to meet international. The export and import figures for the year 2007 were Rs.2923 crores and Rs.2523 crores respectively. Switchgear and control gear Continuous power supply is crucial requirement not only for industry but also for every other use of electricity. Switchgear and control gear are indispensable both in transmission and distribution of power. The Indian switchgear industry is manufacturing entire range of circuit breaker from bulk oil, minimum oil, are blast, vacuum to sulphar hexafluoride as per standard specification. It is estimated that the present size of the switchgear market is more than Rs.4000 crores. The export and import figures for the year 2006-2007 were Rs.1464 crores and Rs.2322 crores respectively. Heavy Engineering Industry The department endeavors to promote international cooperation in the field of heavy machineries, Heavy Industries, capital goods and Auto sector and the range of equipment manufactures includes crushing and screening plants,
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coal/ore/ash handling plant and associated equipment such as stackers, reclaimers, ship loaders/ unloaders, wagon tipplers, feeders etc.catering to the growing and rapidly changing needs of the core industries such as coal, cement, power,port,mining,fertilizers and steel plants. International cooperation Keeps itself abreast with WTO matters, bilateral/multilateral agreement and other issues concerning the department. To promote economic co-operation at international level, meeting are arranged at senior officer/minister level. India has free Trade Agreements (FTAs) with organizations/countries such as ASEAN, BIMSTEC, and Singapore. Thailand and EU etc. The department protects the interests of concerned industries by suggesting the retention items in the negative list. Recently, suggestions were made for retention of certain items relating to Auto and machine tools in finalization of Indias negative FTA: and India Singapore comprehensive economic cooperation agreement (CECA). The views on machinery and Auto sector for the meeting of committee on rules of origin (ROO) in WTO, Geneva have also been conveyed to the department of commerce. A formal India-Czech joint working group (JWG) has been constituted in terms of protocol of India-Czech joint committee meeting (JCM) of department of commerce and joint secretary, Heavy Industries as co-chairman of JWG from Indian side. A beginning has been made and heavy Engineering Corporation Ltd., Ranchi (HEC), has sought assistance from M/S viktovice heavy machinery, Prague for

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submitting offer to Bokaro steel plant against their tender for manufacture and supply of 8Nos ladle cars. HEC will also be participating in various tenders in India on the basis of technology and association of companies of Czech Republic viz M/s Skoda Machine tools; M/s Unexon, on case to case basis and their association will be sought before submitting the bids. As per the agreed minutes of 10th session of India- libya joint commission held on 12th july,2007,based on BHEL offer, general Electric company of libya(GEFL) have signed a contract with ECCO (An Indian Libyan joint venture) for the mountain Extension and in turn, ECCO and BHEL also signed a contract for execution of the project by BHEL.

COMPANY PROFILE
Incorporation of the company Primary objective To manufacture custom built capital equipment for the process industries such as fertilizers, petrochemicals, petroleum refineries, chemicals etc. 1966

Technical collaboration provided by Commencement of construction

M/s SKODA EXPORT,Czechoslovakis 1968

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Completion of construction Commencement of production Initial product cost

1971 1971

Rs.17.5 corers Initial product mix Heat exchangers, columns, pressure vessels,structure,piping etc 23,210M.T

Installed capacity

BHPVS MISSION

The organizational mission of BHPV is to supply projects, systems, equipment and services to the process industry and help the country in achieving selfadvance in this field.

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Corporate objectives

To own core sector plans downstream petrochemical plants to run the business. To develop capability to build equipments like CNC Gas cutting and CNC laser cutting. To develop capability in project consultancy, computer software and other peripheral service. To achieve a leading position in research and development in different filed of engineering and technology in the areas of work related to the business so as to provide adequate Technology backup for the business. To strive for total self-reliance through import substitution by research and development and Indigenization of Equipment. To achieve optimum utilization of capacities installed. To develop export markets for products and services with a view to earn at least to the foreign exchange component of imported materials. To start joint ventures with reputed foreign parties with in India and abroad. To develop export markets for products and services with a view to earn at least to the foreign exchange component of imported materials. To start joint ventures with reputed foreign parties with in India and abroad. To develop a team of experts consisting of engineering quality control production erection and commissioning to make available consultancy services so as to guide and supervise performance of other companies. To make up overseas operation of the plants by installing, maintaining and requirements BHPV.

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To develop infrastructure facilities of the fabrication shop to shift to shift to high tech areas by providing the latest CNC machines in all the areas and off-laid lowtech equipments. To earn fair and return of capital employed in order to generate adequate internal Resource to finance growth of the company.
HEAD OFFICE: - Visakhapatnam, Andhra Pradesh

Branch office: - Mumbai, Calcutta, Chennai, Hyderabad, New Delhi and vadosara Bharat heavy plates and vessels Ltd, it is a public limited company. It is a job order/ shop production industry. According to customer specifications and requirements it produces various products. Fore seeing the countrys need for fabricating of an exclusive factory with the main object of reducing dependence on foreign suppliers and become self sufficient over selves. Thus the birth of BHPV LTD in the year 1966 to meet the demands of process equipment for core industry like fertilizers, petrochemicals, petroleum and other chemical industries initially. BHPV Ltd using different types of materials manufactured and supplied several built equipments such as pressure vessels, heat exchangers, columns, internal trays etc. After executing some important orders, BHPV Ltd gained full confidence of customers which cleared the way to enter the line of cryogenic filed, pulp cooking plant, evaporation plant and industrial boilers on a total turnkey basis which of later years helped in augmenting turnover of the company and increasing profitability. In India these heavy engineering industries occupy a crucial role in its economic development in view of the huge investment as well as the critical importance to nation. These industries are mostly confines to the sector only.

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BHPV Ltd is the largest fabricator of process equipment in India for the petroleum, chemical and allied industries. It is fully owned by the government of India and is managed by an autonomous board of directors. Situated in the city of destiny of Visakhapatnam on the western see coast of the Deccan plateau, BHPV Ltd is accessible by road, rail, sea an is well connected to all metropolitan cities by air. M/s BHARAT HEAVY PLATES AND VESSELS LTD Visakhapatnam is a public sector undertaking. M/s BHPV Ltd has been selected for the study. The topic selected is A study on the management of working capital with reference to M/s BHPV LTD. Bharat Heavy plates & vessels Ltd., started off in 1966 as fully owned government company for design, manufacture & supply of capital equipment required for process industries in the core sector such as Fertilizers, oil refineries & petrochemicals etc. Sri D. sanjeevayya laid the foundation stone, the then minister of industry on 8th Jan 1967 in Visakhapatnam. It comes under the preview of the department of Heavy Industry, ministry of Industry. With the technical collaboration of M/s SKODA Export company of and for the design & manufacture of various process equipments. BHPV became a fully owned subsidiary of Bharat Heavy Electricals Ltd... Licensed installed capacity is 23210MT. The initial capital outlay is Rs.17.5 crores. The product mix included heat exchangers, columns, and pressure vessels, strong vessels, piping etc. During the year of it commercial production i.e. 1971-1972 the turnover was just Rs 5 Lakhs. Now BHPV has crossed the turnover of 200 crores.
HISTORY OF BHPV

Licensed to start construction of plant at Visakhapatnam in 1966, BHPV confronted many obstacles such as water problems, frequent power cuts both at
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initial stage as well as the time when construction was going on .In spite of all those obstacles the civil and structural work completed to a major extent by the end of 31st March, 1967. The licensed and installed capacity is 23210MT. The initial capital outlay being Rs.17.5 crores. Later after completion of installation work had received orders for the 1 st time from M/s BOKARO steel plant and Fertilizer Corporation of India Ltd., for fabrication and supply of equipment. The factory at initial stages had suffered a loss in fabrication and delivery of factory was scheduled to go into production initially in july, 1967, but due to backlog of some uncompleted construction work the minister of state for steel and heavy engineering inaugurated the initial production in 1970 where some production facilities has already been established by installation of fabricating machinery like bending rolls, welding equipment etc. During the first year production, the company has incurred a loss of Rs 27.47 lakhs mainly due to incidence of fixed expenditure apportion-able to production like establishment, depreciation etc. The same loss position was continued till 1978-1979. The continuous losses put BHPV far from profiteering companies. The existence of excessive accumulated interest on loan taken from GOI resulted in heavy loss to the company. In 1978-1979 the company had suffered a loss of Rs 538 Lakhs due to incidence of delayed delivery of equipment, excessive increase in cost of imported raw materials and other administration costs. In later years the situation was improved through collective and expeditious efforts of employees of the company.
REASONS FOR SICKNESS OR SUB-OPTIMAL PERFORMANC Operational Issues

Order booking: The Company was performing with marginal profits until 2000. Due to globalization, the company started facing problems in normal business
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operations

from 2001. Due to low order bookings resulted in to huge losses.

However present order book position is improving. Interest Burden on VRS loans: The Company implemented VRS with the loans from Government of India and 2255 employees were relieved up to 2002. burdened with huge interest Then onwards the company on these loans, which severely affected

profitability of company in the years 2004-05, 2005-06, and 2006-07.

Financial crisis: The company has been facing financial crisis, during the last few years. The bank accounts with consortium of bank have become NPAs. In spite of improvement in the present order book, the company couldnt, execute these orders because of liquidity crisis. The Bankers are not allowing any kind of operations, which include non-fund based facilities like opening of letter of credits issues of bank guarantees this further worsening the situation of the company. The company is also not in a position to quote for new orders in certain cases due to non-issuance on Solvency certificate Which is perquisite in pre-bidding stage.
Management issues

The company is one of the six subsidiaries of BHARAT YANTRA NIGAM LIMITES, the holding company, At corporate level the companys affairs are managed by eh Board consist of full time managing director and CMD,BTNL as the chairman of the board. In addition, 3ex officio Directors, one director

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from DHI (administrative ministry) & 2 nominated directors also constitute the Board. The following vacancies have arisen due to natural separation and needs to be filled: position M.D CGM(FIN) CGM(PP Engg&Commercial) CGM(Cryo.Engg&commercial) CGM(HR) CGM(ES) Company secretary Present status GM as CGM(I/C) as an addl.Duty GM(FIN) GM(FIN) GM(I/C) On extension GM (I/C) On extension GM(I/C) CS(I/C)on extension

The above vacancies are to be files immediately to strengthen the top management of the company for achieving the projected operational results and also the long-range viability of the company.

Technology & Market Issues: The present plant & machinery & infrastructure utilizing by the company is of 40 years old and have been fully depreciated. Therefore, it needs up- gradation to cope up with present technological developments. lead time is high At present the internal when compare to competitors and needs

computerization by going in LAN with Centralized control system to reduce

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the internal lead time. Similarly in the areas of engineering the lead time required for design and drawings is to be reduced which requires implementation of sophisticated process design software.

Adverse Market Condition The survival of any company primarily depends on its order book. However, due to Liberalization and globalization, the company faced stiff competition from multinational companies. Lump Sum turnkey (LSTK) concept adversely affected the companies order book. For Quoting eligible manner. despite for LST projects, the company is not the capabilities to execute the project in conventional

Because of all above problems, the company incurred huge losses in 2002-03 and 2003-04 and the entire net worth of the company got eroded. As the net worth of the company got eroded fully, the company was referred to BIFR as per the act in 2004.

Manpower realization

Implementation of VRS: In order to reduce the manpower cost, the company has been implementing voluntary retirement scheme and 2255 employees have left the company on VSRS. The manpower costs have been substantially reduced from Rs 61 crores earlier to Rs 30 crores per annum now. However, it is still high for the present
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level of production, which is very low. Moreover, BHPV is also incurring huge interest burden on loans on account of VRS given earlier, which is severely affecting the profitability of company. Roll back of retirements age: In the process of manpower restructuring, the company had reduced the retirement age from 60 to 59 years during the 2001 in order to reduce the manpower cost and to improve efficiency.
Product diversification

The company has undertaken several EPC contracts on EPC/LSTK basis at various locations in India and abroad. The company R&D department has developed technology for manufacture of compact heat exchange and on Board oxygen Generating system (OBOGS) for the light combat aircraft (LCA) which is being developed indigenously by Aeronautical development of this technology for the above products indigenously by BHPV has made the country self sufficient and also saving in foreign exchange. Therefore, the company is also expecting export market for the above products. The in house R&D is capable of developing new techniques and methods in welding of special materials. Improvement in marketing

38

The steps taken by the management in improving marketing are not sufficient to meet the present requirements. Therefore, the Regional offices are to be strengthened to improve the marketing activities and for close monitoring with the customers for their requirements. Attempts at optimization of Resources, Etc. AS the order book is low, the capacity utilization is less when compared to the installed capacity; attempts are made to book more orders for effective utilization. Attempts are made to reduce the manpower costs by giving VRA. Attempts are made to reduce consumption of power, water, etc. In order to reduce overhead costs. Attempts are made to develop compact heat exchangers for LCA, by utilizing existing R&D facilities.

