Table Of Content7
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6
INDUSTRIAL RELATIONS IN
INDIAN INDUSTRY E
R
S
SLU
Np
CHALLENGE OF CHANGE:
INDUSTRIAL RELATIONS
IN INDIAN INDUSTRY
CHALLENGE OF CHANGE:
INDUSTRIAL RELATIONS
IN INDIAN INDUSTRY
Editors
C.S. VENKATARATNAM
InternationalManagementInstitute,
NewDelhi
ANILVERMA
FacultyofManagement
UniversityofToronto
Toronto, Ontario
Canada
C 98 - 00187
A ALLIED PUBLISHERS LIMITED
NewDethi eMumbai e Caicutta e Lucknow e Chennai
Nagpur e Bangalore e Hyderabad e Ahmedabad
ALLIED PUBLISHERS LIMITED
RP3er-5ag-rd1t.1hO1nf4a/fF1:la1Kt5as.c(Jh.2iNng.duHdFealroeoCrdr)io,asNsMaRavorragad,n,gBpaHulylrdaaer,rdaAEbshtamadteed,—aMbu5a0md0b0sa2iee
16A Ashok Marg, Patiala House, Lucknow —226001
Sth Main Road,Gandhinagar, Bangalore— 560009 FOREWORD part
17Chittaranjan Avenue, Calcutta —700072
81 Hill Road, Ramnagar, Nagpur — 440010
13/14, Asaf Ali Road, New Delhi — 110002 THomas A. KOCHAN*
751 AnnaSalai,Chennai — 600002
The collection of essays presented in this book seek to analyse and discuss the
dramaticchangesoccurringinsomeoftheIndianindustriesandtheirimplications
© 1997,Allied PublishersLimited forhuman resource andindustrial relations policy and practice. I amparticularly
delighted that most authors take an international perspective by organising the
industry analyses around the general framework that we are using in similar
exercises in othercountries. Thiswill give the analyses additional leverageby not
No ofthiisworkmay bereproducedortransmitittedtedii nanyformorbyany only allowing cross industry comparisons within India but by providing bench-
chelectronicorachantcalincludingphotocopyingandrecording,or markstocomparedevelopmentsinIndiawith thoseofothercountriesinAsiaand
by any information storage and retrieval system, without prior written around the world. It is exactly this type of research project, involving teams of
permissionofAllied Publishers Ltd.
experts who have the needed knowledge and experiencein theculture, traditions
andinstitutionsofaparticularcountryworkingcollaborativelywithsimilarteams
fromothercountries,usingacommonanalyticframework,thathasthebestoppor-
tunitytoadvancethestateoftheoryandpracticeinindustrialrelationsand human
ISBN 81-7023-651-7 resourcemanagementtoday.
Thechapters presented in this volumeclearlydemonstrate that Indian indus-
trial relations and humanresource professionals face enormous challenges. The
1991 shift in governmentpolicy to open the economy and change from an import
AssociateEditor : JyotiMehrotra substitutiontoanexportorienteddevelopmentstrategyanditsassociateddomestic
DIP : PrintoGraphicSystems policieswill,iffullyimplemented,placeseverepressuresonalllevelsoftheexisting
CoverDesign : KamStudio
employmentrelations system. The need for sustained productivity improvement
will require significant investments in education and continuing training and
* Thomas A Kochan is the George M Bunker and Leaders for Manufacturing Professor at the
PublishedbySunilSachdev andprintedbyRaviSachdevarAlliedPublishersLimited Massachusetts Institute ofTechnologySloan School ofManagementandis the Presidentof the
(PrintingDivision),A-104Mayapuri,PhaseII, New Delhi - 110064. InternationalIndustrialRelationsAssociation.
ChallengeofChange
vi Foreword Vii
developmentalong with an accelerated effort to introduce innovations in work bepoliticallyandadministrativelyimpossibletoregulatecollectivebargainingand
ractic4es and human resource policies that more fully utilise employeeskills and workerrepresentation andparticipation through single national policy. How to
Raevanon. At the sametime, the need to cope with the displacement of workers design a set of policies that can reflect and respondto this diversity would also
affected by the industry restructuring that will occur will severelystrainIndia’s appear to me tobeworthy ofthoughtand debate.
