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Fundamentals of Industrial Relations

Aastha Bindlish P10001

Abhishek Budhraja P10002 24th August 2010

Ayushi Jain P10015

Nitin Agarwal P10035

Prachi Salgia P10037

We would like to express our gratitude to Prof. Pranabesh Ray for giving us the opportunity to
present our study through this report. His classroom teachings helped us in learning the current
IR situation prevalent in our chosen industry. We also thank the management, HR department,
and all the employees at MECON who took out time and responded to all our questions
patiently. The data obtained through our interaction with them along with the concepts learnt in
the classroom has formed the basis of our project.

Aastha, Abhishek, Ayushi, Nitin and Prachi


Page no.

1. Objective of the project 04

2. Methodology Adopted 05

3. Introduction about the company 06

4. Mecon Executives Association 07-11

4.1 Introduction 07

4.2 Membership 07

4.3 Structure 08

4.4 Process of selection of governing bodies 09

4.5 Affiliations 09

4.6 Issues pertaining to Association and Management 09-11

5. Mecon Employee Union 12-16

5.1 Structure of governing bodies 12

5.2 Process of election of governing bodies 12

5.3 Affiliations 13

5.4 Cases Associated 13-16

6. Other concerns for management 17-18

7. Learnings & conclusions 19-26

10. References 27

11. Appendices 28-30

1.0 Objective

The objective of the project is to understand the Industrial and Labour Relations scenario
in a particular organization. The organization we studied was- MECON India Ltd. Ranchi.
We by means of our study have tried to co-relate our learning in the classroom to those in
the organization. We, by means of our interaction with the employees and the management
of the company have tried to analyze the dynamics of the labour relations in the company
and the various ways in which the trade union bargains with the management and vice

We were fortunate enough to have a very active executives association in the company
with which we could directly relate the white collar unionism concept of Industrial
Relations. The executives association being the dominant partner with more than 90%
employees as its members makes the situation very interesting. Though there haven’t been
many strikes or lock-outs in the company owing to a number of reasons like a prudent
management and sensible work force, we managed to find interesting instances in due
course of our research. Things like the smooth functioning of democracy, or even the actual
presence of it were very distinctly observable. The company being in the political capital of
the state cannot stay from political interference and due to that things became extremely
interesting in some of the cases. The burning question of political interference in the IR
scenario still remained unanswered because of its pros and cons.

Like all other major organizations MECON too has had a problem with contract labour.

We have tried to analyze the before mentioned issues and a lot of others by means of our

2.0 Methodology

We have relied on a number of sources for the analysis of the data which we collected. We
have primarily relied upon the conversations which we had in the company. Prominent
among them were:-

Mecon Employees Union

1. President 2. Vice President 3. Gen secretary 4. Treasurer 5. Members

Mecon Executives Association

1. President 2. Vice President 3. A couple of Workers

Human Resource Department

1. IR manager 2. H.R. Manager

We talked to them at length about the various issues pertaining to the company, which had
arisen over the years. The employees at first were skeptical before divulging information
but as we kept on calling they became more and more cooperative.

We also got access to the constitution of both the employees’ executive association and the
employees union. Also the employees were kind enough to show us a couple of bipartite
agreements and some of the tripartite ones.

Our basis for analysis was Prof. Pranabesh Ray’s teachings in the class and the course
handout of the subject ‘Fundamentals of Industrial Relations’.

3.0 Introduction about the company
● MECON LIMITED is a public sector under taking under the Ministry of Steel,
Government of India.
● It was established in 1959 under the aegis of Central Engineering & Design Bureau
(CEDB), is India’s frontline engineering, consultancy and contracting organization,
offering full range of services required for setting up of Project from concept to
commissioning including turnkey execution.
● It is a multi- disciplinary firm with 1285 experienced & dedicated engineers,
scientists and technologists, having a network of offices spread all over the country,
experienced in handling consultancy assignments and EPC Projects.
● MECON has played a significant role in the development and expansion of Indian
Industries. MECON is an ISO: 9001:2000 company and is registered with
international financial institutions like WB, ADB, AFDB and has technological tie-ups
with world leaders.

Key areas of activities: Metals, Power, Oil and Gas, Infrastructure

It has Engineering offices located in cities like Delhi, Bangalore, Agra, Bhilai, Bhubneshwar,
Chennai, Durgapur, Kolkata, Lucknow, Mumbai, Vishakhapatnam and many more.


