jet airways labor dispute

Document

Jet Airways Labour Dispute: Trade Unions and

Indias Labour Conundrum

On September 8 2009, around 650 pilots of JetAirways, Indias largest private airline company,

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took a mass sick leave as a protest against the management that sacked two of its pilots for joining

a union. The pilots union named National Aviators Guild (NAG), was formed in August 2009.

Thousands of passengers were stranded because of the flash strike which lasted 5 days and

forced the management to cancel around 900 flights. The strike is an added woe to the already

ailing Indian aviation industry. But surprisingly, aviation industry is not the only industry which

suffered from labour discontent in recent times. Multinational companies in India Nestle, Hyundai

and others also suffered from similar labour disputes adversely affecting their operations. As

Indian economy bets heavily on labour intensive service industry, Indias age old labour laws

might need a modification.

According to the government data, the number of strikes in 2008 was almost double that recorded in

the previous year.

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Business Standard, October 1 2009

st

A more flexible and transparent regime of laws, including labour laws, will in fact contribute to

increased employment. Appropriate and relevant labour legislation are, therefore, in the interests of

labour and in the interests of the nation as a whole,

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Dr. Manmohan Singh, Prime Minister of India

This case study was written by Vivek M.V. under the direction of Dr. Nagendra V. Chowdary, IBSCDC. It is intended to be used as the

basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was

compiled from published sources.

2009, IBSCDC.

No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever

without the permission of the copyright owner.

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Majumdar Shyamal, India Incs Labour Pains, http://www.business-standard.com/india/news/shyamal-majumdar-india-incs-

labour-pains/371797/, October 1

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Prime Ministers Address to the 40th Indian Labour conference, http://labour.nic.in/lc/40ilc/40ilcpmspeech.doc, December

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Jet Airways Labour Dispute: Trade Unions and Indias Labour Conundrum

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Indian Labour Disputes

Indianlabour knewnothingaboutrights exceptduties,spendinglongyearsunderBritish rule.Colonial

labour legislation highly leaned towards British employers that reminded them of duties rather than

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rights. Though the legislations have undergone vast changes during the post-colonialism era, the basic

discontent of labour does not end, or that is what the labour disputes history in India suggests.

The labour discontent in India traces back to 19 century. With the establishment of first cotton

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mill in Bombay in 1851 and first jute mill in Bengal in 1855, India was slowly gaining vigour of the

modern factory developments. In 1875, the workers joined together to demand better working

conditions. The first Factory Commission was formed in Bombay in 1875 and the first FactoriesAct

was passed in 1881. The act prohibited employment of children under the age of 7 years and restricted

the working hours of children under the age of 12 years. With little concern about the work duration

and weekly off, the act was a total disappointment to the working class. In 1884, another Factory

Commission was formed. During the same year, Narayan Meghajee Lokhande (Lokhande) organised

a conference of factory workers and presented a memorandum signed by 5,300 factory workers to

the Commission. The memorandums suggestions of weekly rest, half an hours recess, compensation

for disablement were not considered by the Commission. Continuingan agitation for factorylegislation

Lokhande succeeded in submitting a petition to the Governor General in 1889 and holding a mass

meeting in 1890. In 1890, Lokhande also succeeded in forming a union, the first in India, named

Bombay Mill Hands Association (BMHA).

The labour agitation again gathered momentum during Swadeshi movement following the partition

ofBengal in 1905. The policyof boycottingBritishgoodsfitted wellinimprovingthe workingconditions

of Indian workers in mills. However, an agitation followed in 1908, in support of Bal Gangadhar Tilak

who was convicted of sedition and strikes continued to hamper the mills in Bombay. Slowly, more

organisations similar to BMHA were formed, the dominant one among them being Kamgar

Hitvardhak Sabha (Workers Welfare Association) that was formed in 1910, aimed to improve the

workingconditions.

But the real movement of unionism erupted with the non-cooperation movement in 1920s. With

political unrest increasingin the country, almost every political party lent their support to trade unions.

Bombay, Calcutta and Madras were becoming the centres of trade union activities. Though BMHA

was formed as a union, it did not function like a trade union. The first trade union of the modern kind

was Madras Labour Union, formed in 1918. It had memberships, organisers, office bearers and

independent existence. With increased political support and influence, trade unions were on the verge

of getting politicised. Soon, in 1920, All India Trade Union Congress (AITUC) was formed by the

Indian National Congress to represent the Nation at International Labour Organisation of the League

of Nations. AITUC contained all shades of political opinion, nationalist, socialist and communist.

