MHRD Industrial Relations compendium book JBIMS.pptx

Industrial Relations in
Organisations
Dr. R. Krishna Murthy
S.R.Mohan Das & Associates
9820303236
srmdrrk@gmail.com

What is an organisation?
• An Organisation is nothing but a group of people working
together to achieve a common goal. Transforming
Organisations means transforming people working in the
organisation.
Who is the most important person in the organisation? Is it
not the Head of the Organisation like the CEO or Managing
Director? Or is it the Worker, Sweeper, Peon or Clerk
working in the organisation?
Can we say that an employee like a sweeper or a peon or a
clerk is also part of the “management” of the organisation?
Building Organisations in India – Challenges
2

Dimensions of Industrial Relations
• Unlike Social Relationships, it is a relationship in the
industrial setting and in India, people are not used to
Industry.
• For many of them, it is the first generational experience.
• Industrial employment entails working under time
pressures, under conflicting demands and functional
conflicts get converted personal conflicts. We do not
know how to have conflicts and yet collaborate in many
other areas where we have common interests. Having a
dialogue is the only means of a settlement.
• Language is the basis of relationships. In India, we need
to overcome the handicaps of language, culture, religion
and the Indian ethos. We are good individually, but poor
as members of teams

4
Business Environment
• After Covid-19, Indian economy has to navigate the world order
with the Ukraine crisis, Gaza crisis, the Global economy is facing
pressures of inflation and slow economic growth. What will happen
is uncertain and a high degree of unpredictability – Business is thus
operating not on sound footing, but shifting sands. In this ability to
adapt and sensitivity are important if the organisation is to be able
to respond to the changes.
• Business is operating in an environment of ambiguity, which makes
decision making risky and if changes take place the ability to revisit
decisions and modify them is imperative to cut down the losses and
reorient the business.
• Another dimension of the change is that responses have to be
simultaneous rather than sequential – This places a premium on
multi-tasking and having the antenna very sharp to pick up the
signals and act accordingly.

5
Responses of Organisations
• Speed of response is critical. How quick you are to sense and respond proactively is
a key factor.
• Variables such as Technology, Innovation, Entrepreneurial ingenuity are fast
reshaping the business scenario. We are now talking of cloud computing as the next
major technology platform
• Transformational pace is also dynamic. Ayodhya, CAA. Art 370. Four Labour Codes,
Farm Laws, Vaccine Drive and many such changes are sweeping the National scene.
WFH no more now. Modi 3.0 programs in full swing. Make in India, Made in India.
Atmanirbhar Bharat and Production Incentives in key sectors are expected to pole
vault India to a 5 Trillion Economy by 2025. Modi 3.0 vision.
• Pace of change in laws in society has also transformed. Now various laws, including
the law on sexual harassment have happened much before organisations have
responded to the changes. CEO’s now therefore are at greater risk for the acts and
consequences of managers. The Supreme Court Chief Justice (Ranjan Gogoi, now
retired and an MP) himself had a charge of sexual harassment leveled against him.
He heard the matter himself and his two colleague judges exonerated him of the
charges. Agniveer is a paradigm shift in the armed forces. Private sector will also
step in to support this.

6
Changing Economic Environment
 The Indian economy is flourishing despite global slow down. Covid
shut down hurt the industry. The Ukraine war has also soured things
further. When things will improve is uncertain. It is going to be a long
and painful recovery. Price of oil is rising and Petrol Prices had crossed
Rs. 100 per litre and stabilized. Currently it is around 82 but inflation in
India is better compared t Pakistan, Sri Lanka or Nepal.
 A lot of capital expenditure on construction, infrastructure and
ambitious projects is expected to kick start the economy. The economy
needs oxygen now and the Government will have to focus on this if
Modi 3.0 is to happen. Success of the G 20 summit cannot hide the
tensions on the China India border It will not go away overnight and it
will have an impact on the Indian economy. We used to import most of
the chemicals and raw materials from China. Trade deal with the UK and
perhaps with the USA also will be a great fillip for the economy though
matters with Canada appear to be going Southward.

7
The First Industrial Revolution
1784
The first Industrial Revolution was characterised
by Mechanical production and steam power
1870
Mass Scale Production and electrical power led
to another leap forward – the Second Industrial
Revolution.
1969
The first message sent over Arpanet, the
forerunner of today’s internet opened the
Third Industrial Revolution.
THE FOURTH INDUSTRIAL REVOLUTION
The Growing capability of artificial
intelligence and Big Data represent this era

8
World of Technological Transformation
3D,4R,5G, AI, Robotics, Nanotechnology, etc..
• 3 D Printing has made huge progress even in Construction Industry where houses
are being built by machines in days, not months or years.
• 4R – The world of the Digital Revolution is upon us and makes people and
instruments so well connected.
• 5G – Driverless cars, Remote surgery, Instantaneous Communication and
language ease
• IoT – The Internet of things – will connect machines to machines, people to
machines and make connections.
• Artificial Intelligence- Inert machines can think and act.
• Robotics Machines replace drudge, repetitive and complex tasks.
• Biotechnology - Delivery of medicines, targeted treatment using Genetics and
finding cures to diseases that are still troubling the world like Cancer,
Alzheimer's, etc..
• Nanotechnololgy – A small capsule swallowed gives 3D images of the body parts
and this can be moved inside the body and removed to give an accurate and real
time feedback to doctors. Eye-lens will give medical history, sugar levels, blood
pressure, etc..

9
Jobs Disappearing
• News Reporters – Media –
WhatsApp, Facebook and
other social media has
made print media difficult
to survive.
• Teachers – On line
Colleges, Tuition and
Coaching Classes replacing
University teachers.
• Health Workers – Medical
diagnosis by technology
and also by smartphones
• Lawyers losing relevance
• Accountants – Software making
them redundant.
• Drivers – cars getting
sophisticated.
• Cashiers – Cash dispensing
machines making them
redundant.
• Tele sales/call centre employees.
Amelia , an artificial call centre
agent can speak 20 languages,
learn from co-workers and by
2025 will replace 250 million
knowledge workers. That is 50%
of current India working
population.

10
Dark side of the Robots Revolution
• Manufacturing jobs in the
West were lost to China.
• Now in China, Foxconn, which
is a major manufacturing
outfit has plans to introduce a
million robots in factories. It
will mean the end of jobs in
China, as well as in the world
where the same items are
being manufactured. Just
waiting to happen in a short
while from now.
• Can Robots replace Humans?
• A few years ago, the London
symphony Orchestra performed a
composition that was created by
computers powered by Artificial
Intelligence algorithms. There is
now software that can write news
stories and an algorithm that can
create art. The highly-skilled white
collar workforce will face a
transition. They will have to move
out of jobs they have been doing if
they have to survive.

11
Which jobs are disappearing?
• Routine, ordinary,
skilled, complex,
difficult jobs can be
done by robots easily .
• Jobs which involve
discretion use.
• Jobs which involve
multiple skills,
dexterity, mobility,
creativity, varying
competencies and
human interaction.
• A radiologist can be
replaced but not so
easily a nurse.

12
Context of Employment Relationship
• Legal Framework:
Who is a workman? (Industrial Disputes Act)
Who is not a workman – a person doing work in an
administrative or managerial capacity and a person doing
work of a supervisory nature but drawing a salary of Rs.
10,000 or more
Employee (under Shops Act) Means a person wholly or principally
employed, whether directly or through any agency, and whether for
wages or other consideration in or in connection with any
establishment; and includes an apprentice, but does not include a
member of the employer’s family; (Som Mittal Case – Supreme
Court Hewlet Packard) Worker in the new Shops Act.
Workman under the Factories Act, Contract Labour Act, etc..

Who is a Workman?
• Is Pilot a Workman?
• Is a teacher Workman?
• Is Medical Representative a Workman?
• Is a Doctor a Workman?
• Is a Labour law Advisor a workman?
• Is a Chemist a Workman?
• Is a social worker a workman?
• Is a Customer Relations Executive a workman?

14
Is a Software Professional a Workman?
• HCL Technologies – Labour Court in Madras has
ruled that that the employee was a workman –
No evidence led in the Court to show that he is
doing work to justify he is not a Workman.
• Clarification from the Tamil Nadu Government
that IT and ITes Companies are covered under
the Industrial Disputes Act and Unionisation is
permitted for these industries.

15
Who is a Workman? – Law and Practice
• Employees in the Bombay Stock Exchange are unionised till the level of
AGM whereas in the National Stock Exchange, there are no workmen.
Both are engaged in the same type of business, yet both exist.
• Employees in Private Sector Banks like ICICI, HDFC, YES BANK, KOTAK
MAHINDRA etc. have No workman employees. But in Public Sector
Banks, even the Officers are Unionised.
• Pilots in Air India are unionised, but Executive Pilots are supposed to
be out of the Union. Yet they went on strike last year. Are Pilots really
workmen? History.
• Supreme Court held that Development Officers are workman but this
has been reversed in SK Verma after Adhyantaya judgment and in
Chauharya Tripathi V LIC it has ruled that Development Officers in the
Insurance Industry based on their job descriptions are not workman.
May & Baker, WIMCO and Burmah Shell not considered earlier.