(Motto: Long Live MECON, Long Live MECON executives, Long Live MECON Executive

4.1 Introduction

Over 400 Executives of Mecon on 15th June 1973, decided to form an association after a
lot of deliberations. They took necessary steps for registration of the body, draft the
constitution and carry forward day to day activities to fulfill the common welfare interests.
The name of the association was kept as MECON Executives Association.

The registered office as well as the headquarters of the association is at Ranchi. The
activities of the association extend to any part of the country where MECON has an interest.
Local Branches of the Association are established at such centers. MEA is registered body
with registration no. 16 of 1974-75. MEA under the society’s registration act no.XXI of 1860
and is affiliated to Steel Executives Federation of India. The association is recognized by
MECON management.

4.2 Membership

Any executive of MECON, who desires to become the member of the association, is required
to apply in the form prescribed for the purpose along with an admission fee of Rs. 20 and
Rs. 60 towards insurance premium for the year in which admission is sought. In case of
executive from branch office executive committee considers grant of membership on the
basis of recommendation from branch committee. After becoming a member a monthly
subscription of Rs. 30 per month is deducted from the salary of the member. The funds are
utilized for:

1. Group insurance fee covering all the members

2. Welfare fund
3. Subscription towards SEFI membership
4. Association’s in house communication/news items
5. Legal expenses if any with prior approval of the committee
6. Day to day expenditures of the association


The present strength of MECON executive association is 1755. The office

bearers/management of the association comprises of the following bodies/committees:

4.3.1 General body

It comprises of all the members on roll including members from branch /site/ regional

4.3.2 Branch General Body

It comprises of all the members on the roll in the respective branch/site/regional office

4.3.3 Council

It consists of elected representatives from each section of the company. In general there is
1 member for every 20 members

4.3.4 General Council

The general council consists of council members of head office, executive committee and
branch secretary along with his one nominee

4.3.5 Central committee

It consists of the executives committee at the head office and branch secretary from each
branch committee

4.3.6 Executive committee

It consists of a maximum of 15 members elected by the employees of the organization. The

committee comprises of a President, two Vice Presidents, a general secretary, four joint
secretaries, a treasurer and six members.

4.3.7 Branch committee

If the number of employees at a site is more than 20 and the office is permanent a branch
committee can be formed under the guidance of the nearest branch.

4.4 Process of selection of the governing bodies:

The body is elected through method of voting once in every 2 years. Last election took
place in July 2010. The process of campaigning starts 2 months before the date of voting
and is generally done in groups. No posters or banners are allowed. Generally, groups of
people go and talk to people especially in the canteen or in the MECON colony and
persuade them to vote for them. The entire process is managed by the association alone
without any intervention from the management or any political party. A returning officer is
appointed for this purpose.

4.5 Affiliations:

 Political Parties

There is a general sense of insecurity of unwanted interference by the political parties in

the functioning of the association hence; MEA is not inclined towards to any political party.
They have been approached earlier by a few parties, but they stood by their decision to
stay out of political affiliation. But sometimes they do use political contacts to pursue their
demands and use their influences to pressurize management. Their contacts were used
during negotiations for pay revision in line with SAIL.

 Federations

MEA is affiliated to Structural Engineering Forum of India (SEFI). As MEA is a very small
entity in SEFI, it is not of much help but SEFI has good influence on steel ministry. MEA
pays an amount of Rs.30, 000/- per annum towards its membership.

 Relationship with MECON Employees Union

Most of the times there is no interaction between the association and the union. They
come together in rare cases; One being that of the welfare activities. The canteen issues
are jointly taken up by the MEU and the MEA.


4.6.1 Case of Recruitment

The management had a policy of not recruiting engineers from campuses as MECON was
incurring losses at that time. To meet the requirements, management started to employ
contract employees and then regularizing them. Initially the policy was such that the
management used to regularize them after 2 years of service. The problem with this was
that the process was not transparent and there was nor any fixed process of how to select
employees for regularization. The personal preferences of the management could result in
wrong candidates getting selected.
The association was against regularizing the employees in this way. They bargained with
the management to make these employees permanent only after 5 years of service. The
association is currently negotiating to make the employees permanent after a 2 year
service only if they have scored minimum 60% marks in all the semesters of their studies
and have excellent on their job performance evaluation.
They intend to bring transparency and make the system much more effective.

