rdNHRDN 3 IR Summit 2015 Rejuvenating Industrial Relations to Make in India Happen

Sustainable Industrial Relations” has always been an area of concern for the Industry leaders and investors. This has also assumed greater importance in the context of the ambitious ‘Make in India’ Programme through which the Government hopes to make India a major hub for Global Manufacturing.While Human Resource Management function has evolved from Labour Management to Talent Management and from Industrial Relations to Employee Relations, the development of core competencies required for HR professionals to engage effectively in “Collective Bargaining” processes seem to have taken a back seat which needs to be clearly addressed. Sustainable Industrial Relations is not just about having industrial peaceDemocratic India with adverse demand - supply situation and highly protective Labour law framework could inadvertently drive workmen to opt for unhealthy collective bargaining processes. This also gets accentuated in situations where employment conditions are relatively poorer. On the part of employers, sustainable Industrial Relations demand competency, willingness and the right attitude. . At the end of the day good industrial Relations should enable flexibility, reliability, consistency, and deliver highest standards of productivity and quality.Recognizing these imperatives NHRDN organized its 3rd Industrial Relations Summit – “Rejuvenating Industrial Relations to Make in India Happen”, on 22-23 May, 2015 at Hotel Taj Land End, Mumbai.The Summit started with the welcome address delivered by Mr Kamal Singh, Director General, NHRDN who welcomed all the dignitaries, participants, members of media & its Summit partners. Summit ObjectiveThe Summit objective was shared by Mr Pramod Mahatme Summit Director and Vice President – Employee Relations, Wipro. Mr Mahatme explained what thought had gone in Conceptualising and designing this summit. He said that, since the opening up of the economy and the development of the service sector, Industrial Relations has not been getting adequate focus in Industry and that had resulted in very few competent professionals opting for it and in turn not many educational institutions focusing on it. And consequently the core competencies required of Industrial Relations professionals to engage effectively in “Collective Bargaining” processes have taken a back seat. He emphasised that IR is different from ER and that it is necessary to understand that attitude and competencies required for both are not the same.He said in this summit the focus is on Industrial Relations i.e. when employees surrender their individual bargaining rights and opt for collective bargaining. The lack of this competency among HR professionals leads to

Date 22 - 23 May 2015

VenueParticipants

Mumbai

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Mr Pramod MahatmeSummit Director & V P - Employee Relations WIPRO

addressing the audience

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fear and anxiety resulting sometimes in a hostile attitude and unhealthy Industrial relations. He emphasised the need to realize that Industrial relations is the product of social economic and political realities, aspirations of the people and the requirement of the business and the realities of their inter dependence and is not only about the chemistry between the leaders of the concerned parties.“Sustainable Industrial Relations” has always remained an area of concern for industry leaders and investors, but it has assumed greater importance today in the context of the ambitious ‘Make in India’ programme through which the government hopes to make India a major hub for Global Manufacturing.He explained that in the third NHRDN IR summit they had incorporated the learning’s, feedback and suggestions from the previous session and earlier participants. Mr G P Rao Summit Co-Director & Advisor & Managing Partner GPR HR Consulting LLP explained the structure and gave a complete overview of the sessions. He said that this summit was designed to provide a good insight into most of the issues which influence and determine the Industrial Relations namely:• The challenges faced by the business, the IR imperatives arising there from and the benchmark for deliverables

in terms of IR in global competitive environment• How in some organisations Industrial relations issues get closely aligned with business strategies • What IR models some organisations having sustained, Industrial relations have followed • What challenges service industry faces, whose needs were never taken into considerations when ID act was

framed in 1947 • The critical examination of the impact of the framework of Labour laws, the changes required therein and the

way forward For the inaugural session we had two thought leaders Mr Rajeev Dubey former National President-NHRDN & Group President-HR & Corporate Services, CEO-After Market Sector Mahindra and Mahindra & Dr Mr Adil Malia, Group President HR, Essar Group.Mr Adil Malia talked of our journey from Control Regulation and protection to Liberalisation privatisation and globalisation. He said successful HR professionals who do ER got the courage, conviction and capability because they worked in IR. He said the pursuit of economic desire; growth development prosperity profit will have natural consequences like demand for quality, demand for productivity, demand for speed and demand for accuracy. Similarly when we open the global doors there are implications. IR manager has to understand the changing dynamics of business and the changing aspirations of the people. He also said we cannot forget the social good as we are all part of the society and community but individual aspirations cannot be done away with. He said there has to be a collaboration between the Stakeholders, Workers Union, Management and Government.Mr Rajiv Dubey said business needs competitiveness fairness and inclusiveness. Rationalisation, restructuring, use of contract labour will be necessary but this has to be done for achieving flexibility and not merely to save