4

5

3

Bhasin Lalit, Employment and Labour Laws in India, http://unpan1.un.org/intradoc/groups/public/documents/APCITY/

UNPAN029043.pdf, August 24

th

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0

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4

All-India Trade Union Congress (AITUC), http://www.britannica.com/EBchecked/topic/15873/All-India-Trade-Union-Congress

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Crouch Harold, AITUC and the Split in the Communist Party, http://www.jstor.org/pss/4356954, 1966

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The next milestone in the Indian trade union history was the passing of the Indian Trade Union

Act in 1926. Giving a legal status to the trade unions, the Trade Union Act enhanced the status of

working class in India. The trade union act gives the employees the right to form unions. The act,

which describes trade union as the most suitable organisation for balancing and improving the relations

between the employer and employees, also says that unions are formed to inculcate the sense of

discipline and responsibility (Exhibit I).

Source: Industrial Acts and Legislation: The Trade Union Act, http://business.gov.in/legal_aspects/trade_unions.php

Exhibit I

Aims of Trade Union Act 1926

Secure fair wages for workers and improve their opportunities for promotion and training

Safeguard security of tenure and improve their conditions of service

Improve working and living conditions of workers

Provide them educational, cultural and recreational facilities

Facilitate technological advancement by broadening the understanding of the workers

Helpthemin improvinglevelsof production, productivity,disciplineandhigh standardofliving

Promote individual and collective welfare and thus correlate the workers interests with

that of their industry.

There were no major labour activities till 1947. The Industrial Disputes Act was passed in 1947

and still continues to be Indias central piece of labour legislation. Thrilled in the new found

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independence, India was preparing for major changes in legal, economical and social developmental

processes. Indian government sought support of trade unions in the planned developmental processes.

The working class movements were soon politicised. Indian National Congress formed a seperate,

Congress-controlled trade union, Indian National Trade Union Congress (INTUC) and moved out of

AITUC. The Congress Socialist Party also left AITUC to form Hindu Mazdoor Sabha, followed

by Marxist idealists forming United Trade Union Congress (UTUC) and by 1948, AITUC became

an arm of Communist Party of India (CPI). By 1949, there were four central trade unions in the

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country; AITUC, INTUC, Hindu Mazdoor Sabha and UTUC.

The Trade union Act, Indias central piece of labour legislation has undergone many overhauls.

The principal act has been amended 34 times. Acts that are more than 100 years old are retained

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in Indian central labour laws. Even after the years of amendments and state reforms, the laws are

highly protective of the workers.

6

Beseley Timothy and Burgess Robin, Can Labour Regulation Hinder Economic performance? Evidence from India,

http://econ.lse.ac.uk/staff/rburgess/wp/indreg.pdf, 2004

7

AITUC and the Split in the Communist Party, op.cit.

8

The Industrial Dispute Act, 1947, http://labour.delhigovt.nic.in/act/html_ida/introduction/introduction.html

9

The Fatal Accidents Act 1855


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The period after independence witnessed rapid unionisation. During 19471965 there was rapid

growth of unionisation. The membership in the unions was also trebled and public sector emerged as

a major hub of unionisation. This period was comparatively a peaceful period as there was a dip in

the level of industrial disputes. 19661977 was characterised by low employment levels and stagnation

of industrial activities. There was a dramatic increase in the levels of Industrial disputes following

the lesser demand in the labour markets. In 1980s, independent, industry-based unions started forming,

in spite of the prolonged existence of political party based unions (Exhibit II). In India, political

parties play very important roles in the formation and functioning of the trade unions. In many of the

cases, the union leaders are often outsiders and are affiliated to the political parties. Number of

disputes, however, kept increasing during the decade. In 1989, Indian Chief Justice A. M. Ahmadis

ruling that The right to strike is an important weapon in the armoury of workers, recognised by

almost all democratic countries as a mode of redress,

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supported employees right to strike.