One thing which struck all of us was that the association was not only working to further
the interests of its employees but also kept the interest of the company in view. The
method by which the employees were being regularized, would have affected the
company’s performance in the long run.
4.6.2 Pay revision
The association worked for MECON’s repositioning in the ‘A+’ bracket, where SAIL is
positioned. They wanted their pay to be at par with that of the SAIL employees as since
their inception they had their pay similar to them.
The Union steel ministry later agreed to revise the salary of Mecon executives so that it is
on a par with that of Steel Authority of India Ltd (SAIL).This was made possible after after a
delegation of Mecon Executive Association led by its president Vivek Kapila met Union steel
minister Virbhadra Singh and submitted a petition for implementation of wage revision for
PSU executives.
This was one of the greatest achievements of the association.

4.6.3 Attempted merger with SAIL
MECON was working towards its merger with SAIL. The rationale given was that as most of
the work of MECON came from SAIL and the two companies shared unparalleled synergies.
Most of the executives were in the favour of the merger. MEA played an active part in the
whole process.There was regular communication between the steel ministry and the
association. Several approaches were made through the local MP and through CITU as well.

Though the merger was not approved by the steel ministry still the efforts put in by the
executive association are worth mentioning.
4.6.4 Other welfare initiatives taken by the association
1. Payment of Bumper annual incentive '08-09'
2. Release of adhoc adjustable advance '08'
3. Payment of house perks tax by MECON for '08-09' in line with SAIL
4. Excellent promotion of executives in '2009'
5. Enhancement of EL encashment limit from 240 to 300 days
6. Enhancement of EICS scheme
7. Improved Welfare & canteen facilities for executive
8. Mobile connections to all executives up to 'E-I'
9. Up-gradation of Guest house
10. Improved medical facilities for parents having pension less than Rs. 6000/month
11. Leave encashment W.E.F revised wage scale-07
12. Enhancement of gratuity to Rs. 10.0 lacs
13. Office modernization in engineering & site offices
14. Restoration of welfare activities

"Trade Union" means combination, whether temporary or permanent, formed primarily for
the purpose of regulating the relations between workmen and employers or between
workmen and workmen, or between employers and employers, or for imposing restrictive
condition on the conduct of any trade or business, and includes any federation of two or
more Trade Unions.
Basic details:
 Consists of the ordinary, associate, honorary and displaced members of MECON,
Ranchi and also employees of the branch offices in Bangalore and Gurgaon.
Types of members-
1. Ordinary members – Regular employees of MECON, Ranchi and other branch
2. Associate members – Persons working in MECON on contractual basis
3. Honorary members – People who are considered to be a value addition to the
union but are not eligible to become the ordinary members
 Total Strength : 218
 Although the membership is optional, all the non-executive employees are members
of this union. Thus, giving it a Union Shop feature.
Membership Fee: Earlier it was Rs 2/month but now it has been changed to Rs 20
collected each time elections are held.
Method – Earlier check off method was used to deduct Rs 2 each month i.e. Rs 2 was
deducted directly from the wages by the management and added to the union fund. Now,
considering the small number of members, Rs 20 is directly charged from each member
each time election is held.
5.1 Structure of governing bodies:
It consists of 2 committees:
1) Executive committee: The members have to be specific to the main branch only. It
consists of 20 office bearers which includes a President, Vice-President, General
Secretary, Treasurer and 11 executive members i.e. Total Office Bearers: 20

2) Central Committee: It consists of members of the executive committee of the main
office along with the office bearers of the branch offices.
5.2 Process of selection of the governing bodies:
The body is elected through method of voting once in every 2 years. Last election took
place in August 2009. The process starts 2 months before the date of voting. Campaigning
is generally done in groups. No posters or banners are allowed for it. Generally, groups of
people go and talk to people especially in the mess are or the MECON colony and persuade
them to vote for them. The entire process is managed by the union alone without any
intervention from the management or any political party.

The membership of the union is also renewed at the same time with each member paying
Rs20 for it. Each member is given a box of sweets after he votes (incentivizing voting).
Voting is carried out in the form of Secret Ballot for a total of 20 office bearers.

