Managing Industrial Conflict

HRM/MBA(FT)/ 2010-12/Sameer Pingle

Coverage
What is industrial conflict Nature of industrial conflict Conflict resolution approaches Conflict resolution machinery Prevention of industrial conflict

Subramaniams Dilemma
Facts Company Shivam Gears started as SSI Now public limited company 2400 employees (600+1800) Facts leading to the Event Nov. 95 - Received charter of demands from EMS Dec. 28 Notice of Dispute Jan. 28 Sept. 9 wage negotiations Sept. 11 Wage Agreement Sept 18 dispute by ESS No cognizance taken by the Company

Facts The ER Scenario at SG Harmony no manday lost for last twelve years Better than minimum wage Wages and incentives

Subramaniams Dilemma
Facts - Collectivity Two Unions One representative union (EMS) Majority allegiance with ESS Workers known to be changing their loyalty Facts - Event Negotiated settlement with EMS 7% dedn. towards union fund Official protest by ESS Facts The Manifest Conflict Workers refused to take salary Agitation and strike

The Technical Points

Union Representative and Recognised Unions a legal entity representing the Collective- different positions under HIRA and ID Act Charter of Demands- a document stating the demands from employees side counter charter by employers basis for negotiations Notice of Change legal requirement under the law, communicate intention to change, indicates desired change, intimation to regulatory authorities, due process of law

The Technical Points

Wage Agreement negotiated settlement with the Union, current for the agreed period of time (generally 3-5 yrs.), covers issues related to wage, work norms, roles, service conditions, conflict resolution process (Ex- Tata Steel) Notice of Dispute reference to conciliation there can be no strike when this notice is served; conciliation officers are provided under the law to mediate between the employer and employees, to prevent escalation to courts ( Ex- Ruia and Apollo Tyres) Conciliation Officer statutory authority under the law authorised to mediate, mandatory before referring for adjudication; no authority to decide; if conciliation does not work, give a failure report (Ex Hero Honda in Gurgaon)

Managerial Problem
To have the work resumed at the earliest Implement the negotiated settlement peacefully Prevent inter-union rivalry from further disrupting business Maintain long term peace

The Strategic Dilemma

EMS or ESS ? Whom to support? Choose between a weak, non-representative union and a weak representative union? Muscle Power- Guru das and CPI (M) supported Union To intervene or not to intervene? (under section 23- inform labor commission and police; put up notice of illegal strike, negotiate, divide and rule) Legal or managerial?

The Strategic Agenda

Company
continued peace

EMS
Continuity of status

ESS
Acquire legal status Use every opportunity to undermine the standing of EMS Win management and worker confidence

Undisturbed production Acquire worker allegiance Hold collective power Retain management in check support Use opportunity to Weak or strong union consolidate position

Options
Allow situation to continue let the two unions resolve it amongst themselves continued peace?? Take action against erring employees with support from EMS peace?? Support for EMS?? Call EMS for negotiations withdrawal of clause from the settlement weaken or strengthen EMS?? Ignore ESS and ask EMS to settle the issue directly with them long term consequences?? Play as it comes use situation to own advantage to keep EMS in check explore whether EMS needs to be replaced by ESS requires sensitive and skillful handling of the situation

What is Industrial Conflict

Clash of interests between the parties in industrial relations collectivity of employees and the employer Manifest as stress and tension (action such as work
stoppage, strike, lockout, etc. visible forms of protest)

Multi level between collectivities( management and

union) or between individuals ( managers and individuals, management and individual)

Nature of Industrial Conflict

Employer, Employee, State (Parties involved)

Working conditions, wages, terms of employment, discipline, productivity (common causes of conflict)

Ways and means for resolution, values

Nature of Industrial Conflict(2)

Individual Collective

Latent (subtle resistance) Manifest (protest) Latent and manifest

Why Conflicts Arise

Managerial Reasons issues of role jurisdiction, power & authority Rights and privileges resource availability & distribution managerial style & processes leadership style & orientation Territorial issues, resource control, relationship processes, visibility issues

Why Conflicts Arise(2)

Industrial Reasons Worker attitudes Indiscipline and violence Resistance to change Monetary demands (gratification) Dominance, rights, duties, money, career and service

Why Conflicts Arise(3)

Other Reasons Inter or Intra union rivalry Ineffective government machinery Political influences Value erosion

Political, social, regulatory

How Conflicts Arise

General misunderstanding Communication gaps Rivalry between conflicting groups (potential) Style and orientation (issues of fairness, perceived sense
of justice, dignity and transparency, employers people philosophy)

Gradual process of precipitation

Expression of Conflict
RESISTANCE
Non-co-operation Hostility Withdrawal Stress

PROTEST
Indiscipline Disrupt production Violence Legal recourse

OUTCOMES
Retrench workers Deny benefits Discontinue operation Legal recourse

Approaches to Conflict Resolution

Focus on Process - Behaviour & Attitudes Outcome Strategies Fight Flight Fright

Conflict Resolution Strategies Depend Upon

Perception of the other party as being Reasonable or unreasonable Opposed to our interests Having own interests Belligerent

Conflict Resolution Strategies

UN RE AS ON AB LE

CONFRONT COMPROMISE ARBITRATE NEGOTIATE OPEN TO REASON

Per cepti

Opposed to Our Interests

Having Own Interest

Conflict Resolution Machinery

Consultative Machinery Code of discipline, joint
management council, collective bargaining, negotiations
(within the boundaries of the organisation, limited or no involvement of outside part, participative methods)

Statutory Machinery works committee,

conciliation, voluntary arbitration, adjudication ( labour courts, industrial tribunals, national tribunal) welfare officer, external authority involved, decision to be influenced or dictated by external agency.

Statutory Options
Conciliation Conciliation officer Attempts to conciliate No decision making authority Arbitration Adjudication

Third party court of law Both parties Can decide and agree in writing judge Legally binding Judgement Order can be challenged only in HC

Collective Bargaining
A process for discussion and negotiation between two parties, one or both of whom is a group of persons acting in concert. The resulting bargain is an understanding as to the terms and conditions which a continuing service has to be performed. More precisely, collective bargaining is the procedure by the employer/employers and a group of employees who agree upon conditions of work.

Collective Bargaining Process Dynamics

A civilised confrontation joint administration
process of accommodation between two institutions

Power stands against power

Negotiations

back and forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed

Negotiations - preconditions
Perceived mutual interdependence Need to co-exist ( shared and opposed interests, keep external agencies out) Willingness to respect each others space (give and take, mutual respect)
HRM/MBA(FT)/2010-12/Sameer Pingle