PROPOSED REVIVAL PACKAGE:

Details of proposal / summary or recommendations: Cash infusion: A amount of Rs 380 crores is required form government of India-Rs 225 crores in the form of grant for discharging of pressing liabilities, Rs 80 crores in the form of
39

loan for discharging of creditors and other customer related liabilities and balance of Rs 75 Crores as equity for necessary capital investment. This will enable the company to make its net worth positive and become viable. Financial Restructuring: Financial Restructuring of the company as on 31/3/2007 is to be undertaken, the salient feature of which are as follows:Conversion of GOI loan outstanding as on 31/3/2007 amounting to Rs.224.80 crores, in to equity. Waiver of interest, interest on interest and penal interest as on 31/3/2007 amounting to Rs.190.16 crores. Interest holiday on restructured outstanding GOI loan as on 31/3/2007 for 3 years.

DIVERSIFICATION Originally established for fabrication of process equipment. As a step towards diversification signed collaboration agreement with M/s L Air Liquid of France in 1971 for manufacture of Air & Gas separation plants Cryogenic storage systems

40

 Further diversified into the area of industrial boilers in the range of 50 200 TPH in collaboration with M/s BHEL in 1981 based on the recommendation of the working group constituted by DHI. Entered into the area of oil & Gas Processing systems in 1990 in collaboration with M/s B.S & B Engg. Co., USA.

COLLABORATION AND ABSORPTION OF TECHNOLOGIES Some of the significant collaborations of BHPV entered include: M/s BSL, France in respect of Field erected Cryogenic Storage Tanks. M/s Delas, France in respect of Deaerators. M/s ABB Lummus, Netherlands for Heat Transfer Systems

RESEARCH & DEVELOPMENT

Research & Development department was established in 1975 and is well equipped with high tech equipment to cater to Applies Research and Product Development. R&D has developed 136 Projects so far. Some of the products commercialized include:

1. 2. 3. 4. 5. 6. 7.

Titaning Anodes Titanium Air Bottles Cryo Vats Individual Quick Freezing Unit Super Insulated Piping. Super Insulated Crow Storage tanks D.M. Water Plants

41

A prestigious order for Development of Heat Exchangers for Light Combat Aircraft (LCA) Phase-II has been received from Aeronautical Development Agency, Ban galore.

Some of the Awards received for excellence in R&D include:

CIS Award for R&D achievement in 1992-93.

The Chelikani Atchuta Rao Memorial Award from FAPCCI for individual

Achievement in R&D effort in 1996 (Mr. BSV Prasad).

Subsequent Developments

Reference of BHEL

The Department of Heavy Industry asked the comments from BHEL for merger of BHPV with BHEL. The BHEL indicated that BHEL had earlier examined the prospects which were not found encouraging but now in the changed economic scenario and with power plant orders on the upswing, the BHEL would like to reexamine and assess the position afresh and requested for carrying out due diligence of BHPV

42

After all the above developments, finally on 09.05.2008, the company was formally taken over by BHEL, a navaratna PSU, as per the revival scheme sanctioned by GOI.

The salient features of revival scheme are as below.

(As per the Govt. of India, Ministry of Heavy Industries & Public Enterprises and Department of Heavy Industry)

GOI will waive and write off loan and interest amounting Crs.

to

Rs.415.61

GOI to provide guarantee amounting to Rs.250 Crs to enable BHPV to raise bonds from the domestic market.

43

 The entire paid up capital of BHPV to the tune of Rs. 33.79 Crs would be transferred to BHEL at a notional value of Re. 1/-. BHEL will takeover both the assets and liabilities (including contingent liabilities) of BHPV as a going concern. The takeover will entail the following concessions from the Government of Andhra Pradesh: a) Transfer of title of land measuring 386.73 acres in possession of BHPV as gift along with waiver of registration and stamp duty. b)Waiver of Sales Tax arrears amounting to Rs.42.16 Crs c)Waiver of NALA Tax of Rs.43 lakh and d)Waiver of dues towards Water Tax, Property Tax, and Vacant Land Tax of Rs.3.96 Crs. The consortium of Bankers has agreed for One-Time-Settlement BHEL may take timely advantage of the offer. BHEL will infuse at least Rs.34 Crs as additional Equity Capital and adequate funds for up-gradation of manufacturing facilities, Capex and Working Capital. BHEL will take over BHPV with all its employees. DHI will assist BHEL in settling the disputed demands relating to excise, customs, income-tax etc., on a case to case basis. BHEL will takeover BHPV as its subsidiary and take all possible steps for its revival. The matter regarding reconstitution of the Board of Directors is under consideration of the competent authority.

DRAFT REHABILITION SCHEME

Submitted to BIFR.

Synergy of Business between BHEL and BHPV

44

 In addition to improvement in present business of BHPV, the take over

by BHEL will have the following advantages: Managerial and marketing support from BHEL.
Diversification into High Pressure Power Boilers. Technological Support for new products. Financial

Support

for

up

gradation of manufacturing facilities, Capex and Working Capital Requirements.

Ensured flow of new orders. Synergy

between the two organizations in view of similarity of

products/technologies. Business advantage due to excellent Brand Image of BHEL.

Factors for revival of BHPV through takeover by BHEL

BHEL on its part has worked out the viability of the BHPV takeover, taking into consideration the following:

BHEL to enhance the capabilities & capacities of BHPV to build upon its strengths in the existing business of supplying process equipment to sectors like Oil, Petrochemicals, Fertilizers etc. In addition, BHEL plans to enhance BHPVs capabilities & capacities in the area of industrial boilers, heat exchangers, condensers etc. A capital investment is envisaged for the up-gradation of required facilities. Expected growth in the market for BHPVs products , especially in process equipment and cryogenics. As per Industry analysis, orders worth Rs. 1700 Crs per annum are expected in the next five years from oil Refineries and Petrochemical projects to flow to the engineering & fabrication industry. With a market share of BHPV of 15% 18% in the past in this segment, BHPV can become more confident in addressing this market overcoming its financial constraints by participating in some of the tenders with BHEL support.
45

As such, BHPVs financial weakness would be mitigated once its restructuring is completed and BHEL takes over its functioning. The Captive Power Projects (CPP) and Industrial boilers market segment is expected to grow from around Rs. 1800 Crs in 2007-08 to an estimated level of Rs. 2400 crs in next five years based on projected 12 % industrial growth in the coming years. BHPV can target a share of 25% 30% of this market, provided market expectations on delivery and price are fulfilled. Currently, the Trichy unit of the utility BHEL is constrained in targeting the industrial boilers market due to heavy load of boiler orders from segment. In this regard, BHPV can be developed as a dedicated center for industrial boilers by BHEL. The sales turnover from this segment has been projected to reach to level of Rs, 800 Crs by the fifth year after functional take over by BHEL, based on factors like increased volume, better financial capabilities leading to lower working capital borrowing costs etc.

PRODUCTION FUNCTION

BHPV

supplied

quality

process

plant

equipments, turnkey

Cryogenic,

Combustion, Oil & Gas Systems and services tailor

46

made to the specific

requirements of the Customers and to their satisfaction. BHPV has come a long way since its inception in 1971 to a current turnover of about US $ 26 millions with an eye on US $ 250 million in the near future. This Asia's is one biggest company fabrication which houses excellent engineering quality skills, control,

facility,

uncompromising

dedicated erection & commissioning team under one roof, a combination resulting in India's self reliance. BHPV acquired various National and International quality accreditations

such as ASME, LLOYDS etc.

BHPV with ISO 9001 accreditation is the leading EPC Company in South East Asian region serving following sectors : Refineries Petrochemicals Oil & Gas Steel & Metallurgy Power Nuclear Defense Paper & Pulp Pharmaceuticals Cryogenics Process Plant & Equipment
Boiler Plant & Equipment, Systems Production facilities

Factory Area

:
47

197 Acres

Total Covered Area Covered area of Production Shops Power Requirement No. of Ancillary Units

: : : :

90,000 sq. Meters 56,000 sq. Meters 3,000 KW from APSEB 11 Units

IMPORTANT MACHINERY:

The factory is provided with comprehensive and modern manufacturing and

testing facilities and suitable material handling equipment.

The maximum crane lifting capacity is 120 tones, but loads up to 250 tones

can be lifted with improvised

Maximum Rolling capacity is 60mm in cold condition and 170mm in hot

condition.

BHPV has the largest heat treatment furnace in India, the size being 5.5

meters width, 5.5meters height and 36.5 meters long. One more furnace of 200 Ton capacity and 15mtrs. Bogie length has been added.

Other critical equipment available with BHPV is Deep Drawing Hydraulic

Press of 1600T capacity.

Single Spindle CNC Deep hole Drilling Machine with Gun Drilling

attachment and 2Nos. CNC drilling machines which can employ conventional
48

drills. Another CNC Deep hole drilling machine has been installed recently by HMT

A number of Welding Rotators of capacity up to 250 Tones.

Welding equipment such as manual Arc, Sub merged Arc, TIG, MIG,

Plasma including the latest high productive welding equipment such as Twin Head submerged arc welding, and Bi-cathode TIG welding.

Tube Fining Machine.

A number of vertical and horizontal boring machines with a maximum

capacity of 5 meters dia and 200mm spindle dia respectively.

Different types of Non-destruction Testing Equipment.

Well equipped Physical and Chemical Laboratories.

ABUMPER OFFE-PROCESS EQIUIPMENT

BHPV has manufactured various types of pressure vessels, columns, heat exchangers, storage vessels spheres etc. for a host of applications. Pressure Vessels & Columns From multilayer construction with design pressure of 332 Kg/sq. cm to simple low and medium pressure columns.BHPV has manufactured Columns of length up to
49

90 meters and weight up to 450 M.T with a Pressure range form vacuum to 55 Kg/cm2. With the backup of experienced engineers and a host of heavy capacity cranes and other equipment, BHPV undertakes site fabrication and erection of heavy equipment of any size and weight. The pressure vessel range includes Agitator Vessels, Jacketed Vessels and Autoclaves with limpet coils. Shell & Tube Heat Exchangers From medium to high-pressure heat exchangers with test pressures as high as 450 Kg/cm2 and temperatures ranging from - 65C to 900C. Almost all types of tubular exchangers for practically every requirement in chemical, fertilizer, petrochemical, refinery and heavy water plants have been fabricated and supplied. Air Fin Coolers Air fin coolers of forced draft type for refineries, petrochemicals, and fertilizers. Complete units with fans, driving systems, structural scheme, louvers and panelling are supplied by BHPV as a package. Fired Heaters BHPV has full-fledged collaboration with M/s ABB Lumus Heat Transfer for design manufacture, erection and commissioning of Fired Heaters. With the vast experience and expertise gained in design, manufacture, and erection and commissioning of Fired Heaters, BHPV is now in apposition to take up total systems involving Heaters on Turnkey basis, encompassing Civil, Structural, Electrical, Instrumentation and Piping. The capabilities of BHPV include following type of Heaters. Crude and Vacuum Heaters Coker Heaters Visbreaker Heaters
50

 Catalytic Reformer Heaters Fired Reboilers for Refining Process Steam super heaters Hot oil Heaters Charge Heaters Recycle Heaters Start up Heaters

Storage Spheres BHPV manufactures Storage spheres of any size and thickness including low temperature service. BHPV also undertakes erection and site stress relieving of these spheres. Transportation Tanks BHPV manufactures rail or truck mounted transportation tanks of stainless steel and carbon steel including low temperature applications. Deaerators and Feed Water Heaters BHPV manufactures complete feed water heater systems including deaerators, HP heaters and LP heaters and steam condensers. Paper & Pulp BHPV manufactures Batch and continuous pulp digesters and multiple effect evaporation plants. Column Internals

51

BHPV manufactures column internals like valve trays, bubble cap trays, sieve trays, etc. Liquefied Gas Containers BHPV manufactures Storage and transportation containers for LPG, Chlorine, Ammonia, etc. System-oriented equipment for process plants on turnkey basis Off/on-shore skid mounted package units like Separators, Glycol Dehydration Packages, Gas Collection Modules, etc., including site fabrication and commissioning. Today, BHPV with its vast manufacturing capability can manufacture process equipment of almost any size. In addition, it has the requisite handling facilities and being located at Visakhapatnam, has excellent port facilities for transporting large size vessels. In case of extra large equipment, which cannot be transported, BHPV undertakes site fabrication and erection. Hydrocracker Reactors BHPV has entered into technical back up agreement with NUOVOPIGNONE, ITALY for design, engineering, manufacture and supply of Hydrocracker Reactors. NUOVOPIGNONE is one of the most qualified suppliers of heavy wall reactors for Hydro- cracking, Hydro treating and similar refinery applications. With the above back up from NP, BHPV supplied 3 Nos Hydrocracker Reactors to Indian Oil Corporation for their 6 Million tons new grass root refinery at Panipat.