1

0

Venkatesan V., The judicial response, http://www.hinduonnet.com/fline/fl2018/stories/20030912005302000.htm, August

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0

0

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Exhibit II

Indian Trade Unions and Political Lenience

Compiled by the author from Christopher Candland, The Cost of Incorporation : Labour Institutions, Industrial

Restructuring, and New Trade Union Strategies in India and Pakistan, http://www.candland.info/incorp.pdf and Crouch

Harold , AITUC and the Split in the Communist Party, http://www.jstor.org/pss/4356954, 1966

Trade Union

Political Party

Year

Established

All India Trade Union Congress

Communist Party of India

1

9

2

0

Indian NationalTrade Union Congress

Indian National Congress

1

9

4

7

Hindu Mazdoor Sabha

Janata Dal

1

9

4

8

United Trade Union Congress

Communist Party of India (Marxist)

1

9

4

9

Bharatiya Mazdoor Sangh

Bharatiya Janata Party

1

9

5

5

United Trade Union Congress- Lenin Sarani


1

9

5

9

National Federation of IndianTrade Unions

Naren Sen (Former Indian National

Congresspolitician)

1

9

6

7

National Labour Coordination Committee

(West Bengal centre formerly affiliated

to INTUC)

Indian National Congress

1

9

6

9

Centre for Indian Trade Unions


1

9

7

0

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In June 1991, Indian Government decided to implement the International Monetary Funds (IMF)

stabilisation and structural adjustment programme. Reduced involvement of government in dispute

settlement and increased flexibility in labour front reduced conflicts during 1990s (Exhibit III).

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Devarajan Shantayanan and Ahmed Sadiq, Labour Laws, To create Good Jobs, Reform Labour Regulations, http://

www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:21235163~

menuPK:295589~pagePK:2865066~piPK:2865079~theSitePK:295584,00.html, February 20

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2

0

0

7

1

2

Ibid.

Exhibit III

Indian Trade Unions and Lost Workdays

Source: Christopher Candland, The Cost of Incorporation : Labour Institutions, Industrial Restructuring, and New Trade

Union Strategies in India and Pakistan, http://www.candland.info/incorp.pdf

Member per Union (hundreds)

Union Workers (millions)

Workdays Lost (tens of millions)

1

2

1

0

8

6

4

2

0

1

9

5

0

1

9

6

0

1

9

7

0

1

9

8

0

1

9

9

0

2

0

0

0

Year

Reduced employment generation remained a stumbling block in Indias way to development and

this was majorly caused by the archaic labour laws of India. A recent study estimated that in 1997,

India could have had more than 1 million more jobs in the textiles and clothing sector alone if its labor

regulations had been less restrictive.

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Overall the country could have had 2.8 million more good

quality formal sector jobs a startling 45% of existing employment in the organised manufacturing

sector on that date.

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By 2000, besides workers, supervisors, managers, bank employees and white-collar employees

also formed unions to protect their interests. There were both registered and unregistered unions and

the existence of more than one union in an establishment was common. Union rivalry was an expected

consequence of this. Protecting the interests of the union members was the priority for the union

than the protection of organisational interests. However, the membership significantly reduced from

1990s to early 2000s. But still, according to the rights of trade unions, the members could indulge in

strike and there by affect the operations of the organisation.

In 2003, Supreme Court ruled that government employees have no right to indulge in strikes

since it inconvenienced citizens and cost the state money . The essential Service Maintenance

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Act passed back in1968 had already banned strikes in essential services. Though there were a

few disputes in certain sectors, the number had gone down and was relatively low. Since 2008, the

disputes were relatively low. 2008, the year marked with global financial crisis and head count

reductions gave a new found enthusiasm to the labour union activities. However, what motivates

individuals decision to unionise is still unknown, but it is sure that various factors affect the

decision (Exhibit IV).

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Annual Survey of Violations and Trade Union Rights, http://survey08.ituc-csi.org/survey.php?IDContinent=3&IDCountry=

IND&Lang=EN, 2008

Exhibit IV

Various Factors Affecting the Individual decision to Unionise

Source: Pal Rupayan, Estimating the Probability of Trade Union Membership in India: Impact of Communist Parties,

Personal Attributes and industrial Characteristics, http://www.igidr.ac.in/pdf/publication/WP-2008-015.pdf, July 2008

State Level Variables

Industrial Level Variables

Personal

Industrial Characteristics

Reach of Communist Parties

Gender

Establishment size

PoliticalActivism

Marital Status

Sector- public or private

Unemployment rate

Social-group

Type of industry

Per capita NSDP

Religion

Education

Labour Market experience

Employment status

Occupation

Not only are the workers from the lower income strata earning meagre sums attracted to unionism

of the modern era, nevertheless employees from financially well-to-do industrial sectors are also

finding the trend of unionisation interesting and necessary. Even the IT and ITES industry, mainly the

Business Process Outsourcing (BPO), which never had any unions, are waking up to the realities.