16
Its not just the designation but the job
description
• BSE and National Stock Exchange do the same work. But in
BSE, upto AGM, employees are unionised. In NSE, there is
no Union and all are executives. CDSL
• HDFC Bank, Yes Bank and ICICI Bank have no workman
employees and run the bank with their managerial staff.
• CIPLA, Fulford have no Unionised Medical Representatives
to deal with though MR’s are workmen under the SPE Act.
• Pilots are not workmen though Air India treats them like
one and only executive pilots are supposed to be non-
unionised. In Air India, even executive pilots went on
strike!!

17
Transformation of Industrial Relations
• Brick and Mortar Industry : Predominant Class the
Blue Collar – worker uneducated but very intelligent -
Employer very self righteous and gave “employment”
a transformative touchstone for prosperity – self
righteous and pompous – hire and fire – management
unilateralism prevailed and unionisation and protests
were to get basic worker rights – Statutory Labour
Welfare orientation and Employers were at best
Benevolent like Tata’s, Birla’s, Godrej.
• Welfare model – Looking after the employee from the
Womb to the tomb.

18
Blue Collar to White Collar
• Transformation of Relationships from the mortar
based to service based industries getting
prominence like Insurance, Banking, Travel, Hotels,
etc. and the White Collar jobs becoming dominant
and prominent – White collar unions and
intelligent unions taking companies to court.
Transformation also of relationships to become
accomodative and accepting from confrontational
and disruptive. Milk of Kindness.
• Purchase of Peace and postponement of conflicts.

19
White Collar to the Gold Collar
• Emergence of Services Industry and contributing to
more than 50% of the GDP and the backbone of it
is the IT and ITes Industry. Gold Collar employees
who have a very high value – very young age and
employers chasing them – Software Professionals,
Pilots, Doctors, Chartered Accountants, etc.. who
have many offers at any time and do not care for
the employer. Employer goes out of the way to
woo them and retain them. Retaining these
employees is a challenge – Age Group, Gender –
Retaining them – payments only.

20
Emergence of the Pink Collar
• Employing women at the Workplace poses its own
challenges that organisations have yet to understand and
overcome.
• Making the place of work secure and also ensuring that
Gender Diversity benefits the organisation is very
important and proactive steps and aggressive approaches
may make males feel slighted but that is the way forward
and necessary to achieve the gender balance at the
workplace.
• Internal Complaints Committee in organisations as part of
POSH requirements.

21
Emergence of the Black Collar
• The Black Collar refers to those employees working in the
mines or underground and the persons generally not
seen. In the Indian environment, the existing labour laws
have created a group of people called the black collar
called contract labour that we often do not see. They do
not figure in the permanent head count in companies and
are not on company rolls. But they have become more
important that regular workers as their numbers have
swelled several times that of regular workmen. Maruti
witnessed serious problems because they did not “see”
these workers as important and paid a very heavy price.
In today’s situations, it is much more serious and we
need to understand it.

22
Emergence of the “Green” Collar
• Skill, Scale and Speed – the New Modi mantra and
Modification of Labour Laws places the Green collar as
Central to the Make in India and Made in India
campaign. Apprentices and NEEM Trainees are already
transforming the world of work and companies already
see the benefit of a large number of workers taken as
trainees, without PF/ESI and any other benefits, and
whose services can be terminated at the end of the
training period as a vital transformative tool. They will
re-engineer work and productivity on the Shop Floor.

23
The Emergence of the Collarless Employee
• In the era of electronic commerce and e-business
companies operate with the collarless worker. Uber the
World’s largest taxi company, owns no vehicles.
Facebook, the world’s most popular media owner,
creates no content. Alibaba, the most valuable retailer,
has no inventory!! And Airbnb, the world’s largest
accommodation provider, owns no real estate.
• The only thing a company needs now is to have a portal
or mobile App and it is doing business. Individual who
are faceless, customers, who want the business brought
together for a price and the company operates without
any premises and having a virtual office but raking in
the moolah – real money.

Changing Economic Environment
 The Covid shock and Ukraine war have implications for the world
economy and Indian economy. Oil price rise, escalation of situation
on China border can hurt the economy and when the third and
fourth wave will end is not know. Monkey pox is now around the
corner. Oil Prices are hardening. Inflation will Impact India in 2022.
MSP for Farmers will also increase costs.
 Trade pacts with Australia will help. We are in talks with the USA, UK
and Europe to reach some agreement on trade. That will benefit
India significantly and a Trade War between China and USA may
adversely impact the world economic growth. It will affect India
adversely but a settlement will help India also.
 The improvement in Moody’s rating, Indian ranking 100 to 77 Rank
(2018) to 63 in (2019) in the Ease of Doing Business, shows great
progress in the manner bureaucracy has worked in the Indian
economy 24
02/27/2025 06:18 AM

February 27, 2025 25
Behaviour is a function of the Person
and the Environment
Person’s Behaviour is governed by his
Knowledge, Attitudes and Personality
Environment is a function of Management
Values, Policies, Practices and Procedures.
Management Mindset about Employees, Their
Unions, about the Market and the future of the
Company.

Time Frame and Degree of Difficulty in Effecting Change
Personality
Knowledge
Attitudes
Individual Behaviour
Group Behaviour and Organisational Behaviour
Low
High
High
T
I
M
E
DIFFICULTY

Johari Window
Known to
Self
Unknown
to
Self
Know to
Others
Open Blind
Unknown
to Others
Hidden Unknown
F E E D B A C K
D
I
S
C
L
O
S
U
R
E

Behavioural Dimensions of Employment
relationship
• The Human Factor :
 Physiological Variables
 Psychological Variables
 Sociological Variables
 Economic Variables
 Political Variables
 Environmental and other Variables

Chemistry of Relationship
Supervisor Worker
Line Manager Union
Office Bearer
Union
Leadership
Corporate
Management
How Strong is this
Relationship and
how is it
functioning?
How Strong is this
Relationship and
how is it
functioning?

Relationship between Supervisor and Worker
• Supervisor
Worker
Is it a two way
or a one-way
Relationship?

Worker Union Link
Is the worker
Afraid of the
Leader or is the
Leader afraid of
the worker?
Is the leader an
Equal or Superior?
Worker
Union
Office Bearer
Is the communication
one way or two way?
What is the speed of
Communication?
Is it better than in the
management chain
between supervisor
and the line
manager?
WHATSAPP AND OTHER ADVANCES IN COMMUNICATION HAS BRIDGED THE GAPS IN
COMMUNICATION BETWEEN AND AMONGST THE WORKERS AND LEADERS

SUPERVISOR –MANAGEMENT LINK
Supervisor
Line Manager
Corporate
Management
Supervisor is sandwiched between the
workers and the management and does he
feel he is like the chutney or spice rather
than part of the management. Does he get
the respect and status of the managers or
just a lowly individual neither in the
management nor in the workmen category.
Does he feel he is part of the management?
Do workers think he is part of the
management? Does he know what happens
in the management or learns about this
from the Union or workmen. Is the Boss
seen as a friend or a person to be afraid of?
Making the supervisor a Friend Indeed!!
Formal or
Informal?

Improving Supervisor Management
Relationship
• Improving visibility of the top management
amongst the rank and file supervisor
• Only one way communication from top to down
or both ways? Bottoms up is the right way?
• Only formal or encourage the Informal?
• Visibility of the decision making centers and
maintaining sanctity of the line – not allowing
the Union to interfere with the supervisors or
the line managers.

Industrial Relations Model
• Employer and Employer Organisations
• Employee and Employee Organisations like
Unions and Federations
• Government that defines the rules and
regulations and laws that govern relationship
• Society and being part of the world community –
commitment to organisations like International
Labour Organisation, United Nations, European
Union, etc. Anti Slavery conventions.

02/27/2025 S.R. Mohan Das & Associates. 35
Power Dynamics in I.R.
Industrial Relations involve not just merits but
also dynamics of Power. If power is not matched,
relationships become distorted.
Matching Power involves overcoming
Vulnerabilities and taking corrective action.
It is not a quest for one perfect solution but
striving for perfection and continuous and
positive improvement on status quo by pragmatic
and innovative approaches adopted by the
parties.

