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TRA
CT
We
begi
n by
a
liter
atur
e
revi
ew
disc Aayush Sharma
ussi (B14126)
ng
the Ashish Bhatia
(B14138)
Gagandeep Singh
(B14143)
Karan Chhabra
Contents
Introduction................................................................................................................ 2
Literature Review....................................................................................................... 2
Industrial disputes in the recent past.........................................................................3
Legislative provisions to prevent and resolve industrial disputes...............................5
The Trade Unions Act, 1926:.................................................................................... 5
Industrial Employment (Standing Orders) Act, 1946...............................................5
Industrial Disputes Act, 1947:.................................................................................5
PRICOL CONFLICT.................................................................................................... 7
COMPANY OVERVIEW:................................................................................................. 7
COLLABORATIONS:.................................................................................................. 7
THE PRICOL STRUGGLE.......................................................................................... 8
Genesis of the Struggle........................................................................................... 8
Timeline................................................................................................................... 8
STAKEHOLDERS VIEWPOINT.................................................................................... 10
Owners/shareholders:............................................................................................ 10
management:........................................................................................................ 11
Workers................................................................................................................. 11
Police & Government............................................................................................. 11
Trade Unions.......................................................................................................... 11
GRAZIAONI CONFLICTS......................................................................................... 12
Overview.................................................................................................................. 12
The Timeline............................................................................................................. 12
STAKEHOLDERS VIEWPOINT.................................................................................... 14
Owners (Shareholders).......................................................................................... 14
Managerial Personnel............................................................................................ 14
Workers................................................................................................................. 14
Police and Government......................................................................................... 14
Trade unions.......................................................................................................... 14
STAKEHOLDER ANALYSIS (TABLE 1)...................................................................16
Learnings and conclusion.................................................................................... 17
References............................................................................................................. 19
Introduction
Indian industrial relations have
been shaped primarily by three
legislations which are The Trade
Unions Act, 1926 (TUA); The
Industrial employment Act, 1946
(IEA) and the Industrial Disputes
Act, 1947 (IDA). Trade unions all
over are viewed as a threat by
employers and their independent
identity and power is considered as
a hindrance among employers for
restructuring. In Indian context, the
labor unions have been regulated
by state which supported their
affiliation on account of vote banks.
However with the advent of
economic reforms in nineties along
with the focus of the government
to attract more capital, there are
evidences of shift in government
labor policy in favor of employers.
This impacted the labor relations in
different industries differently. In
some industries it resulted in
higher employment but more of
contract workforce at the cost of
permanent workers. However it
resulted in favor of employers
which could formulate a system of
policies based on their interests. It
can be said that disruption of
peaceful harmony among unions
Literature Review
According
to
Sen
(2011)
multinational
companies
have
proved
their
excellence
in
operations but the existence of
best practices is not so evident,
moreover many of the practices
implemented by managers have
actually caused unrest and inferior
industrial relations. There are
evidences that management at
multinationals
have
failed
to
understand the industrial laws and
prevalent
cultures
in
their
geography of operations be it India
or other emerging countries. The
issues of unrest among workers
have ranged from pay differentials
to treatment differential of contract
workers and recognition of trade
unions.
As per Stephen Frenkel and Sarosh
Kuruvilla (2002); in the era of
globalization
the
nature
of
employment
relations
is
determined by the interaction of
three forces which are different and
independent of each other
competition, industrial peace and
the
structure
of
employment
relations. The industrial relation
system was characterized by the
rules of state institutions before
LPG policy. The LPG policy made
the environment more dynamic
and complex with states making
amendments to labor laws along
with central laws to attract capital
to
their
regions.
Managerial
strategies were devised in pretext
of labour flexibility to weaken
power of labor. The focus was
hiring of contract workers a lot to
circumvent the laws. As per the
case fact In Indian manufacturing
industry the share of contract
workers in comparison to total
workers increased to 26.4% in
2004-05 from 14.6 % in 1995-96.
