Emerging World Trade Regime
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Emerging World Trade Regime

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    Emerging World Trade Regime Emerging World Trade Regime Presentation Transcript

    • EMERGING WORLD TRADE REGIME:Social clause and implications for employeerelations management
    • Agenda Introduction Social realities, culture and organizations: Global perspective (Country perspective) WTO regime and the social clause Centre- State vs State-State pulls Employment security Labor redundancy Wage Policy Social Security Contract Labor Child Labor
    • Introduction Significant changes in social and corporate world due to WTO regime Reforms impact upon all HR practices and trade unions Intensity depended upon ownership, culture Indian context: Reforms treated with suspicion by working class Political parties too interfering in the process
    • New employment relationshipEmployee expectations: Provide education, training, and skill development opportunities Provide education, training, and skill development opportunities Involvement in decision making / empowerment Open communication, mentoring Challenging meaningful and interesting work Performance based compensation
    • New employment relationshipEmployer expectations: Assume responsibility for developing and maintaining skills Produce positive results and add demonstrable value Understand the nature of employers/business Have customer focus Work in teams, and take initiatives Flexibility and commitment
    • Social Realities, culture and organizationsJapan: Submissive and adaptable nature because of agri-centred society Work considered source of moral culture Work ethics weakened in post World War II generation High educational level of workers Non-confrontational attitude and industrial harmony
    • Social Realities, culture and organizationsYugoslvia: Socialist self-management regime Workers’ Council elect top managers Success depends on efficiency of business enterprises
    • Social Realities, culture and organizationsIndonesia: Three cultural levels:  Ethnic regional cultural level: tribal group culture  Regional-national cultural level  National-international cultural level: internalized western values Top managers prefer paternalistic style of leadership Collectivistic, short-term oriented Need vision, less communication barriers Orientation towards- God, environment, and self
    • Social Realities, culture and organizationsThailand Nine value orientations: Ego, grateful relationship, smooth interpersonal relationship, Flexibility and adjustment, religio-physical orientation Education and competence, interdependence Fun-pleasure, achievement-task Direct confrontations and criticism avoided Motivation by benevolent, paternalistic type leader
    • Social Realities, culture and organizationsHong Kong: Issue of cultural adaptation an issue where management is not indigenousSouth Africa: Institutionalized racial discrimination part of organizations Inclusion of HR planning, career pathing, continuous learning in HR agenda Strategically linked HRD needed to overcome labor market segregation based on race
    • Social Realities, culture and organizationsChina: Respect for age and hierarchy, face and harmony, group orientation, personal relationships Confucian traditions and ethos applied to integrations of labor force Tradition of thoroughness in work, strict discipline, credibility, inclusivity of expectations Paternalism, personalism and defensiveness - a socio-historical legacy
    • Social Realities, culture and organizationsTaiwan Four distinct managerial patterns: The Grassroots type and Mainlander type: typical of Chinese values Grassroots type include Japanese features The Specialist type: includes western logic of rationalism The Transitional type: includes both western and Japanese managers
    • Social Realities, culture and organizationsIndia Three types of behavioral dispositions or ethics: Personal ethic of helplessness Organizational ethic of personalized relationships Idealized family-centered work ethic
    • Social Realities, culture and organizationsIndia Draws from the authoritarian practices in family Reward system based on negativity and uncertainty Family and religious traditionalism emphasis on past Joint family systems – need to meet obligatory demands from relatives, friends etc. Nurturance, universalism, peer leadership enhances member integration Synergic and exploitative cultures in large and small organizations
    • WTO regime in India A mixed picture India being the founder member of the ILO, contributed to the codification of international labor standards India benefitted from framing its own labor framework on labor aspects Indian constitution and labor laws uphold all the principles evolved in the eight core international labor standards
    • Social clause & Indian legislation Social Clause Aspects Indian constitution/legislation Freedom of association and right to The trade union of act, 1926 collective bargaining Abolition of forced labor in all its forms Article 23 of the constitution and the bonded labour system (abolition) act, 1976. Equal remuneration convention, 1951. The equal remuneration act of 1926 seeks The four underlying bases for to provide equal remuneration for men determination of work of equal value and women are skills, efforts, responsibility and working condition Discrimination convention which The constitute upholds equality, covers any discrimination, exclusion or denounces discrimination and preference encourages preferential treatment to disadvantaged groups in the society Minimum age for employment should The child labour prohibition act, 1986. ordinarily be 15 and 18 in dangerous occupations
