Resolving DisputesCh-22

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Nature of Disputes

• Industrial dispute refers to any conflict between employees and employers,between employers and employers and between employees and employees.

• Industrial disputes are conflicts, disorder or unrest arising between workers andemployers on any ground. Such disputes finally result in strikes, lockouts andmass refusal of employees to work in the organization until the dispute isresolved. So it can be concluded that Industrial Disputes harm both partiesemployees and employers and are always against the interest of both employeesand the employers.

• As per Patterson:“Industrial strife constituent militant and organized protest against existingindustrial conditions, they are symptoms of industrial unrest in the sameway that boils are symptoms of disorder of body.”

Causes of Disputes

Wages and allowances

Personnel and retrenchment

Indiscipline and violence

Bonus

Leave and working hours

Miscellaneous

Workload

Causes of Disputes

•Political instability

•Affiliation of political parties with unions

Political Causes

•Low morale in society

•Social values and norms

•Rich vs Poor disparity

•Class divisions

Social Causes

•Inadequacy of legal machinery

Legal Causes

•Rising prices

•Shortage in supply

Market Situation

•Unsuitable technology

•Difficulty in technology adoption

•Resistance to change

•Fear of unemployment

Technological Causes

•Wages

•Bonus

•Overtime

•Payment

Economic Causes

Employees' Perception of the Causes of Disputes

Causes of disputes Public sector Private sector

Weighted Mean Rank Weighted Mean Rank

Wages and allowances 6.59 1 6.28 1

Personnel and retrenchment 4.0 6 --- ---

Indiscipline and violence 5.59 3 4.78 4

Bonus 5.50 4 5.78 2

Leave and working hours --- --- --- ---

Miscellaneous 6.29 2 3.85 5

Workload 5.12 5 4.96 3

Disputes Manifestation

Manifestation of Organized Group

Conflict

Manifestations of Unions•Non-Cooperation to negotiate

•Arguments

•Stresses and tension

•Unwillingness to negotiate

•Resentment

•Absenteeism

•Demonstration, Morcha, Gherao

•Loss of Production

•Strike

Manifestations of Management

•Unwillingness withholding

•Termination

•Demotion

•Lay-offs

•Lockouts

Manifestation of individual and

Unorganized Conflict

Workers•Unorganized supervision of efforts

•Intentional waste and inefficiency

•Labour Turnover

•Absenteeism complaints

•Instances of breaking of rules

•Strike

Management•Autocratic

•Over-strict discipline

•Unnecessary firing

•Demotion

•Lay-offs

•Lockout

Settlement of Disputes

Non-Statutory Methods

• Collective Bargaining

•Works committee

•Discipline/ Grievance Process

•Workers Participation

Statutory Measures

• ID Act 1947

• State Acts

Government Machinery

•Arbitration

• Conciliation

•Adjudication

Collective Bargaining

In a bulletin issued by the ILO in 1960, collective bargaininghas been defined as, “negotiations about working conditions andterms of employment between an employer, a group of employersor one or more employer organizations and one or morerepresentative worker’s organizations ….with a view to reachingagreement wherein the terms of an agreement serve as a codedefining the rights and obligations of each party in theiremployment relations with one another; it fixes a large number ofdetailed conditions of employment , and during its validity none ofthe matters it deals with can in normal circumstances give groundsfor dispute concerning an individual worker”

Collective Bargaining

Collective bargaining consists of negotiations between an employerand a group of employees so as to determine the conditions ofemployment. The result of collective bargaining procedures iscollective agreement. Employees are often represented in bargainingby a union or other labour organization.

Collective Bargaining

A collective bargaining agreement is the ultimate goal of thecollective bargaining process. Typically, the agreement establisheswages, hours, promotions, benefits, and other employment terms aswell as procedures for handling disputes arising under it. Because thecollective bargaining agreement cannot address every workplaceissue that might arise in the future, unwritten customs and pastpractices, external law, and informal agreements are as important tothe collective bargaining agreement as the written instrument itself.

Law of Collective Bargaining

• The employer may not refuse to bargain over certain subjects with the employees‘representative, provided that the employees‘ representative has majority support inthe bargaining unit.

• Those certain subjects, called mandatory subjects of bargaining, include wages, hours, and other terms and conditions of employment.

• The employer and the union are not required to reach agreement but must bargainin Good Faith over mandatory subjects of bargaining until they reach an impasse.

• While a valid collective bargaining agreement is in effect, and while the parties are bargaining but have not yet reached an impasse, the employer may not unilaterallychange a term of employment thatis a mandatory subject of bargaining. But once the parties have reached an impasse,the employer may unilaterally implement its proposed changes, provided that it hadpreviously offered the changes to the union for consideration.