cfluoarmbteohfuerrrmwoaomrrkketeotrspalnadansdnsooacciniadalmluanwrneealsgtf.earTtehhesryqosuuetgsehtmisotnhatishnedrreepsfotosrreuecictousnrwisnihgdeerprreaobwclieelslsrti?hskeIsloeftahiednreceri,sthifinopgr ftohratitbBseuvatarblseucyeaorniednftguhlueissdteiusndpgyetcahinefdifrcuetquvurieeestwoifaosnesmmlpuiclehosfyaomredniettepspeorrleialnceavylayintnciecIanfldo,iraho.itsTthoherreiccqaouluensqttuireoisnetisisao:sn
example adequate integration in national policy making of those responsible for Howcould acountrythatled thebattle againstcolonialismandachievedindepen-
macroeconomic andtradepolicies and those responsible for human resource de- denceandestablishedademocraticsocietyearlierthanmostofitsAsianneighbours
velopment andindustrial relations policies? To put it more directly, is there a
coordinated industrial strategy that considers the links between the market hliavvien,gotvoelrostehegrcoouunrdsreeloaftsievveertaolsdoemceaodefs,itaslslmoalwleedr,itmsoerceonraopmiydlayngdrsotwainndgarAdssiaonf
liberalisation policies and a long term strategy for competing on the basis of
neighbours? Morespecifically, what role, if any, did India’s industrial relations
anything other than low wages? This is specially critical for India, given its high
policies and labour managementrelations systemsplayin the failure of India to
wageposition relative to other NIC’s in Asia and other parts of the world. A long advance and prosper? The chaptersin this volumeprovidethe rich raw materials
termstrategyforhumanresourcedevelopmentandindustrialrelationspoliciesthat
needed to address this verybroad and deep question as well as the more specific
reformsandrestructuresthewageprocesstocreatestrongerincentivesforworkers contemporarychallenges facingpolicymakersandpractitionersinourfield.
individuallyandcollectively to acquire greaterskills and toparticipate incontinu-
EditorsVenkatandVermahighlightthemajorconclusionsandimplicationsof
ous productivity and quality improvements on their jobs would appear to be
the various industry studies and arguethe case forcarrying future debates on the
essential. How to achievethisis a questionworthyofconsiderable discussion.
subject,transcendingthetraditionaldomainsofindustrialrelationspolicymakers,
The chapters also documentthat, like the experience of the OECD countries to the testing of the strategic choice model through further empirical studies and
discussedelsewhere,thereisagreatdealofinnovationinworkplacepracticesand
international comparisons.Ihopethatitisjustthe firstphaseinpursuingthis type
human resource strategies underwayin selected firms and employmentrelation- of work andentering it into the international community of scholars and profes-
ships.Yet theseeffortsappeartobeevenmoreisolated anddifficulttosustain and sionals in the Industrial Relations Association and related research networksthat
diffuseinIndiathanmostothercountries.Thequestion,therefore,iswhethersome
share aninterestinthesetopics.
government, academic, or other agency or organisationcan take the lead in docu-
Theeditors andauthorsare tobecommendedformakingthisinitialcontribu-
menting and learning from these cases and using them to develop a coherent
tionto theory,methodandpolicyanalysis. Thisbookshould provideconsiderable
strategytopromotebroaderdiffusionandenhancetheprobabilitythattheinnova-
foodforthoughtanddebateintheIndianindustrialrelationscommunityformany
tionprocesswillbe sustainedovertime.Whatare thekeyobstaclesto diffusion of
years to come.
workplaceinnovationsinIndia?
Another key questionreflects the broad diversity of the Indian economy and
Cambridge,Massachusetts,
society.Inaneconomythatrunsthefullrangefromtheclassdivisionsobserved in
January, 1997.
employmentrelations ontea plantations to the informationworkersinhigh tech-
nologyindustriessuchasinformationprocessing,telecommunications,etc.,itmay
* ThomasAKochan,key-noteaddresstothe“NationalConferenceonChangesinHumanResources
andIndustrialRelationsinIndianIndustry”organisedbytheInternationalManagementInstitute,
NewDelhi,19-21August,1993.
PREFACE
This book is the product of networking among academics and professionals in
differentindustriesinIndiawiththeobjective ofattempting a systematicanalyses
of the changesat the industry level and the consequent implications for human
resource andindustrialrelationspolicies andpracticesina cross-section ofIndian
industries.
Wepresenthereperspectivesonthechangesinhumanresourcesandindustrial
relations in 13 industries in different sectors of the Indian economy during the
post-Independenceera, and moreparticularlysince the 1980s. Considering (a) the
shiftinindustrialisationpoliciesinthewakeofstructuraladjustmentreformswhich
will call for complementary changes in human resource and industrial relations
policies; (b) thegrowingconcernabouttheimplications—particularlyintheshort-
term—ofthestructuralchangesonemployment,jobsecurity,collectivebargaining
andindustrialrelations;and,(c) thesearchforcreativeapproachestodealwithjob
redundancies,retraining,skillsimprovementandattitudinalreorientationforcop-
ingwith the challenges ofthe changing economic scenario, the reflective perspec-
tives and the rich insights the research reported here offer, we hope, will be
immenselyuseful.