Industrial Relations - Prevailing Myths and
Misconceptions
• Indian Labour is Cheap
 Overmanning and poor productivity are our bugbears.
 Performance and Wages are correlated.
 Whether the co-relation is direct or inverse needs to be
understood.
 Trade Unions are the stumbling block to the
change process and have been the main impediments
to the change process
 Trade Unions are only responding organisations
and they have been hit more hard, by the
changes taking place.

Issues in Performance Management
Performance is never given, it is taken, extracted,
an exaction process.
Organisational Performance is not individual or isolated
Brilliance. It is Team Work and Orchestrated
Performance.
Employment is Time Rated and not Work Rated or Piece Rated.
Accordingly, performance has to be with Time Disciplines and
Time Commitments Adhered to and with enforcement and penalties
for Violation
Performance is with Discretion Use and not just Mechanistic.
Performance is not input focused or task oriented. It is output Or
result focused and means fulfillment of a responsibility.

Performance Management
• Performance is not just hard work – It is
meaningful accomplishment of Results. It
means working smart, not just hard.
Performance Standards are to be determined
by the Management –not by worker or the Union.
 Performance has to be output
or responsibility focused.

Conflict Handling Styles
Thomas Kilman Model
Assertive
COMPETING COLLABORATIVE
I WIN WE BOTH
YOU LOSE WIN
AVOIDING ACCOMODATIVE
Passive We Both Lose I Lose or Give In
COMPROMISING
We both get
SOMETHING

Innovative H.R. Practices
• Seamless Organisations and flexible workforce
• Fanciful designations but unfancied work and
phenomenal responsibilities
• Multitasking and multiple accountabilities – no
defined job descriptions Jobs versus Responsibilities.
Results versus task focus.
• Transforming the Culture at the workplace

From Agriculture to Industrial Culture
• Individual to Team culture
• I to We. Building unity and solidarity
• Designations and Titles
• Visibility and availability for group processes.
Indian penchant for secrecy and
confidentiality.
• Skill and Capability building within
organisations – Role of HRD

Climate for Excellence
• Performance linked pay systems/Job
Satisfaction/Dissatisfaction
• Career Growth and Opportunities
• Empowerment but Accountabilities
• Matrix Organisation, no fixed hierarchy
• Mentoring and Coaching for excellence
• Flexitime but inflexible standards for performance
and result
• Retention and Rejuvenation within the organisation

• Business Excellence is not a chance. It is a
matter of strategy and design. It is not
about getting the best people, but getting
the best out of the people you have.
• It is about cohesion and collaborative
team work. It is an outcome of intelligent
management. It is by Intelligent People
Management processes that H R realises
the goal of business excellence.
• For that H.R. must be an integral part of
the Business Strategies. If H.R. can
imbibe this spirit then success is assured.

Grievance and Grievance
Handling
Dr. R.Krishna Murthy

Nature of Grievance
Real
Imaginary
Partially Genuine

Grievance Handling
100% of the Grievances to be Heard
Hearing must be with empathy not sympathy
Don’t give false promises and don’t make fun of a
person with a grievance
Only 10% of the Grievances can be resolved today
Only 10% of the Grievances may be resolved in the
immediate future
80% of Grievances cannot be resolved and the
person must live with it.

Why People Go To Unions?
Some unresolved Grievance
Some perceived injustice or wrong
Discrimination/victimisation
(Rewards/punishments)
Power balancing or matching
Consolation – Getting it off the chest

Resolving Grievances
The Written Discipline
The Time Discipline
The Discipline of Making a Record
The Review Requirement
A B C Analysis of Grievances and Waste
Management (Even Garbage has use, Garbage
or Waste is classified as A B C to enable better
handling and improve the environment)

Respecting Hierarchies
• Manager Employee Relationship is sacrosanct. Preserve the
sanctity
• Don’t play God. Better that the first level resolves issues
than the second or third level
• Provide support and guidance at the first stage itself. Do not
wait for it to come to the third and final stage.
• Issues that concern matters beyond the department need to
go to the second or third stage for resolution.
• Difficult issues, need the second and third level to enable
enterprise vision and matters involving policy has necessarily
to be addressed at the third stage.

Role of Trade Unions in Grievance
Resolution
• Employee-Supervisor Relationship
• Union-Employee Relationship
• Union Management Relationship
• Ensuring that the power structure is
not short-circuited.

Some things not to be done
• Do not form committees to look into Grievance
Resolution
• Delays in resolving Grievances – non adherence to
the limits specified in different stages of handling of
grievances
• Popularity is not achieved by yielding and conceding
things. The Grievance Procedure is not a popularity
contest. Seek Respect, not Popularity. The former is
lasting the latter is ephemeral

02/27/2025 06:18 AM 52
MODIfication of Labour Laws Modi 1.0
 Labour Reforms permitting Factories less than 300 to close
down with permission is now in 3 states (Rajasthan, Chattisgarh
and Assam), 45 days retrenchment compensation instead of 15
days; engaging contract labour and the registration
requirements being raised to 50 instead of 20
 Factories Act revision of limits 20 to 40 without power and 10
to 20 with power – No visits by the Inspectors without
intimation – power of prosecution taken to higher levels –
deemed approvals under Shops Act – Ease of Doing Business –
Andhra and Telengana in the forefront – not the BJP led states.
How competition is improving the business environment.
 Fixed term contracts has been extended to other sectors of the
economy and not just textile industry to which it was
applicable. Lack of majority in Rajya Sabha in Modi 1.0
prevented major labour reforms that were promised.

Labour Reforms Modi 1.0
• Amendments to the Factories Act –
Definition of Factory 10 20 and from 20 40
for establishments using power and not using power respectively.
• Amendment to the Contract Labour Act
20 50
• Amendments to the ID Act in Rajasthan, Madhya Pradesh and Assam – 45
days retrenchmt comp instead of 15 days
100 300
• Ease of Doing Business
India’s rank up from 130 in 2017 to 100 in 2018, 77 in 2019 and 63 in 2020.
• Electronic Returns Faceless interactions. Notice before inspection.
Curbing the powers of Inspectors – Facilitator - No direct prosecution -
Computer to decide on inspections – etc.. These Changes are now reflected
in the Labour Codes

India & Ease of Doing Business
• India has been performing well considering the leaps it is taking with respect to her ease of
doing a business performance. The significant points are given below:
• India as per the latest report i.e. EoDB Report 2020, has jumped 14 places to be ranked at 63rd
position (last year it was ranked at 77th position), with a score of 71.00 (last year it was 67.23)
• India continued to be at the first position among South Asian countries
• The good run for India continued in the rankings as it has jumped from being ranked at 130th in
EoDB 2015 to 63rd in EoDB 2020 (out of 190 countries)
• India has performed exquisitely under parameters such as – securing construction permits,
trading across borders; and has had smaller improvements in starting a business and getting
credit
– India made starting a business easier by fully integrating multiple application forms into a
general incorporation form
– With a single electronic platform- improved electronic submission methods for documents
and upgrades to port infrastructure, import and export process became easier
– Recovery rate under resolving insolvency has improved significantly from 26.5% to 71.6%.
Also, the time taken for resolving insolvency has also come down significantly from 4.3
years to 1.6 years
• The World Bank will now include Kolkata and Bengaluru, besides Delhi and Mumbai, for
preparing ease of doing business report, in order to provide a holistic picture of the business
environment of the country

Top 5 , 2015 Top 5, 2016
1 GUJARAT
71.14
1 TELENGANA AND
ANDHRA PRADESH
98.78
2 ANDHRA PRADESH
70.12
2 GUJARAT
98.21
3 JHARKHAND
63.09
3 CHATTISGARH
97.32
4 CHATTISGARH
62.45
4 MADHYA PRADESH
97.01
5 MADHYA PRADESH
62.00
5 HARYANA
96.95
STATES NOW RATED ON 340 PARAMETERS COMPARED TO 98 PARAMETERS IN THE LAST YEAR
Dept of Industrial Policy and Promotion rankings

Ease of Doing Business 2017
SCORE
• 1 ANDHRA PRADESH 98.42
• 2 TELENGANA 98.33
• 3 HARYANA 98.07
• 4 JHARKHAND 97.99
• 5 GUJARAT 97.96 Chattisgarh, Madhya
Pradesh, Karnataka, Rajasthan and West
Bengal were ranked next 5

57
UP jumps 10 places from 12 to rank 2 in 2019
Rankings Ease of Doing Business
2019 Ranking 2018 Positions
1 Andhra Pradesh Andhra Pradesh
2 Uttar Pradesh Telengana
3 Telengana Haryana
4 Madhya Pradesh Jharkhand
5 Jharkhand Gujarat
6 Chattisgarh Chattisgarh
7 Himachal Pradesh Madhya Pradesh
8 Rajasthan Karnataka
9 West Bengal Rajasthan
10 Gujarat West Bengal