Process of Collective Bargaining

Phase 5 administration

Phase 4 collective agreement

Phase 3 bargaining

Options Criteria for bargaining Strategies for bargaining Bargaining power of parties

Phase 2 preparation for negotiations by management and unions

Data collection Policy formulation Management strategy planning Union strategy

Phase 1

Registration of union Recognition of union

Process of Collective Bargaining

Bargaining

Options• Rejection of all

demands

• Considering a few

• Temporary suspension to study the implications

• Counter demands

Criteria for bargaining• Give and take

• Open communication

• Read the hidden agenda

• Identify striking point of other side

Strategies for bargaining• Distributive

• Integrative

• Intra organizational bargaining

Bargaining power of parties• Persuasion

• Negotiation

• Coercion

Works Committee

Section 3 of the Industrial Disputes Act, 1947 provides for the setting up of aworks committee in all industrial establishments employing one hundred ormore workers consisting of representative of management and employees….Itis the duty of the employer to form such a committee

Discipline/ Grievance Process

• According to Richard D. Calhoon, “Discipline is the force that promptsindividuals or groups to observe rules, regulations, standards and proceduresdeemed necessary for an organization.”

• Therefore discipline means securing consistent behavior in accordance withthe accepted norms of behavior. As discipline is essential in every aspect of lifeit is equally essential in industrial undertakings.

• Simply stated, discipline means orderliness. It implies the absence of chaos,irregularity and confusion in the behavior of workers.

Nature of Discipline

According to Megginson, discipline involves the following threethings.

• Self-discipline implies that a person brings the discipline in himselfwith a determination to achieve the goals that he has set forhimself in life.

• Orderly behaviors refers to discipline as a condition that must existfor an orderly behaviors in the organization.

• Punishment is used to prevent indiscipline. When a worker goesastray in his conduct, he has to be punished for the same and therecurrences of it must be prevented.

Objectives of Discipline

• To gain willing adherence of the rules, regulations and procedureof an organization .

• element of uniformity despite several differences in informalbehavior

• desire among employees to make adjustments• seek direction and responsibility among employees• atmosphere of respect for the human relation• enhance the working efficiency and morale of the employees

Types of Discipline

• Positive DisciplinePositive discipline involves creation of an atmosphere in the organization whereby employees willingly conform to the established rules and regulations. Positive discipline can be achieved through rewards and effective leadership.

• Negative Discipline Under negative discipline, penalties are used to force the workers to obey rules and regulations. In other words, workers try to adhere to rules and regulations out of fear of warnings, penalties and other forms of punishment. This approach to discipline is called negative or punitive approach.

Symptoms of General Indiscipline

• Change in the normal behaviors• Absenteeism• Increased grievances• Lack of concern for performance• Go slow• Disorderly behaviors• Lack of concern for job• Late coming etc

Causes of Indiscipline

• Unfair Management Practices: Management sometimes indulges in unfairpractices like:• Wage discrimination• Non-compliance with promotional policies and transfer policies• Discrimination in allotment of work• Defective handling of grievances• Payment of low wages• Delay in payment of wages• Creating low quality work life etc.

These unfair management practices gradually result in indiscipline.

• Absence of Effective Leadership: Absence of effective leadership results inpoor management in the areas of direction, guidance, instructions etc. This inturn, results in indiscipline.

Causes of Indiscipline

• Communication Barriers: Communication barriers and absence of humaneapproach on the part of superiors result in frustration and indiscipline amongthe workers. The management should clearly formulate the policies regardingdiscipline. These policies should be communicated and the policies should beconsistently followed in the organizations. The management should also beempathetic towards the employees.

• Inadequate attention to personnel Problems: Delay in solving personnelproblems develops frustration among individual workers. The managementshould be proactive so that there is no discontent among the workers. Itshould adopt a parental attitude towards its employees. However it should benoted that no relationship can continue for long if it is one sided. What I amimplying here is that the workers should also live up to their commitments.They should be reasonable in their demands.

Causes of Indiscipline

• Victimization: Victimization of subordinate also results in indiscipline. Themanagement should not exploit the workers. It is also in the long-terminterest of the management to take care of its internal customers

• Absence of Code of Conduct. This creates confusion and also provides chancefor discrimination while taking disciplinary action.

Nature Grievance

It arises when an employee feels that something has happened or isgoing to happen which is unfair, unjust or inequitable. Thus, agrievance represents a situation in which an employee feels thatsomething unfavorable to him has happened or is going to happen.In an industrial enterprise, an employee may have grievance becauseof long hours of work, non-fulfillment of terms of service by themanagement, unfair treatment in promotion, poor working facilities,etc.

Nature Grievance

Grievances are symptoms of conflicts in the enterprise so theyshould be handled very promptly and efficiently.

