Case Study 4e1it

CASE STUDY

Submitted to: Ms. Jiveta Chaudhry

Prepared by: Neeti Som (066) Pooja Sachdeva(074) MBA IIIA

Contents  Acknowledgement  Certificate 

Theoretical framework

 Case summary  Solution  Annexure

ACKNOWLEDGEMENT It is our duty to record our sincere thanks and deep sense of gratitude to our respected teacher Ms. Jiveta Chaudhry for her valuable guidance interest and constant encouragement for the fulfillment of the report.

CERTIFICATE THIS IS TO CERTIFY THAT THIS REPORT HAS BEEN PREPARED BY NEETI SOM & POOJA SACHDEVA UNDER MY GUIDANCE AND TO MY SATISFACTION. IT IS BASED ON THEIR OWN EFFORTS.

THEORETICAL FRAMEWORK WHAT IS COLLECTIVE BARGAINING?? Collective bargaining is process of t decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firm’s and workers’ representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another.

Collective bargaining involves discussions and negotiations between two groups as to the and conditions of employment. It is called ‘collective’ because both the employer and the employee act as a group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Thus collective bargaining: •

is a collective process in which representatives of both the management and employees participate.

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is a continuous process which aims at establishing stable relationships between the parties involved.

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not only involves the bargaining agreement, but also involves the implementation of such an agreement.

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attempts in achieving discipline in the industry

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is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

FEATURES Randle observes “a tree is known by its fruit. Collective bargaining may best be known by its characteristics.”

The main characteristics of collective

bargaining are: 1- Collective Process: The representatives of both the management and the employees participate in it. Employer is represented by its delegates and , on the other side, employees are represented by their trade union. Both the groups sit together at the negotiating table and reach at some agreement acceptable to both. 2- Continuous Process : It is a continuous process. It does not commence with negotiations and end with an agreement. It establishes regular and stable relationship between the parties involved. It involves not only the negotiation of the contract, but also the istration or application of the contract also.It is a process that goes on for 365 days of the year.

3- Flexible and Mobile: It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is reached. 4- Bipartite Process: C.B. is a two party process. Both the parties—employers and employees—collectively take some action. There is no intervention of any third party. It is mutual give – and –take rather than a take-it-or-leave it method of arriving at the settlement of a dispute. 5- Dynamic: C.B. is a dynamic process because the way agreements are arrived at, the way they are implemented, the mental make-up of parties involved keeps changing. As a result, the concept itself changes, grows and expands overtime. It is scientific, factual and systematic. 6- Industrial Democracy: It is based on the principle of industrial democracy where the labour union represents the workers in negotiations with the employer or employers. It is a t formulation of company policy on all matters affecting the labour. 7- Complementary Process : C.B. is essentially a complementary process, i.e., each party needs something which the other party has, namely, labour can put greater productive effort and management has the capacity to pay for that effort and to organize and guide it for achieving the organizational objectives. 8- It is an Art: Collective bargaining is an art , an advanced form of human relations. 9- Discipline in Industry: C.B. is an attempt in achieving and maintaining discipline in the industry. 10- Industrial Juris prudence: It is an effective step in promoting industrial jurisprudence.

IMPORTANCE OF COLLECTIVE BARGAINING Importance to employees Collective bargaining develops a sense of self respect and responsibility among the employees.

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It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group.

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Collective bargaining increases the morale and productivity of employees.

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It restricts management’s freedom for arbitrary action against the employees. Moreover, unilateral actions by the employer are also discouraged.

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Effective collective bargaining machinery strengthens the trade unions movement.

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The workers feel motivated as they can approach the management on various matters and bargain for higher benefits.

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It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced.

Importance to employers 1. It becomes easier for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers.

Scope of Collective Bargaining There is no standard specification of what should not be included, although certain issues are often sought to be excluded from C.B. and retained for discussion and disposal by the management. As the bargaining relationship matures and the two parties grow in mutual trust and confidence, the agreement acts as a framework for peacefully settling day-to-day disputes. And when the new contracts are negotiated, additional subjects are brought under collective bargaining. The contract provisions may be divided into four categories : --- union security --- worker security --- economic factors ---management protection. Union security : A union security clause means the extent to which the contract protects the union in holding its hip. This clause may vary from mere recognition at one extreme to the ‘closed shop’ at the other. In many contracts, a “check-off’’ clause is also included, which requires the employer to deduct the union dues from the employee’s pay and forward them directly to the union. Worker security : This clause provides for seniority protection, covering promotion, job assignment and lay-off. Economic factors : The economic items include wages and the fringe benefits.