52

The Hydrocracker reactors are highly critical equipments in the Refinery. The reactors require heavy forgings with internal strip cladding. These are ASME U2 code stamped equipments. Boilers BHPV entered into full-fledged collaboration with BHEL / CE for design, manufacture, erection and commissioning of Industrial Boilers for process and captive power. The technology obtained from CE, USA has been improvised to suit Indian fuels with the support of BHELs vast experience and continuous R&D effort. BHPV has fully absorbed the technology from BHEL. A large number of highly efficient Boilers from BHEL / CE are operating successfully all over the world. With this back up, BHPV has more than thirty such installations to its credit.

BHPV offers steam generators of capabilities up to 200 TPH in low, medium and high-pressure ranges with Superheat up to 540C. These are offered in the following patented types: VP package units, oil/gas fired. VU-60 bottom supported, oil/gas fired. VU-40 top supported, oil/gas/coal (PF) fired. VU40S stoker fired.

The main features of these boilers are natural circulation, welded water-wall (membrane type), front/tangential firing, and forced/balanced draft, bi-drum, to meet varying process load demands. These are equipped with all modern features like: FSSS (Furnace Safeguard & Supervisory System) or BMS (Burner Management System) High Energy ARC Ignition (HEA)
53

 UV/IR flame scanners Microprocessor based auto control systems with DCS Pollution monitoring instruments OTHER SYSTEMS The following equipments/systems are offered by BHPV along with boilers as a part of total service package. Deaerators and feed water system with HP/LP heaters, feed water pumps with motors/turbine drives, control valves. Main steam, feed water piping and other external piping Water treatment plants Coal and ash handling systems Electrostatic precipitator/mechanical dust collector/bag filters Oil storage, pumping and heating units. Complete electrical requirement of the system. Fire fighting system. Integration of Boiler with steam turbo generators (STG) Erection and commissioning of STGs. Dynamic simulation of power plant.

WASTE HEAT RECOVERY STEAM GENERATORS (WHRSG): BHPV has also the capability to design, manufacture, erect and commission WHRSG. BHPV executed 2 Nos 140 TPH WHRSG of dual pressure, forced circulation with auxiliary firing using LSHS/Gas for 2 Nos. Frame-VI GE USA Gas Turbine (30MS-ISO-rating each) located at IPCL, Vadodara. These Boilers are designed in collaboration with HCG Netherlands, a sub-licensee of GE, USA. BHPV is also geared to handle Waste Heat Boilers from the exhaust gases of: DG Sets Kiln off gases in Sponge Iron Plants Kiln off gases in Cement Plants, etc. Cryogenic Plants and Equipment

54

BHPV branched off into the manufacture of Cryogenic equipment in 1971. The move was prompted by BHPVs growing awareness that Indias process industries were hopelessly dependent on imports for all Cryogenic Equipment. In collaboration with L Air Liquide of France, BHPV ventured into this technologyintensive field. In just a few years, BHPV has left its mark. In 1982, in the face of fierce international competition, it bagged a prestigious contract from Vizag Steel Plant to meet the entire cryogenic need of the plant.

QUALITY

BHPV is reputed for quality and workmanship of its products. BHPV has received a number of international accreditations such as

LLOYDS REGISTER OF INDUSTRIAL CLASS I CERTIFICATE FOR FUSION WELDED PRESSURE VESSELS

ASME ASME NATIONAL BOARD OF BOILER & PRESSURE VESSELS INSPECTORS, U.S.A STAMI CARBON HALDOR TOPSOE ARBIAN AMERICAN OIL COMPANY

U & U2 STAMPS ON PRESSURE VESSELS S STAMP FOR INDUSTRIAL BOILERS

R STAMP FOR REPAIS OF CODED VESSELS

UREA REACTORS AMMONIA REACTORS AND HIGH PRESSURE HEAT EXCHANGERS PROCESS PLANTS

As a part of total quality management program, BHPV has acquired ISO

9001 certification during the year 1993-94 particularly to boost up its exports and to be competitive in the international market.
Re-certification of ISO 9001 has been obtained in September, 1996.

55

 In recognition of high standards of our quality, confederation of Indian

industry (CII), Southern Region, AP presented the Quality Award.

Case to case tie ups, BHPV entered into include:

Evaporators from M/s Ecodyne Corporation, USA Paper & plus digesters from M/s Kamyr AB, Sweden Gas collection modules from M/s KTO Corporation, USA Large space simulation chamber from M/s HVEC, USA. Primary reformer from M/s Halder Topse, demark Waste heat boiler from Borsig, Germany Feed water heater from delas, France. Argon recovery unit from M/s LAir Liquide, France etc. Hydro cracker reactors from M/s Neo-Pignani, Italy. Vacuum Ejector systems from M/s Korting Hannover, Germany. LPG handling & storage system from M/s Noell-LGA, Germany Ammonia storage system from M/s KTI, Germany etc.

56

By absorbing know-how from various world renowned collaborators, BHPV upgraded its status from a mere fabricator of process equipment to that of an engineering company of international repute.

PROJECT OF NATIONAL IMPORT AN EECUTED/UN EXECUTION

S.NO. CUSTOMER 1. 2. 3. 4. 5. 6. IOCL, Panipat IOCL, Panipat IOCL, Panipat IOCL, Mumbai IOCL, Chennai BOKARD Bokaro 7. 8. NRL, Numaligarh HPCL, Visakhapatnam STEEL

PROJECT/EQUIPMENT Hydro cracker reactors-3No.s Reactor, Regenerator & Office Chamber Reformer & WHR Package 150 MT Capacity LPC bullets Sphere PLANT, Argon Recovery unit

Air Fin collers/SS Clad Vessels, Spheres etc. CDU Heater with APH System/VDU Heater

9.

HPCL,

VREP

II Clad/CS Columns/CS heat Exchangers etc

Visakhapatnam 10. 11. HPCL, Visakhapatnam HPCL, Visakhapatnam Co-boiler Revamping of 50TPH oil & gas fired boiler

57

12. 13. 14.

HPCL, Mumbai BPCL, Mumbai

50 TPH Boiler Nitrogen Plant

Hyundai Heavy Industries, New Cryo Nitrogen plant Delhi

15.

Space

application

centre, 505m Dia thermal vacuums system

Ahmadabad 16. TECHNIMONT Mumbai

STRUCTURE OF HRM DEPARTMENT

ICB

LTD. Nitrogen plant

Functions of sr.manager (P&A)

He looks after all the moments which are related to salary and wage

administration of employees. Separate estate administration department working under him. He looks after the time office particulars Legal proceedings which are related to collective bargaining, disciplinary discussions and enquiry proceedings are conducted in present of him. Contract lobour problems, tenders, daily wages negotiation with presence of him. Hindi language cell is to teach Hindi to all employees. Functions of Sr.manager HR: under him five departments are there. He has ultimate control over the departments. P&IR departments deputy manager looks after the industrial relations and workers problems, grievances. Separate hospital in township, which is headed by the medical superintendent. Canteen Administration. Security and five departments.

58

 Welfare department administration.

RECRUITMENT

Objective: The rules are intended to regulate recruitment of executives, supervisors, workers and their employees of staff category on the basis of merit/reservation for various posts. The rules are only for consumed as restricting the general powers of management to waive a suspend or amend these rules.

Appointment authority The president of India, the board of directors, the chairman, the managing director and or any other officer of the company to whom the power in this grand have been special delegated. Trainee A learner recruited under any of the training schemes of the company and who is engaged in learning and is governed by the terms and conditions laid down in the agreement executed by him with the company excluding apprentice under this act.

Employee: Means directly employed, only person, in the company other than personnel on deputation. Classification of officers Senior executives : E4 and above

59

Middle mangt.Executives Executives

: E2 and E4 : E1

Classification of supervisors: Senior Supervisors Junior Supervisors Classification of workmen Skilled Semi skilled UN skilled : S3 : S1 and S2 : HSW-I, HSW-II, HSW-III : WG-III TO WG-VI : WG-II : WG-I

Eligibility: Candidate for appointment must by A citizen of India or

A Tibetan refugee who came over to India before 1st January 1962, with

the intention of prominently setting in India or a repatriate from Burma, srilanka or East Asia, on A person of India who is migrated form Pakistan eight the interim of permanent settling in India.

MANPOWER (As on 31st March, 2010)

Workmen / Staff

767

60

Staff Supervisors Executives Total

: : : :

249 59 263 1250

EMPLOYEE WELFARE AMENITIES

facilities

Township Area No. of Quarters 20 bed Hospital Protected Water Supply Underground drainage system

151 Acres 1192

English medium school with CBSE Syllabus Telugu medium school with AP State Syllabus Special school for mentally handicapped children. Vocational training centre for mentally handicapped Community center for cultural activities & sports open air theatre

VOLUNTARY RETAIRMENT SCHEME The government of India had adopted a new economic policy where by is is relaxed and in certain cases removed restriction in import and export. This resulted in significant charges in industrial and business sector. One of the important aspects of the liberalized economic policy is the existing voluntary
61

retirement scheme policy. Since the procedure under industrial dispute act 1947, for retrenching involves a lot hurdles and compels so the voluntary scheme is totally opposed both by hand trade unions.
FINACE FUNCTION:

FINANCE FUNCTION (DEPARTMENT) IN BHPV: Finance is a core function of any manufacturing concern. Hardly can we find any such industrial organization functioning after isolation of finance department. Though this finance discipline is of recent origin, it has unique spot in the functioning of firms operations. As every developing activity starts with financing function, it has been given immense importance both by executives as well as project authorities. OBJECTIVES OF FINANCE DEPARTMENT: The micro objective set to function efficiently in Finance department includes: To avoid operations of cash credit and also to maintain adequate cash balance. To see that the current ratio, which reflects the firms liquidity positions, is followed according to BPE norms of 1:1 The additional funds thus generated through efficient operations are proposed to divert for payment of part of outstanding interest due on loan taken from government of India.

The finance department of BHPV ltd., headed by the general manager. As shown in the finace division chart.

State bank of India

62

 Canara bank Andhra bank State bank of Hyderabad State bank of Patiala Oriental bank of commerce

PROFITEERING YEARS FOR BHPV After a series of continuous loss years, BHPV for the first fine in its history, in 1979-80 has witnessed several significant events both on financial as well as production fronts. BHPV for the first time in its years of commercial production attained a break-even level with a marginal profit of Rs 33.09 lakhs as against a net loss of Rs 129 lakhs projected at the beginning of the year. During 1980-81 the company for the second consecutive year, earned a net profit (after tax) rs 48.21 lakhs from its operations. This year BHPV Ltd operations included manufacturing of very critical and sophisticated equipment to core industries. Again in 1981-82 the company operations resulted in a net profit of Rs 60.19 lakhs as against a budgeted loss of Rs 20/ lakhs. Major pending interest on loan from GOI was cleared in year. During 1982-83 BHPV reached 100% target production and resulted in a net profit of Rs 103.71 Lakhs as against the budgeted loss of Rs 95 lakhs. With prestigious work orders from Visakhapatnam steel plant for supply of air and gas separation plants BHPV crossed a target production and its operations resulted in a net profit of Rs 575 lakhs. The year 1986-87 is treated to be the dark year for BHPV. Since its entrance into threshold of profit arena, it could not achieve its set motto of beyond billion barriers. Sinking of a ship carrying bulk of raw material and components

63

slackening demand for loss of Rs 170 Lakhs again. In 1987-88 BHPVs projects were successfully fabricated and its profit took an upward trend and its operations resulted in PAT of Rs 290 Lakhs. It was expected to emerge an increasing trend in the profit of BHPV for the year 1988-89. After 1987-88 profits are in decreasing trend. It got a loss of Rs 590 lakhs during 1955-96. Amidst tight liquidity conditions the company the company has made a net profit of Rs 1.31 crores (before tax) and Rs 1 crores after tax during 1997-98,Rs 1.23 crores PBT. Details of turnover, profitability for the period from 1997-98 to 2005-06 are as follows.