Modi 2.0
• Not Labour - CAA, Art 370, Farm Legislation, etc.
• Four Labour Codes from July 1, 2022 will consolidate
29 labour Labour Laws
• Wages Code incorporating Min. Wages, Payment of
Wages, Equal Remuneration Act and Bonus Act
• Social Security Code encompassing 9 Laws
• Industrial Relations Code encompassing 3 laws
• Occupational Safety, Health and working Conditions
encompassing 13 Laws (Total 29 laws)

Central Acts
• Employees Provident Fund Act
• Employees State Insurance Act
• Payment of Gratuity Act
• Payment of Bonus Act
• Maternity Benefit Act
Authorities under the Act:
Regional Provident Fund Commissioner;
Regional Commissioner,ESIC
Controlling Authority (State or Central – Payment of
Gratuity Act)
Regional Commissioner of Labour (Central)

State Acts
• Contract Labour Act
• Shops and Establishment Act
• Labour Welfare Act
Authority under the Act: Asst. Commissioner of Labour or
Commissioner of Labour – State Government

Profile of Labour Legislation in India
Norms &
Standards
Legislation
Welfare &
Amenities
Legislation
Rights of
Parties
Legislation
Factories Act
Shops & Estb.Act
Contract Labour
Act
Comp.Noti.of Vacans. Act
Equal Remuneration Act
Payment of
Wages Act
Minimum Wages
Act
Trade Union Act etc..
Interstate Migrant
Workmen’s Act
Building & Constr.Wkrs
Act,1996
P.F. Act
ESIC Act
Maternity Benefit
Act
Payment of Gratuity
Act
Workmen’s Comp.
Act
Labour Welfare Fund Act
Individual Rights:
Industrial Employment
(Standing Orders Act)
Collective Rights:
Industrial Disputes
Act
Payment of Bonus
Act
B I R Act
MRTU & PULP Act

Industrial Disputes Act, 1947
Dr. R. Krishna Murthy

Definitions: S. 2
• (a) "appropriate Government" means--
• (i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central
Government, or by a railway company *[or concerning any such controlled industry as may be specified in this
behalf by the Central Government] or in relation to an industrial dispute concerning[a Dock Labour Board
established under section 5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1940), or the
Industrial Finance Corporation of India established under section 3 of the Industrial Finance Corporation Act, 1948
(15 of 1948), or the Employees' State Insurance Corporation established under section 3 of the Employees' State
Insurance Act, 1948 (34 of 1948), or the Board of Trustees constituted under section 3A of the Coal Mines Provident
Fund and Miscellaneous Provisions Act, 1948( 46 of 1948), or the Central Board of Trustees and the State Boards of
Trustees constituted under section 5A and section 5B, respectively, of the Employees' Provident Fund and
Miscellaneous Provisions Act, 1952 (19 of 1952), or the "Indian Airlines" and "Air India" Corporations established
under section 3 of the Air Corporations Act, 1953 (27 of 1953), or the Life Insurance Corporation of India established
under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or the Oil and Natural Gas Commission
established under section 3 of the Oil and Natural Gas Commission Act, 1959 (43 of 1959), or the Deposit Insurance
and Credit Guarantee Corporation established under section 3 of the Deposit Insurance and Credit Guarantee
Corporation Act, 1961 (47 f 1961), or the Central Warehousing Corporation established under section 3 of the
Warehousing Corporations Act, 1962 (58 of 1962), or the Unit Trust of India established under section 3 of the Unit
Trust of India Act, 1963 (52 of 1963), or the Food Corporation of India established under section 3, or a Board of
Management established for two or more contiguous States under section 16, of the Food Corporations Act, 1964
(37 of 1964), or the International Airports Authority of India constituted under section 3 of the International
Airports Authority of India Act, 1971 (48 of 1971), or a Regional Rural Bank established under section 3 of the
Regional Rural Banks Act, 1976 (21 of 1976), or the Export Credit and Guarantee Corporation Limited or the
Industrial Reconstruction Bank of India [the National Housing Bank established under section 3 of the National
Housing Bank Act, 1987 (53 of 1987) or] 3*[a banking or an insurance company, a mine, an oil-field] 4*[, a
Cantonment Board,] or a major port, the Central Government, and
(ii) in relation to any other industrial dispute, the State Government;

Definition of Industry
• S 2 (j) Industry means any business, trade,
undertaking, manufacture or calling of
employers and includes any calling service,
employment, handicraft or industrial
occupation or avocation of workman;
• (Amended by Industrial Disputes Act, 1982 but
change has not been notified)

7*[(j) "industry" means any systematic activity carried on by co-operation between an
employer and his workmen(whether such workmen are employed by such employer
directly or by or through any agency, including a contractor) for the production, supply
or distribution of goods or services with a view to satisfy human wants or wishes (not
being wants or wishes which are merely spiritual or religious in nature), whether or
not,--
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit,
and includes--
(a) any activity of the Dock Labour Board established under section 5A of the Dock
Worker (Regulation of Employment) Act, 1948 (9 of 1948);
(b) any activity relating to the promotion of sales or business or both carried on by an
establishment. but does not include--
(1) any agricultural operation except where such agricultural operation is carried on in
an integrated manner with any other activity (being any such activity as is referred to in
the foregoing provisions of this clause) and such other activity is the predominant one.
Explanation.--For the purposes of this sub-clause, "agricultural operation" does not
include any activity carried on in a plantation as defined in clause (f) of section 2 of the
Plantations Labour Act,
(2) hospitals or dispensaries; or
(3) educational, scientific, research or training institutions; or
(4) institutions owned or managed by organisations wholly or

substantially engaged in any charitable, social or philanthropic service; or
(5) khadi or village industries; or
(6) any activity of the Government relatable to the sovereign functions of the Government
including all the activities carried on by the departments of the Central Government
dealing with defence research, atomic energy and space; or
(7) any domestic service; or
(8) any activity, being a profession practised by an individual or body or individuals, if the
number of persons employed by the individual or body of individuals in relation to such
profession is less than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or any other
like body of individuals, if the number of persons employed by the co-operative society,
club or other like body of individuals in relation to such activity is less than ten;]
(k) "industrial dispute" means any dispute or difference between employers and
employers or between employers and workmen, 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;

(s) "workman" means any person (including an apprentice) employed in any
industry to do any manual, unskilled, skilled, technical, operational, clerical or
supervisory work for hire or reward, whether the terms of employment be
express or implied, and for the purposes of any proceeding under this Act in
relation to an industrial dispute, includes any such person who has been
dismissed, discharged or retrenched in connection with, or as a consequence
of,
that dispute, or whose dismissal, discharge or retrenchment has led to that
dispute, but does not include any such person--
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950
(46 of 1950), or the Navy Act,1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of
a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one
thousand six hundred rupees per mensem or exercises, either by the nature of
the duties attached to the office or by reason of the powers vested in him,
functions mainly of a managerial nature.

4*[(kkk) "lay-off" (with its grammatical variations and cognate expressions) means the
failure, refusal or inability of an employer on account of shortage of coal, power or raw
materials or the accumulation of stocks or the breakdown of machinery 5*[or natural
calamity or for any other connected reason] to give employment to a workman whose
name is borne on the muster rolls of his industrial establishment and who has not
been retrenched.
Explanation.--Every workman whose name is borne on the muster rolls of the
industrial establishment and who presents himself for work at the establishment at
the time appointed for the purpose during normal working hours on any day and is not
given employment by the employer within two hours of his so presenting himself
shall be deemed to have been laid-off for that day within the meaning of this clause:
Provided that if the workman, instead of being given employment at the
commencement of any shift for any day is asked to present himself for the purpose
during the second half of the shift for the day and is given employment then, he shall
be deemed to have been laid off only for one-half of that day:
Provided further that if he is not given any such employment even after so presenting
himself, he shall not be deemed to have been laid-off for the second half of the shift
for the day and shall be entitled to full basic wages and dearness allowance for that
part of the day;

"retrenchment means the termination by the employer of the
service of a workman for any reason whatsoever, otherwise than
as a punishment inflicted by way of disciplinary action, but does
not include--
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of
superannuation if the contract of employment between the
employer and the workman concerned contains a stipulation in
that behalf; or
2*[(bb) termination of the service of the workman as a result of
the non-renewal of the contract of employment between the
employer and the workman concerned on its expiry or of such
contract being terminated under a stipulation in that behalf
contained therein; or]
(c) termination of the service of a workman on the ground of
continued ill-health;

(cc) "closure" means the permanent closing down of a place of employment or part
thereof;
(l) "lock-out" means the 1*[temporary closing of a place of employment] or the
suspension of work, or the refusal by an employer to continue to employ any number of
persons employed by him;
(q) "strike" means a cessation of work by a body of persons employed in any industry
acting in combination or a concerted refusal, or a refusal under a common
understanding, of any number of persons who are or have been so employed to
continue to work or to accept employment;
S.2A. Dismissal, etc.., of an individual workman to be deemed to be an industrial
dispute.- Where any employer discharges, dismisses, retrenches, or otherwise
terminates the services of an individual workman, any dispute or difference between
that workman and his employer connected with, or arising out of, such discharge,
dismissal, retrenchment or termination shall be deemed to be an industrial dispute
notwithstanding that no other workman nor any union of workmen
is a party to the dispute.]