While dealing with grievances of sub-ordinates, it is necessary tokeep in mind the following points:

• A grievance may or may not be real.• Grievance may arise out of not one cause but out of

multifarious causes.• Every individual does not give expression to his grievance.

Forms of Grievance

• Factual: When an employee is dissatisfied with his job, for genuine or factualreasons like a breach of terms of employment or any other reasons that areattributable to the man arrangement.

• Imaginary: When an employees grievance or dissatisfaction is not because ofany factual or valid reason but because of wrong perception, wrong attitudeor wrong information he has.

• Disguised: An employee may have dissatisfaction for that are unknown tohimself. This may be because of pressures or frustrations that an employee isfeeling from other sources like his personal behavior.

Causes of Grievance

• Economic Causes: Wage fixation, overtime, incentive, allowances, incrementsetc are some of the causes responsible for grievance.

• Work Environment: Poor physical condition of workplace, stringentproduction norms, defective tools & equipment, unfair practices etc lead togrievances.

• Supervision: Relates to the attitude of the supervisor towards the employeesuch as perceived nation of bias, favoritism, regional feelings etc.

• Work Group: Employee is unable to adjust with his colleagues, suffers fromfeelings of neglect etc.

• Miscellaneous: Issues relating to certain violations in respect of promotions,continuity of service, transfer, disciplinary actions, medical facilities etc.

Grievance Management in Indian Industry

• At present there are three legislations dealing with the grievancesof employees working in industries.

• The Industrial Employment act, 1946, requires that everyestablishment employing 100 or more workers should framestanding orders.

• These should contain, among other things, a provision forredressal of grievances of workers against unfair treatment andwrongful actions by employers or his agents.

• The Factories Act, 1948, provides for the appointment of a welfareofficer in every factory ordinarily employing 500 or more workers.

Grievance Management in Indian Industry

• These welfare officers also look after complaints and grievances ofworkers & will also look after proper implementation of existing laborlegislation.

• Individual disputes relating to discharge, dismissal or retrenchment canbe taken up for relief under the Industrial Disputes Act, 1947, asamended in 1965.

• However, the existing labor legislation is not being implementedproperly by the industries. There is a lack of fairness on the part of theemployees. Welfare officers are also not taking their work seriously.

• In India, a Model grievance procedure was adopted by the Indian Laborconference in its 16th session held in 1958.

Workers Participation

The International Labor Organization states the implications of workersparticipation in management as follows:• Workers have ideas which can be useful• Effective communications upwards are essential to sound decision making at

the top• Workers may accept decisions better if they participate in them• Workers may work more intelligently as they are better informed about the

reasons for and the intention of the decision• Workers may work harder if they share in decisions that affect them• Workers participation may foster a more cooperative attitude amongst

workers and management, thus raising efficiency by improving team workand reducing the loss of efficiency arising from industrial disputes

• Workers participation may act as a spur to managerial efficiency

Forms of Participation

Form Action

Informative Only inform

Consultative Consult before taking decision

Associative Seek suggestions from workers

Administrative Decisions are already taken, implementation method can vary

Decisive Decisions are taken together (management and workers)

Conciliation

According to ILO conciliation can be defined as “the practice by whichthe services of neutral third party are used in a dispute as a means ofhelping the disputing parties to reduce the extent of their differencesand to arrive at an amicable settlement or agreed solution”

According to the industrial disputes Act 1947, the conciliationmachinery in India consists of

1. Conciliation Officer2. Board of conciliation3. Court of Enquiry

Adjudication

Adjudication involves, “compulsory attendance of witness,compulsory powers of investigation and compulsory enforcement ofawards with penalties for breaches of these awards…thusadjudication embraces intervention in the dispute by a third partyappointed by the government”

The three tier Machinery for the adjudication of industrial disputes asprovided by industrial disputes Act 1947 consists of1. Labor Court2. Industrial Tribunal3. National Tribunal

Arbitration

Arbitration is a , “voluntary method of resolving industrialdisputes…It is resorted to before the dispute is referred to a laborcourt, industrial tribunal or national tribunal…”

Arbitration is different from Conciliation in the following aspects:

1. Its decision is binding on the parties2. The arbitrator gives his judgment on the basis of the evidence

submitted to him by employers and the employees (unions)

Differences between Arbitration and Adjudication

Arbitration Arbitration

Voluntary method of resolving industrial disputes. It is compulsory and is the ultimate remedy forresolving industrial disputes provided by the ID Act,1947.

The power to refer an industrial dispute to anarbitrator is derived from the written agreementmade by the employers and the workmen togetherand it is these two parties together who agree torefer a dispute to arbitration.

The power to adjudicate upon dispute is statutoryand is derived from the provisions of ID Act, 1947.

Arbitrators are specified in the written agreement. The presiding officers of adjudication bodies areappointed by the appropriate government only andall these consist of one person only.

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