The Indian industrial scenario has seen rapid transition in the last decade. From a traditional factory based mindset the Indian industry has moved on to become world class large conglomerate. Indian industry has moved on beyond the Indian borders and is spreading it's footprint across the globe. Indian family owned businesses are today an epitome of professionally run multinational organization. Indian Family run businesses now employ Expats, CEOs and employees to run their profit ventures.  Clearly the business mindset – the way we were used to conducting business of our industries - has undergone a sea change.  How and why did this transformation transpire? 

In the late nineties, Indian manufacturing sector has undergone an economic slowdown. This resulted in closure of many well known businesses. People working in these industries were rendered jobless. In order to survive, the industry resorted to various cost cutting initiatives, which included rationalization of its employee force. The Trade Unions raised this as a big issue as one of the basic principles of the constitution of the Trade Unions – protection of jobs – was being shaken. That was the time when the industrial Managements embarked upon the journey of building effective and transparent communication channels to win over the partnership, collaboration and working trust of the Unions. The downturn was long enough to enable these efforts to stabilize. The Trade Unions became effective partners in progress and actively participated in cost elimination drives, manpower rationalization drives. Although, manpower rationalization was implemented through various Voluntary Retirement Schemes (VRS) or Golden Handshakes. This process in the late nineties till about 2002 helped organizations to close non profitable / non sustainable sections of their businesses and also did effective cost rationalization and manpower rationalization – thus becoming LEAN in the industrial sense of the term. Later, when the upswing came these lean organizations were absolutely ready like a crouching tiger and made the best use of resources in taking all possible advantages of an ever liberalizing economy. Trade Unions which had witnessed the recent downtrend were happy to support all the progressive programmes initiated by the new Managements. The now leaner and more prudent Managements also made it a point to take the responsibility of spreading the knowledge amongst their workforce and started working towards enhancing employee connect and engagement. The above scenario and resulting efforts brought about a change in the erstwhile Management / Union adage of US & THEM. There was now a TEAM which worked together for the betterment and fortification of the industry and its employees.

I have the privilege of advising a lot of industrial units by virtue of my holding honorary positions in the industrial associations both at the local and at state / national levels. I have clearly seen a marked change in the industrial dispute resolution process.

First: as I have mentioned above, due to the maturity of the TEAM in an industrial organization, the complexion of industrial disputes has undergone a change. The small, individual – sometimes frivolous – type of industrial disputes have reduced and more issue based disputes which affect larger population or the ones which challenge a question pertaining to interpretation of a policy or its clause are now becoming more in numbers.

Second: The shift from Tripartite to Bipartite way is happening at a very fast pace. The Managements and the Unions have realised over a period that the way the dispute resolution process runs under the Tripartite based system – involving Government agencies – it only results in delays and as they say justice (read Resolution) delayed is justice denied. Therefore, the Managements and the Unions now sit across the table and after hearing each other out are finding resolutions to their differences. The positive side effect of such type of resolutions is that they are respected more and thus are more long lasting.

Third: The way the Government agencies have gone about resolving disputes, has left much to be desired and delivered. The approach in most of the cases has been enforcement than conciliation. The Indian Laws are by and large are labour protective. This was necessitated by the way earlier industrialists used to run the industries. This is not the case in India only but it has its roots in the 'sweat shops' of 19th century industrialised Europe. However, on one hand, like in other developed / developing nations, Indian industry too has embraced modernization and follow processes which are ergonomic, safe and produce world class quality products. On the other hand the Indian Industrial legislation still remains archaic.  I would like to bring forward a point here that the Indian Trade Unionism took birth when India was not an independent country. The Trade Unionism took its roots in the fight for freedom – freedom struggle and this added a very strong flavour to the recipe of Indian Trade Unionism. Then, the Indian industrialists – the pioneers – the first generation – have their industrial rooting in an Imperialistic & closed economic scenario. Even after India won its freedom, this negative inertia continued to drag the Indian industry. Combined with the above said archaic and over protective labour legislation – this became a recipe for disaster. Indian industry struggled with this recipe for almost 50 years post independence.  Then dawned the era of LPG – Liberalization, Privatization and Globalization.  Suddenly, the over protected Indian industry was exposed to the harsh presence of a giant – Global Economy and the related competition. Many large Indian Business houses could never come out of this sudden awe. Whereas, most of the industrial houses showed quick responses and they were very swift in adapting to the new world order. In my view the Indian industry took about ten years time to unlearn the business ways which it was entangled with for more than a century. Now the Indian industry is seen with a renewed global level of respect. I have many examples to quote here which would make any Indian proud. What did these successful Managements do?