Details of turnover, profitability for the period from 1996-97 to 2008-2009 are as follows. YEAR 1966-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 TURNOVER 29998 29160 21465 12558 25670 23409 14750 5956 10943 12202 18036 18030 8439 PROFITABILITY(BEFORE INT) (RS IN LAKHS) 2411 2825 1968 476 2301 2378 14512 10694 3281 -2321 -2932 -4492 -12212

Financial restructuring

64

Financial restructuring of the company as on 31/3/2007 is to be undertaken, the salient feature of which are as follows: Conversion of GOI loan outstanding as on 31/3/2007 amounting to Rs.224.80 crores, in to equity. Waiver of interest, interest on interest and penal interest as on 31/3/2007 amounting to rs 16 crores. Interest holiday on restructures outstanding GOI loan as on 31/3/2007 for 3 years

MARKETING FUNCTION

As BHPV is heavy engineering industry, there is no full-fledged department. The marketing activities are taken by the commercial department. The chief general manager (Engineering & Commercial) is the head boiler (Commercial) divisions. Process plant (Commercial) look after the marketing activities of the process plant only each of the department divisions is further divided into two groups will look after the marketing activities. The main functions of the marketing department in BHPV Ltd., Submission of pre-qualification documents and company capabilities, enlistment with customer and consultants as an approved contactor. Meeting customers time-to-time, going through newspapers and other informative journals to asses upcoming projects and business potential of BHPV. Arrangement of Technical collaboration or process license for critical equipments and projects with various foreign/domestic consultants.

65

 Once the project is coming up marketing department will see the BHPV shall qualify for the particular project by way of submitting prequalification documents as desired by the customer and to receive the enquiry.

MAJOR CUSTOMERS

Fertilizer industry Petroleum refineries Steel plants Chemical industries Power sector
Nuclear, Defence & Space Sectors SOME DOMESTIC CUSTOMERS

Fertilizer Corporation of India.

National Fertilizer Limited Hindustan Fertilizers and chemicals Ltd. Rashtriya chemical and fertilizers Ltd. Indo Gulf chemical and Fertilizer Ltd. Indian farmer Fertilizers co-operative ltd. Bindal agro chemical ltd. TATA chemicals and fertilizers Co-operative Ltd. Indian oil Corporation
66

 HPCL BPCL Madras Refineries Ltd. Cochin refineries Ltd. Indian petrochemicals ltd. Maharashtra gas cracker complex Indian Drugs and pharmaceuticals Ltd. Hindustan Antibiotics ONGC Steel Authority of India Ltd. Rashtriya Ispat Nigam Ltd.

MAJOR COMPETITORS

Larsen & Turbo GR Engg Lloyd steel I.O.L INOX L&T Linda, Germany B.O.C, UK Air products, USA & UK KOBE, Japan Nippon Sanso, Japan } HOPM, China PRAXAIR, USA

} } } } } } } } } } for cryogenics & systems for process plants

} }
67

BHEL L&T BABCOCK THERMAX ACC Babcock Ltd.

} } } } for industrial boilers

EXPORTS IN BHPV

Export performance:

In late seventies BHPV started its exports is sending of two standard oxygen plants to Iran in 1977. The value of the order is 4, 10,000 dollars.

After gap of 10 years (1988) BHPV re-entered into the export market by receiving and order from Colombo gas water company Limited, sri lanka for the supply of Chlorine containers and another order from Buffalo and storage research center, Vietnam for supply of cryo Bilolocal containers. BHPV also executed an order for the transfer of technical know-how with ENGC, Algeria during 1981-86.

Exports strategies of BHPV Limited

The following strategies are followed by BHPV in order to increase their exports.

Multilabteral Aided project

68

The World Bank and other multilateral lending organization like IDA, IBRD, IADS etc., create a vast market every year to the tune of about 37 Billions US dollars by funding various projects. Apart form carrying attractive business prospects, these projects enjoy high priority in India and also get adequate support from both the executing agency as well as the funding agency. BHPV interacts with the beneficiaries of these programs right from the conceptual stage. It also makes use of the date available from the EXIM bank, ECGC, and other agencies on these projects.

Consortium Approach With the objective to step up exports in the fertilizer and chemical sector, the government has nominated BHPV as lead agency to co-ordinate the export effort in these sectors. The Indian consortium leader, BHPV identifies the various business opportunities and penetrates into the market by pooling up the common resources of these companies, which helps it in entering into the systems supply by offering the projects in turnkey basis.

The Indian consortium for oil and natural Gas (Icon) was formed for exporting the products and services in the hydrocarbon sector with HIL as the consortium leader. BHPV is also a member of ICON, other being EIC, ONGC, BHEL, B&R, Mazagon dock limited, instrumentation limited and petroleum India Limited; the opportunities available through this consortium are fully exploited for generating export order for BHPV.

Middle East Market The Gulf in oil market and the subsequent fail in the revenue and other problems have made these countries to bank on developing countries like India for their
69

technological requirements. BHPV has been concentrating on this sector and trying to penetrate into the Market.

FUTURE PLANS
PRESENT STRENGTHS
Excellent design & Engineering capabilities.

State-of- the-Art Manufacturing facilities. Accomplished image as a supplier of quality products in the domestic and international markets. High degree of Customers confidence. Technological tie-up arrangements Well trained and qualified work force and Engineers. Sound work culture & harmonious Industrial relations Extensive Computerization] Capability to supply project& systems on turnkey basis. Project Management skills.

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FUTURE PLANS To grow as an engineering, procurement and construction company. To enlarge Export Business To resort to extensive computerization and automation for reduction of cycle time, improvement of quality and reducing costs. To Forgo strategic business alliances with International companies to derive technological and marketing advantages To strive for continuous updating of technologies to be on par with International companies. To focus on human resources Development. To change the work culture to be compatible with market demands. After merging with BHEL the target is to make it Rs. 1000 crore company in the forth coming five years, with a capital expenditure of Rs.236 crore spread over three years.
Action plan for Exports

Efforts should be made to identity the business potential and penetrate into these markets. In view of Government policies to promote export, it should be BHPVs Endeavour To increase the export business. The devaluation of he rupee convertibility will help BHPV to be more competitive. Agents are main instruments in generating enquiries as well business for BHPV in the international market. BHPV should identity suitable and influential for the target markets.

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BHPV will generate more in Iran for the upcoming projects such as Arak petrochemicals and tabring petrochemicals. Efforts should be made to finalize agency agreement for the gulf countries such as Oman and Kuwait. BHPV should make use of their collaboration with firms such as BS&B, ALSTOM, ABB-LUMMUS etc, for generating export business wherever possible joint bidding shall be made.

Constraints

Dependence on imports even for common materials like Boiler Quality

plates. Port congestion adding to the delays in importing of materials. Big burden of high interest rates on working capital while competing with International suppliers who have the facility of very low interest rates. Abnormal increase in bank charges such as commission on Bank guarantees, retirement of documents etc. Restrictions in shipping imported materials (FOB contracts VS C&F contracts) resulting in delays.

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CHAPTER-3

73

THEORITICAL FRAME WORK OF THE STUDY ON INDUSTRIAL RELATIONS

Industrial Relations is concerned with the relationship between Management resenting the holders of capital and trade unions representing the holders of labour power regarding the employment, unemployment, terms of employment and unemployment, conditions of employment and unemployment and conditions of work, Industrial relations is a developing and dynamic concept and does not limit itself merely to the complex of relations between the unions and management, but also refers to the general web of relationships normally obtaining between employees themselves. Both parties to industrial relations have a common interest in industry, but many a time, they are found to be pulling in different directions which lead to industrial unrest. Therefore, it has become necessary to secure the cooperation of both workers and management to achieve good industrial relations. Besides management and workers, state is another party associated with industrial ions. The interference of government in industrial relations through legal and administrative measures is quite common. Thus, the area of industrial relations has been extended relations among the state, employer and employees.

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Definition:
According to Encyclopedia Britannica "The subject of industrial relations includes individual relations and joint consultation between employers and workers at the place of work, collective relations between employers and their organizations and trade unions and part played by the state in regulating these relations". According to Dale Yoder "The term industrial relations refers to the relationship between management and employees or among employees and their organization that arise out of employment". Major Players to Industrial Relations: Thus, There are Three major players in industrial relations.
1.

Workers and their Organizations:

The personal characteristics of workers, their "culture, educational attainments, qualifications, skills, attitude towards work, etc play an important role in industrial relations. Workers' organizations, known as trade unions are political institutions. Trade unions are formed for safeguarding the economic and social interests of the workers. They put pressure on the management for the achievement of these objectives.
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2.

Employers and their Organizations:

The Employers are a very important variable in industrial relations. They provide employment to workers and try to regulate their behavior for getting high productivity from them. Industrial unrest generally arised when the employers' demand from the workers and other benefits. In order to increase their bargaining power employers in several industries have organised Employers' Associations. These associations put pressure on the trade unions and the government. They also participate in tripartite bodies constituted by the government to regulate industrial relations.

3.

Government:

The Government exerts an important influence on industrial relations through such measures as providing employment, intervening in working relationships and regulating wages, bonus and working conditions through various laws relating to labour. The government keeps an eye on both the trade unions and employers' organizations to regulate their activities in the interest of the nation.

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Indian Industrial Relations Spectrum

The spectrums of "Industrial Relations" scenario in India today present four distinct pictures. Scenario-1: A sweet heart relationship scenario representing Industrial peace and harmony characterized by (a) (b) (c) Mutual trust Mere perfect collaboration and Even "collusion with unions"

Scenario-2: A "cat and Dog" scenario, resulting in frequent conflict, workstoppages and strikes, lock-outs, characterized by (a) Complete distrust (b) Mutual blackmailing on issues and (c) Product losses Scenario-3: A "Blow-hot, Blow-cold" scenario somehow pulling along relationship characterized by (a) (b) (c) Some time peace Some time conflict Most of the organizations fit into this category.

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Scenario-4: A "peace in the Grave" or "Marriage of convenience" situation Characterized by (a) (b) (c) (d) Apparent peace Patching of an issue Self-out of managerial authority Constant sickness of the industry

Most of the sick Government Industries are the examples. While certain aspects of Industrial Relations scenario have been cited above a close examination of the" government, judiciary, a worker involved in the Industrial relations scenario also requires proper appreciation. The Government has also stepped in and played an important role in establishing harmonious Industrial Relations, partly because it has itself become an employer of millions of workers but mainly because it has enacted a vast body of legislation to safeguard the rights of industrial workers and management by enlisting cooperation of both. The objectives of Industrial Relations are to facilitate good relationship between employers and employees. The quality of this relationship differs Company to Company, industries and economies. These relationships are based on class contradictions and antagonism historically born out of the social structure, which is determined by the mode of production.
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CHARACTERISTICS OF IR:

IR is outcome of employment relationship in an industrial enterprise. IR develops the skills & methods o adjusting to & cooperating with each other. IR system creates complex rules & regulations to maintain harmonious relations. The government involves shaping the IR through laws, rules, agreements, awards etc. The important factors of IR are: employees & theirorganizations,employers&theirassociations & government

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FACTORS OF IR

INSTITUTIONAL FACTORS: It include Government policy, labour legislations, voluntary courts, collective agreement, employe courts, employers federations, social institutions like community, caste, joint family, creed, system of beliefs, attitudes of works, system of power status etc.. ECNOMIC FACTORS: These factors includes economic organization, like capitalist, mixed etc, the structure of labour force, demand for & supply of labour force etc TECHNOLOGICAL FACTORS: It includes mechanization, automation, rationalization, computerization etc. SOCIAL & CULTURAL FACTOR: It includes population, religion, customs & traditions of people race ethnic group, cultures of various groups of people etc.