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As BPO industry becomes one of the largest employment providers, protecting the democratic

rights of the employees demanded attention. With some critics charging that the young workforce of

BPO industry is often treated as indigent workers, the need of unionisation in the industry gained

momentum. Though the industry lobbies fear that the unionisation in the industry might be counter

productive, Indian BPO industry alreadyhas enough unions. When industrial relations become fragile,

protecting the workmens interest becomes the priority of the unions.

Trade unions roles are often interpreted and understood in different ways by different interest

groups. While many think a union has no morality but only exhibits brutal power, some think it is the

workersright to form union and protect their interests. Atrade union is a continuous association of

the wage earners to maintain a healthy relationship between the management and the working class.

Trade unions try to restrain labour abuse and establish necessary economic and legal conditions by

industrial (strikes andprotests) and political (influencinggovernment policies) actions. Mismanagement

of workers can often lead to a rift between the management and union.

However, whether the growing labour unrest in India can be termed as militancy is altogether

another question. Militancy means extremism. But in the context of unions, it means struggle, not

extremism.

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However, the recent developments in the Indian trade union front would leave no doubt

about the meaning of extremities (Exhibit V). The fighting for right kind of labour unions have given

way to more strong, politically flavoured battalions that can act on impulse and even murder someone

as an evidence of the power. The murder of a CEO of Italian MNC Graziano Transmissionis unit in

Noida and murder of auto parts manufacturer Pricols vice president (HR) in Coimbatore might be

indicating the increased adoption of violence as a tool of protest.

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4

Pandhe M.K., Have trade unions become more militant?, http://business.rediff.com/report/2009/oct/07/have-trade-unions-

become-more-militant.htm, October 7

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Exhibit V

Labour Disputes in India is on a Rise

2

0

0

8

February 25

th

Bank Employees Strike for two days

August 27

th

BSNL employees strike against disinvestments

September 24

th

Bank employees strike against privatisation and M&As

September 28

th

CEO of GrazionoTransmissioni, an Italian auto parts firm, killed by sacked workers

at Delhi plant

October 1

st

Strike by CineworkersAssociation

December

Jute workers of West Bengal goes on a strike for unpaid compensation

Contd...


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2

0

0

9

January 5

th

Coal workers demand higher wages

January 6

th

Truckers demand lower diesel prices and tax cuts

January 7

th

Oil workers at IOC, BPCL, HPCL and GAIL strike for higher wages

February 25

th

NTPC stir for better pay packages

April 30

th

Airport workers threaten strike against transfer of 4,000 workers from Mumbai

and Delhi

April 20

th

CITU-led workers at Hyundai strike demanding union rights

May2

nd

Nestle workers at Pantnagar strike after removal of probationers

May 4

th

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0

-

day tool-down strike at M&M in Nashik

May 9

th

Sit-in strike at MRF

May 12

th

Two-day strike by workers of JNPT. Strike at Paradip and Cochin Port

May 19 20

t

h

th

MTNL employees demand wage hike

May 20 21

t

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st

Mine workers strike at Bailadila mines

May 25

th

Goa PWD workers demand wage hike

May 28

th

Bharat Electronics employees call for strike on wage issue

June 12

th

Bank employees to go on strike

August

Go-slow strike at Honda Plant Gurgaon causes productivity fall 50%

September 8

th

JetAirways pilots Strike causing much inconvenience to passengers

September 23

rd

HR head of Pricol, auto parts manufacturer, killed at Coimbatore plant

Compiled by the author from Singh Gurbir, The Summer Of Discontent, http://www.businessworld.in/index.php/

Corporate/The-Summer-Of-Discontent.html, June 5 2009

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Year 2008 meant disastrous fear for employees across the world, with US financial crisis forcing

the companies to downsize and India was not spared. Especially, the airline sector was terribly

affected with immediate slash down in air travel, both from corporate executives and leisure travellers.

Many airlines downsized their workforce, increasing labour discontent in the whole aviation sector.

Could unions have saved the jobs put on block? The pilots strike at Jet Airways seems to be a

genuine case of mismanagement of a consequential labour issue and the labour reaction.

JetAirways:AWrong Take Off

The rift between the Jet Airways management and the pilots started with the formation of NAG,

which is a union of Jet Airways pilots. The services of two senior Jet Airways pilots, D Balaraman

and Sam Thomas, were terminated without any explanations by the Jet Airways management at the

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end of July 2009. NAG said the termination was only because of the pilots active participation in the

formation of the union. On August 22

nd

2009, the management received a strike notice from the

union, NAG. The same notice was also sent to the labour commissioner. The pilots were sacked

because they formed the guild. The guild is not illegal and is registered with the labor commissioners

office. Our only demand is they take the two pilots back. Otherwise there will be indefinite strike,

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said Captain Girish Kaushik, president of NAG. But the management remained undeterred about

their decision. The labour commissioner, who received the strike notice, called both the parties for a

conciliation meeting onAugust 31 2009.