The forces interacted to create an
environment which gave flexibility
to workers but also reduced the
union power.
Indian industrial relations have
evolved through four phases which
are 1950 to mid-1960s, mid 1960s
to 1979, 1980 to 1991 and 1992 to
2000. The LPG phase of 1992 to
2000 led to increased flexibility of
labor
employment,
less
government
intervention
and
stronger managerial power. This
had both a positive and negative
side to it as though it led to more
employment but it led to reducing
power
of
organized
labor.
(Bhattacherjee, 2001)
Industrial disputes in
the recent past
Indian industry has undergone
major
changes
since
the
liberalization in 1991. The economy
is more open to the global
competition therefore more and
more industries are coming up in
India. Most of these companies
prefer management of work force
through various committees which
have led to a decline in the trade
union activities. The increase in IT
industries and other knowledge
based
service
industries
has
further decreased it. But in the last
decade, we have again seen a rise
in number of unrests and disputes
in the industry. Some of the major
incidents are as follows:
Graziano Transmissioni : 2008, a
mob of 200 dismissed employees
forcefully barged in and in one of
the worst cases of industrial
violence cases, killed the MD/CEO
of the unit
Graphite India Ltd Powmex Steel
division:
2011, Car of DGM
(operations) was stopped by some
suspended workers and set on fire
which proved to be fatal
Pricol:2009,Vice-president(human
resources) was
killed
near
Coimbatore after the company
sacked few employees on grounds
of indiscipline
Legislative provisions
to prevent and resolve
industrial disputes
(i) any
agreement
between
partners as to their own business;
Act,
British
Government
under
the
recommendation
of
Royal
Commission of Labour. The act
covers law relating to formation of
trade unions. Trade Union means
any
combination,
whether
temporary or permanent, formed
primarily for the purpose of
regulating the relations between
workmen
and
employers
or
between workmen and workmen,
or
between
employers
and
employers,
or
for
imposing
restrictive
conditions
on
the
Industrial Employment
(Standing Orders) Act,
1946: This act aims at laying
down the laws for defining the work
contract and conditions of work by
issuing standing orders. The main
aim of the act is to remove any
undue flexibility of the employer to
change terms of job, hours, timing,
leave grant, productivity measures
etc. The standing orders mandate
that the employer classify its
employees,
state
the
shifts,
payment of wages, rules for
vacation, rules for sick leave,
holidays, rules for termination
amongst others
PRICOL CONFLICT
COMPANY OVERVIEW:
Established
in
1972
and
commencing
commercial
production in 1975 at Coimbatore,
with an initial installed capacity of
4
Lakh
number
Dashboard
Instruments, Premier Instruments &
Controls Limited, is an automobile
ancillary unit and it later diversified
into Electronic Control Instruments,
Precision Machine Tools, Panel and
Sensor Instruments for Defense
and Industrial Gauges. Its main line
of business remains that of
manufacturing
automotive
instruments and allied accessories.
To grow its business in the
upcoming automotive cluster of
Gurgaon and serve the existing
customers in less time, company
installed an assembling unit at
Gurgaon, Haryana with an installed
capacity base of 5 Lakh numbers of
dashboard
instruments.
The
commercial production in Gurgaon
unit commenced on April 1998.
Emerging as a market leader, with
a share of about 50% of all the
OEM requirements of the domestic
market, company increased its
installed capacity from 4 Lakh
numbers to 34.5 Lakh numbers of
Dashboard instruments catering to
the needs of almost all the vehicle
manufacturers along with meeting
40
%
of
the
demand
of
replacement market through a
countrywide distribution network.
Starting in 1985, PRICOL begin
exporting its products with a
turnover of Rs 2.88 Lacs, which
grew to Rs 752 Lakhs in financial
year ending 31st March 1994.
Company is the first among the few
and only one in the automotive
instrumentation sector to obtain
the coveted ISO 9001 Certificate in
the country.