5.3 Usage of the union fund:

 The union fund is mostly used for the election process and for distributing sweets to
the members. The fee is too low and thus, union lacks enough funds for any extra
 In the times of need, members collect extra money to help some other union
5.4 Employee Welfare:
For employees, the union also arranges for accidental insurance at Rs.28 per month. The
union has always gone out of its way to help the families of employees who pass away
before retirement. In a particular case of Mr.Sushil, who died while on duty, the union
arranged for a sum of Rs. 4.5 lacs by initiating a donation drive within the organization.

5.5 Affiliations:

 Political Parties

There is a general sense of insecurity of unwanted interference by the political parties in

the functioning of the union hence; MEU is not affiliated to any political party. They have
been approached earlier by a few parties, but they stood by their decision to stay out of
political affiliation.

 Federations

MEU shares good relations with CITU President Mr. M K Pandhey who is also an MP. They
get indirect help from CITU but cannot afford direct membership as the fee is not
affordable by them. They also go to Delhi in rare cases to meet the CITU President and get
advice from him.

 Relationship with MECON Executive Association

Most of the times there is no interaction between the association and the union. MEU deals
with the management directly. They come together in rare cases; One being that of the
welfare activities. The mess issues are jointly taken up by the MEU and the MEA.

5.6 Related Cases:

1) This is the case where MEU and MEA came together for a common cause. During the
chairmanship of Mr. D Rath, both the groups raised separate demands for bonus for
Durga Pooja. On suggestion of the Chairman, both groups cooperated with each
other and raised a common demand. They decided on the terms of negotiation and
in the end, both benefitted from this cooperation.

2) In 2009 when the demand for increased wages was approved based on the 6th pay
commission, the benefits received by the MEA were much higher when compared to
the MEU. Executive officers received perks worth 47% whereas union members did
not receive any perks. After this the relationship between the 2 groups got strained
and there has been no work that they have taken up together since then.

 Contract Labour

Contract labourers are not a part of the union.

5.7 Policy Decisions –

Most of the decisions are based on bipartite agreement involving union along with the
management and later on the labour commissioner is involved.

The union shares good relations with the labour department of the government. They are
overall happy with the system.

5.8 Branch Offices

Each branch office has its own governing body for the union. They have a close connection
with the main MEU in Ranchi. Most problems are resolved locally, but in case of some
bigger issues, MEU, Ranchi is requested for help. The union here then takes the
responsibility and sends help to the respective branch office.

5.9 The relationship with the management

The general feeling amongst the union for the management is positive. They uphold
immense respect for the management and consider the relationship between management
and union as one of guardian-ward.

5.10 A case where the union turned against the management

This is a case when in 2003; the company was going through a very bad phase. The
employees had not been paid salaries for 4 months. The then Chairman was blamed for the
situation. The Trade union finally succumbed to the pressure of livelihood, loyalty to the
company had always been there, but to survive without salaries for the non-executive
members was impossible. One day the union members “GHERAO-ed”, i.e. they surrounded
the board of directors in the conference room with demands of immediate action and
payment of dues. The union members got utensils, trumpets and other instruments to
protest. It was past midnight but the management did not buckle under the pressure. None
of them moved from their seats. At 3.30 in the morning, the union members who had
staged this dharna, without food, water, etc. decided to quit .They let the management
leave. The management did however promise to look into the matter.
However this was possibly the only way the management could have reacted, according to
the trade union leaders. The company didn’t have any money and there was a lot of
pressure from outside to disinvest/ close down. However this was a time when the union
and the management and the executive association came together to revive the company.
All realized that it was in the common interest of all that the company made profits. Soon
the situation changed, new disciplinary rules were chartered and other changes were also

This case clearly showed the relationship shared between the management and the union
that despite the hard times, union decided to stay by the company’s side and the company
was revived.