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The labour Commissioner asked the management to come with a satisfactory reply for terminating

the services of the pilots by September 7 2009. The Commissioner also directed the NAG not to go

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on strike while the hearing was on. However, the NAG was persisting they get a satisfactory reply,

possibly that favours them, by September 7 else they would continue with their plan to go on strike,

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though it is illegal to go on strike when the talks are on.

When there was no favourable move from the management, the pilots went on with the strike,

but in a legally acceptable way. The pilots went on a massive sick leave, which led to high chaos

in airports especially in Delhi and Mumbai. The chairman of Jet Airways, Naresh Goyal (Goyal)

said he was open to talks but blamed pilots for the massive troubles the airlines caused passengers.

They are behaving like terrorists. They cannot hold the country, passengers and the airline

hostage,

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said Goyal. The management sacked two more pilots. On September 9

th

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0

9, nine

central trade unions Hindu Mazdoor Sabha, Centre for Indian Trade Unions, Bharatiya

Mazdoor Sangh, AITUC, INTUC, All India United Trade Union Centre, United Trade Union

Congress, All India Central Council of Trade Unions and Self Employed Womens Association

extended their support to the striking Jet Airways pilots. In a letter to Jet Airways CEO, Wolfgang

Prock Schauer, the unions said, By preventing the pilots to form a union, you are violating their

legal right to pursue legitimate trade union activities and infringing their fundamental right to freedom

of association guaranteed to them and all citizens of India by the Constitution.

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The mass sick leave continued till the management and the NAG reached an agreement on late

night of September 12 2009. The management agreed to take back the dismissed pilots on board

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and a consultative group was formed to resolve the issues.

Though the strike ended, it left the ailing airline with more damages. Cancellation of the scheduled

flights led to massive loss. Even after the flights were resumed, a reduction in the average daily

revenue and the number of passengers clearly indicated that the damage was difficult to repair. The

company lost INR 20 crore ($4.5 million) on an average on the days of strike owing to the cancellation

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Chowdhuri Anirban, Jet Airways Faces Pilot Strike Threat, http://online.wsj.com/article/SB125118907876356279.html,

August 25

th

2

0

0

9

1

6

Jet pilots behaving like terrorists: Naresh Goyal, http://economictimes.indiatimes.com/News/Politics/Nation/Jet-pilots-

behaving-like-terrorists-Naresh-Goyal/articleshow/4990346.cms, September 9

th

2

0

0

9

1

7

Jet Air-pilots standoff continues; passengers suffer, http://business.rediff.com/report/2009/sep/11/jet-airways-pilots-may-

call-off-strike-today.htm, September 11

th

2

0

0

9


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(Exhibit VI) and a drop of 30% in the ticket bookings.

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The developments were deepening the trouble as the

company had lost INR 225.3 crore in the quarter ending

June 2009.

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Indias largest private sector airline also has

a debt of INR 16,000 crore.

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After the 5-daydispute, Jet Airwaysdaily revenue of

$8 million reduced considerably and the number of

passengers dropped from 23,000 per day to 7,500.

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The

5-

day long protest of pilots has created new problems for

the struggling company. All that Jet Airways got was bad

publicity, cancelled flights, angry and upset passengers and

a deep hole in the already draining pocket.

The strange fact is that even after repeated advice and

appeal to not to go on strike, both from the labour

commissioner and the management, even after an order

from the Mumbai high court calling the strike illegal, the pilots have not retreated from their stand.

They continued to be on sick leave, leaving no chances for the management or government to claim

it to be a strike. No law could blame the pilots as they were doing nothing against the law and still it

was a strike and everyone including the legislatingbodies, the management, and the pilots participating

in the strike knew it, still there was nothing that the legislation could do (Exhibit VII).

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Bhas Ramiya, Jet Airways in losing Rs 20 Cr revenue daily, http://www.dnaindia.com/mumbai/report_jet-airways-is-losing-

rs20-cr-revenue-daily_1288909, September 10

th

2

0

0

9

1

9

Ibid.