Lay – off
In ability of employer to
employ workmen
because of reasons
beyond his control.
Employer employee
relationship subsists.
Layoff compensation
50% of Basic and DA
240/120 days
continuous service
Ineligibility for Lay-off
Section 25 E
Relationship commences
once layoff is not
needed
Retrenchment
Not mere termination
of surplus labour
Retrenchment
compensation (15
days wages for every
completed year of
service) and
severance of
employment. – No
Employer Employee
Relations.
LIFO principle for
retrenchment
In case of
recruitment,
preference for the
senior most to be
taken back.
Closure
Closure
compensation like
retrenchment
compensation –
limitation for closure
reasons beyond
control of employer.
Permanent severance
of relationship
between employer
and employee
More than 100
workmen –
manufacturing
establishments –
Onerous provisions of
Chapter V B
Strike/ Lockout
Employer-Employee
relationship subsists.
Wages/allowances for
period dependent on
legality of strike/lock
out.
Strikes have to be
legal and justified.
Lockout period wages
depending on
reasonableness of
action of the
employer.

(n) "public utility service" means--
(i) any railway service 2*[or any transport service for the carriage of passengers or goods
by air];4*[(ia) any service in, or in connection with the working of, any major port or
dock;
(ii) any section of an industrial establishment, on the working of which the safety of the
establishment or the workmen employed therein depends;
(iii) any postal, telegraph or telephone service;
(iv) any industry which supplies power, light or water to the public;
(v) any system of public conservancy or sanitation;
(vi) any industry specified in the 4*[First Schedule] which the appropriate Government
may, if satisfied that public emergency or public interest so
requires, by notification in the Official Gazette, declare to be a public utility service for
the purposes of this Act, for such period as may be specified in the notification:
Provided that the period so specified shall not, in the first instance, exceed six months
but may, by a like notification, be extended from time to time, by any period not
exceeding six months, at any one time if in the opinion of the appropriate Government
public emergency or public interest requires such extension;

Provisions of the Industrial Disputes Act:
Definitions of Workman, Industrial Dispute, Retrenchment etc..
Machinery Constituted under the Act for the Investigation and
Settlement of Industrial Disputes:
Conciliation and Boards of Conciliation:
Settlement in Conciliation and Outside Conciliation
Labour Courts, Tribunals, National Tribunals
Arbitration
Works Committee
Notice of Change S 9A
S.10 (1), Public utility Service S.10 (2) Joint
Reference
S11A:Power of Courts to give Relief.
S.17 A- period of operation of award, S. 17 B
Chapter V A; Chapter V B
S.22, 23. S.33. and Protected Workmen; S. 33 C(2)

Grievance Redressal Committee
• Where 20 or more workmen employed
• GRC to have equal representatives of Workmen and
Employer( 3+3)
• More than 2 members to include women
representatives
• GRC to complete proceedings within 30 days of
receipt of complaint.
• Appeal against decision of the GRC to the Employer
• Chairmanship rotated between workmen and
employer every year.

Industrial Disputes Act
Employer
Workmen
Dispute
Settlement (2p)
Failure Conciliation
Labour Court
Tribunal
National Tribunal
Award
Settlement
In Conciliation
Reference for
Adjudication or
Voluntary
Arbitration
Award
Labour Court
Tribunal
National Tribunal

Important Laws Pertaining to Employment
• Industrial Employment Standing Orders Act or
popularly called Standing Orders – Model
(Standard) or Certified Standing Orders.
• Important issues that have to be understood –
standard clauses in the law
• Clauses incorporated in the letter of appointment.
• Industrial Disputes Act for collective issues and the
Maharashtra Recognition of Trade Unions and
Prevention of Unfair Labour Practices Act in
Maharashtra

Industrial Employment Standing Orders Act
Model Standing Orders and Certified Standing Orders
Rules Governing
 Movement and Mobility
 Performance
 Behaviour and Conduct.
Determination of the employment: By Workman: Resignation,
(with or without Notice), Retirement or by Loss of Lien.
By Employer: Discharge on
Grounds of Loss of Confidence, Termination For Misconduct.
Categories of Workman: Permanent, Probationer,
Temporary, Casual , FTE,or Trainee/Apprentice.

Standing Orders Concerns
Appointments made and the manner in which a person is confirmed or terminated during
and after probation can lead to some legal issues and problems. Individuals may go to court or
even before the company’s senior management team members taking up their case. In some
instances, influential persons connected to outside political organisations or linked to the
company’s important customers may seek to make it an issue. Instances where company’s
information system pertaining to background checks coming well after the person has been
confirmed can create issues.
 Severance of employment is seen as a serious matter not only in the Indian
environment, but the Constitution of India which is a socialistic democracy makes
the Courts, empowered under Section 11 A of the Industrial Disputes Act to look into
termination of workmen evaluate whether your punishment is too harsh or
excessive.
 The Law of the Land also gives rights to employees in the matter of working hours,
holidays, leave, etc.. These have to be respected and sometimes the company provisions may
be contrary to the state laws. In reality, the law where you operate will always apply and if
your internal company rules are in conflict with the state laws, the state laws will always
prevail. Leave and overtime are issues where companies need to be careful and more
importantly asking people to come to work on their weekly offs like Saturdays and Sundays.
We have to be sensitive to the local laws.

The Letter of Appointment
• Transfer to any location in India, any company, existing and likely to come up in
future
• Is performance a condition of service?
• Is Attendance a condition of service? Absconding cases
• Increments automatic or performance/attendance linked?
• Bonuses, discretionary or conditional?
• What rights employer has for fraud – suspension of the employee-subsistence
allowance?
• Notice Pay, is it defined? Salary for leave encashment and Notice different. Why?
• Jurisdiction in case of disputes?
• Discharge on Grounds of Loss of Confidence?
• Validity of Non-Compete Clauses?
• Validity of Garden Leave?
• Prohibition on employment with competitors
• Penalty v/s liquidated damages for training – Training Bonds – validity
• Retirement, premature retirement
• Medical examination during the tenure of employment
• Notice period –waiver of notice at discretion of employer – refusal to allow a
person to resign during notice period.

Managing Indiscipline
• Promoting Positive
Discipline
• Controlling
Indiscipline
 Exemplary Behaviour  Enforcement capabilities
 Reforming Behaviour  Punishment/Deterrence
 Reinforcing Good
Behaviour
 Repellent
 Incentives  Disincentives

Misconducts
• Acts of Commission
1. Fraud
2. Theft
3. Assault
4. Insubordination
5. Drunk or Drugs at
workplace
6. Any other Act of
misconduct
• Acts of Omission
• Sleeping while on Duty
• Negligence
• Neglect of work
• Loitering, Loafing,
Gossiping, etc..
• Unauthorised Absence

 How to Handle the problem of Theft, taking
out pen drives, sensitive material
 Person coming to the place drunk or under
influence of drugs. Procedure to be
adopted.
 Person coming to the place with poor
grooming.
 Absconding and not reporting for duty
 Threat of committing suicide or attempts
thereof.
 Becomes violent or disorderly

MISCONDUCTS
RELATING TO DUTY
1. Non Observance Implied Duties
- Being Trustworthy
- Act in a manner to
justify employer
confidence
Sharda Prasad V/s C.Rly
ILLJ 167 (1960) – Act, Conduct or Behave in a manner not in
consistent or incompatible with faithful discharge of duties.
e.g. Refusal to carry out orders.
Exhibiting advertisement slides without permission, authorisation.

2. Non-Performance of Work
Performance of Implied duties Incidental to
Contract of Employment
 Coming On Time
 Being decently dressed (personal grooming)
 Wearing Uniform, if any
 Use of Safety Equipment

3. Negligence of Duty
Not doing anything, Loitering, Loafing, Idling,
Gossiping, Sleeping While on Duty.
 Gross Negligence – Kalyani v/s Air France
S.C. - mistake in preparing
Load sheet one day and
Balance chart Another day.
 Habitual Negligence

4. Absence without Leave
 Casual
 Sick
 Privilege Leave
Leaving Work Place Early
or Without Permission – Burden of Proof on
Employee

Managing Leave
Leave is only an eligibility and not an
automatic entitlement
Leave is only of two types: Authorised
Unauthorised
Casual Leave is neither taken casually nor sanctioned casually
Sickness never occurs as per the sick leave balance of the person.
Privilege Leave is not a Privilege to be availed at any time.
Employer can regulate and refuse permission for leave.
Sanction of Leave is dependent of exigencies of Business and
Discretion of the Leave Sanctioning Authority.