5.11 What is the main reason/rationale for conflicts and disagreements?

The union has been working towards regularization of contract employees. Their target is
to reduce this list by almost 50%.
Until 1992, a family member of the deceased employee or any dislocated person i.e. a
person whose lands were taken by MECON for various purpose such as for building MECON
Colony and departments were given permanent employment. But after 1992, MECON
started engaging them as contract employees. Till 1995, the management did not agree to
regularize the contract employees. As a result, the list of contract employees (family
members of deceased people and dislocated persons) became really long. After much
persistence by the union, the management decided to regulate certain employees who had
a work experience of greater than 15 years. Upon further pursuance and negotiations by
the union to regularize these employees the following employees were regularized-
2009: 6 in which 2 were contract employees, 2 were displaced employees (employees
whose land was taken by the company) and 2 were relatives of the deceased employees.
2010: Major success achieved with 18 employees absorbed by the company.
As of now, the primary goal of the union is to reduce the list by 50% and once this goal is
achieved, the secondary goal is to further negotiate the ‘15 years work experience’ limit .

5.12 Attempt to form another union

In ***, one of the employees of the MECON hospital created another union called the
MECON Karmachari Sangh. Certain officials of the MEU took this as a threat to their
existence and used unlawful means to stop the formation. The Karmachari Sangh never
saw the light of the day. Since then there have been no further attempts.
There have been no strikes or attempts of strikes in last 3 decades. The last strike took
place in 1977. The management is cooperative and understanding too. The union considers
the company as their family and deal with issues mostly on negotiation basis through

discussions. The union office is within the premises of the MECON office in Ranchi and the
space is provided to them by the management.


6.0.1 Issue of lightning strike by contract workers

One of the recent problems faced by the management was due to the contract labourers.
There was a lightning strike by the labourers involved in the up keeping job. The
management was given no notice about the strike and the matters became more serious as
the labourers had political support even to the level of ex-chief minister. The reason for the
strike was that the contractor had not contributed to the PF of the workers. The workers
instead of going to the contractor wanted the Mecon management to contribute to the PF.

According to the IR manager, the ulterior motive was to gain permanent employment and
succumbing to the workers’ demands might have proved dangerous to them in the long

The IR policy at Mecon was to always keep the contractor “in front”. To find the solution to
the above problem the management instead of paying the PF themselves, held several
meetings with the contractor. Finally the solution was reached, with the contractor paying
his dues. Hence in the end it was a “win-win” situation for both the labourers and the

From the discussions we had with the IR manager we observed that the philosophy of the
management to keep the contractor in the front was more of a preventive measure. Having
faced some problems earlier when they dealt directly with the contract labourers, they did
not want to let the matters reach a level where dealing became difficult. The labourers
could have collected the receipts of the payments done by the management in lieu of the
contractor and later used it to demand regularization. To prevent matters from reaching
this stage the management tried it’s best to solve the matters by interacting with the
contractor and the labourers to solve their grievances.

From what we could gather from our interaction the first step they took if any such
situation arose was to suggest the labourers to go to the contractor directly and tell their
grievance to him and if it does not work then intervene to act as a link between the two.

6.0.2 Case for regularization

Mr. ***, a contract workman working as a liftman and DG operator in Mecon filed a case for

The situation started when the contractor who employed the liftman left the scene without
paying the wages of the workman. The workman approached the management and the
management started paying him wages on a daily basis.

On the other hand the workman collected all the receipts and by taking the help of an
outside union, asked the management to regularize him. The matter reached the
conciliation officer. The process failed. Later the case was referred to the labour court.

The labour court gave the decision in the favour of Mr. ***. After that Mecon citing certain
references of past judgements has appealed in the high court and the case is still on.


7.1 Trade union & Democracy

We, in due course of our project came across numerous instances where we could see
Democracy in play. Also we found numerous situations where we could actually test the
strength of democracy.

The various parameters on which the democratic structure can be evaluated are:-

1. The legal School: - The election procedure and other electoral procedures reflect
the efficiency of democracy in a big way. According to our study, the elections of
both the Association and Union are carried out with extreme care and no instances
of rigging have ever been reported. A separate election returning officer and 2
assistant returning officers are appointed before every election to oversee and
coordinate the whole process. Also like mentioned in the constitution, General Body
Meetings are held twice a year, with almost 100% attendance. Regular meetings of
the union and the association are also held. The most striking part was the strict
adherence to the constitution by both the union and the association.
We recall a particular incident when one of our group members commented that the
constitution was actually only literature and that matters at the ground level were
entirely different. In response to this the official got extremely angry and said that
here the constitution is sacrosanct.

One more important point to be noted was the fact that the union and employee
executive association have witnessed the election of new members after every
election. More than 70% members change after every election and that there is little
opposition to newer members contesting and winning the election. Campaigning is
carried out in groups, i.e. there are various parties standing for the election which validates
our point further.