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POLITICAL FACTORS: It include political system in the country, political parties & their ideologies their growth, mode of achievement of their policy, involvement in trade unions etc. GOVERNMENT FACTORS: It includes government polices like industrial policy, economic policy, labour policy, export policy etc.

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PRINCIPLES OF IR
1. Recognition of the dignity of the individual & of his right to personal Freedom & equality of opportunity. 2. The part of the both employee, management & workers & their representatives in the exercise of the rights & duties in the operation of the Industry. To promote & develop congenial management relations. To enhance the economic status of the worker by improving wages benefit & by helping the worker in evolving sound budget. To regulate the production by minimizing industrial conflicts through state control. To socialize industries by making the government as an employer. To provide an opportunity to the workers to have a say in the management & decision making. To encourage & develop trade unions in order to improve the workers strength. To extend & maintain industrial democracy.

CHANGES IN IR

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Occupation in ancient India: In ancient times the principal occupation was agriculture, and trading. In this period the caste system had influence on the development and progress of the various industries and occupations. The concept of caste system was originally based on the transfer of skill and specialization which ultimately led to the standardization of professionals. Labour in medieval India: British are entered in India. In this period the principal occupation was craft, painting. A large no. of occupation was also carried on by small manufacturers and traders in their cottages mostly on hereditary basis. A majority of artisans lived at starvation level. They led a miserable life. Guilds and unions: Shreni union is the first union that is formed by craft people at the time of Mugal Empire. The utility of union has been stated in shukla yajurveda samhita: if men are united nothing can deter them. Cultivators, merchants, cattle breeders, bankers and artisans worked under the recognized rules of their unions. These unions gradually gained strength so that the employees could improve unions were helpful not only in the evolution of arts like sculpture but were powerful centers of arts themselves. IR system:

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The industrial relations machinery during the Vedic times consisted of a madhymasi, a man of potion and influence in the society. People in the rural community were able to solve and settle all disputes by themselves. The village officials attended to and solved the local problems. They were invested with judicial as well as executive authority. His system prevailed under the Hindu government. The unions were not only the assemblies of the employees but they were also the institutions for maintaining cordial relations between employers and employees. Early British rule: The first industrial unrest in the year 1877 in the weavers of express mills in Nagpur. In 1895 workers have called of for the first strike in budge jute mill. The first factories act is enacted in 1881. The first labor association known as Bombay mill hands association was established.

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IR from Ist world war to pre Independence period:

The First World War (1914-1918) gone back to their villages. After 1919 international labor organization is established.

Trade Disputes Act 1917. Workmen Compensation Act 1923. Trade Union Act 1926.

II world war:
In this period they give 1% share to the employees:
In 1947 INTUC formed. In 1946 INDUSTRIAL EMPLOYMENT STANDING ORDER ACT In 1947 ID ACT, which paid the machinery mainly to solve industrial disputes.

IR after Independence:
85

Factories act in 1948

To bring the industrial peace with a industrial truce revolution in 1947(only employees). In 1948 Factories Act, Minimum Wages Act, employee State Insurance Act. In this only the first five years plan was formed in1951 for bring industrial peace. Second five year plan several mechanism and practices like need base and minimum base, schemes for workers participation and management etc were incorporated. Third five year plan in 1962 there is a war between India and china. In 1962 the industrial truce revolution again brings peace in between the employees and employers. In 1965 bonus act was enacted. In 1969 first national commission labour under the chairmanship of gagendragadhar.

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New economic policy and IR:

In 1991 June 14th the new economic policy was started. Here increased the foreign direct investments and also increased the MRTP. Introduction care growth plans for workmen. By providing regular training to employees to minimize their obsolence. Rationalization the workforce through internal transfers. Nurturing stress between union and management. In culcating proper work, culture etc.

IR committee
In BHPV, for maintaining industrial relations a separate committee is there i.e., Industrial relations committee. It is representing the members of both management and employees. The main function of this committee is to promote a capital relation between the employee and employer which helps in smooth running of an organization without any disputes

TRADE UNIONISM
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A Trade Union signifies an organization of workers engaged in securing certain economic benefits for its members. However, this is not the true view of a trade union. In I the modern context, trade union's activities are not. confined to mere "securing the I economic benefits". The purview of its activities now includes even the political and welfare activities undertaken by it for the benefit of its members. Trade union is a historical necessity and by product of the Industrial revolution. For good Industrial Relations, be remember that trade Unions play a vital role. With a view to self-protection and selfhelp, labour has organized itself under employee associations and unions. Conflict between capital and labour in Europe and American resulted in the origin of the trade union movements.
(a)

Trade Unions Definition: The trade unions Act, 1926 defines a trade union as meaning

"any combination whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workman and workmen, or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions".

88

(b)Registration of Trade Unions: Any seven or more members of a trade union can, by subscribing their names to the rules of the trade union and otherwise complying with the provisions of this Act, apply for registration under the Act. The application has to be made to the Registration of Trade Unions appointed by the appropriate Government for the State (sec3&4). This application must be accompanied by a copy of the Rules of the Trade Union and a statement containing prescribed particulars. The name under which the trade union seeks registration must not be similar to that of any existing union (S.7). On registration, the Registrar issues o certificate of registration in the prescribed form. This is conclusive evidence that the said Trade Union has been duly registered. Trade union is a necessity and by product of the Industrial Revolution. For good Industrial Relations, it must be remembered that trade unions play a vital role in providing a proper work atmosphere and congenial Industrial Relations scenario. With a view to selfprotection and self-help, labour has organized itself under Employee Associations and Unions. The conflict between capital and labour in Europe and America resulted in the origin of the Trade Union Movement.

89

The following are various tools employed by the Trade Unions. They may use one of the too, or combination of some of them in pursuit of achievement of their objectives. 1. Financial Support: It means the provision of a fund to insure against eventualities and be of some encouragement to the needy workman. It also acts as a deterrent to a worker from accepting jobs on terms which are less advantageous to the work force. 2. Collective Bargaining: This is useful for the workers, as their capacity to get the best in Industry diminishes in case there are small groups, whereas the bargaining power goes high when it is a collective and collaborative approach. Lasting settlements can be reached through collective bargaining and implementation also is quick and smooth. 3. Legal Approach: Trade Unions also take the law as resort to realize their objectives. Also they employ the usual methods of propaganda, canvassing etc. to convince the community and the Government that the measures suggested for addition will prove advantageous to the working class. When such aspirations are reflected by enactment, it satisfies the Trade Unions.

90

4. Direct Action: Implies, strikes, gheraos, procession, work-stoppages, demonstrations etc. This should be discouraged because it is harmful in the long run for both the employees and employers. This leads to loss in production, strained relations.

THE OBJECTIVES OF TRADE UNIONS:

The following are some of the aims and objectives of trade unions to secure for the worker fairer wages in the light of the cost of living and the prevailing standard of living.
1.

To improve the worker's working conditions by securing shorter working hours, better leave facilities, adequate social security benefits, appropriate educational facilities and other welfare benefits:

2. To assure the workers a share in the increased profitability of an industrial unit by providing him payment of adequate bonus; 3. To protect the workers interest and more specifically to avoid heir exploitation; 4. To ensure the workers security of employment by resisting retrenchment and victimization.
5.

To protect the large interest of society by aiding in the improvement of trade and industry.
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A Trade Union signifies an organization of workers engaged in securing certain economic benefits for its members. However, this is not the true view of a trade union. In the modern context, trade union's activities are not confined to mere "securing the economic benefits". The purview of its activities now includes even the political and welfare activities undertaken by it for the benefit of its members. A trade union may be defined as an organization of employees formed on a continuous basis for the purpose of gaining diversified benefits. Trade union is a necessity and by product of the Industrial Revolution. For good Industrial Relations, it must be remembered that trade unions play a vital role in providing a proper work atmosphere and congenial Industrial Relations scenario. With a view to selfprotection and self-help, labour has organized itself under Employee Associations and Unions. The conflict between capital and labour in Europe and America resulted in the origin of the Trade Union Movement.

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TRADE UNION MOVEMENT IN INDIA Trade Unions, as understood today, however, originated in the first quarter of the 20th century, although the groundwork was laid during the last quarter of the 19th century. In Mumbai, as early as in 1875, reformers undShapurji started a movement. They protested against the appalling conditions of the factory workers and appealed for introduction of adequate legislation to prevent them. The credit for laying the foundation of the organized Labor Movement in India is attributed to Mr.N.M.Lokhande, a factory worker himself in 1884 in Mumbai. Actually a real organized labour movement in India was started at the end of the First World War. Rising prices, without a corresponding increase in wages despite the employers making huge profits, led to a new awakening. Many Trade Unions were formed throughout India. To this was added the influence of the Russian Revolution, the establishment of ILO (International Labour Organization) and the All India Trade Union Congress. This speeded up the pace of the Trade Union Movement. Following the Second World War, there was a spiraling of prices. The workers once again became restive. This further indirectly strengthened the movement in India.

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TRADE UNIONS IN BHPV:

Under the trade unions act 1926, the term trade union means any combination whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employees and employers. NUMBER OF TRADE UNIONS In BHPV there are 13 trade unions are there they are: 1.BHPV mazdoor sangh (Regd No.1686/98) 2. BHPV National Employees Union-recognised union (Regd. No. 237/74) 3.BHPV Employees union (Regd. No.1517/96) 4.BHPV Karmika sangh (Regd. No1324/93) Affiliated to BMS 5.BHPV Democratic employees union (Regd. No.1583/96) Affiliated to IFTU 6.BHPV Janatha Employees Union (Regd. No 1613/97)
94

Affiliated to HMS 7. BHPV Uniyted Employees Union (Regd. No. 1645/97) Affiliated toTNTUC 8. BHPV Employees Trade Union Congress (Regd. No. 1526/96) 9.BHPV staff and workers Union (Regd. No. 1568/96) 10. BHPV National Employees Trade Union Congress. (Regd. N0. 1580/96) 11.BHPV Janatha Dal Employees Trade Union (Regd. No. 1613/97) 12. BHPV Karmika Samkshema Trade Union ( Regd. No. 1764/99) 13. BHPV Progressive Employees Union (Regd. No.D/2054/2007)

95

Out of these unions, the active function unions are INTUCCongress party, CITU-CPM, BHPV Majdoor sangh, BMS party. Independent unions are also there in BHPV, affiliated to state, these unions are organized by those people are familiar faced and have the ability to organize others. For every once in two years elections will be conducted, whose party has got the majority that will be the lead party.

RECOGNISED TRADE UNIONS

In BHPV, only one recognized union is there i.e BHPV National employees Union, affiliated to INTUC i.e Congress party. It is an active union, this union has the right to meet or talk to the management directly regarding the problems of employees.

PROCEEDURES FOR RECOGNITION

Any seven or more workers of an establishment can form into a trade union and apply to the registrar for its recognition by subscribing their names to its rules. In BHPV, INTUC is the recognized union in that 77 members are as office bearers. The application for registration should be accompanied by a copy of the rules of the nation and the settlement containing particulars namely the names, occupations, and address of the members making the application.

96

 The names of the trade union and the address of its head office. The titles, names, ages, addresses, and occupation of the office barriers of the trade union. The registrar after verifying all these, the registrar of the trade union under trade union acts 1926 and issue a registration certification. For every once in two years the verification is done i.e that the funds are properly used or not, manner for appointing the members etc. by the Deputy Commissioner of Labor, Visakhapatnam. Every year the membership has to be renewed then only the union has the right to enter or participate in the elections. What ever the information was submitted to the recognition was not accurate, and then he has the right to dissolve the trade unions. In BHPV there are 6 unions, which union got the highest percentage of votes that union will be recognized by the management. In BHPV as we know that INTUC is a recognized union, in that President Is V.Babu Rao Secretary is Ch. Muni Babu Honorable President is Dr. Kesawarao.

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These members are selected depending upon the efficiency, caste, experience; cash etc, basing on that the members will be elected.