COLLABORATIONS:
1. During the year 1985, the
Company entered into technical
collaboration
with
M/s.
NS
International Ltd., U.SA. (Subsidiary
of M/s. Nippon Seiko Co. Ltd.,
Japan) for up gradation of existing
Technology in the manufacture of
Dashboard Instruments for Two
Wheelers. The technology has been
fully absorbed.
pace
with
the
international
technologies in the instrumentation
field.
THE PRICOL
STRUGGLE
The Pricol struggle is one of its kind
as there were so many parties
which came together for the
struggle. All permanent worker,
ancillary unit workers and contract
laborers joined the union led by
AICCTU. It was also supported by
the law students, civil rights
activists and Dalit organizations.
The struggle was against several
unjust practices followed by the
management:
sham
contract
labour system, satellite vendor
systems, victimization of laborers
through closure, denial of wage
increase
and
termination
of
workers were few of them. Thus
workers demanded the government
to intervene and pass orders under
Section 10B of Industrial Dispute
Act 1947.
The struggle which
started in 2007 and continued till
2009 had a very frightening end.
Workers
bravely
fought
with
management and succeeded in
making strikes which lasted for
several
months.
The management tried to threaten
workers by branding them as a
Maoist-Leninist leadership. The
uproar and struggle led to the
murder of Pricol HR vice-president
Roy George in Coimbatore.
Timeline
Phase 1
This phase was marked by strong
discontent by employees in the
form of strikes. More than 3000
workers were involved.
9-03-2007: Women played an
instrumental role and staged a
Road Roko in Coimbatore.
10-3-2007:
Dharna,
strikes
continued in front of the factory.
25-03-2007: Fast in Coimbatore city
by 4000 workers.
Phase 2
Unions wanted government to pass
order under section 10B of
Industrial Dispute Act 1947.
23-04-2007: Workers and children
covered their faces with black cloth
in protest.
Even other factory workers sent
telegrams to government for 10B
orders.
24-05-2007: Government finally
passed 10(1) and 10B orders. Thus
management was ordered not give
effect to break in service, partial
lockouts and not to employ recruits
taken during strike period.
26-05-2007: Strike was withdrawn.
Phase 3
The management then turned to
victimization measures. Satellite
Vendor Units were closed down and
the workers associated with it were
terminated.
Wage increase was denied by the
firm
which
violated
the
settlements.
13-07-2007: Workers were attacked
by local hooligans.
28-07-2007: Hundreds of workers
gathered for a public meeting.
13, 15, 17 -08-2007: Slogans were
raised by workers and 114 workers
were
demoted.
Management
refused to give wages to workers.
Pricol workers collected thousands
of
signatures
demanding
amendment in the Trade Unions
Act. This amendment was aimed at
providing recognition of trade
union through secret ballot.
5-04-2008: Massive hunger strike
in Coimbatore.
10-06-2008: Management created
a concentration camp for the
partially locked out workers who
returned to work.
21-08-2008: More than thousand
workers courted arrest. 16 workers
were arrested and management
partially locked out 170 workers.
24-08-2008: Conciliation officer
helped to arrive at a conclusion.
Phase 4
Management started with some
tactical and resorted to divide and
rule. The General Secretary of the
two fighting unions went over to
the side of the management.
STAKEHOLDERS
VIEWPOINT
10-12-2008:
The
management
deducted salaries of 183 workers.
12-12-2008:
dismissed.
41
workers
were
Phase 5
Unrest leading
orders.
to
second
10B
YEAR
2000
2009
DOMESTIC SALES
179.10
476.50
OWNERS/SHAREHOLDERS:
EXPORTS
22.19
137.50
TOTAL SALES
201.3
614.0
MANAGEMENT:
Management had one of the most
important stakes in the whole
episode as it was on the front end
dealing with Trade unions. Also, the
direct effect of any judgment in this
regard would have had a direct
Workers
Workers were devoid of their basic
rights and it was just on their part
to protest. The ordinary workers
who depend on the organization for
their livelihood, who work hard to
earn more incentive were the
ultimate sufferers.