    • Centre – State vs State-State Pulls Significant changes in labour laws by states i.e. trade unions act 1926  Secret ballot for trade union recognition  Secret ballot through tripartite social dialogue  Simplified labour inspection laws (Rajsthan)  Kerala extended full rights to entrepreneurs for hiring of labor Implementation has been the weak link
    • Wage policy Wage policy is main concern in the Indian context Dearness Allowance is based on the lowest basic wage indexing which declines as the basic wage rises Bonus payment governed by the payment of bonus act, 1965 Average real wage rate tends to decline when inflation rate rises above certain level Revision of basic wages does not consider labor productivity and profitability in organization Economic reforms lead to cost adjustment and wage flexibility is an important tool
    • SAAT, 1996 South Asia Multidisplinary Advisory Team (SAAT) Reported by SAAT, government should have several objectives-  Ensuring minimum level of living  Creating condition for systematic growth of wages  Sustaining appropriate wage productivity linkages  Incorporating appropriate incentives structures  Limiting income inequalities  Minimum wage should be fixed at national level
    • Employement Security & labourmarket flexibility SAAT report indicates that, Indian employment security system is based on three premises( Legislations : Industrial disputes Act 1947, Industrial employment Act 1946 ) Industrial workers – potential victims of exploitation   Protection from exploitation – must come from government regulations  Income security follows from employment security Retrenchment (except under certain conditions) in enterprise employing 100 or more workers requires prior permission from govt. authorities
    • Labour Redundancy Sizeable lot of redundant labour due to:  Inapt handling of industrial sickness incidents  Continuance of non-viable enterprises by the Government for employment protection  Over employment by public enterprises Introduction of reforms aimed at:  Development of institutions for efficient redeployment of labour from organized to unorganized sectors  Stimulation of growth of the unorganized sector  Commitment of large resources on the part of Government
    • Labour Redundancy  Measures  Voluntary Retirement Schemes packaged with programmes for counselling, retraining and redeployment  Transparency in the entire system  Self employment: measures for entrepreneurship training  Unorganised Labour Market  Reforms aimed at income security and social security
    • Wage Policy Minimum wages set by Government for unorganised sector Variations in minimum real wage rates across states and across occupations Minimum wage rates revised very infrequently Revised rates lower in real terms than pre-revision rates Statutory minimum wages below the poverty-line wages Actual wages below the statutory wages  Lack of proper indexation  Irregular revisions and weak enforcements  Setting different wages for organized and unorganized sector
    • Wage Policy  Recommendations for minimum wage  National minimum wage payable to all unskilled workers irrespective of age and sex  Fully indexed and above he poverty-line  States to derive minimum wages from this by using appropriate price indices
    • Social Security Unorganized sector workers mostly covered under LIC, General Insurance Corporation of India, National Social Assistance Programmes and Annapurna Frequent change in occupations : specific occupation based programmes rendered useless Schemes like Annapurna failed due to administrative and operational problems Thorough evaluation of schemes in their total structure Social security partners need to be strengthened with respect to finance, human resource development, monitoring and evaluation
    • Contract Labor Act, 1970 Provisions for  Abolition of contract labour in perennial and permanent jobs  Regulating the contract labour system Suggested reforms  New dispensations for the wages, safety and welfare of contract labour  Right to employees to go for contracting without any restrictions  Labourisation or workers’ financial participation as an effective remedy
    • Child LabourIndia  11.28 million child labourers (1991 census)  40% of the world child labour force Child Labour (Prohibition and Abolition) Act, 1986: hazardous industries and activities Further implementation of national policy and more advanced reforms such as creation of Child Labour Cells in each state Lack effective implementation Social initiatives and strenghtening of inspection measures required
    • Discussions Pre WTO, employees enjoyed lifetime employment, company sponsored health programmes and retirement pensions Post WTO, employees expected to work in multi faceted teams and update their skills continuously Restructuring  Feeling of job insecurity
    • Recommendations Acceleration of reforms required Role of Government important due to legislative reforms falling under their purview Extensive controls, large Government sector and many Government programmes bureaucracy leading to failure in implementation Monitoring of reforms by independent regulatory bodies with greater transparency
    • Thank You