2. The Behavioural School: - The presence of a constructive opposition is integral to

the functioning of a democracy. However, post elections it was witnessed that the

opposition isn’t very active and except for an occasional quarrel, there is hardly any
constructive work put in by the people who lost in the elections. Since there are
elections every two years it isn’t a lot of time either.

3. The Responsiveness School: - The leaders we met looked extremely experienced

and capable of standing up for things they deemed correct. The association
executive also gave us the idea that they were receptive to any suggestions made by
the employees and even in the past there had been numerous instances of
employees directly walking up to them and discussing issues. However, in the
Union which is a closely knit group of 200 odd members, the issues are common to
most of them; hence the union leadership is very close to them.

However the occurrence of one stray incident which made us question the
democracy. This was a time when a rival trade union was not allowed to exist
because according to some people it threatened the unity of the existing trade union.
It was perceived that it would hamper the bargaining power of the existing union
which in itself only had very few members. Some elements of the union went to the
labour offices and using unfair means stole all the papers of the union and didn’t let
it form. This attempt by some union members is an open blot on the democratic
structure of the union.
However, the reaction and the vocal support of the workers to this issue and the
very fact that, things have run very smoothly after this makes us rethink our initial
stance. Though it seems that single union is better in this case as the number of
members is very less but then the way to attain the objective is questionable.

7.2 IR and the state

As we know that industrial relations are based on three pillars – the management, the
union and the state.
From our discussions with the executive association, the employees union and the IR
department the importance of the relationship between the three was enforced. Though in

most of the cases the IR department and the union try to come to a solution through
bipartite means, still there is a visible effort put in by the union to be on good terms with
the state and the officials of the labour department.
The union organizes informal meetings with the officials during festivals. During our talks
with the union we were also told that the recent agreement reached on the pay revision has
been sent to the labour commissioner’s office for his signature. They further told us that
even though the negotiations were bipartite the state is kept in the loop most of the times.
The MECON Executive Association also believes in the same philosophy of maintaining
good relationship with the state. They also organize guest sessions, informal dinners and
get-together for the officials of the labour department.
We also observed that in spite of having good relationship with the union, association and
management, labour department works towards providing benefits, resolving disputes,
and fostering goodwill for the employees. The state in this case acts as a watchdog,
overseeing all the agreements. So, despite the matters being resolved in a bipartite manner
the presence of the state helps the scenario in more than one way. It ensures that neither
party is able to exploit the needs of the other.

7.3 Trade Union and Politics:-

From our learning so far, we have seen that linkage of political parties with the trade union
is a common phenomenon and it exists at various levels.
At MECON, the management and the workers both believe in no affiliation with any of the
political parties.
 unwanted intervention by the parties in the functioning of the company
 The IR situation overall in MECON is peaceful and hence, there has not been a strong
need for the affiliation so far
 Management wanted to avoid obligations and pressures from the parties in case of

 MEU feels that most political parties have selfish interests and most of the times the
union is left stranded after affiliation
Hence, according to Munson’s typology, both, the Mecon Executive Association and Mecon
Employee Union are politically neutral i.e. they have no accepted political ideology. They
have a democratic structure and are hence, member centric and also dependent on
management for most of their needs. However, they do follow the activities of the CITU
affiliated union at SAIL.
Although, they claim to have no political linkages, certain instances have been observed by
us that make us believe that the current situation in India makes it very difficult to keep
politics and union completely separate. They were:

 In one of the instances, the Mecon Executive Association requested Mr.Kansay(a

political party leader) to arrange for a meeting of the association members with
Steel Ministry of India. The association also helped them arrange a speech/meet
with the ministry when they came to Ranchi.
 They used their political parties to exert pressure on the management regarding
their demands in the case of pay revision
 MEU maintains good relations with the CITU President

There have also been other instances, e.g. - the case of downfall in 2003 where unions were
approached by political parties but they stood firm by their decision and did not succumb
under the pressure despite being denied 4 months salaries.

Based on our analysis, we concluded that due to the less strength of the members in the
union at Mecon and the cordial relationship between the union and the management, they
could retain their basic ideology of no participation in any political activity.