The issues covered under agreements can be grouped in three categories: a) employment and working conditions; b) labour welfare, labour recruitment and management matters; c) organizational matters. The first two which cover wages, bonus, D.A., retirement benefits, working hours, holidays with leave, supply of subsidized items like food, transport, housing, etc. are worker- interest oriented. The last category comprising union recognition, exclusive bargaining rights, checkoff schemes, workers participation in management, etc. are union-interest oriented matters. Stages And Bargaining Process The C.B. process generally starts as soon as the charter of demands is presented by the trade unions on behalf of their to the management. The provisions of existing agreement continue till a new agreement is signed and enforced. Usually , there are two stages in collective bargaining : [A] The negotiation stage [B] The stage of contract istration.

PRINCIPLES OF COLLECTIVE BARGAINING For union and management  Collective bargaining should be made an educational as well as a bargaining process.  It should be looked upon as the means of finding the best possible solution and nt as the means of acquiring as much as one can while conceding the minimum.  Both the parties to a dispute should command the respect of each other and should have enough bargaining power to enforce the of the agreement that may be arrived at. 

The two parties should meticulously observe and abide by all the national and state laws which are applicable to collective bargaining.

For the management 

The management must develop and consistently follow a realistic labour policy, which should be accepted and implemented by all its representatives.

 The management must grant recognition to it without any reservations and accept it as a constructive force in the organization and the industry.  The management should deal only with one trade union in the organization. 

While weighing the economic consequences of collective bargaining, the management should place greater emphasis on social considerations.

For the trade union 

In view of the rights granted to organized labor, it is essential that trade unions should eliminate racketeering and other undemocratic practices within their own organization.

 Trade unions and their have an obligation to assist the management in the elimination of waste and in improving the quality and quantity of production.  Trade unions should resort to strikes only when all other methods of settling a dispute have failed to bring about satisfactory results. GRIEVANCE Definition: According to Michael Jucius, “ A grievance can be any discontent or dissatisfaction, whether expressed or not, whether valid or not, and arising out of anything connected with the company that an employee thinks, believes, or even feels as unfair, unjust, or inequitable.” ILO defines a grievance as a complaint of one or more workers related to: - Wages and allowance - Conditions of work - Interpretation of service conditions covering such as OT, Leave, Transfer, Promotion, Seniority, Job Assignment & Termination of Service” The National Commission on Labour Observed that “Complaints affecting one or more individual workers in respect of their workers - Wage payments, OT, Leave, Transfer Promotion, Seniority, Work Assignment & Discharges Constitute Grievances”. The causes of grievances may be broadly classified into the following categories: (1) Grievances resulting from working conditions (i) Improper matching of the worker with the job. (ii) Changes in schedules or procedures.

(iii) Non-availability of proper tools, machines and equipment for doing the job. (iv) Unreasonably high production standards. (v) Poor working conditions. (vi) Bad employer – employee relationship, etc. (2) Grievances resulting from management policy (i) Wage payment and job rates. (ii) Leave. (iii) Overtime. (iv) Seniority and Promotional. (v) Transfer. (vi) Disciplinary action. (vii) Lack of employee development plan. (viii) Lack of role clarity. (3) Grievances resulting from personal maladjustment (i) Over – ambition. (ii) Excessive self-esteem or what we better know as ego. (iii) Impractical attitude to life etc. EFFECTS OF GRIEVANCES: Frustration Alienation De-motivation Slackness Low Productivity Increase in Wastage & Costs Absenteeism