Leave Can Be Refused
 Depending on the Business Exigencies
 Discretion of the Manager
 The order of the Manager must be
Lawful and Reasonable
Unauthorised Leave can lead to loss of pay and also
Disciplinary Action against the Employee.
Making absence as loss of pay leave is giving sanction
to an Employee.

5. Late Attendance
Punctuality in employment is an
Implied Condition of Service

6. Strikes
Strikes have to be Legal and Justified
Role of Workmen in Strike – Active or
Passive?
7. Go-Slow
8. Gherao
Misconducts Relating to Discipline:
1. Acts Subversive of Discipline:
 Writing Offensive letter to Directors
 Abusing Supervisor
 False Complaint to Police against officer of Co.
 Preventing Officer from Discharge of Work
2. Insubordination or Disobedience.

Domestic Enquiry
• Judge evolved law
• Master Servant Relationship – law of hire and
fire – applicable to the law of personal
service
• Domestic Servants
• Specific Reliefs Act – provision of suit for
damages and no relief of reinstatement.

Domestic Enquiry not needed when
• Termination is not for a Misconduct,
but discharge of grounds of loss of
confidence
• Discharge is on account of ill health
• Discharge is on account of
unavailability of the employee.

Steps in Conduct of Domestic Enquiry
• Preliminary Enquiry
• Chargesheet
• Suspension Pending Enquiry
• Ex-parte Enquiry
• Domestic Enquiry
• Findings of the Enquiry
• Punishment

Preliminary Enquiry
• To determine whether a “prima facie” case
exists against the workmen.
• For collection of facts
• For deciding whether punitive action should
be taken against the workman.
• It may be held ex-parte
• Defect in preliminary enquiry does not vitiate
the regular enquiry.

Charge Sheet
• A Charge Sheet outlines the facts of the Misconduct or act
of indiscipline alleged against the workman.
• Ingredients of the Charge Sheet:
o It must be clear and not vague
o It must contain material particulars of the
Charge.
o Changes can be made in the Charge Sheet
o Mode of service – refusal to accept the
charge sheet.

Procedure in Domestic Enquiry
• Who can hold the Enquiry? Manager of the company,
outside person, lawyer?
• Essentials of Enquiry:
(a) Employee has to be informed of charges
(b) Witnesses examined in his presence
(c) Opportunity to Cross-examine witness
(d) Rebut charges and lead his evidence
(e) Enquiry Officer gives a report recording the
findings of the enquiry

Procedure to be followed
• Reading of the Charges and acceptance thereof
• If Charges accepted, there is no need to conduct
any enquiry
• If Charges not accepted, employer has to lead
evidence and give opportunity to the workman to
cross examine the same.
• Full statements to be recorded so that infirmity if
any can be checked.

 Worker permitted to be assisted by a Co-worker or an Office Bearer of the
Union of which he is a member
 If the Management has an outsider/lawyer as a presenting officer the
employee may also ask for the assistance of a lawyer to help defend him
 The Charges are read out to the workman and he is asked whether he has
understood the charges framed against him and whether he accepts the
charges.
 If the charges are not accepted, then the management will have to lead
evidence of the charges against the accused workman.
 Statements made have to be recorded in the presence of the workman and
his signature taken.
 Workman can cross examine the witnesses
 Another Enquiry Officer can replace the one who has resigned from the
company or dies or recuses himself from the case on objection of the workman
and there is no need to start the enquiry de novo and it may proceed from the
stage where the earlier Enquiry Officer left off.

Principles Of Natural Justice
1 Audi Alteram Partem- Hear the other party
2 Nemo Debet Esse Judex In Causa Propia Sua
- Let no man sit in judgment in his own cause.
3 Consider Gravity of the Misconduct
4 Consider Extenuating (Mitigating) Circumstances
5 Punishment should not be disproportionate to
the Crime

Giving Full Opportunity to Workman to rebut
charges
• No man can be condemned unheard
• Reasonable opportunity must be given to be
heard
• Opportunity to cross-examine witnesses to
challenge any testimony and point out any
inconsistencies or check out doubts on the
credibility of the witnesses

Principle of Bias
• Personal knowledge, being a witness or a
complainant will disqualify a person from being
the judge.
• Any allegation of Bias has to be established by the
person levelling the allegation.

Enquiry officer must give a reasoned order
• As a Domestic Enquiry is a quasi-judicial
enquiry there has to be a reasoned order and
not just a one line order of the guilt of the
person concerned.
• A company may act against the order only if
there are material reasons or the evidence is
perverse to the order given.

Procedure for Disciplinary Action
Dr.R.Krishna Murthy
1. Preliminary Enquiry - “Show Cause Notice”
2. Charge Sheet
3. Domestic Enquiry
4. Ex-Parte Enquiry
5. Findings of the
Enquiry
6. Punishment

Domestic v/s Judicial Enquiry
• Domestic Enquiry
 Quasi Judicial
 No minimum qualification reqd.
for Enquiry Officer
 Not as per the Indian Evidence
Act
 Hearsay not disallowed
 Can be conducted even when
there is a criminal case
proceeding against the individual
• Judicial Enquiry
 Must conform to judicial
procedure set out.
 Judge must be qualified
 Strictly as per the Indian
Evidence Act
 Heresay Evidence not
allowed.
 Bar when trial is before
another court.

105
Differences between Domestic Enquiry and
Enquiry under the Sexual Harassment Act
Domestic Enquiry Enquiry under the Sexual Harassment Act
Quasi Judicial proceedings. Quasi Judicial Proceedings
No Oath administered Oath can be administered
No Power to summon
witnesses/documents
Power to summon witnesses and also
production of documents.
Police will not assist in the matter Police may be asked to execute summons
if the person does not attend the
proceedings.
Disciplinary enquiry can proceed
simultaneously along with criminal case.
Generally, complaint is filed internally and
not externally. Internal proceedings have
to be done by the Committee delicately
and not in the same manner as a
domestic enquiry for a misconduct. Rules
do not permit complainant to be
confronted by the accused.
Principles of Natural Justice followed Principles of Natural Justice followed
Lawyers may be permitted to defend As of now, no Lawyers or outsiders
allowed

S. 11 A of the I.D. Act
• Powers of the Court to give relief if the
punishment is deemed to be too harsh –
Concept of Social justice different from
industrial equity or industrial justice.
Problems of termination for absence without
leave or intimation – absconding cases, fraud
cases, theft cases – Courts consideration and
management perceptions can significantly
differ.

S. 33 of the I.D. Act
• Some checks and balances under the Act
pertaining to protected workmen as well as
approval application in case any termination
is made of a workman before the authority
before whom a dispute is pending.
• The requirements for getting protected
status.

Law on Reinstatement and Backwages.
• Changing laws pertaining to reinstatement.
• Whether wages will be paid or not depends
on the facts of the case.
• If the person was gainfully employed or not.

New types of Misconducts
• Hacking of email accounts
• Downloading of prohibited content, softwares,
programmes, pornographic stuff, circulation of emails
with objectionable contents
• Entering the system and making changes with a view
to alter transactions or content
• Intellectual Property Theft and theft of data
• Sexual Harassment

Why People Go To Unions?
Some unresolved Grievance
Some perceived injustice or wrong
Discrimination/victimisation
(Rewards/punishments)
Power balancing or matching
Consolation – Getting it off the chest
Is your HR an Employee Champion or Frustration Fantastica?
HR’s gentle touch should transform operations into a more caring and more
sensitive workplace that empowers individuals and blossoms their creativity at
the workplace. It is a difficult and challenging job as operations does not like
change and that too at the behest of HR!!

Why Trade Unions?
1. Solidarity: One for all and all for One
2. Safety: Strength in Numbers
3. Security: Against loss of job.
Unions help secure better benefits for an individual
Unions help define the rights and responsibilities at
work
Unions help acquire privileges and status different
from others
A Shoulder to Weep On.
Competing for the Constituency

Conflict Manifestation
• Can be overt – Heated arguments, (insubordination) abusive
language (misconduct),violence (assault).
• Can be covert – Externally not visible but manifestation of
conflict may be in invisible and perverse forms, more difficult
to detect or treat – Anonymous complaints to authorities such
as police, labour depts., Income tax, etc.. Malicious emails
being sent to group particularly abroad and making things
difficult by giving false, fabricated and forged documents,
statements allegedly supporting misdeeds and other
complaints. May lead to internal suspicion, hostility or even
organisational action in response to reduce the matter
becoming public because of the sensitivity of the data being
circulated. (Threats to take the matter to RBI, press or the
company HQ or customers)

Conflict Management
• Civilised conflict manifestation is better than uncivilised
conflict manifestation.
• Civilised conflict resolution permits issues to be
negotiated, discussed, debated and resolved bilaterally or
through tripartite mechanisms like negotiations,
conciliation, mediation, arbitration or adjudication.
• Uncivilised conflict resolution focuses on the philosophy of
might being right or satisfaction from revenge. It may also
mean that the person is willing to suffer some damage and
loss for the purpose of causing a greater devastation and
punish the opponent. The Taliban suicide philosophy
where becoming a martyr in the cause can motivate
diehard individuals to volunteer for the cause and paralyse
the other.

