Liberalisation had its benefits.
One of them was that it gradually removed violence and turbulence from industrial
Those who have seen industrial
relations in seventies and eighties will readily testify how maddening
situation it was. Nothing seemed to work, though there were islands of good
relations. The two states stood out – Kerala and West Bengal where employers
dreaded to invest. Tilting the scales in favour of labour was all right but as
it happens in our country, leaders went overboard making situation very hostile
for industry to carry on business.
Liberalisation changed industrial
relations. Mr Sanjeeva Reddy [President of INTUC then] provided the biggest
acknowledgement. He said that ‘employers were no longer enemies of working
class; the real enemy was international competition.’ This might sound
not-so-earth-shaking statement today. But it touched tender nerves then. When I
wrote a piece on this in our house magazine, it was picked up by a journalist
[with my permission] and he published an article in a leading Marathi daily. Several
companies in Mumbai exhibited the article on their notice boards. At last good sense
and rationality was returning to industrial relations!
The good sense and rationality soon
got capitalised in power equations. The competition forced companies to make
many changes for their survival, ‘cost reduction’ became the name of the game. Voluntary
retirements [‘Encouraged Retirements’ might be more accurate and honest term]
became very common, and that simultaneously destroyed the power of unions. The
Labour Courts which had at least 100 cases everyday on its board now had about fifteen.
The Government abdicated its role as the watch-dog. Actually it abdicated its
role in industrial relations altogether! Not that it was very effective in that
role; it was either an onlooker or behaving like a dog as in His Master’s
Voice. There was euphoria in some quarters with these changes; the pendulum had
swung in favour of the managements.
This new reality indeed had its
positive impact which gets written about more often because it is very clearly
visible. But everything comes with a flip side, with a price that one has to
pay. One of them was clearly articulated in a newspaper report on Textile
Strike at Ahmedabad. It is very true and representative of the situation in the
industrial relations scenario today that I am tempted to quote it. [Quote] “Experts suggest that even mill owners and
senior managers have lost touch with workers and the industrial relations
department in textile units, which had its ears on the ground, is now hardly
connected with labourers.”
Why did managers lose their touch
with employees [which some of them used to consider as their ‘constituency’]?
Because now it was no longer essential! In many units things could be done at
will, there was only a nominal resistance. Good employers also engaged in good
practices – employing initiatives like TPM, TQM etc. meant that employees were far
better integrated with the overall production process. It had its benefits, but
few employers used these initiatives consciously to build employee relations.
The industrial relations
situation had its fallout on academic field. I know of one management institute
which placed Labour Law subject in ‘optional’ or ‘elective’ category for a
MBA-HR course which stalwarts in HR consider a ridiculous decision. In any
case, teaching [and learning] industrial relations was de-emphasised. An entire generation of management graduates ignored industrial relations subject completely. The
National HRD Network and The Employers’ Federation of India recognised that
there was a huge skill gap in this area, moreover they figured out and rightly
so, that there have to be enough good teachers to teach the subject. So they
launched an initiative. A very laudable effort indeed.
On the other hand, demand for training
programs on ‘Employee Relations’ has increased and is increasing. Maruti and
Air India strikes have highlighted this need, so also the two instances where
Heads of HR lost their lives.
The industry will do well to act
out of hope rather than fear to create good industrial relations. The
newspapers ask “Is violence in Industrial Relations returning?” which treats industrial
relations as externally influenced. The possibility of collaboration is
substantially higher today than ever before. The fact is that industrial relations
are defined by two parties, employers and employees in an enterprise. I know of
an SME where the employer retained all his employees during the recent
slowdown, and the employees too reciprocated in the manner they thought fit.
One of the fallout of liberalisation
is that the industrial relations now operate clearly at two levels. One is
obvious, at the Union and management level, and this is where it largely
focused on in pre-globalisation era. The other level is the Manager-Employee
level which has emerged strongly now with use of OB [organisational behaviour] theories
to build relations in industry. So there are opportunities to build productive employee
Henry Adams captured the
experience of repairing relations well, he said, “At best, the renewal of
broken relations is a nervous matter.”