The initiative to organise such a network was borneout of the efforts of
ThomasKochan, Anil Verma and Russel Lansburyin successfully steering sim-
ilar, but larger international networkings among OECD countries and subse-
quently in the Asia-Pacific region. While one of us (Anil) was among the prime
moversintheOECDnetworkingalso,bothofusparticipatedinthe firstmeeting
of the networking in the Asia- Pacific region at Singapore in September 1992.It
wasfelt at this meeting that it would be useful to spread the networking more
x ChaliengeofChange
intensivelyatthenationallevel also for greater impact and morerigorous study
and analysis. When we approached ourcolleagues in the academic and indus-
trial circles in December1992 the response was spontaneous. While somecol-
leagues had to back out due to other professional commitments,‘on the whole
the response to ourmaideneffort in India hasbeenveryencouraging, given the
constraints of time and resources. This is a project which began without any
funding fromany source. Yet, once we launchedthe project, resources were not
a major constraint.
The selection of industries is by no means exhaustive. A number of key
industries we wishedto include in this book were perforce omitted dueeither to CONTRIBUTORS
lack ofprevious research orbecause the promised help did not materialise. Also,
wewerenotabletofullyexploreallpossiblesourcesofexpertisewhichcouldhave
helpedthecoveragebemorecomprehensiveandrepresentative.Itisourhopethat
our modesteffort will encourage and stimulate further research at the industry
level. Itisalso ourwishthatthecontributors to thisbookand otherswill continue
with furtherresearch—perhapsmorerigorous and focussed empirical research of
SunilAbrol C-DOT,
a representative sample of firms in each industry that could contribute to the
New Delhi.
developmentoftheoryandpolicyanalysis.
K BAkhilesh DepartmentofManagementStudies,
Weare grateful to the International ManagementInstitute, in particular to IndianInstituteofScience,
NitishKSengupta,fortheencouragementand supportatall stagesofthisproject. Bangalore.
WeappreciatethesupportoftheInternationalLabourOrganisation,particularlyto SBalakrishnan FormerExecutiveDirector(Safety),
E G Mabare and P H Chandrasekharan. We thankThomas A Kochan for writing SteelAuthorityofIndiaLimited,
the foreword. NewDelhi.
WeappreciatetheacademicsupportofV.ChandraandD.K.Panigrahi,admin- AK Bhat IndianInstituteofPetroleumManagement,
Gurgaon.
istrative supportofAnup Sarin and DeepakPandhi andthesecretarial assistance
ofKaulandLeena.Finally,wewouldliketoacknowledgetheenthusiasticsupport, SharitBhowmick DepartmentofSociology,
throughouttheproject,ofSureshGopal,ourPublishingConsultantatAllied. UniversityofBombay,
Mumbai.
U KDikshit
IndianInstituteofPetroleumManagement,
Gurgaon,
C. S. VENKATARATNAM
ANILVERMA MRGera AllIndiaMaanagementAssociation,
NewDelhi.
DVGiri DepartmentofPersonnelManagement
and IndustrialRelations,
BerhampurUniversity,Berhampur
AnilKKhandelwal BankofBaroda,
Mumbai
JacobMankidy NationalInstituteofBankManagement,
Pune.
xii
ChallengeofChange
BSMurthy DepartmentofPersonnelManagement
andIndustrialRelations,
AndhraUniversity,Waltair.
VPParanjpe CentralInstituteofRoadTransport,
Pune.
BRPatil IndianInstituteofManagement,
Bangalore.
PSubbaRao DepartmentofManagementStudies,
SriKrishnadevaRayaUniversity,
Anandapur.
ABBREVIATIONS
JibiteshRath BhilaiSteelPlant,
Bhilai.
RatnaSen IndianInstituteofSocialWelfare
andBusinessManagement,Calcutta.
PSudarsanam CentralInstituteofRoadTransport,
Pune.
CSVenkataRatnam InternationalManagementInstitute, AIBEA AllIndiaBankEmployees’ Association
NewDelhi. AIBEF AllIndiaBankEmployees’Federation
AIBOA AllIndiaBankOfficers’Association
AnilVerma FacultyofManagementStudies
AIBOC AllIndiaBankOfficers’Confederation
andCentreforIndustrialRelations,
AICOBOO AllIndiaConfederationofBankOfficers’Organisation
UniversityofToronto.
AICPI AllIndiaConsumerPriceIndex
AdministrativeStaffCollegeofIndia,
AIDEF AllIndiaDefenceEmployees’Federation
Hyderabad.
