05 session02-trade unions in india

7/27/2019 05 Session02-Trade Unions in India

1/29

Session 5

Labour Unions and collective bargaining

"Trade Union" means any combination, whether temporary or permanent,

formed primarily for the purpose of regulating the relations betweenworkmen and employers or between employers and employers, or forimposing restrictive conditions on the conduct of any trade or business

Trade unions are formed to protect and promote the interests of theirmembers. Their primary function is to protect the interests of workers

against discrimination and unfair labor practices Objectives

Representation

Negotiation

Voice in decisions affecting workers

Member services(a) Education and training

(b) Legal assistance

(c) Financial discounts

(d) Welfare benefits


2/29

Reasons for joining trade unions

Greater Bargaining Power

Minimize Discrimination

Sense of Security

Sense of Participation Sense of Belongingness

Platform for self expression

Betterment of relationships


3/29

Types of Trade unions

Altruistic Trade unions

To take up welfare measures for improving the morale of workers To generate self confidence among workers

To encourage sincerity and discipline among workers

To provide opportunities for promotion and growth

To protect women workers against discrimination Selfish trade unions

(a) To achieve higher wages and better working conditions

(b) To raise the status of workers as a part of industry

(c) To protect labors against victimization and injustice


4/29

Theories of trade union

Freeman and Medoff (1984)

The monopoly Increases the members wages over the market wages

Restrict the labour supply

Compels to substitute capital for labour

Better quality of labour

Misallocation of resources

Greater inequality within the workforce

Block technological change

Inflexibility in the labour market


5/29

The Collective voice

A positive economic, political and social effects Development and retention of specific skills

protect the interests of lower income groups

Smaller the wage inequalities within the income groups Fairness in conflict

Neutral third party arbitration

Theories of trade union (contd)


6/29

Trade union in India-Background

Beginning of Industrialization American civil war from 1861to 1865

Opening of Suez Canal in 1869

Main events in the industrialization process First textile mill in Bombay in 1853

First jute mill in Calcutta in 1855

First railway track

Mobility (rural to industrial cities) number of factories and workers

Number of registered factories 653 and workers 3,16715 (1892)

By the end of the century, factories-1,207 and workers 548956

Working and living conditions Housing problems

Working conditions in the factories

No holiday, and no fixed payment

Closed and unventilated area

Lay off without notice

Inhuman conditions

Labour movement


7/29

Forms of Protest

Various forms of protest Tendering mass resignation Holding public meetings Militant way of protest (Strikes)

Strikes Ahmadabad in 1895 Jute mill in Calcutta, 1895

Birth of Labour movement Two strikes every year in each factory The protest by railway employees against the delay in payment The Employees and Workmens Disputes Act, 1860 (one of the first labour laws in India) Indian Factory Act of 1881-provisions of the act were not up to the expectations of workers

Stiff opposition from workers Bombay Government - Commission in 1884 NM Lokhandeythe first labour leader in India Bombay Millhands Association, 1890; the first labour organisation Deenbandhu

Weekly holiday on Sunday The founder of the labour movement in India


8/29

Some Major Strikes

Beginning of the 20th century Acute shortage of skilled labour-widespread occurrence of the epidemic of plague

Competition Against electricity

Working hours 14 to 15 hours A number of strikes in the textile millsBombay Millowners Assoication: 13 hours

Six-day strike of Bombay workers in July 1908 (Lokmanya Tilak)

22nd

July 1908 -15 persons were killed Ahmadabad strike

Year 1917Anasuyaben Sarabhai Payment of plague allowance

Went on strike from 4th December (Labour Day)

Millownersa wage increase of 20 per cent as against workers demand of 50%

Gandhijis intervention (wage rise 35 per cent) Famous Trade Union: Textile Labour Association

Sholapur strike 28th January 1920 (higher wages) 16th Februarymeeting at the gate (a large number of workers were injured)

17

th

marchworkers started joining work Historic strike of Buckingham and Carnatic mills (B.P Wadia)


9/29

1920s

All India Trade Union Congress (AITUC)

First session of ILO in 1919 16th July 1920NM Joshi

30th October 1920founding conference

Resolutions adopted

Indian Trade Unions Act, 1926

NM Joshi, member of the Central legislative Assembly-legalise trade unions Trade Unions Act passed in 1926

Provisions of the Act

Any trade union with minimum seven members can apply for registration

Unions went up to 75 with a membership of 1,81,077 Amendment of Act in 2001 (the figure raised to 100 from 7 members or 10

percent of the workforce in the plant)

General strike of Textile workers (1924)-over the issue of bonus

A A Alwe

Girni Kamgar Mahamandal (union)


10/29

Entry of Communists in the labour movement

The year 1928

The biggest strike of textile workers in Bombay Held under the leadership of A A Alwe

The issue-rationalise work, cut down labour cost

Started 15th April, spread to other mills by 26th

Major demands

No wage reduction Wage increase Standardization of work conditions Formation of service rules

