Fictional Air India Case on Human Resource Management


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Fictional Air India Case on Human Resource Management

  1. 1. The SARS Effect: Air India & IPGA. Anand | K. Ahuja | N. Jain | BK Sanjay | V. Kukreja | V. SatheGroup 2 – Section C
  2. 2. Case Overview Air India is the Govt. of India owned airline that operates in domestic and international sector Indian Pilots’ Guild (IPG) is the trade union of Air India pilots In 2003, following SARS breakout and Iraq War, IPG issued directive to pilots not to operate on these sectors This caused disruption in Air India services and resulted in a dispute between Air India and IPG Air India, backed by the government, sacked several pilots and derecognized the IPG. Strike was called off.
  3. 3. Legal FrameworkActions of Air India and the IPG
  4. 4. Trade Union Act, 1947 A trade union (TU) can be formed by 7 or more workers Does not indicate about recognition of TU by employer TU has right to refuse work legitimately in case of dispute with respect to employment conditions including pay, hours TU or its members can not be prosecuted in criminal court for any action regarding industrial disputes, including violation of employment agreement
  5. 5. Industrial Disputes Act, 1947 One of the primary objective is to prevent illegal strikes Industrial Dispute is defined as contention between employer and employee on terms or conditions of employment or non-employment Machinery for resolution of Industrial Disputes –  Works committee – Dialogue between employee representatives and management  Conciliation – Mediation by third party like government  Arbitration – Binding decision by arbitrator like tribunal  Adjudication – Judicial process Strike is the ultimate weapon, but reckless use can do more harm than good, defined as cessation of work by no. of employees for common cause (Sec. 2(q) ID Act)
  6. 6. Legality of strike Illegal if  Reconciliation in progress or within 7 days of completion  Adjudication in progress or within 2 months of completion  Arbitration is in progress or within 2 months of completion  Award/settlement in operation, for same problem  If 14 days notice is not given for public utilities Unjustified if  Motivated by demands unconnected with the grievances  Unnecessarily prolonged  There has been any violence
  7. 7. IPG Actions Directive not to operate flights can be considered as strike as it disrupts the business, IPG did not serve any notice 14 days in advance (required for public utilities) to management of official strike or lockout While in conciliation, IPG extended directive of non-operate if cabin crew is coming from affected sectors, this makes strike illegal Reasons of SARS can be considered under employment condition dispute, however there was no concrete evidential data to support. Other airlines continued operations and WHO certified the precautions taken at airport as sufficient Real motivation behind strike may have been pay hike or political, that makes strike unjustified as per supreme court directive Partial lockout (certain sectors) only could be considered as go-slow, which is serious misconduct
  8. 8. Air India’s Action Air India aware of differences within pilots union, with Government support decides to break the strike through tough measures like suspension and disciplinary action Actions of IPG made the strike illegal, boosting Air India’s stand on legal and moral front Judicial, Government and Media support behind Air India No mandate by law to recognize TUs in organization. AI derecognized the IPG in 2003. Recognition resumes for its successor only in 2009. This is unfair labour practice. AI had Executive Pilots which were classified as management cadres without any significant distinction in job responsibilities, thereby preventing them to join IPG IPG would have never achieve complete lockout, as it can not force its members and non members who wish to report on work, as forcing for strike is illegal. This makes AI’s position strong in this bargaining scenario.
  9. 9. As IPG PresidentHow IPG could have avoided the conflict and addressed problem?
  10. 10. Handle things better Management Action on Health Issue:  Expert Opinion: Consult with Indian Medical Association to understand the SARS threat and measures to prevent  Understand situation: Check how other airlines are handling the situation and what precautions are taken at airports  Open Discussion: Alert the management if it finds current health facilities are not satisfactory and demand the improvements based on above points Unity:  Fence sitters did not support cause making strike unsustainable  Air India, aware of the situation took hard stance to break  IPG should have ensured the cause has unanimous support.
  11. 11. Handle things better Impression Management:  Direct strike angered public, media and government  Should have explained cause to media and attempt get its sympathetic support  People’s support translates into Government support Mixing the issues:  IPG used SARS as mask under which it pushed several demands linked with pay rise, training and promotions  It reduced credibility of the strike and made it unjustified  Should have set transparent agenda and made demands Management Relationship  Management as enemy – No confidence motion  Should put certain trust, consider management as partner to address employee grievances understanding each other’s position
  12. 12. Evaluation of Action Government and Judiciary
  13. 13. Government’s Action Air India is a nationalized entity, Govt. role crucial IPG’s stance was defiant, govt. stance appropriate Management’s stance about FDTL agreement was improper, no sufficient number of pilots present to challenge Govt. should have intervened to ensure that on such issues views from all concerned parties are heard Route wise differential payment policy inappropriate, govt. should intervene to rationalize the salaries Overall, Govt. actions were correct but not complete
  14. 14. Judiciary Action Terming the strike illegal was correct Management biased against agitating pilots Even after strike was called off management was not ready to take back suspended pilots in order to teach them lesson De-recognition of IPG was not correct step, as it led to its dissolution. Court should have intervened to ensure that independent trade union exists to represent pilots
  15. 15. Future Trends Govt./Judiciary Role Overuse of strikes as weapon has blunted them Compared to 1970s era, today strikes have lost their significance and power to influence govt. greatly. With downfall of communism and MNC domination, trade unions are also becoming weak. Strikes and lockouts are loosing public sympathy. Degraded image of government employees due to corruption and disruption of essential services are the main reasons. Naturally Govt. is becoming stronger and is handling these issues with an iron fist. Essential Services Maintenance Act, 1981 (ESMA) when invoked renders strikes with respect to public utilities illegal and empowers govt. to take stringent steps.
  16. 16. Future Trends Govt./Judiciary Role Courts in support of dialogue and not strike Arbitrations are preferring to handle manners by evaluating worker’s demands and accordingly directing employers Strikes called when arbitrations are in progress are considered illegal Judiciary processes in India are very lengthy, matters in courts take long time for resolutions E.g. Railway, Petrol Bunk owners, Milk Distributors, Resident Doctors strike Not in interest of common workmen, will lead to disregard genuine demands and increase exploitation
  17. 17. Food for thought Pilots are generally viewed by majority as “overpaid” and they are less in number Pilot’s sudden strike impacted common people as travel plans affected To face Media and public outrage, management blamed pilots Neither judiciary nor government supported IPG Hypothetically imagine if IPG has legitimate demands, will there be any change in stance of Govt./AI? Hypothetically imagine if instead of IPG, ground staff (low paid, high in number) association starts fighting for illegitimate demand, would government, political parties and media react in same way?