Preventing Conflict
Blake, Shepard and Mouton Model
Three Basic Attitudes Towards Conflict
Active
Passiv
e
High Stakes
Moderate
Stakes
Low Stakes
Conflict
Inevitable,
Agreement
Impossible
Conflict Not
Inevitable Yet
Agreement Not
Possible
Although
There is
Conflict,
Agreement is
Possible
WIN-LOSE
Power Struggle
Withdrawal Problem
Solving.
WIN-WIN
Third Party
Intervention
Isolation Splitting the
difference
Compromise,
Bargaining,
Mediation
Fate Indifference
Or
Ignorance
Peaceful
Coexistence

Manifestation of Conflict Behaviour
PASSIVE
ACTIVE
 Withdrawal of Cooperation
 Work to Rule
 Boycott of Overtime
 Slogan Shouting/Demonstrations
 Black Badges/Protests
 Concerted Absence-Mass C.L.
 Tool Down Strike/Pen down strike/Token
 Go-Slow
 Coercion/Violence
 Intimidation – Dharnas Outside Residences
 Lodging False FIR’s and assaulting the
person and the complainant gets arrested
when he goes to lodge a complaint

Conflict Behaviour and legality
• Withdrawal of Cooperation: This means the exact manner of conflict is not
articulated but the organisation will hit roadblocks when employees refuse to
do things they were normally doing. For example leaving the office premises
at exactly the time stipulated, even when work demands otherwise, not
working on overtime, or doing those things without being told. The objective
is to hit the organisation and create a climate to show to the constituency that
they can paralyse the company and put pressures for discussions and
resolution of the issues.
• Legality: Many of the things required to be done are never written down
and proving that something was done deliberately may become difficult.
Getting proof of the actions not done may also be difficult as the person
may plead ignorance. Everything in employment relationships are not
codified and hence taking action against the employees, either individually
or collectively becomes difficult if not impossible. Companies either over
react and chargesheet and suspend/threaten dismissal by blowing up trifles
and settling issues or choose to ignore the minor provocations. Employees
also find it difficult to keep an artificial low intensity conflict going as
sometimes, some errors may blow up into mistakes and have adverse
consequences.

Work to Rule
• Strictly adhering to the rule and citing the rule not to do the work
required. This is a very powerful strategy that operates to handicap
and pressurise the management.
• While some work may be refused, insisting on following the rule
when common sense says otherwise is a disaster for the
organisation.
• Difficult to prove legally that the employee did not work as per the
company’s requirements and achieves the irritation and pressure to
settle the matters.
Legal Remedies: Converting the guerrilla conflict to a clean conflict.
Ask for undertakings from employees that they will work “normally”
and adhere to the standing orders as a condition for allowing them
inside the premises. The company can also declare lockout and issue
a notice of lockout. Generally, if a lockout notice is issued, after 14
days the lockout can become effective. The Union or the employees
are compelled to find a solution before the issue gets drawn into a
protracted battle. For the company, problem of justifying the lockout
exists. For the employees, the uncertainty of the conflict and new
issues clouding the original reason for the conflict can emerge, that
can side-track and derail the settlement process.

Boycott of Overtime
• Puts pressure on the organisation during peak
activities and affects the work.
• Legal view: Overtime cannot be insisted and the
employee can refuse to work the extra hours unless
it is very critical activity. However, the action also
hurts the employee, if he is in the award staff as
incomes get reduced with agitation.

Slogan Shouting
• Most visible and impactful agitation and leads to
group involvement and group activity.
• Peaceful demonstrations permissible and courts
give restraining order only where business can be
adversely affected. However if peaceful, courts
permit demonstrations and sound should carry to
the management.
• Abusive slogan shouting – calling a Director – Thief
is a misconduct for which dismissal is justified -
Bombay High Court.

Mass Casual Leave
• Legal View: Concerted absence by 10 or more
can be construed as a strike.
• Absence on Casual leave or sick leave can
create a disruption in the work. Leave also has
to be sanctioned and cannot be just “Taken”
by the employee.

Strike
• Pen Down, Tool Down, Token strike, one-day, two day
strike etc.., Indefinite Strike
• Requirement to give notice of strike - public utility –
strikes prohibited under the ID Act.
• Legal View: Strikes have to be legal and justified. A Strike
may be justified but illegal. A Strike may be legal but
unjustified. Punishment for the striking workers has to
differentiate those who were passive and merely
followed the strike call and those who were active in
orchestrating the strike. The latter may be more severely
punished but the former should be give a different
consideration.

Go-Slow
• Legal View: Go slow is a Pernicious and a
serious misconduct. However, proof of Go-
slow may be difficult to prove or establish.
• Pro-rata wage cut can be effected by the
company if go-slow can be clearly established.
(Supreme Court)

Violence and other misconducts
• Company can effect severance of employment
and also deny several benefits like gratuity,
bonus to employees involved in misconducts
of violence and also recover the damages
from the dues payable to them.

Violence and Worsening climate
• Violence at Maruti – Manesar to Winstron in Bengaluru, leading to IR
professionals becoming more valuable and thrust into the forefront in
managing conflicts. IR now being recognised as something of importance
even by the IIM and giving some stature and importance to the IR
professionals, who were looked down by the snootier HR professionals.
• Regency Ceramics, in Yanam Dist. Andhra Pradesh, Mr. Roy George, VP –
HR of Pricol, Coimbatore;
Mr. Joginder Singh, AGM Of Allied Nippon, Uttar Pradesh etc.. dying in
violent protests.
o Violence in Nashik in Everest – Dr. D. L. Karad’s union and Syndicate
Vypers as Mhape, COD disputes.

In India agitations and problems for Companies
have begun
Strikes and Violence in Industrial Relations are back in the News:
Strike in Maruti Suzuki at Mannesar – Payment ranging from 16
lakhs to 40 lakhs (Sonu Gujjar and Shivkumar) to buy off dissent
and get outside leaders to quit the Union. Company not wanting to
deal with the outside leaders of contractors labourers and wanting
the internal union alone to represent its workers. Fragile or is it
lasting peace? (Death of Avanish Kumar DGM –HR , sudden or part
of old saga?) Has it ended now?
 Agitation in Birla Tyres, Apollo Tyres, MRF, CEAT etc..
Volvo Bus, Bosch Ltd.in Bangalore
Nokia, Hyundai in Chennai
 Honda Scooters in Gurgaon, Exide in UP Ghaziabad etc..

Maruti Nightmare continues:
• Gurgaon Labour Court ordered payment of Rs. One Lakh as
compensation to 425 workers who were dismissed for the
violence. Criminal proceedings against more than 100
workmen have commenced. 4.25 crores to be deposited in
the Court.
• 547 workmen dismissed by company because of violence
have challenged the dismissals on grounds that no enquiry
was conducted, many were not there on the premises when
incidents took place and also no permission from authority
was taken as the matter was pending before Conciliation. S.
33 of the ID Act violated and If court says that the
terminations are bad in law and orders reinstatement
because the termination is illegal, company can expect
massive problems.

September 24, 2008 Lalit Kishore Choudhary, 47, the head of the Indian
operations of Graziano Transmissioni, a manufacturer of car parts that has its
headquarters in Italy, died of severe head wounds in Noida p- dispute on
better pay and permanency of contract labour.
September 22, 2009 Mr. Roy J. George, Vice President – HR, Pricol, Coimbatore,
who was attacked in his cabin by a mob of workmen died. Mr. Roy was earlier
employed with Suzlon Energy Ltd.
November 2010 – Joginder Singh – Assistant General Manager – Allied Nippon in
Uttar Pradesh was assaulted by workmen who feared that the gun shot has killed
some co-worker and thrashed. Succumbed to the injuries. Workers dancing on the
roof tops with lathis filmed by cowering managers on their mobiles. After the
assault, many workmen arrested.
February 2012 - President , Manufacturing of Regency Ceramics beaten to death
by irate workers who were violating the prohibitory orders and in the lathi charge,
one leader of the union, a Dalit worker died of heart attack. That led to violence.
July 2012 – DGM – HR Avanaish and 100 Managers assaulted and Hospitalised in
orchestrated violence over an incident of worker slapping supervisor.
Violence at Nashik in Everest Ltd. 3 Managers stabbed while in Conciliation on COD

Huge Bonus Payouts
• Sulzer Pumps giving 12% of the Gross Profits as
Bonus to employees giving employees a bonus of
over Rs. One Lakh.
• Deepak Fertilizers giving bonus of over Rs. 50,000
to all workers.
• The question of paying 20% Bonus is passé –
Aspirations of workers is increasing.