The strike continued for five months

A committee of enquiry The strike was withdrawn on 6th October

A new unionBombay Girni Kamgar Union

The strike was led by the activists of the communist party of India (S A Dange,

Mirajkar, Nimbkar)


11/29

Major developments during 30s and 40s

Recession and its impact on working class Curtailment of production Rationalization and wage cuts

Split in the movement

The short congress rule General election in 1937 Congress, except in Punjab and BengalState initiatives

Bombay Industrial Disputes Act of 1938 Outbreak of second world war

Boost to Indian Industries

Quit India Movement in 1942 (message to nation-do or die)

Attitude of communists

Postal strike: 10th July 1946immediate revision of pay scales Strike by armed forces

Started in one royal navy ship 19th February 1946 A mutiny against the British Government


12/29

Phase 1 (1950-1960) A period of national capitalism

Import substitution

Increase in public sector employment Setting up of public enterprises

Rise of public sector unionism

Two trade unions (INTUC and AITUC) Unions are highly centralised

Average economy growth 2.3 per cent

Average employment growth rate (1951-56) 0.4 per cent

The registered trade unions 4,623 (1951-52); 11,614 (1961-62)

Industrial disputes act (1947) single most piece of legislation between

workers and employers (no legal strike)


13/29

Phase 1 (1950-1960) A period of national capitalism

Started state-driven industrialization

Controlled labour movement State has a role in the determination of wages

State knew more about workers needs

Industry level unions in some regions like Mumbai By the end of the first phase, socialists broke away from congress

Hindu Mazdoor Sabha

Indiachina conflict

The radicals broke away from CPI, and formed CPI Marxists

New Trade unionsCITU (Centre for Indian Trade Union)


14/29

Phase 2 (1960-79)

3rd, 4th and 5th five year plans

Inflation was at danger mar (10%) in1966-67 food inflation was at 20 %, it was worsened in 1973-74

Slowdown of public investment

Unequal terms of trade Income inequalities

Oil price shocks in 1973

Increase in the number of industrial disputes

New forms of protests (Hartals and Bandhs)

Proliferation of trade unions

Inter-union rivalry increased (industrial disputes by union type)


15/29

Phase 2 (1960-79) Summary

Economic slowdown

Political turmoil Slowdown in employment

Declining real wages

Massive strikes and industrial conflicts

Inter-union rivalries

Multiple unionism

New Trade Unions (HMS and CITU)


16/29

Phase 2 (1960-79)

Emergency regime of Mrs Gandhi (1975-77)

The right to strike was suspended

Reduction of annual bonus (8.3 percent to 4 per cent)

A Qualitative change in the political climate (Janata govt (1977-80)

Attempt to forward an industrial relations bill banning strikes and

lockouts in essential industrial and services sectors Stiff opposition from trade unions

The Bill was not passed

The industrial disputes act amendment in 1965

In 1976 (firms employing more than 300 workers had to get governmentpermission before lay-off

State enacted their own labour laws

Government role reduced over the industrial relation system


17/29

Phase 3 (1980-1991) The period of domestic economic liberalization

Average annual growth rate 5.7 per cent

Employment growth 1.8 per cent The best decade of economic growth, but worst for employment growth

Jobless growth

% of employment in manufacturing decreased from 24.5 percent to 17.4

per cent

Open unemployment increased

Worst drought in 1979

Industrial recession in 1980-81 Balance of payment crisis and IMF loan

Gulf recession in 1990

Mrs Gandhi Returned to power


18/29


Public sector strike in Bangalore (1980-81)

Mumbai textile strikes regarding wage bonus issues Dr. Datta Samant

New party (Kamgar Aghadi Party)

Trade union (Hindu Mazdoor Kamgar)

Government has slowly withdrawn from industrial relation system

Independent unions operating in the major industrial centres

Regional wise analysis

Steady decline of ideological trade unions

Under the dominant political parties

Plant and firm based unions in Bangalore and Mumbai

This is due to dissatisfaction with traditional bargaining structure


19/29


High increase of wage in firms with plant specific unions

Traditional unions predominant in older industries Due to increasing instability in the product market, traditional unions were

unable to form plant-specific trade unions

High productivity brought about the increase in real earnings

Industrial Disputes act amendment in 1982 a firm employing more than 100workers (earlier it was 300) need permission from state government to lay offworkers

A bill was proposed to reduce the multiplicity of unions

It was rejected because of the controversy over the definition of industry

Summary Independent trade unions

Skilled versus unskilled

Period of jobless growth

Massive strikes


20/29

Fourth Phase (Since 1991) The period of economic reforms

Post reform decade

Stabilisation and structural adjustment programmes Rupee was devalued in 1991

1992-96 GDP growth was 5.3 per cent

Industrial recession (1996-97)

Decline of public investment

Emergence of transnational companies

Foreign direct investment (5.3 billion in 1991 to 141.9 billion in 1994)