My view is they decide to do much more than just what was absolutely required under our laws / legislations. They took over the right to manage from these laws and their enforcers and took upon themselves to devise their own guidelines. Management, it is not just fulfilling the peripheral needs – outer standards of Labour Laws. In the open and liberalized Indian market economy the issues of Productivity, Quality, and Globalization are the ones which are currently under a lot of focus, and sadly our Labour Legislation or for that matter the dispute resolution machinery is not up to speed on such important points. Therefore, Progressive industries are moving away from the legal peripheral issues. They are stepping into the ARENA – where all the action is. There is a need of the industry to distinguish between Laws and Management – to wean away (not avoid) from Labour Laws as these are laws and just laws are not Management. The focus has changed from just fulfilling the bare minimum legal requirements to doing much more so that the focus shifts from just complying with the laws but the same energy is being focused on transformation of employee mindset towards becoming World Class. Coming over to the Dispute Resolution…..what is it? I can say it is primarily about two things…  - Assuaging hurt feelings -Protection against insecurity generated by actual or perceived threats  Although, everyone has heard the saying’ Prevention is better than cure’, I strongly believe that in Employee Relation scenario – ‘Prevention is the ONLY cure’. 

Now to illustrate the challenges and the best practices I would like to discuss two case studies in which I have contributed as a team member which brought about the change.

Case 1:  A large American MNC present in India for over 80+ years. A major name in the automotive component sector. The challenges this industry was faced with were amongst others:
• A mediocre run in the Indian market
• Profits  - a struggle
• A large employee force on the shop floor.
• Very poor education standard of this employee force.
• Average employee age profile 48+
• Very strong Unionized representation
• Rigid mindset – unaware of productivity concepts
• Strong divide between Management & Union
• High polarization on caste based Union politics
 
This industry was plagued with high employee cost, very strong Union (17 office bearers) which majority of the times was not the most logical one. Long term wage agreements were mostly one sided – Union sided. The only gain Management used to have under these agreements was to buy cooperation and peace from the Union. The communication links between shop floor associates and the Management were non existent. All the communication was done by the Union through a phenomenon called gate meetings. True to their flavour these gate meetings were giving one sided communication to the associates. The Union got elected every year and every Union’s endeavour was to get the maximum mileage in this year and then plan for the new election. The Union which negotiated the long term wage agreement was not the one which got the same implemented. There was no sense of ownership, connect and belonging. All communication by the Management was with coloured glasses and the level of TRUST was at an abysmally low level. Union always fished for the hidden agenda of the Management in any new initiative / proposal / endeavour. This also was a result of callous and indifferent approach of the Management. This kind of lack of TRUST and understanding led to frequent industrial relations outbursts resulting into a very negative atmosphere in the organization which promoted finger pointing and blame games. Given the above scenario, it became essential to take immediate corrective actions to steer the organization on the right course. As a first measure, daily communication meetings started with the core group of the Union. In these meetings information regarding organization, market and customer was openly shared. The principle behind these meetings was two fold. One that the Union always tries to find out such information and they have their own ways and means of finding out such information. Now, when such information was shared with them openly they had no reason to discover this clandestinely. Second, when you have the information handed over officially to you, then you have to take the ownership of the same and take appropriate actions which are necessitated by such information. This helped enhance the levels of TRUST between the Union and Management. Slowly the Union started taking help from the Management to tackle some issues pertaining to the running of the Union.

This also resulted in the Management coming closer to its associates on the shop floor. The Management then started to be seen as ‘genuine’ Management with a positive intent.  The Management, in the interest of stability in the Union ranks, promoted a concept of having Union elections, once in three years. This idea once seeded germinated into a fruitful plant and now the Union which enters into the Long Term Agreement also sees to its proper implementation. The overall strength of the Union office bearers also was rationalized from 17 to 12. These Union office bearers, who earlier never used to work on their jobs, once elected – started working on their jobs. The Long Term Wage Agreements entered with this Union became a benchmark in productivity based agreements – and productivity, which actually was delivered on the ground.  Progressively, all pending industrial disputes were resolved through the bipartite route and the tendency of filing disputes before the Government dispute resolution machinery got discarded. Then came a time when not even a single industrial dispute was pending before any dispute resolution authority. The trend continues even to date. Then came the era of economic slow down in 1998-99, which put the very existence of the organization into a red danger zone. It was during this time the real test of Union / Management camaraderie came up. 