Mr G P Rao Summit Co-Director & Advisor & Managing Partner

GPR HR Consulting LLP

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cost. He said we should do it for flexibility and not for cost arbitrage. Typically union management bargain gets into a win-lose situation but we need to move to win-win situations. He said productivity improvement with salary increase effectively does not increase the cost. He said Contract labour will be a pattern in all industries and It is a potential Time bomb if not managed well. He also emphasised that labour laws need changes but we ourselves also need to change.Setting benchmarks for key IR deliverablesThe first technical session was about setting benchmarks for key IR deliverables in the challenging global environment. The Session was chaired by Dr Aquil Busrai CEO – Aquil Busrai Consulting and the eminent Panelist in this session were Mr Pradeep Banerjee, ED – Hindustan Unilever Limited and Mr Jalaj Dani, President International - Asian Paints. They said IR managers must have a human face and clear understanding of the business and profitability and must demonstrate responsibility, consistency and competitiveness. They must demonstrate to be responsible for total value chain which include workers, managers, suppliers, vendors, investors and customers and be a custodian of trust in the whole organisation and then only will his role undergo a total change.Key issues to focus on will be inclusion, wellness, capability building, skill development and thought leadership. People should look at IR manager for giving Direction and Ideas and thoughts and not just the immediate solutions to IR problems. Mr Pradeep Banerjee presented Rosamma’s story revolving around giving meaning to life. He said Authenticity and People Focus are the crucial competencies for an IR manager and his evaluation should be based on his business linkage , his courage, his risk taking abilities, and his involvement in employee engagement.Automation Enabled Contract Labour ManagementHaving realised that Contract labour is going to be a pattern in all industries and it is a potential Time bomb if not managed well, a session was devoted to understanding how this could be managed well to ensure compliances. Ms. Priyadarshini Anand GM – Change Management Aditya Birla Group presented how technology could be used for ensuring, compliances, accuracy, speed in employment of contract labour. They said it is a responsive and proactive IR initiative for ensuring productivity and cost and tool for ensuring compliances.Frame-work for Responsive Industrial RelationsSustainable Industrial Relations is not about just having industrial peace. Good industrial Relations should enable Flexibility, Reliability and Consistency and deliver highest standards of Productivity and Quality. How Industrial relations issues get closely aligned with business strategies while operating within the given socio economic environment. Panellists representing Management schools, Employers association, Advisors to the Trade union among others were part of this session. The participants were benefited by the views of eminent Panelist including Mr Pramod Mahatme, V.P- Employee Relations WIPRO, Mr R S Maker Director General – EFI, Mr Sharad Gangal Sr. V.P. HR – Thermax Ltd, Mr Arvind Shrouti Sr Advocate & Owner Option Positive and having association with Trade unions.The Session was chaired by Dr J K Das, Director FORE School of Business.

Mr Adil Malia Group President HR Essar Group

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The Panel debated on root causes of key issues like what leads to individuals opting for collective bargain, what leads to militancy and some unfair practices that prevail, the issues of income disparities etc. and some of the thoughts which were presented were as below: Union is the logical compulsion of socio economic and political situation. Union’s strength stems from company’s dependence on the unit and it is not the function of the capability of the leader they choose. Not so much chemistry between the leaders but the relative forces of interdependence which drive the relationship and builds the bond. Income disparities is not necessarily the cause for Militancy , often most privileged better paid permanent workmen resort to militancy and violence and not the poorly paid contract workmen. History reveals the strong co relation between militancy and the reluctance to accept the Majority union. Only a strong union can agree to bring reforms and can be leveraged to improve standards, flexibility , cost reduction and stability. Mr Mahatme said Strike is not a misconduct but it’s a genuine tool for collective bargaining process and that Power to resign in individual bargaining gets replaced by power to strike in collective bargaining.Takeaways from some sustained models of Industrial RelationsThe next session was about sharing the Success Stories from leading Indian Conglomerates where ‘Industrial Relations’ get adequate focus at all levels of an enterprise – strategic, functional and operational.And how they had ensured that Industrial relations issues get closely aligned with business strategies. The Panel members included Mr S K Acharya, Director-HR-Neyveli Lignite Corp Ltd Mr J S Kaushal, Director-HR-CWC Mr Ashwani Prashara, Head Hr & IR Group Manufacturing Services Reliance Industries Limited , Mr Rajneesh Bawa, Director-HR-New Holland Tractor and Mr Vineet Kaul, CHRO-Hindalco Industries.Some of the points that came up during the session were that people seek income security more than job security and the models we choose should focus on delivering flexibility rather than cost advantage. ER is the front end of HR and is based on the strong foundation of IR . IR is for peace, Personnel is for stability and HRD for development. Have a foundation to build peace, have fairness to build stability and HRD to have development. IR issues have to be resolved through understanding people and wining their consent and not through influencing the leader. Some people hide efficiencies under the umbrella of relationship. Legal right may not always be morally right. It should not be a matter of pride and reward for IR managers that they have managed to delay settlements.Mr Rajneesh Bawa talked of a model of not having a union, yet taking care as if there is a union which is based on principle of inclusion and engagement and the powerful conversation at the lower level understanding the pulse of the business and the social engineering. And he explained the concepts of Nitee and Nyaya . Mr Kaushal with his public sector experience stressed on partnership, firmness, equity, trust and credibility. He said communication has to be continuous and not just before LTA. Mr Ashwini from Reliance said that there is no single model that works for them in all units. The relationship between the stake holders is important and transparency and communication helps. Mr Vineet Kaul from Aditya Birla group stressed that IR has to be a line management responsibility and the role of IR specialist is to aid advise and assist him and enable him to perform