The workers staged protests and
strikes
and the management
resorted to victimization,
fuelling the agitation.
thus
Trade Unions
Trade unions which were meant to
support the workers were not able
to fulfil its responsibility. Leaders of
these unions were supporting
management to promote their selfinterests.
Graziaoni Conflicts
Overview
Noida, is situated next to capital of
India and has been a lucrative
place
for
many
multinational
corporations to open their offices.
Graziano Transiminsioni, which is
an Italy based manufacturer of
automobile components was one
among over 24 MNCs located in
SEZ, Noida. SEZ refers to the
special economic zones being
pushed by the government of India
to move ahead in its path of growth
and industrialization.
On September 22, 2008 the Chief
executive officer (CEO) and head of
Indian operations, Lalit Kishore
Chowdhary, died in office premises
due to head injury. It is noted that
there was a meeting with some of
the dismissed employees which
broke into violence. Police security
which was present there did not
arrested anyone at the time of the
death. It was only in the evening
that workers were arrested for
alleged murder.
This case presents a very good
example of the happenings and
suffering of not only with the
workers at Grazioani but also
across the country. It shows that
how every stakeholder tries to
maximize their benefit from the
The Timeline
Situation before 2 December, 2007:
Working hours increased from 8 to
12 in 2 shifts. Workers allege that
no weekly holidays were given and
those who did not comply were
thrown out.
2 December, 2007: First disputes
over raise of wages by employees
on the claim that punch time cards
were not done properly.
Worker wanted to form a trade
union, but their application got
rejected three times by labor office.
It is said that labour office was
working in collusion. So they
affiliated with AITUC, Trade union of
CPI party.
4 December, 2007: A settlement
took place.
7 December, 2007: Settlement
repudiated by employer. AITUC
sided with the management to
restore
normalcy
for
later
negotiations. Workers refused to
accept it and AITUC abandoned the
workers.
Such determination from workers,
forced management to enter in a
written agreement in presence of
DLC, Deputy Labour Commissioner.
Wages
were
revised
homogeneously
incrementing
Rs1200 per year.
February 2008: Management hired
400 contract workers.
Regular workers claimed that these
contract workers used to bring iron
rod and used to threaten regular
workers.
A security team was also appointed
in
February.
Regular
workers
perceived it as a battalion of armed
goons more than security with a
purpose
of
replacing
regular
workers with contract workers.
May 2008: 5 apprentices or trainee
workers were dismissed. Workers
demanded that the 5 dismissed
trainee workers be reinstated back.
On this demand, 27 more workers
were suspended.
It is claimed that employers at this
time reversed the exhaust fan,
allegedly to teach workers a lesson
which led to increase in working
temperature
beyond
tolerable
levels.
30 May 2008: 30 workers were
locked
out
charged
with
committing
affray.
Each
was
released only after the signed a
The issue
sensation.
became
national
Stakeholders viewpoint
Owners (Shareholders)
Italian manufacturer firm, Graziano,
had setup their plant at Noida
mainly for cost cutting. Most of the
produce was exported.
Managerial Personnel
Workers
Those
who
were
conducting
protests
for
their
jobs
and
livelihood were put behind bars,
citing murder charges. They were
also injured in the incident and
rested in help of trade unions led
by political parties to support them.
The incident actually went against
them as the media portrayed them
as murderer and they were easily
laid off after the incident.
Government
industrialists
security.
supported
other
by providing extra
Trade unions
HMS was the one who finally took
their issue. These trade unions are
usually the wings of political
parties. Though their primary job is
to
identify
common
interests
between employee and employer
so that a negotiation can be
established but apparently, many
trade
unions
have
political
interests. These trade union are
formed under Indian Trade Union
Act 1926.
