Transcript MGT 4330 Industrial Relations

MGT 4330 Industrial Relations
Chapter 10 India
India- Facts
Population: $1.2 billion (2nd)
 GDP : $2 trillion (10th)
 GDP per capita: $1,592 (140th)
 Main Industries: Agriculture, Textile, IT,
Banking and finance
 28 states and 7 union territories


6% GDP
Industrial relation
High levels of state intervention
 During WWII, British government control
industrial conflict to ensure uninterrupted
supply of wartime production.
 Union survival is now increasing
dependent on their ability to co-operate
with employers

India-Actors

Union’s political influence is a legacy of trade
union movement in Indian independence
struggle.
◦ All India Trade Union Congress (AITUC) is
affiliated to Communist Party of India
◦ Centre of Indian Trade Unions (CITU) is affiliated
to Communist Party of India (Marxist)
◦ Indian National Trade Union Congress (INTUC)
is affiliated to the Congress Party
◦ Bhartiya Mazdoor Sangh (BMS), the largest union,
is affiliated to Bhartiya Janata Party
India-Actors

In 1999-2000, the total workforce in India
was 336 million of with only 28 million
(8.3%) was employed in “organized”
sector.
◦ Organized sector consists of large and
medium scale enterprises with regulated by
labor laws.
◦
◦ Unorganized sector consists of small firms
and self-employment.
India- Union Density

By 2000, registered trade union is 65,286.
But, only about 7,000 unions submitted
membership returns, which make it
difficult to estimated union density.
◦ From 2.6% to 75% (See P. 203)
India-Legislation
Trade Unions Act (1926)
 Industrial Employment Standing Orders
Act (1946)
 Industrial Disputes Act (1947)
 Minimum Wages Act (1948)
 Payment of Bonus Act (1965)

Industrial Disputes Act
IDA requires employers to gain the
approval of the state government before
closure or lay-off.
 Government seldom gives permission for
layoffs.

Minimum Wages Act
Minimum wage for different occupation
set by government as a “floor” of wage.
 Minimum wages are revised periodically
based on change in the cost of living
indices.
 Government appoints tripartite
committees for “recommending wages”.

Payment of Bonus Act
Company with 20 or more employee
must pay a minimum annual bonus to all
workers.
 8.33% of annual basic wage
 Upper limit of 3,500 rupees per month in
wage calculations

Collective Bargaining
Collective bargaining takes place at
enterprise level, except insurance and
banking sector.
 Unions with 66% majority have exclusive
representative.
 Unions with 25% can proportional involve in
negotiation.
 Unions with lower than 10% cannot
participate negotiation
 Non-union workers apply to collective
agreement as union members.

India-Works Committee

Firms with 100 or more employee should
establish works committee
◦ Equal numbers of employee and management
◦ Information sharing and reaching workplacelevel agreement
◦ Enforcing discipline, controlling absenteeism,
and insuring productivity targets are met
India-Dispute Resolution
Fist stage is to refer to dispute to
conciliation board. (District, regional, and
state level)
 If not resolved, the dispute may be referred
by state government to Labor Courts and
then Industrial Tribunal.
 The state have right to decide whether to
refer a dispute to implement the award of
the court.
 There is no specified time limit for
conciliatory board to hear and settle a
dispute.

India- Industrial Conflict
Increasing industrial conflict (see P. 208)
 Lockout was very frequent.

◦ 58% indiscipline of workers
◦ 5.56 related to wage and bonus

Most of the conflict happened in private
sector. (96%)
India- Labor market flexibility
Employers avoid directly hiring employees, but
hiring workers through labor contractors and
subcontractor.
 Hire less than 100 workers
 Terminate and rehire the same worker within a
few weeks.
 Redesign job titles to exclude employee from
bargain unit.

◦ Telephone operators  communications officers
◦ Accounts clerks payroll executives

From 1983-2002, only 13 to 14 per cent of labors
were employed in long-term regular employment.