Mr Rajeev Dubey then National President NHRDN and Group

President-HR & Corporate Services, CEO-After Market Sector Mahindra & Mahindra

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his task better. He said the success and failures are contextual. He said IR needs focus right up to board level and he said LTA has to be based on “Give and take “and it can easily be self financed i.e. when workers agree for increasing productivity and quality or flexibility in return for salary increase. Mr Acharya talked of family approach in Neyveli ,he insisted on having transparency, long term approach and genuine relationship.Challenges faced by service industry. Day 2 started with challenges in Services industry where the distinguished panelist from Service industry shared on how a Service Industry with ‘Employees first Situation’ faces unique challenges when people resort to collective bargaining. Traditional IR approach often does not work. Professionals from different verticals in service industry, Mr P Dwarkanath, Advisor-Group Human Capital Max India ,Dr. PVR Murthy, Global Head HR- Taj Hotels, Mr. Jacob , Chief People Officer-Apollo Hospital, Mr Bartanu Das, Head HR-Blue Dart and Prof Shaji Kurian HOD-HRD IFIM Business School, Bangalore shared their experiences and unique challenges they faced in their respective areas. They all agreed that in service industry the engagement and pride of the individual is important. The customer-facing employee has to be motivated. The employee behaviour has direct and immediate impact on the business. The employees in many service industries have not opted to unionise but there has to be a lot of pro active activities to maintain the same. They recalled some instances like nurses resorting to strike when things were not well handled. In service industry it is always a employee first situation but when this issue was debated the consensus was that both customer and employees are equal. Mr Dwarkanath stressed on Seva Bhav. They all said that in service industry recruiting right people or people with right attitude is the key, if not it can be very difficult. In service industry apart from monetary compensation people also look for psychic income which comprises of intangibles like respect, empowerment, training and development and work environment. Further in service

industry employees are more technology savvy and large number of minds can come together in no time. Every issue cannot be addressed with rules. Rules sometimes cannot overshadow the emotions in service industry. Employee behaviour during 26/11 attack was exceptional. As of today the knowledge workers in service Industry have not opted for collective bargain but the service industry has to prepare itself for opting for it in the times to come.Labour Law framework and its impac t on employment generation and inclusive growthThe last session was about examining our Labour Law framework and its impact on employment generation and inclusive growth. Are our labour laws labour friendly? Given a choice would India’s Youth today

Speakers and Panelist at the inaugural Session

Mr Jalaj Dani President-HR, International & Chemical, Asian Paints

prefer highly protected poverty or would they prefer little less protected prosperity? Should we not focus on: Employment generation rather than employment p ro te c t i o n . B u i l d i n g c a p a b i l i t i e s to ex p l o i t opportunities and enhancement of Social Securities rather than Job securities- these were some of the issues which were analysed by a panel of experts from the field of education and leading labour law practitioners Prof. J. Philip, President XIME Bangalore, Mr. B.C. Prabhakar, Advocate and Management Consultant, Mr Kuldip, Joshi Management Consultant and Mr Partha Pratim Dasgupta, CEO-Apogeeleads.Prof. Phillip made a quick comparison of the labour law framework of different countries including UK and China and highlighted how it had helped the employment generation in those countries. He said we need to shift from labour laws focused on job protection to employment laws focused on employment generation. Mr B. C. Prabhakar presented the proposed changes in Industrial Relations Bill. He pointed out that move to make Chapter VB of ID Act also applicable to Service industry was highly undesirable. ID Act curtails flexibility in every possible way making it difficult for any business. The specific provisions which impact the most are Section 9A read with Items 9,10,and 11 of Fourth Schedule which does not practically allow any change without settlement and Chapter VB which does not allow retrenchment closure or lay off . He said these provisions providing excessive protection has had a huge impact on employment generation in the manufacturing sector. Valedictory AddressThe Summit concluded with the Valedictory Address of Dr A. K. Balyan, MD & CEO – Petronet LNG. Dr Balyan observed that toughness and roughness was more in white collared employees. He said the measure of good IR is the productivity and not the strikes and lockouts. Strikes and lockouts have come down but that is not enough. Sustainable IR is still a question mark. Rigidness, isolation from society, lack of leadership, inequality, disparity are the main concerns. HR should look at IR as connectivity with workmen and encourage collective bargaining with positive vibes.

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Mr Pradeep Banerjee,ED Hindustan Unilever Limited

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