In discipline Labour unrest ESTABLISHING A GRIEVANCE PROCEDURE. The following principles should be observed while laying down a procedure: (1) A grievance should be dealt with in the first instance at the lowest level: that is, an employee should raise his grievance with his immediate superior. (2) It must be made clear to the employee what line of appeal is available. If he cannot get satisfaction from his immediate superior, he should know the next higher authority to which he can go. (3) Since delay causes frustration and tempers may rise and rumors spread around the work, it is essential that grievances should be dealt with speedily. (4) The grievance procedure should be set up with the participation of the employees and it should be applicable to all in the organisation. The policies and rules regarding grievances should be laid down after taking inputs from the employees and it should be uniformly applicable to all in the organisation. It should be agreed that there would be no recourse to the official machinery of conciliation unless the procedure has been carried out and there is still dissatisfaction, and moreover, there must be no direct action on either side, which might prejudice the case or raise tempers while the grievance is being investigated. Open door policy: Under this policy, any employee can take his grievance to the chief boss and talk over the problem. As the name suggests, the management keeps its doors open for the employees to share their problems. It is said that this policy can remove the cause of grievance quickly. Though this policy appears to the attractive, it has some prerequisites.

The open door policy is workable only in small organizations. In big organizations, the top management does not have the time to attend to innumerable routine grievances daily that is the work of lower-level mangers. Under this policy, the front-line supervisor who should be the first man to know about the grievances of his subordinates is byed. This provokes him in two ways. First, he thinks the man who skipped him is disrespectful. Secondly, he fears that he will incur his superior’s displeasure because of his failure to handle his subordinates will interpret this. Step-Ladder Procedure Under the step-ladder procedure, the employee with a grievance has to proceed step by step unless he is able to redress his grievance. According to the Model Grievance Procedure, an aggrieved employee shall first present his grievance verbally in person to the officer designated by the management for this purpose. An answer shall be given within 48 hours. If he is dissatisfied with the answer, the worker will present his grievance to the head of the department, who will give his answer within 3 days. If the worker is dissatisfied with the answer, he may ask that his grievance should be referred to the Grievance Committee, which shall make its recommendations within 7 days to the manger. The management must implement unanimous recommendations of this committee. A dissatisfied worker can apply to the management for a revision of its decision within on week’s time.

STEP 1 Filling of complaint

written

STEP 2

Supervisor Foreman

or

STEP 3

STEP 4

Head of department t grievance committee

STEP 5 Chief executive

LAST STEP

Voluntary arbitration

SETTLEMENT

Step – ladder Grievance Procedure

MODEL GRIEVANCE PROCEDURE The Model Grievance Procedure was formulated in pursuance to the Code of discipline adopted by the 16th Session of the Indian Labour Conference in 1958. Most of the grievance procedures now a day are built around the Model Grievance Procedure with certain changes to suit the size and special requirements of an enterprise. The model Grievance Procedure provides for five successive timebound steps. These are as under: (1) An aggrieved employee shall first present his grievance verbally in person to the officer designated by the Management for this purpose. An answer shall be given to him within 48 hours of the presentation of the complaint. (2) If the worker is not satisfied with the decision of this officer or fails to receive an answer within the stipulated period, he shall in person or by his departmental representative, if required, present his grievance to the head of the department designated by the management for this purpose. And he will get the answer within 3 days of the presentation of his grievance. (3) If the decision of the departmental head is unsatisfactory, the aggrieved worker may request the forwarding of his grievance to the Grievance Committee, which shall make its recommendations to the management within 7 days of the worker’s request. The final decision of the management shall be communicated to the worker within the stipulated period (3 days) by the Personnel Officer. (4) A revision of his grievance can be done if the decision is not satisfactory. The management shall communicate its decision within a week. (5) If no agreement is possible the union and the Management may refer the grievance to voluntary arbitration within a week from the date of receipt by the worker of the management’s decision.

In the above-mentioned procedure the following points should be noted: • Calculating the various time intervals under the above clauses, holidays shall not be included. • The Management shall provide the necessary clerical and other assistance for the smooth functioning of the grievance machinery. • During the working time, the concerned person may go for enquiry with the Labour/personnel Officer, provided the he has taken permission from his supervisor. Hence he may not suffer any loss of payment. GRIEVANCE MACHINERY For the purpose of constituting a fresh grievance machinery, workers in each department and each shift elect from among themselves, and for a period of not less than 1 year at a time departmental representatives and forward the list of persons so elected to the management. Correspondingly, the management shall designate the persons for each department who shall be approached at the first stage and the departmental heads at the second stage. Two or three of the departmental representatives of workers and two or three departmental heads nominated by the management constitute the Grievance Committee.