ROLE OF TRADE UNIONS IN CHANGING BUSINESS SCENARIO Many events in India and abroad are making significant effects on the trade union movement in India. Firstly, the collapse of the socialist economies in Russia and Eastern Europe has revealed glaring economic disparities between the East and the West and also resulted in a uni-polar world. Secondly, while these changes are making significant socioeconomic and political impact on the world economy, regionalisation and protectionism are also on the increase. The unification of Europe and the formation of NAFTA are examples. Thirdly, the development of satellite communication and the explosion in information technology has resulted in customer needs across the world getting more and more homogenized and this has perhaps lead to the creation of "The Global Shopping Centre". Fourthly, the emergence of the so called Asian Tigers in the 1980's as major players in global trade challenges the classical international trade theory-the convention jpwhich believes that the basis of international trade is the endowment of the resources of nations. The Asian Tigers are not endowed with any of the traditional productive or I natural resources.
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What made them major players,

in the world market was their conscious effort to create a competitive advantage for themselves. These nations used $ technology and linked up their economy to the world market economy to gain benefits. Lastly, the liberalization policies of opening up of the Indian economy to the global competition have also affected trade unions.

EMERGING TRENDS:
1 As a consequence of all these happenings, a few issues are coming into sharp focus in the Indian economic scene. Gradually, as India gets integrated into the world market, there is cut-throat competition in the industrial sector. 2 Competition is inducing innovation and companies r,re evolving newer strategies to survive the onslaught on their market share by new and more efficient enterprises, improving the quality of their goods and services and yet trying to remain cost efficient. 3 Faced with keen competition, one sector of economy is also, at times evolving short term strategies with utter disregard to the interest of other sector(s).
4

The customers are becoming supreme, seeking greater and greater value in the goods and services they buy.

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ROLE OF TRADE UNIONS: Indian Trade Unions and, for that matter, trade unions in any developing economy in the above scenario, is finding it difficult to continue with their traditional role of promoting the interests of their membership with a sectarian emphasis. Market forces are no longer allowing any sub-optimal utilisation of resources to be passed on to consumers in the form of substandard goods/services or increase in prices. In such a situation, any demand for "more" has to be linked up with higher productivity and improved quality. In this changed context, trade unions in India may have to find a new role for themselves as important agents of social and economic transformation for the common good of everybody, especially the under privileged. Trade Unions with their resources and expertise may also provide a platform to other social institutions to integrate the conflicting interests of different segments of society, e.g., the employed and unemployed/under-employed etc. However, no voluntary organisation can survive by neglecting the sectorian interests of their membership altogether. Keeping this in view, I would suggest that the unions operating in industrial and services sectors may shift their emphasis from demanding more and more financial benefits for their members to more important issues on-their agenda such as:

Rehabilitation of displaced employees

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 Facilitating self-employment Ensuring social security

Safety and health of the workers Working as a watch-dog for protection of environment .

Worker education Involvement in the running of business through greater degree of participation Productivity bargaining etc.

However, in order to play any meaningful role, trade unions must have a strong membership base. For too long has the trade union movement in India remained weak and obsessed with intraunion and inter-union conflicts. For ages, their leadership has deliberated over some important and urgent issues like: 1 Secret ballot vis-a-vis verification of membership through check-off; 2 Recognition of a single union vis-a-vis formation of bargaining council or a combination of these; 3 One union in one industry vis-a-vis formation of a confederation of trade unions, etc.

But very little has been achieved so far towards consolidation of workers. There has been, in fact, a tendency of further splitting the movement with every split in political parties.

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This has hot only created utter frustration amongst the sincere and devoted sections of trade union members, but the movement is also losing public sanction very fast.

In my analysis, two major issues are to be resolved by the leadership to achieve consolidation of the movement. They are:

a) Over-emphasis on political ideology of some trade union houses; b) Leadership issues in the consolidation process;

Once these issues are resolved and he trade union movement gets consolidated, the leadership will find itself more comfortable in its redefinedrole.

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DISCIPLINARY PROCEDURE

Discipline is a Code of Conduct in an Enterprise in which the members of the enterprise conduct themselves within the standards of acceptable behaviour which means that the stipulations of the code of conduct laid down by the enterprise are properly understood and observed by one and all. The state of Industrial Relations in a country/factory is also reflected in the discipline and the morale of the labour force. Discipline is very essential for a healthy industrial atmosphere and the achievement of organisational goals. In any Organisation maintenance of discipline among personnel at all levels is required' to create the conducive work environment so as to facilitate increased productivity and organisational effectiveness! So management of an organisation can adopt two approaches for discipline maintenance: 1 Adopting preventive measures 'prevention is better than cure' principle is based on the assumption that employees perform better through rewards than punishments. So the problems of indiscipline do not emerge. 2 Curative measures that it taking "disciplinary actions" against the persons involved in indiscipline. The Disciplinary Action should be taken after going through specific process because the punishment may be held invalid if there is
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any deviation from the procedure laid down. The procedure for taking disciplinary action is defined by the Standing Orders formulated by the Organisation. While taking an action, all the relevant facts leading to indiscipline must be ascertained so that the need for disciplinary action is determined. The facts must be collected as soon as possible to take the action promptly. The disciplinary procedure either Punitive or Curative has to be invoked for preserving industrial peace as well as maintaining the efficiency of the organization.

DISCIPLINARY MANAGEMENT
DISCIPLINE Discipline refers to a condition or attitude prevailing among the employees, with respect to rules and regulations of an organization Maintenance of effective discipline in an organization ensures the most economical and optimum utilization of various resources including human resource. Need for discipline Rules and regulations of an organization are essential to maintain peace. Disciplinary measures ensue just and equal treatment to all the employees, efficient 2 way communications, encourage c0operative and build team pride. Disciplinary measures regulate the behaviors i.e commitment towards work.
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Objectives of Discipline
To obtain a willing acceptance of the rules, regulations and procedures of an organization, so that organizational goals may be obtained. To develop among the employees a spirit of tolerance and desire to make adjustments. To give and seek directions and responsibility.

BHPV employees follow the disciplinary rules and regulation framed by the management, to run the organization successfully because even the company gave less wages to all the employees were showing interest to develop their organization profitably like previous one, this can be acquired through this disciplinary measures.

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Disciplinary procedures
Disciplinary procedures in BHPV comprise the following stages.

1. Issuing a letter of charge to the employee calling upon him for explanation:When the management of BHPV comes to a conclusion that an act of misconduct committed by an employee warrants disciplinary action the concerned employee should be issued a charge sheet. The charge sheet should indicate the charges of in discipline or misconduct clearly. Explanations should also be called from delinquent employee of that sufficient time should be given. 2. considerations of the explanation:What ever the explanations given by the employee is satisfied by the employer, there is no need for conducting an enquiry. When the management is not satisfied with employees explanation, there is need for serving a showcause notice. 3. show cause notice:In the show case notice, the employer provided another chance to the employee, to explain this conduct. This notice was issued by the manager to the employee. It is nothing but an enquiry commission.

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4. Holding of a full fledged enquiry:In this, the enquiry should be in conformity with the principles of natural justice i.e. the delinquent employee must be given a reasonable opportunity of being hear the enquiry offices should record his findings in the process of enquiry. He also suggests the nature of disciplinary action. 5. Considering the enquiry proceeding and findings and making final order of punishment. 6. Follow up:After taking disciplinary action, there should be proper follow up. The disciplinary action should not make the employees repeat the mistake.

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Punishments

When a delinquent employee is going to be punished, the type of punishment should be based on severity of the omission or misconduct. The following are punishments imposed by the management of BHPV to the delinquent employee i.e.,

Oral warnings:-In case of minor, oral warnings will be given by superior concerned. Written warnings:-Whenever oral warning fails to achieve the desired behavior a part of an employee, written warning may be given means certain rights of an employee would be withdrawn.

If the omissions are minor, one year increment will not be given to the delinquent employee, if it is a major life long Increment will be deducted.

Promotions will not be given in some case. Demotions:-Under this kind of punishment, an employee is reduced to a lower grade from the grade enjoyed by him earlier. Termination:-The employee services can be terminated in the following forms i.e. discharge simplicity, discharge, and dismissal.

Showing disciplinary action for various offences.

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INDUSTRIAL DISPUTES
Dispute, in general sense, is the expression of differences over some issues of interest between two or more parties. Industrial disputes like problems of indiscipline and their effective management are on the major issues in maintaining good Industrial Relations in the Country / Organization.

Definition:
According to Industrial Disputes Act, 1947 "Industrial Disputes means any dispute or difference between employers and employers or between employers and workers or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person". An individual dispute between an employer and one of his workmen is by itself not an industrial dispute, which can be referred to under section 10 of the Act. But such a dispute may become an Industrial dispute provided a majority of workmen, or union of workmen takes up the cause of particular workman, in the particular industrial establishment. The causes of industrial disputes are many and varied and sometimes even trivial. In India, various causes of Industrial disputes may be grouped into four categories: economic factors, management practices, trade union practices and legal and political factors.

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Machinery for Handling Industrial Disputes

In managing industrial disputes, management can take certain actions. These actions may be grouped into two categories

Prevention of industrial disputes:

The preventive machinery has been set up with a view to creating harmonious relations between labour and management so that disputes do not arise. It comprises of the following measures. (a) Worker's Participation in Management (b) Collective Bargaining (c) Grievance Procedure (d) Tripartite bodies Code of Discipline
(e)

Standing Orders

Settlement of Industrial Disputes:

If preventive machinery fails, then the industrial dispute settlement machinery should be activated by the Government under Industrial Dispute Act, 1947, because no-settlement of disputes will prove to be very costly to the workers, management and the society as a whole. This machinery consists of (a) Conciliation (b) Court of Enquiry (c) Voluntary Arbitration (d) Adjudication (Compulsory Arbitration)

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COLLECTIVE BARGAINING SYSTEMS

Collective Bargaining is a technique adopted by the organization of workers and employers collectively to resolve their differences with or without the assistance of a third party. Its ultimate aim is to reach some settlement acceptable to both the parties involved in labourmanagement relations. This concept was coined by Sydney and Beatrice Webb. Great Britain is said to be the 'Home of Collective Bargaining'. The phrase collective bargaining is made up of two wordsCollective which implies group action through its representatives; and Bargaining which suggests/haggling and/or negotiating. This concept, implies "Collective negotiation of a contract between the managements' representatives on one side and those of the workers as the other. It may be defined as a process of negotiation between the employers and the organized workers represented by their union in order to determine the terms and conditions of employment. International Labour Conference also defined as 'Collective Bargaining' extends to all negotiations which take place between an employer, a group of employers or one or more employers'organizations on the one hand and one or more workers' organizations on the other for determining working conditions and terms of employment and/or regulating relations between employers and workers and/or regularizing relations between employers of their organizations and a workers organization.
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As

per

Habirson,

collective

bargaining

is

process

of

accommodation between two institutions, which have common and conflicting interests. It is the resolution of industrial problems between the representatives of employers and the freely designated representatives of employees acting collectively with a minimum of Government dictation.

It is a process in which the representatives of a labour organization and representatives of the business organization meet and attempt to negotiate a contract or agreement which specifies the nature of employer-employee union relationship. The technique of CB has been adopted by unions and management for resolving their conflicting interests. It plays a significant role in improving the labour management relations and in ensuring industrial harmony. It helps a lot in better understanding of each other's point of view as well as problems. Through discussion and interaction, both the parties learn more about others and often misunderstandings may be removed. It helps in easing out many minor differences and there are many instances in which even major disputes are said to be settled without any work stoppage or outside intervention. Accordingly, its role in conflict resolution is very significant.

112

Collective bargaining brings the employees and managers closer; develops better understanding helps industrial peace; resolves conflicts and differences; brings social change. It helps effective functioning of the enterprise and promotes industrial harmony. It helps effective functioning of the enterprise and promotes industrial harmony. It is a two-way process and mutual give and take aspect rather than take it or leave it method of arriving at the settlement of disputes. The essence of collective bargaining is the agreement for dispute settlement and smooth functioning of the enterprise. The agreements bring both labour and management together to determine the conditions of employment and create new environment for problem-solving. It provides a flexible means of adjusting wages and conditions of employment to economic and technological changes.

113

Scope of collective Bargaining:

The Encyclopedia Britannica defines collective bargaining as follows: "In its widest sense collective bargaining is a negotiation between the employer or group of employers and a group of work-people to reach an agreement on working conditions. If negotiations are between an employer and a group of his own work people the dependence of the work people on the employer for their jobs weakens their bargaining powers, and therefore, collective bargaining is more usually understood to be negotiations between one or more trade unions and an employer or group of associations or employers". It is a process of self-settlement by which management and organized labour may discuss each other's problems and exchange each other's view points negotiate and reach a common understanding to develop a setting for a better employment and working conditions to the mutual benefit of workers and management in a spirit of cooperation and goodwill for keeping peaceful industrial relations.

