Bharatiya Kamgar Sena, the workers union affiliated to the Shiv Sena, was in the news recently after its members at Big Bazar went on a flash strike to protest the termination of 120 employees. The strike not only succeeded in ensuring the reinstatement of the sacked staffers, but also brought to fore the issue of working conditions in malls and BPOs.
In another incident, the management of Hindalco Industries declared its canteen staff, who had been with the company for over a decade, temporary workers. The union, Association of Engineering Workers, moved court. Finally in March 2008, the Supreme Court passed a judgement in their favour and asked the company to grant them permanent workers status. These are only some examples that highlight how empowered labour unions are in India.
Entrepreneurs in the IT/ITeS segment are yet to come face-to-face with the union issue. But recently, WNS had to deal with union interference at its Nashik centre. Some IT/ITeS entrepreneurs have reservations about setting up centres in states like Kerala and West Bengal due to the strong trade union movements there, says K Ganesh, an entrepreneur who has started an e-learning company.
In India, a trade or labour union is the primary instrument for championing the cause of the working class. Article 19c of the Constitution confers on all Indian citizens the right to form a union, as a fundamental right. A strength of seven is all that is required to form a labour union.
Mafoi Management Consultants CEO E Balaji feels that the formation of a labour union can happen on the first year of a business operation, or it may not happen even after 40 years. It all depends on the view of the employer towards the labourers. If he looks at his staff as partners and adheres to good HR practices, labour relationship may remain good forever.
Usually, an entrepreneur starts his business with 10-15 close aides, and then comes the expansion. For example, he may set up a manufacturing unit and hire 200-500 people. Suddenly, he finds that he has to master the delicate art of labour management, without much help or guidance to fall back upon. If he is not careful, he might just spend his entire time dealing with them, or even risk seeing his well-laid growth plans go awry.
For labour unions, the main grouse is with the contracts system. They feel companies enter into contracts to avoid paying workers their rightful dues. Hiring on a contract-basis is an escape route companies are taking, feel labour leaders. It is a sham and is an arrangement to avoid making workers permanent and giving wages and benefits as are applicable to permanent workmen, they feel.
Most entrepreneurs, on the other hand, feel that the main problem lies in multiple unions, unrealistic demands from unions, or from unions affiliated to political parties. But they also agree that unions can help organisations grow better if they are internal to the company. And also if both management and unions can approach each other professionally.
Companies need to be fair with the staff, pay well and pay on time, provide safe working conditions to minimise the possibility of formation of unions, say HR experts. A union does not hinder the growth of a company. However, the cordial relation between the employer and the union is always helpful to achieve expected growth of the company, says LawQuest founder Poorvi Chothani.
T Muralidharan, chairman and managing director of talent management company TMI Group, says: Union problems are primarily a thing of the past. Today, due to abundant job opportunities, companies are doing their best to retain employees. Even unions are not being negative in the private sector. However, union issues can arise if salary levels are extremely low or when companies are employing at minimum wage levels.
TMI has an empowered employees committee with authority to recognise, reward and even take disciplinary action against errant employees. It has also initiated the process of inviting employee groups to take a more active role in the company's management.
Phani N Raj, founder of eYantra, an online branding company, had a lot of doubts when he planned to set up his manufacturing unit. I was not sure about managing and arranging the labour, the laws are draconian, and there is not much clarity on the labour laws. Each time we wanted to do some changes, there was always a doubt whether the labour will touch base with unions and will they obstruct the reforms.
So, eYantra asked itself what is that an union provides which the company cannot and why do labours need unions after all? The company hired an expert to look into labour relations. Some of the problems it faced were absenteeism, low productivity, irregular behaviour pattern. These problems, the study found, were regular in nature. So, the expert designed a programme by isolating each problem and employee. The company then realised that only 0.5% of the entire labour force were among the culprit.
So, we isolated these guys by giving them much better jobs and higher salaries, then for the rest of the employees we initiated a programme to offer a gold coin for 100% attendance, and free lunches and dinners for those who completed the production on time. Slowly what happened is that we started improving on productivity. Absenteeism became less and we saw productivity improving by 100%, says Mr Raj.
eYantra also started conducting yoga classes and distributing free medicines to the workers families, which also improved morale. As LawQuest's Ms Chothani says, The success of any industry and the protection of workers go hand-in-hand with each other.