Services sector growth

Structural transformation

Merger and acquisitions

Regional inequality


21/29

Fourth Phase (Since 1991) The period of economic reforms

Restructuring of unprofitable public sector enterprises

Reduce the workforce through VRS More employment flexibility

Decentralised bargaining structures

Less government interventions in the bargaining process

Inter-state competition to attract foreign and local capital Down the labour market institutions

Investment in capital-intensive technologies

More labour intensive sectors were uncertain (Textile and Jute)

More capital intensive sectors have plant based independent unions (Banking,transportation)

Capital intensity led to jobless growth

Wages were determined at the plant level

Maximum growth in IT enables services


22/29

Fourth Phase (Since 1991) The Period of Economic Reforms

In the 1990s, about 15 per cent workforce reported job less (Shut down

many industrial units) Growth in labour productivity, and average workforce earnings

Since 2000, economy has witnessed revival of employment

Employment growth outstrips population growth

But casual and regular employment decline

Only self-employment increases

More than 50 per cent are self-employed in india

Decline in agriculture


23/29

Major changes summary

Collective bargaining in India has mostly been decentralized, but now in sectorswhere it was not so, are also facing pressures to follow decentralization.

Some industries are cutting employment to a significant extent to cope with thedomestic and foreign competition e.g. pharmaceuticals. On the other hand, inother industries where the demand for employment is increasing are experiencingemployment growths.

In the expansionary economy there is a clear shortage of managers and skilledlabor.

The number of local and enterprise level unions has increased and there is asignificant reduction in the influence of the unions. Under pressure some unions and federations are putting up a united front e.g.

banking. Another trend is that the employers have started to push for internal unions i.e. no

outside affiliation. HR policies and forms of work are emerging that include, especially in multi-

national companies, multi-skills, variable compensation, job rotation etc. Thesenew policies are difficult to implement in place of old practices as the institutionalset up still needs to be changed.

HRM is seen as a key component of business strategy.

Training and skill development is also receiving attention in a number ofindustries, especially banking and information technology


24/29

Causes of industrial disputes

The causes of industrial disputes can be broadly classified into twocategories:

economic causes

The economic causes will include issues relating to compensation likewages, bonus, allowances, and conditions for work, working hours,

leave and holidays without pay, unjust layoffs and retrenchments.

non-economic causes

The non economic factors will include victimization of workers, illtreatment by staff members, sympathetic strikes, political factors,

indiscipline etc.


25/29

Causes of strikes

A strike, which is a powerful weapon used by trade unions and other laborassociations, involves quitting of work by a group of workers for the purpose of

bringing the pressure on their employer so that their demands get accepted.When workers collectively cease to work in a particular industry, they are saidto be on strike.

Strikes can occur because of the following reasons: Dissatisfaction with company policy Salary and incentive problems Increment not up to the mark Wrongful discharge or dismissal of workmen Withdrawal of any concession or privilege

Hours of work and rest intervals Leaves with wages and holidays Bonus, profit sharing, Provident fund and gratuity Retrenchment of workmen and closure of establishment Dispute connected with minimum wages


26/29

Lockouts and Picketing

A lockout is a work stoppage in which an employer preventsemployees from working. It is declared by employers to put

pressure on their workers. This is different from a strike, in which

employees refuse to work. Thus, a lockout is employers weapon

while a strike is raised on part of employees When workers are dissuaded from work by stationing certain men

at the factory gates, such a step is known as picketing.

Pickets are workers who are on strike that stand at the entrance totheir workplace.

It is basically a method of drawing public attention towards thefact that there is a dispute between the management andemployees.


27/29

Gherao

Gherao in Hindi means to surround It denotes a collective action initiated by a group of workers under

which members of the management are prohibited from leaving

the industrial establishment premises by workers who block the

exit gates by forming human barricades. The workers may gherao the members of the management by

blocking their exits and forcing them to stay inside their cabins.

The main object of gherao is to inflict physical and mental torture

to the person being gheraoed and hence this weapon disturbs theindustrial peace to a great extent.


28/29

Trade union in India stylised facts

Union density

Union members/workforce = 4 per cent

Union members/wage and salary earners = 25 per cent

Union membership

Trade union Affiliation 1989 2002

BMS BJP 3.11 m 6.22m

INTUC Congress 2.7m 3.89m

CITU CPI(M) 1.78m 2.67m

HMS Socialists 1.47m 3.22m

AITUC CPI 1.07m 3.34m


29/29

Major trade union in India

All India Trade Union Congress (AITUC)

Bharatiya Mazdoor Sangh (BMS)

Centre of Indian Trade Unions (CITU)

Hind Mazdoor Kisan Panchayat (HMKP)

Hind Mazdoor Sabha (HMS) Indian Federation of Free Trade Unions (IFFTU)

Indian National Trade Union Congress (INTUC)

National Front of Indian Trade Unions (NFITU)

National Labor Organization (NLO) Trade Unions Co-ordination Centre (TUCC)

United Trade Union Congress (UTUC) and

United Trade Union Congress - Lenin Sarani (UTUC - LS)

05 session02-trade unions in india

Documents