114

Collective bargaining performs a legislative function. The agreement under collective bargaining as concluded between the parties performs a judicial function when it helps the parties in the interpretation sought in case of a particular clause and also furnishes meanings, explanation and application which a particular clause conveys. Within the ambit of executive function of collective bargaining comes the enforcement of the agreement, the various methods and procedures, for discipline and grievances handling.

Some of the salient features of collective bargaining are:

It is a 'group' process; wherein one group representing the employers and the other representing employee sit together to negotiate terms of employment.

It is a process in the sense that it consists of a number of steps. The starting point is the presentation of the charter of demands and the last stage is the reaching of an agreement, or a contract which would serve as the basic law governing labourmanagement relations over a period of time in an enterprise.

115

Negotiations form an important aspect of the process of collective bargaining, i.e., there is considerable scope for discussion, compromise or mutual give and take in the collective bargaining deliberations rather than confrontation.

It is a bipartite process. The employers and the employees are the only parties involved in the bargaining process. is no third party intervention. are regulated by those directly concerned. There The conditions of employment

The purpose of collective bargaining is that it brings parties close and develops better understanding for industrial peace, democracy resolves conflicts and differences; guarantees the rights and responsibilities of the workers; develops self-respect and fosters responsibility on both workers and employers; brings social change through acceptable solutions; and formulates the terms and conditions under which labour and management will have to work together. The primary objective is to ensure effective functioning of the individual enterprise and more importantly the entire economy.

116

Main functions of Collective Bargaining:

The main functions of Collective Bargaining are: Concentration on wage determination-fixing the prices of labour services; Establishment of a system of workers rights in industry - this may be termed as democratization of industrial relations system or industrial jurisprudence;

Establishment of machinery for the representation of employees in decisions affecting their industrial and group interest.

117

WORKERS PARTICIPATION IN MANAGEMENT

Workers Participation, also known as Labour participation or Employee participation, in management is a concept shrouded with so much vagueness that for different people, it has different meanings. The basic reason for this perceptual difference is due to different pattern of practices and programmes adopted by various Countries for implementing workers participation-in management. Many Industrial Relations experts regard it as an essential step involving redistribution of power between management and workers in the direction of industrial democracy though there are differences of views over the content and level of participation. The principal forms through which workers participate are Information sharing, Joint consultation and Suggestion schemes.

118

The various forms of workers participation in management have assumed great importance these days because it serves the following purposes: Reduced industrial unrest Maintaining good Industrial Relations Higher productivity Workers participation in management falls into several categories. These are informative, consultative, associative, administrative and decisive participation. Informative: In informative participation, there is sharing of information for instance, the information regarding production figures, the balancesheet of the company and economic conditions etc. Consultative: In consultative participation workers' representatives are consulted on matters relating to welfare facilities by the management. Here, the workers' representative action an advisory capacity and the final decision rests with management.

119

Associative: In associate participation the management accepts the suggestions of the council for solving a problem on hand. The management is obliged to accept and implement if the committees take unanimous decisions regarding a problem. Administrative: In administrative participation, the decision is already taken and the councils (joint bodies) have the right to choose the method of implementing it. This may include administration of welfare measures, operation of vocational training and apprentice schemes and preparation of work schedules. This involves higher degree of delegation of authority and responsibility to the lower rank and file of the organization. Decisive participation: Finally there is decisive participation, the highest form of participation where all matters, economic financial and administrative are brought under the scrutiny of the councils and the decisions are taken jointly.

120

OBJECTS

OF

WORKERS

PARTICIPATION

IN

MANAGEMENT:
The objective pursued by the various systems of workers participation in management varies from country to country, from region to region and even from organization. The workers or the trade unions may regard participation as a means to increase their wages, while the others may regard it as a means to increase production, which may not necessarily result in greater security for workers. All these objectives include in particular (ILO, 1969):

i.

Moral, ethical or ideological considerations which are linked with the growing awareness of (a) the basis equality of men which beyond the political sphere, should extend also to that of economic pursuit and production effort, and (b) the importance of the undertaking for the socio-cultural life of the workers in general, and, more particularly, their need to be recognized and associated as a community in decisions which may affect their conditions of work and living within and without the undertaking.

121

ii.

Socio-political

objectives,

aimed

mainly

at

applying

the

principles of democratic self-government within the economy; this generally claims for what has often been defined as "industrial democracy" being particularly stressed either where the need is felt thus to develop or to strengthen democratic institutions in the political sphere by making them rest on the undertaking selfgovernment, or, in the undertakings belonging to the public sector of the economy or under the. National development programmes, also, to supplement or to replace private entrepreneurial motivation through the association of workers in management and in the results of the undertakings. However, the social aim in management and in the results of the undertakings. However, the social aim of some of the participation schemes is merely to achieve a closer integration of the workers within the undertakings while not interfering with the latter's basic structures;
iii.

The general economic objectives based on the assumption that whenever people are allowed to participate in the preparation of measures and policies which they are called upon to implement, such participation may prove apt particularly where linked with economic advantage, to reduce conflict and to enhance the cooperative spirit of all concerned.

122

SPECIAL FEATURES LEADING TO THE SUCCESS OF PARTICIPATION

One reason for the successful functioning of the joint consultation is the clear demarcation of issues to be" discussed by various forums, which is strictly, adhered to. Another important reason for the continued success is that both management and union treat it as a dynamic system. From time to time? New subjects are added to the list and financial powers of JDCs are increased. The list of subjects which the highest council -the JCM - discusses is impressive. It includes not only performance in relation to production, cost and manpower, but also sales, finance and industrial relations. It is indeed a rare sight in India to see a meeting attended by an equal number of top management and union officials which is chaired- 7 the union president. Again, despite the pressures on his time the Managing Director makes it a point to attend DC meetings. Other reasons of success are peaceful industrial relation climate, good upward communication system, and progressive personnel policy of the organization.

123

SOME SUGGESTIONS FOR PROMOTING WORKERS PARTICIPATION IN MANAGEMENT

Some important points which may be considered by the Government, management and trade unions for making participative management a success and relity.
1)

INDUSTRIAL RELATIONS: The quest for industrial peace has been the central preoccupation of employers, workers and government for a long time. The Five Year Plans, Labour legislations, the Industrial policy, have all endeavoured to emphasise industrial peace as the necessary pre-requisite for industrial growth and development, but it has remained elusive. Here an attempt has been made to indicate briefly some important measures which are considered necessary for bringing about a conducive industrial relations climate which is one of the basic prerequisites for the success of participative management. The essential features are:-

124

(A)

It is a fact that in the absence of an arrangement for statutory recognition of unions, or voluntary recognition by employers on moral grounds, collective agreements have not made much headway.

(B)

Consequently, there is a greater scope for more reliance on collective bargaining thereby replacing avoidable adjudication or more of governmental interference.

(C)

To create appropriate climate for collective bargaining, it becomes necessary to resort to statutory recognition of a sole bargaining agent, where voluntary efforts fail.

(D)

Recognition of trade union should be made compulsory under a central law:

(i) for all undertakings employing more than 1000 workers;

(E)

Provided the trade union seeking recognition has at least 45% membership among workers at present, but attempts should be made to have a higher percentage of around 55 to 60.

125

(F)

There should be a properly recognized authority under a central legislation to decide disputes through verification of records, where the difference in the verified membership is 10% or less than a secret ballot open to all the employees should be taken.

(G)

The recognized union should be statutorily given:

exclusive right of sole representation; exclusive right to enter into collective bargaining;

exclusive right to collect membership subscription within the factory premises;

Right to nominate representatives on different joint committees.

(H)

The minority union should only be allowed the right to represent individual cases of dismissal and discharge before a labour court.

126

(I) TRAINING FOR PARTICIPATION: All employees (both management and workers) should be briefed on the reason for the introduction of participation and its likely impact, they should receive clear documentation and have the facility of questions being answered. Training for those management and workers' representatives who are going to be directly involved in participative forums should cover three main points:

Basic knowledge of the philosophy, operation and intent of participation Within the company. This approach should be intended to promote joint working based on problem resolution rather than negotiating 'conflict'. Team development techniques in a workshop situation may be used for this purpose.

Special skills training to enable them to discuss and contribute to the decisions in which they are to be involved: Contextual training - participation puts strains on and questions the company's traditional approach to management. Opportunities therefore have to be provided for management teams to consider the impact that participation will have on them.

127

PARTICIPATIVE MANAGEMENT
Joint management councils: It constitutes a committee known as joint management committee, to look after the duties and responsibilities of joint management councils. These bodies represent both labor and management. The nature of functioning of these bodies are only consultative in nature means, the management given an opportunity to participative in management decisions, so that the employees shows more interest towards the work.

Safety committee: Means it is the committee which looks after the safety facilities in an industry. In BHPV, one safety committee is there, the inspector of factory is the safety committee head. His main function is to provide good working atmosphere at the work place, whether the machinery in the company was properly functioning or not, is there any pipe leakages, etc all these facilities will be properly maintained or not are checked by the safety committee.

128

Works committee: According to industrial disputes act 1947, every establishment employing 100 or more workmen may be required by the government to constitute a work committee representing equal representatives of both management and workmen for promoting dialogue between the employer and the workmen.BHPV constitutes this work committee. The main function of this committee is to Endeavour to compose any difference of opinion in matter of common interest, and thereby promote amity cordial relations between the employer and employee.

129

GRIEVANCE MANAGEMENT

Grievance is a state of dissatisfaction over some issues related to employment. Generally, expression of this dissatisfaction in oral form is known as complaint while in written form it is known as grievance. In the organizational settings, employees may have some grievances against employers, in the same way, employers may have grievances against employees. Grievance Management is very essential to maintain good Industrial Relations, which increases productivity and effectiveness of an organization. Grievance should be redressed by adopting proactive approach rather than waiting for the grievance to be brought to the notice of management. In many cases, even the proactive approach of management for removing the causes of grievances may leave some scope for the emergence of grievances. For handling such grievances, a Grievance Handling Machinery, known, as Grievance Procedure is required.

130

The Grievance Procedure is problem solving, dispute-settling machinery which has been set up following an agreement to that effect between labour and management. It is the means by which a trade union or an employee makes and processes hi r- claim that there has been a violation of the labour agreement by the company. Grievance Procedure is a device through which grievances are settled, generally to the satisfaction of employees/trade union and management.

GRIEVANCE READRESSAL MECHANISM:

A Grievance is a sign of employees discontent with job and its nature. The employee has got certain aspirations and expectations which he thinks must be fulfilled by the organization, where he is working. When the organization fails to satisfy the employees needs, he develops a feel of discontent or dissatisfaction. For instance, the employer expects proper implementation of the central and state government laws, collective agreements, company policies and management responsibilities. A violation of any one degree among these cause dissatisfaction on any part. Thus, grievance is caused due to the difference between the employee expectation and management practices.

131

GRIEVANCE PROCEEDURE:If any grievance is there, then the grievant employee, communicate with there immediate supervisor, then the supervisor has to solve within 48 hours, if he is unable, then he communicate with the Head of Departments, then the representatives of the department has the decision within 3 days regarding this grievance, if he is unable, then communicate with grievance committee, if the decision was not satisfied the employees, then it will goes to the manager, next to the committee of union and management of representatives, not satisfied, communicate to voluntary arbitration, within 7 days. The grievance will be settled. This was the normal procedure which was followed by every organization. But in BHPV, at present there is no grievance committee, it there is any grievance, they can directly approach to the union, and the union talks with the management and try to solve the grievance, if it is not possible then the third party, i.e. voluntary arbitration will be done.

Previously, one welfare officer will be there, if any grievances are there he will collect the grievances from all departments and communicated to the concern authorities and decision will be communicated in the next day.

132

INDUSTRIAL RELATIONS AND ITS IMPACT ON PRODUCTION AND PRODUCTIVITY

Industrial relations do not emerge in Vacuum they are born out of "employment relationship" in an industrial setting. It is the Industry which provides the environment for industrial relations. The Production and Productivity of an Organization depends upon the type of Industrial Relations or the events that take place in an organization which are harmful to industrial relations. When it comes to Productivity, the impact of Industrial Relations events on Productivity was not so severe. The Productivity details of the company show that the productivity was increasing continuously in the last ten years. If the events did not take place may be the productivity would have further increased.BHPV plant being one of the integrated plates and vessels in the Country. The loss of production in one department will affect the other department and the cost of loss of production is also depends upon the type of manufacturing department. If it is a major production unit the loss is very severe if it is a service unit the loss is less. The Production and Productivity of an Organization is good when there is a good Industrial Relations. The Industrial Relations would be good when the management provides safety measures, incentives, good internal communication and good welfare activities to the employees. At the same time the Trade Unions should also function effectively to improve the Industrial Relations.