Stakeholder Analysis
Stakeholders
Involveme
nt in
Issue
Impact of
issue on
stakeholde
r
Interest
in Issue
Influence
/ Power
Resources /
Position
Firm
owners:
Sent their
consultant
s,
appointed
India head
and
interacted
with
Italian
Embassy
Setup the
plant
in
1998
in
India.
Most
output
was
exported.
Hence
cost
cutting
was
the
major
concern
High
power
because
they
have
invested
their
capital.
100% Owner
of the Indian
subsidiary. A
multinational
corporation
with
high
financial
resources
Factory
reopened
after
a
week
of
CEO's
death.
Managem Laid
off
ent
employee
s.
CEO
killed
Cost
reduction,
operating
profit
of
factory
Power to
lockout.
Power to
set
wages
and the
strength
of
workers.
High position
in terms of
contact with
politicians,
police, labor
courts
and
other
government
authorities
They could
now easily
target
workers in
media and
laid
them
off.
They
finally got
contract
labor on roll
easily
Workers
Their jobs,
livelihood
was
at
stake
Vulnerabl
e
migrants
from
other
states,
regularly
subjected
to
threats,
Denied their
rights. Could
not form a
union.
Approached
trade unions
of such as
HMS,
CITU
which
were
fronts
of
Many
arrested,
with
charges of
murder.
Other laid
off from the
job.
Italian
firm
Conducte
d protest
for better
workplace
and
replaceme
nt
of
permanen
t
employee
s
by
contract
employee
s.
and
abuse.
political
parties
Trade
unions
Initially
AITUC and
CITU
abandone
d
the
labour.
Finally
HMS took
the issue.
Political
interests.
Job
-To
identify
common
interest
between
employee
and
employer
and
to
facilitate
negotiatio
ns.
Generally
divided
on
political
lines.
Powers under
the
Indian
Trade Union
Act, 1926
Various
trade
unions
came
together
and did an
independen
t study to
show
the
suffering of
workers.
Police
and
Governm
ent
Was
present at
the time
of
incident,
but
did
not
do
anything.
It
was
their job
to
preserve
law
and
order
Apparentl
y,
they
had less
power as
compare
d
to
manage
ment as
all
of
those
who were
arrested
those
supportin
g
the
manage
ment
were
released.
They
have
arms
and
power
to
overtake any
situation esp.
in case of
commotion.
But it useful
only if they
act as per
the law and
not as per
the wishes of
rich
Police
officer was
suspended
later
for
dereliction
of
duty.
Governmen
t supported
other
industrialist
s
by
providing
extra
security
Learnings and
conclusion
References
Press release by Oerlikon Graziano India, Delhi - India, September 22 -2008 titled
Incident at Oerlikon Graziano India. Accessed from the World Wide Web on
March
11,
2015.
http://www.oerlikon.com/ecomaXL/files/oerlikon_Oerlikon_Graziano_India
News Articles :
Lalit Kumar, TNN, Sep 23, 2008, 01.24AM IST : Dismissed employees beat CEO to
death
London Times, Published September 23, 2008 : CEO Bludgeoned to Death in India
by Fired Employees
http://www.cpiml.org/liberation/year_2009/nov_09/special_feature.html
http://timesofindia.indiatimes.com/city/delhi/Dismissed-employees-beat-CEOto-death/articleshow/3513395.cms September 23, 2008
http://www.thehindubusinessline.com/todays-paper/tp-opinion/workplaceviolence/article1569084.ece
http://www.business-standard.com/article/companies/terror-reigned-at-alliednippon-workers-110111800105_1.html
http://www.dnaindia.com/india/report-12-arrested-for-murder-of-pricol-v-pnear-coimbatore-1292572
http://indiatoday.intoday.in/story/maruti-manesar-plant-violence-due-tointernal-issues-sit/1/224999.html
http://www.ficci.com/spdocument/20188/Industrial-unrest.pdf
http://www.ilo.org/dyn/natlex/docs/WEBTEXT/32075/64876/E26IND01.htm