2

0

Phukan Sandeep and Chopra Shaili, Financial Cost of Jet Pilots Strike, http://www.ndtv.com/news/india/

financial_cost_of_jet_pilots_strike.php, September 8

th

2

0

0

9

2

1

Jet Airways pilots end strike, flights to resume immediately, http://beta.thehindu.com/business/companies/article19498.ece,

September 13

th

2

0

0

9

Date

Number of

Flights Cancelled

September 8

th

1

8

6

September 9

th

1

7

0

September 10

th

1

9

8

September 11

th

1

5

0

September 12

th

1

8

0

Exhibit VI

Jet Airways: Number of

Flights Cancelled

Compiled by the author

Exhibit VII

An Excerpt of the Interaction between Management and Sacked Pilot

Q:

Let me ask you a simple direct question: 360 pilots absented themselves yesterday, 432

have absented themselves from work today claiming sickness. Is this a strike or an

epidemic?

Thomas: Probably an epidemic. We are not on strike. I reiterate the fact that we are not on strike.

Q:

If it is an epidemic, dont youthinkyou should be urgently seekingmedical attention?After

all, something like 60% of your colleagues have fallen mysteriouslyill.Your lives could be

at threat?

Contd...

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Thomas: We are very thankful to the company. They are taking care of it. They are sending doctors

to everybodys house.

Q:

And you are refusing to see the doctor, which makes it rather strange doesnt it?

Thomas: Yes. They are coming at 2 and 3 in the morning. So, that is going to be a problem.

Q:

So you mean to say you will onlysee a doctor during visiting hours and daylight regardless

of the fact that you are so sick that 432 of your colleagues out of 760 cannot go to work?

Are you fooling the country by trying to suggest that this mass sickness is a reality and not

a strike? Are you trying to make forgive my colloquialism an ass out of the rest of us?

Thomas: The issue is very clear that there are laws in the country. The law tells us when a pilot is

capable of flying and when he is not. What we are saying here is that a constitutional right

to form a union cannot be trampled upon. As far as the passengers are concerned, we

apologise to them.

Q:

No one denies that you have a constitutional right to form a union. I am not suggesting by

any means that you havent been stopped by the airline. The airline is suggesting they

havent stopped you. You have been told by the Bombay High Court that you must not go

on strike. You have tried to get around that by declaring mass sickness. You are really

assuming that the judges of the court are forgive my colloquialism fools who wont see

through your ploy. This is dangerous potential contempt of court. Is it mature for airline

pilots to behave in this way?

Thomas: That is the way you look at it. The Federation of Indian Airlines, which our management

was a part of, also did the same thing and issued a strike notice. But as far as we are

concerned, we are going by the law. What is more pertinent here is that it has been 14

days.We have tried every possible avenue. We have contacted the CivilAviation Minister,

anybody who is even remotely connected. It is not that we went on strike overnight.

Q:

When you talk about waiting 14 days and when you suddenly absent yourself, you are

clearly suggesting byyour language that this is a strike. Everythingsuggests this is a strike

except for the fact that you insist on calling it mass sickness?

Thomas: No, I think you are putting words in my mouth. We have very clearly withdrawn the strike

notice. Now if you want to come and visit the pilots yourself or when the pilots en masse

individually stood up for, I dont think that you could term it as a strike. By terming it as a

strike, it is misrepresentingthe issue. There has been gross injustice. Would you not like it

if you had been done the same?

Source: Pilots union, Jet slug it out on live TV, http://www.moneycontrol.com/news/business/exclusive-pilots-union-

jet-slug-it-outlive-tv_414865-0.html, September 9 2009

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But whether the problem lies with pilots alone is another question to be asked. Sam Thomas, in

another interview pointed out the flaws of the management (Exhibit VIII).


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Exhibit VIII

Excerpt from the Interview with Sam Thomas

Pilots are highly paid, about Rs 600,000 a month, which makes people wonder why they

should want to form a union or a guild. You are hardly workers in that sense.

If highlypaid people are not workers and cant formunions, the Constitution of India should mention

it. We dont cease to have the right to form unions just because we are highly paid. Tell me, if all

journalists are paid Rs 600,000 a month and asked to do domestic work, would you not form a union

and fight for your rights?

But why did you form a union now?

We had a good association for the last ten years. We also have the Society for Welfare of Indian

Pilots. But the expatriate management from the Arab countries is not used to workers having any

rights. They are used to Indians coming to their countries and working like slaves. The association

and the management had several agreements on working conditions but the expatriate management

is going back on most of them.

What is the proportion of expatriates in the management?

Our management is completely expatriate. Our CEO is from Australia, the COO is from Bahrain,

two top officials are from Ireland, while another is fromAustralia.

What was the immediate provocation?