133

Quality circles
It is a small group of employees in the same work area or doing similar type of work who voluntarily meets regularly for about an hour every week to identify analyze and resolve work related problems not only to improve quality, productivity and the total performance of the organization but also to enrich the quality of work life of the employees. Objectives: To develop enhance and utilize human resources effectively. To improve quality of products and reduce cost of production. To improve various supervisory skills. Benefits: Improvement in job performance of workers. Development of solution to the identified area. Promotions of participative management culture and team work.

134

Quality Management
BHPV is reputed for quality and workmanship of its product. BHPV has received a number of international accreditation regarding quality. As a part of total quality management programmes, BHPV has acquired ISO 9001 certificate during the year 1993-94 particularly to boost up its exports and to be competitive in the international market. Re-certification of ISO! Has been obtained in September 1996. In recognition of high standards of our quality, confederation of industry (COI) southern region, AP represented the quality awards. QUALITY POLIOCY IN BHPV:To maintain a commanding position as a supplier of quality product systems and services by continuous updating of technology to meet international standards and to build a high level of customer confidence and satisfaction by providing cost effective quality products.

135

QUALITY ASSURANCE ACTIVITIES AT BHPV

The quality assurance activities that have been taken up at BHPV are Advance planning of quality assurance activities for industrial equipment. Preparation and updating of quality manual standards systems and procedures. Defect analysis and casual removal. Quality auditing. Systematic training of quality control. Quality reporting and follow up corrective actions. The quality of equipment manufactured by BHPV has received international recognition.

136

CHAPTER-4

137

DATA ANALYSIS AND INTERPRETION

1) How is your company maintaining industrial relations?

S.No

Response No. Of Respondent 1 12 33 2 48

Percentage 2.083 25 68.75 4.166 100

1 Very good 2 Good 3 Satisfactory 4 Un

satisfactory

Total

100 90 80 70 60 50 40 30 20 10 0

very good good satisfactory unsatisfactory total

no of percentage respondents of respondents

INTERPRETATION:

From the above table we can say that 68.75% of

your company maintaining industrial relations

138

2) Do you feel that industrial relations help in improving production in your company?

S.No

Response No. Of Respondent 42 0 3 45

Percentage 93.33 0 6.66 100

1 Yes 2 3
No Dont know

Total

120 100 80 60 40 20 0 percentage of respondents no of respondents

yes no dont know total

INTERPRETATION: From the above table we can say that 93.33%of respondents feel that industrial relations help in improving production in your company

3) How far is the company following trade union act and

139

Industrial disputes act rules & regulations on a scale of 100, how much percentage will you Rate.
Response No. Of Respondent 0 18 24 3 45 Percentage 0 40 53.33 6.66 100

S.No

1 Very good 2 Good 3 Satisfactory 4 Un

satisfactory

Total

120 100 80 60 40 20 0 no of respondents percentage of respondents very good good satisfactory Un satisfactory Total

INTERPRETATION:

From the above table we can say that 53.33%of

respondents are satisfactory in BHPV

140

4)

What are the different problems faced by trade unions.

S.No

Response

No. Of Respondent 35 0 30 15 80

Percentage 43.75 0 37.5 18.75 100

1 Related to compensation 2 Related to work

environment

3 Related to management 4 All of the above Total

120 100 80 60 40 20 0 no of respondents percentage of respondents

Related to Compensation Related to Work Envirnoment Related to Management All of The Above Total

141

INTERPRETATION: From the above table we can say that, 43.75% respondents related to compensation

5) Is workers participation in management is satisfactory in your organization

Response No. Of Respondent 40 34
6

S.No

Percentage
50 42.5 7.5

1 Yes 2
No

3 Needs a relook by
the org

Total

80

100

142

120 100 80 60 40 20 0 no of respondents percentage of respondents

yes no Needs a relook by the org total

INTERPRETATION: From the above table we can say that, 50% of respondents workers participation in management is satisfactory in your organization

6) Collective

bargaining strengthened industrial relations.

Response S.No 1 Strongly Agree 2 Agree 3 Disagree 4 Strongly Disagree Total

No. Of Respondent Percentage 40 34 6 0 80 50 42.5 7.5 0 100

143

120 100 80 60 40 20 0 percentage of respondents no of respondents

strongly agree Agree Dis agree Strongly dis agree Total

INTERPRETATION: From the above table we can say that 50% of respondents Collective bargaining strengthened industrial relations.

7) What

kind of systems do you approach for solving the

Grievance Redresses

144

S.No

Response

No. Of Respondent 18 24 3 45

Percentage 40 53.33 6.66 100

1 Open door policy 2

Step ladder policy

3 Both Total

120 100 80 60 40 20 0 percentage of respondents no of respondents

open door policy step ladder policy Both Total

INTERPRETATION: From the above table we can say that 53.33% of respondents are approaching step ladder policy

145

8) Grievance

redressal forum are satisfactory

S.No

Response No. Of Respondent 24 18 3 45

Percentage
53.33

1 Satisfied 2 3
Not satisfied Dont know

40 6.66 100

Total
120 100 80 60 40 20 0 no of respondents

Satisfied Not satisfied Dont know total percentage of respondents

146

INTERPRETATION:

From the above table we can say that 53.33% of

respondents Grievance redressal forum are satisfactory

9) How is the system of labour management relations functioning in your organization?

S.No

Response No. Of Respondent 10 20 50 45

Percentage
13

1 Very good 2 3
Not Effective Can do better

25 62 100

Total

120 100 80 60 40 20 0 no of respondents percentage of respondents

very good Not effective Can do better total

INTERPRETATION: From the above table we can say that 62% of respondents the system of labour management relations Functioning in your organization

147

10) Is

job rotation system in BHPV is functioning?

S.No

Response No. Of Respondent 15 55 10 80

Percentage 18.75 69
12.5

1 Yes 2 3
No Dont know

Total

100

120 100 80 60 40 20 0 percentage of respondents no of respondents

yes no dont know total

INTERPRETATION: From the above table we can say that 62% of respondents are job rotation system in BHPV is functioning

148

11) Management

is concerned for welfare of work man ?

Response S.No 1 Strongly Agree 2 Agree 3 Disagree 4 Strongly Disagree Total

No. Of Respondent Percentage 0 55 15 10 80 0 69 18.75 12.75 100

120 100 80 60 40 20 0 no of respondents percentage of respondents

strongly agree Agree Dis agree Strongly dis agree Total

INTERPRETATION:

From the above table we can say that 69% of

respondents Management are concerned for welfare of work man

149

12) Quality

of work life is better in BHPV

Response S.No 1 Strongly Agree 2 Agree 3 Disagree 4 Strongly Disagree Total

No. Of Respondent Percentage 12 30 10 0 52 23.07 57.69 19.23 0 100

120 100 80 60 40 20 0 percentage of respondents no of respondents

strongly agree Agree Dis agree Strongly dis agree Total

INTERPRETATION: From the above table we can say that 69% of respondents Quality of work life is better in BHPV

150

13) Better

industrial relations is the reason for increased

Production &productivity

Response S.No 1 Strongly Agree 2 Agree 3 Disagree 4 Strongly Disagree Total

No. Of Respondent Percentage 40 20 0 0 60 66.67 33.33 0 0 100

120 100 80 60 40 20 0 percentage of respondents no of respondents

strongly agree Agree Dis agree Strongly dis agree Total

INTERPRETATION: From the above table we can say that 66.67% of respondents Better industrial relations are the reason for increased Production &productivity.

151

14) Does

the employer have right to lockout?

S.No

Response No. Of Respondent 40 34 6 80

Percentage 50 42.5 7.5 100

1 Yes 2 3
No Dont know

Total

120 100 80 60 40 20 0 no of respondents percentage of respondents

yes no dont know total

INTERPRETATION: From the above table we can say that 50% of respondents employer has right to lockout

152

15)

How is management _employees-work relations in your Organization

S.No

Response No. Of Respondent 42 0 3 45

Percentage 93.33 0 6.66 100

1 Very good 2 3
Satisfactory Not satisfactory

Total

120 100 80 60 40 20 0 no of respondents percentage of respondents

very good satisfactory Not satisfactory total

INTERPRETATION:

From the above Interpretation we can say that

93.33% of respondents are very good

153

CHAPTER-5

154

SUMMARY
The overall Industrial relations scenario in BHPV is peaceful, conidial and healthy. With the dedication and commitment of BHPV collective, the organization has surmounted all odds and achieved best even records by crossing its rated capacities continuous effort to improve the employees morale have resulted in improving the Technological and operational discipline Which ultimately helped in heightening the motivation of the Employees.

It is noticed that since inception BHPV has signed successive usage settlements with the recognized union. The notable features of the implementation are productivity and production. Apart from this a number of settlements on various issues like promotions, incentives and welfare have helped enhancing the moral and motivate and motivation of the employees. Participative committees have helped the organization goals through the active employees participation/ involvement.

One of the most important factors is the productive work culture which is being considered as of crucial important is BHPV. As such several initiatives have been taken to adopt a multiskill and multi-employment thus ensures the optimum utilization of its human resources.

155

FINDINGS
A critical evolution of organization reveled that the personnel department is not totally independent one. The structure neglects the functions like manpower planning, scientific recruitment Since last several years they had been no strikes and lockouts in the organization. The number of disciplinary cases not must to cause alarm or to reflects a highly unsatisfactory of industrial relations. The functioning of various participative particularly not successful in the company. forms has

Workers participation meeting committees are not held regularly.

156

SUGGETIONS

It should be suggested that the manpower planning and forecasting should be done strictly and properly. Employees are not satisfied with welfare measures, so the management should take due steps for the effective use of welfare measures. Here the unions are leaders centered, so the rank & file members should be allowed to participated in the unions. There are no industrial disputes and the climate has been very cool and quite. I suggest that management should adopt the Hot stove rule for prompt redressal of the cases and awarding to the punishment. The management should try to implement all collective bargaining decisions. A few quality circles are functioning regularly so management should try to encourage workers to participate and improve the mutual trust between the parties. Grievance procedure should be maintained as far as possible.

157

Questionnaire for Employees

Name of the Employee Department : :

1) How is your company maintaining industrial relations a)very good b)good c)satisfactory d)unsatisfactory

2)Do you feel that industrial relations helps in improving production in your company a)yes b)no c)dont know

3) How far is the company following trade union act and industrial disputes act rules & regulations on a scale of 100, how much percentage will you rate. a)very good b)good c)satisfactory d)unsatisfactory

158

4)what are the different problems faced by trade unions. a)related to compensation b)related to work environment c)related to management d)all of the above

5) Is workers participation in management is satisfactory in Your organization. a)yes b)no c)needs a relook by the organization

6) Collective bargaining strengthened industrial relations. a) Strongly agree b) agree c) disagree d) strongly disagree

7) What kind of systems do you approach for solving the Grievance Redresses. a)open door policy b)stepladder policy c)both

159

8) grievance redressal forum are satisfactory a)satisfied b)not satisfied c)dontknow

9) How is the system of labour management relations Functioning in your organization. a)very good b)not effective c)can do better

10) Is job rotation system in bhpv is functioning a)yes b)no c)dont know

11)Management is concerned for welfare of work man a)strongly agree b)agree c)disagree d)strongly disagree

12) Are there any industrial disputes in your organization a) yes b)no c)not aware of

13) Quality of work life is better in bhpv

160

a)strongly agree b)agree c)disagree d)strongly disagree

14) Better industrial relations is the reason for increased Production &productivity a)strongly agree b)agree c)disagree d)strongly disagree

15) Does the employer have right to lockout a) yes b)no c) cant say

16) How is management _employees-work relations in your organization. a)very good b)satisfactory c)not satisfactory

161

BIBLIOGRAPHY
BIBLIOGRAPHY

1. Journals ANNUAL REPORTS AND MANUALS OF B.H.P.V. Ltd.

2. Text books HUMAN RESOURCE INDUSTRIAL RELATIONS - V. SUBBA RAO

162

 PERSONNEL MANAGEMENT - EDWIN B FLIPPO 3. Websites www.bhpvl.com

163

164