7.4 Collective Bargaining

Collective bargaining is considered to be the one of the most important processes for
successful working of an organization, wherein the workers along with the management,
work in complete harmony.

ILO defines Collective Bargaining as:

Negotiations about working conditions and terms of employment between an employer, a
group of employers or one or more employers' organizations, on the one hand, and one or
more representative workers' organizations on the other, with a view to reaching

In our organization we came to know that all the negotiations were done by the 2 parties
i.e. the union and the management, with a view to reaching agreement. All the cases which
we have discussed in our report show that all the agreements were come upon in the form
of bipartite agreements.

We also learnt about the various directions from which collective bargaining can be looked
upon from. They are:

1. Economic
There were certain instances where the union had some wage related issues such as
the one they wanted their pay to be at par with that of the SAIL employees.
It was only after the persistence and the negotiating power of the union that they
had managed to convince the management to take the matter further up with the

2. Psychological
Sometimes the process also acts as a ritual of negotiation provide cathartic effect on
pent up tensions in the minds of the workers. A case which aptly depicted this was
when employees were denied salaries for 4 months. One day the
Union members “GHERAO-ed”, i.e. they surrounded the board of directors in the
conference room. This incident showed the level of frustration of the workers,
which came out in the form of a sort-of violent demonstration.
3. Political
The political angle of the process of collective bargaining can be depicted in the
incident in where the workers power bloc challenged the power bloc of
management. The main issue of conflict between the workers and the management
was related to the regularization of the contract employees, who got their jobs due

to the death of a certain employee or the acquisition of their land by the company.
Till 1995, the management did not agree to regularize them. Only after many
discussions and talks, the management finally decided to regularise certain
Employees regularised-
2009: 6 in which 2 were contract employees, 2 were displaced employees
(employees whose land was taken by the company) and 2 were relatives of the
deceased employees.
2010: major success achieved with 18 employees absorbed by the company.
This instance along with the case mentioned above, where the management was
‘GHERAO-ed’, are classic examples of how two power blocs can come at loggerheads.

Though there have been a few incidents of conflicts between the workers and the
management, overall we can say that the IR situation in MECON is stable. There have
been no strikes in last 3 decades. The last strike took place in 1977. Generally issues are
sorted out by the process of bipartite agreement.

7.5 Managerial Unionism

The MECON Executive Association is an example of white collar unionism. While studying
in class we had discussed whether these are unions or associations and whether there is a
difference between the two. Though the association is registered under the Society
Registrations Act it performs most of the activities like a union.
It is also observed that they call themselves associations just because there is a stigma
attached to the word “union” and the members have a perception of superior social and
occupational status. This was exactly what we experienced. One of the incidents which
emphasized this was the strong reaction of an association member when we called it a
union by mistake.
Also while talking to a member of the committee we felt that they considered themselves
superior to the union and preferred working alone. Any association with the labour union

was not desirable. Also the association had the view that the union was just interested in
extracting money. This showed that the association did not have a very good opinion about
the union.
However it must be noted that the association and the union worked together on welfare
issues like managing the canteen. Various initiatives are taken for the welfare of the
members and issues like wage negotiation etc. were carried out.

7.6 Employers Association

During our conversation with the officials of the executive association, we were told that
MECON is a member of the Standing Conference of Public enterprise (SCOPE) and The
Associated Chamber of Commerce and Industry of India (ASSOCHAM).
We could co-relate that MECON management had joined such chambers/councils because
of following reasons:
1. To promote collective bargaining at different levels.
2. To bring a unified employers viewpoint on the issues of industrial relations to the
government in a concerted manner.
3. To make them globally competitive. Empowering its members with a platform to
gain access to new technologies, insights into new business models available
globally etc.
4. International representation.
We also observed that the employers of MECON are able to pay a hefty amount of
Rs. 2, 00,000/- annually towards membership fees of these councils whereas MEU was
struggling for funds. Through our discussions, we observed that MEU though wanted to
become a member of CITU but was unable to because of shortage of funds.

7.7 Workers Participation in Management (union)

There is a consensus among the organization that there should be a say of the workers in
the management process. However there is no particular initiative taken by the
management to ensure the participation of its non-executive members in the decision
making process. According to the union, though it tries to put across its suggestions to the

management there is no particular need for a Works Committee in the organization. A
similar comment was made by the administration stating that it too believes in involving
workers but then there is no need for a particular platform there. There is no concept of a
worker Director either.