Restrictive environment in Maharashtra
• The existence of the MRTU & PULP Act is a major
source of irritant and problems for employers
with Unions seeking intervention of the courts for
flimsy reasons.
• Threat of the government to abolish the contract
labour and this being a perennial problem at the
time of elections and during festive occasions.

Engaging Executives instead of Workmen
• Standard Chartered Bank – Relationship Officers
– whether workman under the Act. Case law
• ICICI Bank – take over of Bank of Rajasthan.
• Agitation in Dhanalakshmi Bank over
recruitment of officers directly bypassing the
Officers Union.

The Price Performance Paradox
Category Price Perceived Perceived
Performance Risk
Permanent High Low V. High
Probationer Appropriate High Low
Temporary Low Good Low
Casual Low Good Marginal
Contract Very Low Excellent Low
Trainees Low As Required Negligible

Paradigms being changed
• Settlements in Pune Region – Maruti settlement of a mind
boggling payment Rs. 18,000 p.m. per worker – Similar increases
in Pune region – Increase of 11,750 p.m. in Thermax Ltd. and
over Rs. 10,000 increase in Hyundai, Volkswagon, General
Motors, etc..Rs.9300 p.m. Atlas Copco Ltd.,Tata Motors 6500
pm, JCB 7500 pm, Apollo Tyres – Vadodara Rs. 7900/=
• Virgo Engineers in Pune Ltd. have given a Rs.8200 p.m. increase
and another 2000 in Indirect Benefits (loans) to first breach the
five figure mark in wage settlements. This is not going to be the
last.
• Sulzer India Ltd. Settlement for 10 years and increase of 1400
p.m. per year
• Sulzer Pumps – 13 lakhs as bonus for 2011 – share in profits.
• Thermax settlement for contractor’s workmen of over Rs. 4,000
p.m.

The New Paradigm
Engagement of Contract rather than permanent
employees
Fixed Term Contracts
S.25 FF provisions- Change of ownership and change of
management can lead to retrenchment
Temporary employment
Part time employment
Employment not in the establishment.
Franchisees and service providers (Team Lease, Kelly,
Sodexo, etc.. have become major employers)
Departments getting Outsourced
Managerial and supervisory persons only engaged
The emergence of the Gold Collar and Pink Collar

Severances –Becoming very costly
• CADBURY – THANE – 5 LAKHS TAX FREE AND 13
LAKHS IN ANNUITY
• BAYER INDIA LTD – THANE 24 LAKHS
• HINDUSTAN LEVER LTD – LAST DRAWN SALARY AS
PENSION FOR LIFE.
• COLOUR CHEM – CLARIANT 29 LAKHS
• RELIANCE 30-34 LAKHS
• CABOT – 25 LAKHS
• HINDALCO – KALVE – 8 LAKHS
• RAYMONDS - 19 LAKHS
• RALLIS – TURBE – 27 LAKHS
• GLAXO SMITHKLINE – WORLI – 45 LAKHS
• Pfizer – 50 Lakhs with 3 tolas of Gold – early bird.

Engaging Executives instead of Workmen
• Standard Chartered Bank – Relationship
Officers – whether workman under the Act.
Case law
• ICICI Bank – take over of Bank of Rajasthan.
• Agitation in Dhanalakshmi Bank over
recruitment of officers directly bypassing the
Officers Union.

Risk Tree for Contractor’s Worker
Outsourcing? Perennial or intermittent?
Intermittent
Outsource
Activity – Less than 240 days or more
than 240 days
Less than 240 days
More than 240 days – Possible to give work outside factory
or
Inside the Factory
High Risk Low Risk
Large Numbers of Workmen or Small Numbers of Workmen in Factory
Unionised or Non-unionised
Change Contractor periodically. New Contractor and New Workmen or New
Contractor and Old Workmen – Delaying the Inevitable

Collective Bargaining
 Bargaining Implies give and take. Unless coercive
element is present and you have the ability to Bar some
gain, there cannot be a Bargain! Not Give and Give or
Take and Take!! Not a process where the Union Collects
when the management Bargains.
 Collective Bargaining Implies Group Processes and not just
individual processes
 Role of Line Managers in the organisation
 Are Managers Spectators or Players
 Are they involved and well aligned or non-aligned
and indifferent.

Some guidelines for coming to a Figure for
settlement
• Defensive Bargaining or Dynamic Bargaining?
• History of the previous settlement (Figures as well as in
percentage terms)
• Business environment and settlements in the region
• Growth in dividends, prices, profits, managerial salaries
• Manpower cost ratios, Manpower cost to Sales and to units
manufactured. Industry trends.
• Projected growth and costs as a factor of affordability.
• Optimistic, Optimum, Crunch

Negotiation Strategy:
• Negotiation preparation through goal setting, fact-
finding, planning and testing.
• Methods for assessing facts and figures,
competition, timing, and bureaucracy to increase
bargaining power.
• Elements of the negotiation: agenda, procedures,
authority to commit, position presentation and
negotiating for agreement.
• Negotiation techniques, including the use of mutual
interest, questions, silence, alternative positions,
concessions, deadlines, straw issues, threats,
caucuses, walkouts and deadlocks.

Perspectives
• Wages as a Cost and as an investment – If wages are
seen as a cost, the overall emphasis is on reduction of
cost.
• If wage is seen as an investment, the issue that engages
ones mind is the return on investment. Moreover,
investments need to be properly looked after, if they
have to continue to generate returns. Utilising the brains
as well as the brawn are both relevant. Can we keep our
employees engaged and contributing continuously to the
company’s goals is an issue that engages us.

Work or Result Focus
• Traditionally, Indian focus has been on jobs or
activities. It has not been on results or
responsibilities. A Sweeper can just sweep with a
broomstick and refuse to do all other jobs that
cannot be done with a broomstick or he can be
the person who keeps the place clean. That is a
responsibility or outcome. If he can also look
after, repair or maintain the vacuum cleaner, he
will be a semi-skilled or skilled manpower, not
just unskilled worker or a sweeper .

More the skill, more the wage?
• More the effort, more the recognition/reward?
• Better the result of the effort, better the
pay/reward? If company makes a fabulous profit at
the end of the year should you not get a share of
the profits?
• If it makes a loss in spite of your best efforts, how
much must you lose because the company made
losses?

Time versus piece rate
• Logic of a time rate
• Why Piece rate or incentive needed?
Distinguishing between a person working at normal pace and above normal Pace. If a person
works at more than the normal pace and gives benefit of Increased output to the company,
should not the company reward him for The increased output?
Incentive schemes that have been time saving, increased efficiency, and Schemes that benefit
the employee and the employer. While employee gets the benefit of increased wages, the
organisation benefits In terms of reduction in per unit cost.
It appears to be a Win Win Situation. Yet why has it
not caught on in a big way?

Problems of incentives
Is wage not an incentive?
What are the disincentives if a person does not perform? Are there
any penalties?
Dichotomy between direct workers and indirect workers
Problem of those not covered by the incentives like supervisors, QC,
Maintenance etc..
Individual versus the group
Inability to provide work, problems of breakdown, lack of orders,
Inflexibility in workforce and employees earning incentives not
wanting to change positions.
Spurts and troughs in performance – loopholes in the incentive
scheme
Atrophy of production norms and inability and unwillingness to
change.
Overtime and other factors that can cripple an incentive scheme.
Transparency and ease of understanding.

SL No Problems/Challenges faced in shop floor Key Expectation from the session.
Example Chronic absenteeism. How to handle chronic
absenteeism cases?
1 Member refuse to work, giving reason of Health. How to manage & make him work?
2 Member doing slow down affecting production. How to make him & union leaders
understand that he is doing slow
down?
3 Member arrives late to work repeatedly. How to correct him?
4 Member spends more time in Toilet/Clinic. How to control?
5 Unplanned absenteeism repeatedly. How to correct him?
6 Member declares that he can do only particular/
limited job.
How to make him realize?
7 Members misusing IL, HLC, ESI facilities. How to strengthen the policy
implementation?
8 Members falsely blaming the supervisor in mass,
when questioned, regarding discipline.
How to support the supervisor?
9 Leaders loosing temper, because of helplessness. How to support Supervisor?
10 How to control unnecessary intervention of
Union leaders & EC members.
How to support HR to revise the
policy?

MHRD Industrial Relations compendium book JBIMS.pptx

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