There were many provocations during the last two years. The latest was regarding our career

progression and promotions. No promotions were happening and all our allowances were cut. We

understood that it was because of the recession. But if you are cutting our allowances, you cant hire

foreigners at double salaries. The foreign management was making Indians wait indefinitely for

promotions. If your office gets taken over by foreigners, what do you do? We want dignity and not

money. Money cant be a substitute for dignity.

The government feels that you are workmen under the law and you have the right to form

a union. But it also feels that you have no right to go on strike when the conciliation

process is on. You should have gone to the labour commissioner instead?

I know what the idea is. The management will find a legal way to keep us down. They will say that

the talks are on but the next hearing will be after three months and the subsequent one after five

months. So, we will keep flying as we cannot strike work when the talks are on.

But that is how it is. You cant go on strike.

Ok . But who says we are on strike? We are not on strike.All of a sudden, 400 people can fall ill due

to food poisoning. We can get medical certificates to prove our illness.

Source: Menon Sreelatha, We want dignity and not money, http://www.business-standard.com/india/news/we-want-

dignitynot-money/369897/, September 13 2009

t

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1

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HRM0049

Whether the public are made fools or the management is taught a lesson, the strike could only

bring dissonance. Both the sides were trying to prove their power and the ones who suffered were

the customers. Though the pilots were disrupting an essential service, there was no action taken

against them. Though the management is accused of discrimination, no action was taken. Even

while a strike during conciliation process is a punishable offense, masking their protest in mass

sickness, pilots used the loopholes of Indian labour laws well.

Labour Relations: Time to Rethink?

In a way, the global financial crisis and the reactions of firms towards it subtly contributed to the

growth of labour unrest in India. The disputes since 2008 would give a clear picture about the level

of unrest. Just a cross view of Indian labour sector would give the impression that the unrest is

growing for sure. Indias age old labour laws have become fragile enough to control the labour

unions. The contradictory fact is that it was the Indian labour laws which gave power to the labour

unions by supporting their activities.

The lack of maintaining proper labour relations had become a curse on India.Apart of it, however,

is blamed on the industrialisation and privatisation that have changed the business front of India.

Pandering to labour unions demands no longer became an option in the highly competitive field of

business. More over, employees too did not feel the necessity of forming a union in an industrious

world. The industrialisation also left many unions with lack of vision and zeal. More than ten unions

in a single plant or industry, fighting for recognition is not a rare scene in the modern day scenario.

There is a tremendous increase in the number of unregistered unions that have nothing to do with the

interest of the organisation.

Moreover, the increase in the contract labour has also reduced the union activities. A labour

scenario which breeds informal labour has a high chance of erupting labour discontent in violent

ways. The decline of militant unions is an unintended consequence of an undesirable decline of

organised employment, says Manish Sabharwal of TeamLease, Indias leading staffing company.

2

2

What causes the labour unrest is a fear psychosis, say experts. Both the management and the

workers are suffering from it. Militancy might be too strong a term to be used as far as Indian trade

unions are concerned but the fear is real. There is a growing unrest, which may or may not go down

with the general improvement of the countrys economic health and improved labour statistics.

One question, however, remains unanswered on the Indian labour front. Do the labour laws need

an urgent renovation? The answer is not known and not so-easy to find. The need to make labour

reforms come from the changing times and mode of business and industrial establishments. In a

democratic country like India, development depends on the flexibility of labour markets. But contrary

to the expectation, labour relations are fragile in the country and they often break, unable to withstand

even the slightest pressure. While being more flexible remains the motto of every industrial

establishment globally, in India, things take an unfavourable twist. The labour laws which are basically

meant to enforce the acts which are age old are not strong enough, as there are a lot of loop holes.

2

2

Labour Pains: Is Industrial Unrest Growing or Slowing?, http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4392,

July 2

nd

2

0

0

9


1

4

HRM0049

Indian labour market is known for its inflexibility that arises from the nature of the labour laws in

India. Counting to more than 50 central acts and more than 150 state variances that affect the labour

market, Indian scenario of labour remains rigid (Annexure I). It is to be noted that these laws overlap

many a times. Many common items like workman, wages, employee and factory are defined

differently in differentActs pertaining to the same sector. Provisions under the FactoriesAct, do not

match with provisions under the Minimum WagesAct. Provisions under the BeediAct are at variance

with those under the Contract Labour Abolition Act,

2

3

said Dr. Manmohan Singh, Indian Prime

Minister and well known economist, citing the flaws of labour laws.