This state of affairs could be attributed to a number of reasons.

1. The number of workers is very less (250 odd out of 2000).

2. The management has always been very friendly and considerate.
3. The channels of communication in the organisation are very strong.

It is only during the time of celebrations like the Independence Day, Republic Day etc. and
in charitable activities that the union, the employees association and the management
come together to organize events, collect money etc.

In case of the association a lot of members of it are at the General Manager and Deputy
Manager Level and actually have a say in the decision making process . So any particular
initiative is not required on their part.


1. Fundamentals of Industrial Relations (Selected Readings): Pranabesh Ray

2. Classroom notes & slides
3. Labour and Industrial Laws : Prof P K Padhi
4. Labour Laws: Taxman 2010 edition.



1. Contract labour: A workman shall be deemed to be employed as contract labour in

or in connection with the work of an establishment when he is hired in or in
connection with such work by or through a contractor, with or without the
knowledge of the principal employer.

2. Contractor: In relation to an establishment, means a person who undertakes to

produce a given result for the establishment, other than a mere supply of goods or
articles of manufacture to such establishment, through contract labour or who
supplies contract labour for any work of the establishment and includes a sub-

3. Controlled industry: Any industry the control of which by the union has been
declared by any Central act to be expedient in the public interest.

4. Establishment:

It means:

-Any office or department of the Government or a local authority, or

-Any place where any industry, trade, business, manufacture or occupation is
carried on.

5. Principal employer:
It means:
i. In relation to any office or department of the government or a local
authority, the head of that office or department or such other officer as the
Government or the local authority: as the case may be, may specify in this

ii. In a factory, the owner or occupier of the factory and where a person has
been named as the manager of the factory under the Factories Act, 1948,the
person so named.
iii) In a mine, the owner or agent of the mine and where a person has been
named as the manager of the mine, the person so named.
iv) In any other establishment, any person responsible for the supervision and
control of the establishment.

6. Wages: Wages mean all remuneration ( whether by way of salary, allowance or

otherwise) expressed in terms of money or capable of being so expressed which
would, if the terms of employment, express or implied , were fulfilled, be payable to
a person employed in respect of his employment or of work done in such
employment, and includes:
 Any remuneration payable under any award or settlement between the
parties or order of a court;
 Any remuneration to which the person employed is entitled in respect of
overtime work or holidays or any leave period;
 Any additional remuneration payable under the terms of employment
(whether called a bonus or by any other name);
 Any sum which by reason of the termination of employment of the person
employed is payable under any law, contract or instrument which provides
for the payment of such sum, whether with or without deductions, but does
not provide for the time within which the payment is to be made;
 Any sum to which the person employed is entitled under any scheme
framed under any law for the time being in force, but does not include any
bonus (whether under a scheme of profit sharing or otherwise) which does
not form part of the remuneration payable under the terms of employment
or which is not payable under any award or settlement between the parties
or order of a Court.

 the value of any house-accommodation, or of the supply of light, water,
medical attendance or other amenity or of any service excluded from the
computation of wages by a general or special order of the State Government;

 any contribution paid by the employer to any pension or provident fund,

and the interest which may have accrued thereon;
 any travelling allowance or the value of any travelling concession;
 any sum paid to the employed person to defray special expenses entailed on
him by the nature of his employment; or
 Any gratuity payable on the termination of employment in cases other than
those specified in sub-clause (d).]

7. Workman : "workman" means any person employed in or in connection with the

work of any establishment to do any skilled, semiskilled or un-skilled manual,
supervisory, or clerical work for hire or reward, whether the terms of employment
be express or implied, but does not include any such person—

 who is employed mainly in a managerial or administrative capacity; or who,

being employed in a supervisory capacity draws wages exceeding five
hundred rupees per mensem or exercises, either by the nature of the duties
attached to the office or by reason of the powers vested in him, functions
mainly of a managerial nature; or
 who is an out-worker, that is to say, a person to whom any articles or
materials are given out by or on behalf of the Principal employer to be made
up, cleaned, washed, altered, ornamented, finished, repaired, adapted or
otherwise processed for sale for the purposes of the trade or business of the
principal employer and the process is to be carried out either in the home of
the out-worker or in some other premises, not being premises under the
control and management of the principal employer.