CASE SUMMARY This case is related to The Andhra Pradesh State Road Transport Corporation which is a state owned enger transport company. The pay scales in the corporation are determined on the basis of mutual agreement between the management and the recognized trade union. The scales are revised once in three years. The corporation has both the grievance machinery and the collective bargaining machinery to resolve employee problems. An agreement had come into force from September, 1988 in which the pay scale of the class II drivers was enhanced from Rs. 600 – 900 to Rs. 900 – 1600. The agreement further said that the pay scales of the drivers drawing the scale of Rs. 600 – 1200 will be fixed in the scale of Rs. 900 – 1600. Now the corporation had absorbed 10 drivers who were with the private enger transport companies upon the nationalization of that rout at a pay scale of Rs. 600 1200. When these drivers demanded the increased pay scale they were refused and told that only the drivers drawing the pay scale of Rs. 600 – 1200 were eligible for the raise. The drivers then took up the matter with their immediate superior who was a foreman. They were told to raise this issue in collective bargaining with the help of trade union leaders as it was a policy issue. The trade union included this item in their draft agenda but the collective bargaining committee deleted this it saying that this issue can be settled through grievance machinery as only 10 drivers out of 3000 of the corporation are concerned with this issue.

THE PROBLEMS: 

WAGE RELATED PROBLEM : The new hires demand a pay equivalent to that given to the existing employees as per the policy of the company.

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CLASSIFICATION OF PROBLEM: The employees are not sure whether to take up the matter to the grievance committee or the collective bargaining committee. The collective bargaining committee has also asked them to go to the grievance committee only because only 10 out of the 3000 employees are concerned.

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AMBIGUOUS OF THE AGREEMENT:

Even though the

agreement mentions that “the pay scales of the drivers drawing the scale of Rs. 600 – 1200 will be fixed in the scale of Rs. 900 – 1600” , it says nothing about the employees that will be hired in future for the same category of drivers.

QUESTIONS: Ques 1. Who is correct? The personnel department or the foreman or the collective bargaining committee? Sol.

We will have to first understand the view point of each of the party: 1.

The personnel department has fixed the pay in accordance with the literal interpretation of the agreement which states that “ pay scales of the drivers drawing the scale of Rs. 600 – 1200 will be fixed in the scale of Rs. 900 – 1600”. Since the personnel department is concerned with the implementation of the wage policy it is, to some extent, not at fault. Also , as per The Employment Exchanges (Compulsory Notification Act 1959) the organization must have d for the vacancy

mentioning the eligibility as well as the pay scales. If it had been done so and the drivers knew about the wage before ing the organization, then the drivers’ demands are unjustified. 2. The foreman based on his knowledge recommended the drivers to go to the union as the matter is concerned with the employee welfare related to the wages, an area in which he actually doesn’t have an authority 3.

The collective bargaining committee here showed a rather narrow approach towards the employee’ grievance. They deleted the issue from their agenda only because the matter, right now concerned only 10 employees. They failed to see the problem from a long term perspective since the problem shall remain there even if new drivers the organization.

In our view, the foreman is indeed correct as the problem arose mainly because of the agreement. Ques 2. Where do you place this issue for redressal? Ans. We would say that the issue should be taken to the Grievance committee first. If the issue remains unsolved then it certainly needs to be resolved by the collective bargaining committee since the agreement that came into effect needs to be reviewed.

Ques 3. How do you redress this grievance? Ans. The problem if not solved through the Grievance Committee would be taken to the collective bargaining committee. The committee can then try to resolve the matter with the management in accordance to the provision of the arbitration that must have been incorporated in the agreement. Another solution could be that for a period till the policy is next reviewed i.e. 3 years the trade union could pay some amount to the drivers out of their own funds the provision of which is made under The Trade Unions Act 1926 sec. 15 and then after 3 years when the scales are revised the trade union can bring into light the ambiguities of the statement. If the drivers or the union are still not satisfied with the solution then the matter could be taken to the conciliation board and then to the industrial tribunal under The Industrial Disputes Act, 1947