Tough times do call for tough decisions. We as Management, planned to cut cost all across. All ranks of employees were to be reduced. However, the Union – right from the beginning – was taken into confidence. The dire financials of the organization were shared with them. Their views were solicited. They were presented with the planned measures. As expected, the Union, though in agreement to the need for taking drastic measures, clearly displayed reluctance in supporting the move of the Management. We mooted amongst ourselves and then we decided to call an open communication session. We planned to call all the employees and share with them the health of the organization and thus the need for taking certain steps to help our organization tide over the dire situation. We did invite the entire Union body to attend this open house. This had never been attempted before and there were many sceptical and cynical views floating around. We had this open house communication session; all attended, full Union body was also present. The information on the financial health and required actions were shared. Audience listened with rapt attention. After the declaration that we would have to go in for a manpower cut – there was complete silence. We explained to all that with the planned cut in manpower, everyone on the shop floor would have to take up the additional workload as the productivity standards had to improve and the organization could not afford to lose production. Later, small groups were addressed at departmental levels to answer any queries floating around.  This straight forward open communication by the Management with the entire employee force yielded results. Although, there were pockets of shop which witnessed high emotional outbursts, the impact of clear cut ‘Social Dialogue’ was clearly visible. The social dialogue which had been going on for some time gave a binding effect to all hierarchies of the organization and we all acted as one big TEAM who had only one objective – together we have to succeed – we have to save our organization.

This cultural change saw the organization tide over tough times and the productivity standards, which used to be the worst in the world (as compared to other sister concerns across the globe) became the best in class for its type of industry. These successes of Team Spirit led to a complete CONNECT of all Unionised workforces with the organization and they were eager to move from one milestone to the next. It’s been seven years since I left this organization as I moved on to another organization, however, the connect with the organization, with our shop associates has not diminished at all. This was in true spirit a TEAM which was built on the foundation of TRUST with SOCIAL DIALOGUE as its pillar of strength. In this organization, I have witnessed a journey from a complete feudalistic approach to a committed TEAM approach propelled efficiently by fuel of SOCIAL DIALOGUE. I still feel an integral part of the TEAM and feel very proud of the fact that I too contributed in a diminutive way to this successful experiment on dispute / conflict resolution through Employee Connect and Social Dialogue.  Now moving on to our next case. Case 2: A large European Multi National Company, amongst the top three, in the world in its class of industry. This organization came to India as a joint venture partner of an Indian Business House. The going in the initial 24 years was smooth.  The market for its products was steady and was growing at a comfortable pace. The profits were reasonably comfortable and everything was going on smoothly. 

As the market requirement pressures were not much, the Management took a very complacent view and fell into the trap of giving out hefty increases through the Long Term Wage Agreements. In return the Management got ‘Peace & Co-operation’ from the Union. Everything was going on smoothly….until the day the European partner decided to take the controlling share in the joint venture. Post this event, the European JV partner started running the Organization in a much more focused and integrated manner. The market saw an increase in the demand for its products. The Management convened discussions with the Union representatives, however, the talk of productivity enhancement was not received well. The basic issue was the standard Union concern: what is in for us? All scientific logic on how enhancing productivity was not an issue at all, met with a heavy resistance. Then came another announcement – The European JV Partner decided to take up 100% share in this venture. This news was met with a mixed reaction. While some welcomed the transition, some (especially on the shop floor) went into a shell. There were fears as to how the 100% owner would behave vis a vis work processes etc. There was a general feeling of anxiety related to job security. This led to people getting into a state called ‘cocooning’ where they had fully withdrawn themselves from the organizational interactions and were thinking on the above lines….which took them further deep into their cocoon. These employees were disconnected, detached from the new owner. The atmosphere on the shop floor used to be eerie where no one used to interact with anyone. People just kept doing what they were used to doing. In short, the new Management was not trusted and was being received with a whole lot of suspicion. 