AIOE AllIndiaOrganisationofEmployers
AIPDWF AllIndiaPortandDockWorkers’Federation
AIPWF AllIndiaPetroleumWorkers’Federation
AIRF AllIndiaRailwaymen’sFederation
AISBISF AllIndiaStateBankofIndiaStaffFederation
AITUC AllIndiaTradeUnionCongress
ASP AlloySteelPlant
BCCL BharatCokingCoalLimited
BHEL BharatHeavyElectricalsLimited
BPCL BharatPetroleumCorporationLimited
BPE Bureau ofPublicEnterprises (India)
BRL BharatRefractoriesLimited
CCA CityCompensatoryAllowance
CCPA ConsultativeCommitteeofPlanters’Association
CCTPW CoordinationCommitteeofTeaPlantationWorkers
CDPWR CommitteeforDefenceofPlantationWorkers’ Rights
CIL CoalIndiaLimited
CIRM CentralIndustrialRelationsMachinery
CITU CentreofIndianTradeUnions
CLE ChiefLabourCommissioner-General
xiv ChallengeofChange Abbreviations XV
CMIE CentreforMonitoringIndianEconomy MECON Metallurgyand EngineeringConsultancyLimited
COPU CommitteeonPublicUndertakings MEL MaharashtraElectrosmeltLimited
CPI CommunityPartyofIndia MOU MemorandumofUnderstanding
CPI(M) CommunityPartyofIndia(Marxist) MTWAct MotorTransportWorkerAct
CPPRI CellularPaperandPulpResearchInstitute NASSCOM NationalAssociation ofSoftwareandServicesCompanies
DLB DockLabourBoard NCL NationalCommission onLabour(1969)
DPE DepartmentofPublicEnterprises NCWA NationalCoalWageAgreement
DA DearnessAllowance NFIR NationalFederationofIndianRailwaymen
EFI Employers’FederationofIndia NFPM NationalFederationofPetroleumWorkers
FCI FoodCorporationofIndia NJCCSI NationalJointConsultativeCommitteeforSteelIndustry
FICCI FederationofIndianChambersofCommerceandIndustries NJCS NationalJointCommitteeforSteelIndustry
HindMazdoorKisaanPanchyat NMDC NationalMineralDevelopmentCorporation
HMS HindMazdoorSabha NPC NationalProductivityCouncil
HindustanPetroleumCorporationLimited NTPC NationalThermalPowerCorporation
OECD OrganisationforEconomicCooperation andDevelopment
HRM HumanResourceManagement
ONGC OilandNaturalGasCommission
HSL HindustanSteelLimited
OSOA OilSectorOfficers’Association
HSCL HindustanSteelCorporationLimited
IBA IndianBank’sAssociation PDWWFI Port, DockandWaterfrontWorkers’FederationofIndia
PLC PlantationLabourCommittee
ICISI IndustrialCommitteeonIronandSteelIndustry
PNM PermanentNegotiatingMachinery
ISCO IndianIronandSteelCompany
PPC &E Performance,Planning,CounsellingandEvaluation
ILC IndianLabourConference
RBI ReserveBankofIndia
ILO InternationalLabourOrganisation
RINL RashtriyaIspatNigamLimited
InternationalMonetaryFund
(AlsosameasVisakhapatnamSteelPlant)
INPDWF IndianNationalPortandDockWorkers’Federation
SAIL SteelAuthorityofIndia
INPMWF IndianNationalPaperMillWorkers’Federation
SBI StateBankofIndia
INRWF IndianNationalRailwayWorkers’Federation
SCOPE StandingConferenceonPublic Enterprises
INTUC IndianNationalTradeUnionConference
SEB StateElectricityBoard
IOC IndianOilCorporation
SIDA SwedishInternationalDevelopmentAgency
IPA IndianPorts’Association
SLC StandingLabourCommittee
IPT InstitutionofPaperTechnology
SOP StandardOperatingProcedure
IR IndustrialRelations
SSP Salem SteelPlant
IRB IndianRailwayBoard
TISCO Tata Ironand SteelCompany
InformationTechnology
TPA Tea Planters’ Association
ITA IndianTeaAssociation
Tata Workers’Union
IndianTelephoneIndustries
UPASI United Planters’ Association ofSouth India
JBCCI
JointBipartiteCommitteeonCoalIndustry
JWNC UTUC United TradeUnionCongress
JointWageNegotiationCommittee
LTS VISL Visvesvarayya IronandSteel Limited
Long-TermSettlement
VSP VisakhapatnamSteelProject
MAIT
Manufacturers’AssociationofInformationTechnology WTWFI WaterTransportWorkers’ FederationofIndia
MBO
ManagementofObjectives
