Are we prepared to tackle the increasing cases of labor unrest? How should management confront such issues of labor unrest?
In my view, the starting point is, what is that we need to ensure that there is no labor unrest. While it may sound cliché, managements should realize that treating employees with respect and having mutuality is the essence of harmonious industrial relations and unions should realize that disruption in production erodes competitive advantage of their own organization. However, if despite all efforts there are differences, then there are means of resolution beyond Government intervention too; for example, a mutually agreed arbitrator and here the decisions can be fast and credible. I don’t see many examples of arbitration options exercised by either management or unions.
I don’t think confronting labor unrest is the right way of looking at disharmony. The success lies in strong advocacy of facts that are in the long term interest of the organization than me v/s you. I think post liberalization and integration with global economy, we cannot have archaic positions of union and management as competitors; both of them have to be on the same side of the table.
We have been hearing pious utterances on labor reforms for several years. What should be the direction of labor reform in India?
By labor reforms in India, if anyone is expecting that employers will have the choice of a pure play exit policy at their will, I don’t think it is possible and appropriate for our country unless there is a strong social security net. With high unemployment rates, we will only add to the problem. What we should have is flexibility of having employees, ensuring that they are made members of the provident and family pension scheme, paying them gratuity, and ensuring basic medical cover for them and their families while they are in employment in partnership with insurance companies. Providing for retrenchment compensation which is reasonable - certainly not just 15 days for every completed year of service and to be given to employees with every break in employment – is a must too. Also, the employer should be compelled to give first preference to those who were terminated when they want to start re-hiring; of course, this will have to be regulated by ensuring that there are clauses of good behavior, performance, etc. built in, but we need to make a beginning somewhere and this should be legislated so that employers don’t have the fear of permanent employment in case of down turn. Unions and social activists should realize that we are no more in a command and control economy and there are bound to be dynamics of demand and supply phenomenon which will require a flexible labor market mindset.
Are India Inc. and trade unions ready for a dialogue on wage negotiation? What should be the methodology to be followed to arrive at a minimum wage?
I think wage negotiations are happening; unfortunately, what is still being followed is the ancient route of collective bargaining. In my view, both the words collective and bargaining in a negotiation context are based on mistrust which is completely out of place in contemporary working in today’s era. It’s about being open and brutally honest, of affordability and competitive edge. A continuous communication about business realities with all the employees is a must. Managers must realize that employees are their constituency and not the Union committee.
Appreciation of reality comes only out of awareness and alignment follows. The employees should also cognize denial of market realities will not resolve any issues. Minimum Wages Act has to be made simpler and transparent; it should be revised every 3 months and publicly announced; and should reflect inflation or contraction impact. For those who pay anything above minimum wage should have no visits by inspectors subject to documentary proof and certification from the individual employee. It is time we should try out these methods!