Therefore, we had our hands full – we had to bring our employees out from their self imposed cocooning and also we needed to it quickly as then we had to start our journey of enhancing our very low productivity standards. The second part was very important as there were customers in the market who were waiting for our products. We took a stock of situation and as Management we decided to move ahead on the path to enhance employee engagement, connect through involvement and Social Dialogue. We started our communication drive. Everyday, informal interactions with Union, key opinion makers were initiated. Sharing Organizational information, information about products, market, customer etc.  The second initiative we started was spending one week at the shop floor. This initiative was for the top team of this Organization, who by turn would spend one week’s time on the shop floor. They were not allowed to do any office work. They were actually on the shop floor, learning processes from the people on the shop floor, interacting with them and even working with them. I too tried my hand at welding and did not do a bad job of it at all. This initiative brought us closer to the associates on the shop floor. They too opened up and started responding to these initiatives in a positive manner. The third initiative we started was to reach out to the families of our shop floor associates. 

It is very natural for a person to share his doubts, concerns with his immediate family. Our endeavour was to contact the families so as to provide a positive reinforcement reaching back to the employee from his home front. This was a very thoughtful initiatives and this clearly showed our resolve to reach towards our associates, who for reasons mentioned above had withdrawn themselves from the mainstream.

To take this initiative forward, we hired a lady Social Welfare Councillor. She was a trained social worker; however, this type of an initiative was new to her too. The initiative was started, and as expected, we came across a wall. Such initiatives need certain specific data to start the journey. We created basic data collection forms and requested our associates to provide us with the required data. We faced a lot of reluctance. Why a councillor, why - what is the purpose – what actually is the game of this new Management??? Were the types of concerns thrown at the councillor. However, our persistent efforts in this regard paid off and we were able to collect the requisite data. Thereafter, this data was analysed and based on this analysis an action plan was formulated.  The councillor initiated the Family Contact programme and again we met a dead end. Why is she visiting our houses? That too in our absence….why is she talking to our wives and kids? It was a consistent and marathon effort which took about six months to yield some positive results. Once the visits became stabilized there was no stopping this initiative. There came a stage where the councillor was getting requests from the spouses of our shop floor associates to visit their houses. The Councillor helped cases of drug and liquor related addictions. The Councillor also helped out mothers to identify problems related to their children. They were taught health and hygiene awareness. The children of our associates were given best of the available career counselling, personality development coaching and skills to face the interviews. 

This initiative proved to be the best one which helped us bring us closer to our associates. The feeling of cocooning and alienation transformed to a big family emotion.  This is the time we started celebrating the annual Family Day where the importance of family support to the associates and in turn to the Organization is highlighted every year. This is one event which everyone awaits eagerly. So we had transformed the entire TEAM to a big – large family. This emotion of CONNECT and BELONGING is becoming stronger with time. We have seen a six fold increase in productivity….and that is not the end. The same associate force which used to work in a very unexciting manner is doing six times the productivity in a highly energised and charged up atmosphere. They are raring to do more. Of course, we as Management have remained focused and have remained fair towards our PARTNERS IN PROGRESS and the hard work put in by our associates does not go unrewarded. We also started an Employee Satisfaction Study (through an independent third party) and we are proud to notice that every year our results are moving up.  Over the past six years we have entered into two Long Term Wage Agreements which have been benchmarks – both in terms of productivity enhancement and employee benefits. As I see it, this turnaround has been a direct result of the Social Dialogue initiatives where we involved all in our journey toward excellence.

Today, there is not a single industrial dispute pending before any dispute resolution authority. Our associates are busy contributing through initiatives like Cross Functional Teams, Kaizens, and Cost rationalization drives etc. All differences are resolved in a bipartite manner as there is a high degree of mutual TRUST amongst our TEAM members. FAIRPLAY & EQUITY are integral to our organizational ethos. There has been no production loss due to any industrial relations activity since we embarked on this journey of SOCIAL DIALOGUE. In this Organization too, our Indian Operations were not amongst the best but in a span of just five years, our Indian operations are looked upon as a benchmark and we have become a very sizable part of our global business. Our Indian operation now is looked at with a renewed respect. All this would not have been possible if our shop floor associates were not an integral part of this journey. We have the process of SOCIAL DIALOGUE to thank for steering us on this journey towards excellence. In conclusion, I would like to summarize by reiterating the futility of just following outer bounds of Labour Legislation. It’s high time we as Managements come into the ARENA and adopt SOCIAL DIALOGUE as a vehicle to propel our Organizations forward. An Organization’s success is not measured by how many Labour litigations / disputes are pending, or how many of these the Organization has been able to convert into victories. The real accomplishment lies in the fact as to how many employees have FAITH and TRUST on the Organization and that they are willing to follow the Organizational path to EXCELLENCE. We continue to tread the path towards SOCIAL DIALOGUE.