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 , 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 workplace- level 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 , only 13 to 14 per cent of labors were employed in long-term regular employment.