The intervening and overlapping labour laws that have no standard definitions and terms remains

the major problem of Indian labour front. Even the major acts on the labour regulations have flaws

that would harm the over all growth prospects of the country (Exhibit IX).

2

3

Prime Ministers Address to the 40th Indian Labour conference, op.cit.

2

4

Datta R.C. and Sil Milly, Contemporary Issues on Labour Law Reform in India, http://atlmri.googlepages.com/RCD_MILI.pdf,

2

0

0

7

Exhibit IX

Flaws in Laws?

The Industrial Disputes Act (1947)

According to the central legislation of India, The Trade Union (Amended) Act 2001, a registered

trade union in India needs to have at least 10% or 100 of the workers as its members. Out of this, a

minimum of seven people must be engaged or employed in the establishment. The rest can be

outsiders. The Act concentrates on the organised labour (as all the Indian Labour laws) and has

arguably restricts the rights of the organisations to hire and fire the workers. This rigidity has forced

manyof the organisedplayers not to hire on the first hand foreseeingthe future difficultyof offloading

a worker, even if he is useless. The jobless growth of economy in India was a result of it.

The Contract Labour (Regulation and Abolition) Act (1970)

It is said that contract labour allows flexibilityand permits outsourcingbut provisions of the Contract

Labour Act was never meant to protect contract labour.

2

4

The Supreme Court ruling in 1972 which

says if the contract labour essential to the main activity then it should be abolished, spoiled the

flexibility of contract labour. Employees still cry out that the law is oftendisobeyed by the employers.

Employers argue that they should be allowed to contract the peripheral work in order to increase the

efficiency. But for that the act should be scrapped.

Contd...

1

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HRM0049

Problems are many for the Indian labour sector; growth of unorganised sector, alarming increase

in lost workdays, tensedrelation betweenemployers and employees, lackof trust, political intervention,

overlapping labour acts, lack of proper enforcing bodies, increasing labour unrest, jobless economic

growth and many more. It can be easily observed that the plethora of problems stem majorly from

the labour relations and the governing labour legislation. For example, while there are only a handful

of inspections in factories of China, often not more than five, Indian factories are inspected by 30

inspectors on an average, under various laws and rules and regulations.

27

The inspector raj should

end if the industries are to prosper. It is not that the Indian government is unaware of the problems.

the time has come for us to take stock of our labour laws and see how best we can in fact

serve the interests of our working people, especially the vast mass of low-skilled, unemployed youth

who are looking for jobs in the manufacturing sector,

2

8

said Dr. Manmohan Singh on the 40 Indian

t

h

Labour Conference, 2005. After 4 years, India is nowhere near the reforms that it intended to make.

The situation in India is more challenging as the political interests and bureaucracy are intimately

related and a major reformof an important legislation can become deadly.There is little doubt about the

negative effect of labour laws on growth and development, including employment creation. However,

an immediate take on labour reforms would be out of question as there are several factors that determine

the kind of reform the country is intending to take. Creating awareness about the benefits of labour

reforms is one option, but is a herculean task in a country like India. Moreover, effectiveness of such an

awareness programme would be questionable as it is the decisive factor of its success.

Labour reforms are happening, but not in the expected scale and level. In September 2009, IT

and ITES establishments were exempted from the provisions of Industrial employment act (1946).

2

9

But until the parts of labour legislation that actually hurt the working class interests are changed,

investments in labour-intensive sectors would be discouraged. With Indias labour force growing at

a rate of 2.5%, and an employment growth of only 2.3%, leaving 1million million jobless every

year, India would struggle to find the growth of if it does not give importance to labour reforms.

2

5

Contemporary Issues on Labour Law Reform in India, op.cit.

2

6

Ibid.

2

7

Prime Ministers Address to the 40th Indian Labour conference, op.cit.

2

8

Ibid.

2

9

Kumar Anil M., IT companies free of Labour Laws for two Years, http://timesofindia.indiatimes.com/NEWS/Business/

India-Business/IT-companies-free-of-labour-laws-for-2-years/articleshow/4957075.cms, September 1

st

2

0

0

9

Trade Union Act (1926)

The Trade Union Act, which allows outsiders to be the office bearers and members, is heavily

criticised. Through this, employees who are not directly working under the company would also turn

against the company when disputes arise. An act that allows outsiders to intervene in the company

matters does not exist in any other countries in the world.

2

5

Lack of democracy in the unions is also

a problem in India. While trade union policies in countries like Singapore aims at the overall

development of the country, in India, these policies restrict the economic growth and productivity.

2

6

Compiled by the author


1

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jet airways labor dispute

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