Vineet Kaul, CHRO of Hindalco spoke at EFI Seminar last week. He makes, as
always, important points to think about. Here is his speech:
the last few months, interest has built up on the ‘Employee Relations’
Scenario. Whether it has to do with reporting
in the National Press, Debates and Conferences – after nearly 2 decades the
subject has been receiving a lot of attention.
‘Employee Relations’ has been the burning platform during the 80’s and
early 90’s in this city too. The
landscape has changed and industries which are in and around Mumbai can now be easily
counted on the finger tips. Over the
last 3 decades, we have witnessed massive changes – both in physical form and
in the thought processes too. The
sweeping reforms of early 90’s brought about an avalanche of restructuring across
many of the factories and the market demand and costs pressures compelled
companies to Innovate and re-design their products & services.
subject matter of ‘Industrial Relations’ / ‘Employee Relations’ has had its
challenges over the years. The normal
reasons for the current state of IR put forth are Government, Unions and at
times the workmen (as if they are not our own).
Let me attempt to examine the issues raised against each one of them :-
1. Government : All along we have been experiencing that the
Labour Laws are inflexible, and not aligned in today’s competitive
scenario. The role and contribution of
the Government Machinery in IR has always been questioned by Management and
Unions. A proactive mediation is very
rare and seldom do solutions emerge hence adding to the existing issues.
2. Unions : Multiplicity of Union causes havoc to Operations
and the Managements ultimately have to bear the losses. In some factories having upto 5/6 Unions is
common. In addition, the Union Leaders
have their own Agenda which is not always restricted to the Company and its
3. Workers : They do not behave maturely and take
responsibility. Their demands are always
sky high and the moment a new Union promises something better – they change
as professionals we were to dispassionately review the above, its time to think
differently now – start accepting few realities in life. Can IR / ER situations be very different from
the current environment prevailing in the country. Can it be very different in Employee
1) Government : Which Government has even
moved the needle in as much as “Labour Reforms” are concerned ? Except for
raising the eligibility limit in few Social
Security Acts – has anything changed ?
We all have excellent firsthand experience of how the Labour Department operates : just take a small case – Contract labour system
abolition is ordered for the Canteen of one company whereas in another 300
other Canteens in the neighbourhood Contract labour working continues ? Why the
2) Unions – We always quote the Trade
Unions Act that any 7 workers can form a Union and hence there is an
issue. In Maharashtra, we have MRTU Act
Recognition which provides recognition of a single Union. In States like Andhra Pradesh and Orissa too
there is a proper system of one bargaining Agent. Does it solve the problems ? No, perhaps it provides newer challenges. Let me give you an example – in many Units, we
sign the Settlement with Union ‘A’.
Subsequently, Union takes over – do they take responsibility of
Implementation ? By the way in Korea 2
workers can form a Union.
3) Workmen – Whilst their attrition is
very rare – the Union allegiances and the nature of demands keep changing. They are always putting the pressure on
Management. They would like to pick up
the best market practices example 50% hike in wages in one LTS or a VRS for 40
lacs. Can we really blame the workers ?
us appreciate that ‘Employee Relations’ is a Management Function and we have to
accept full responsibility for managing it in its entirety. What do I mean by this ? Please do not look to the Government for a
solution – it has too many issues both National and local to handle. This subject is not top on the Agenda. A
leading company last year publicly declared that 60% of their workmen, in
manufacturing were Contract labour. Did
the Government act ?
Unions have their own compulsions and many of
them have a larger Agenda than just truly representing the Employees. We have to accept them as they are and deal
with them. The same applies to workmen –
being part of the ‘family’ – our ownership has to be all pervading in the real
professionals in the ER & HR functions, it is therefore imperative on us to
prepare our Organisations and ourselves to manage ER well. Indeed, whilst there are learnings available,
all across, it is also well known that each Company’s situation is unique. Employee Relations is dynamic in ever
changing situations. We cannot take a
harmonious IR situation for granted. Companies who have all along had no ER issues
are indeed lucky and fortunate. In view
of the recent developments across the country, it has become necessary to equip
ourselves with adequate learnings and knowledge of the subject. We need to continuously look at the relevance
of our own ER practices given the changing Employee demographics, rising
expectations and Business scenarios that we operate in. Things will be getting even more challenging
to say the least.
a way, what we have witnessed in the last few months has quite some reminisces
of the 80’s. The Economic scenario has
brought enough pressure on the Companies to deliver. All sectors and businesses have gone through
Restructuring and Change. Over the last
2 decades – newer Sectors like Telecom, Insurance& Retail have opened and
also provided excellent opportunities both to Business & Employment. The recent announcement on Reforms signals
even greater competitiveness in the market.
These are excellent signals for the Consumers, but they bring their own
set of challenges to the Companies.
Quality, Cost & Delivery will reign supreme. In the endeavour of Cost Competitiveness
& Innovation – the nature of workforce will undergo a change. About 10
years back, Outsourcing and Temporary Staffing were Jargon; today it is
uncommon to see a Company which does not have Outsourcing and Temporary
demographic advantage that we are proud of is indeed posing its challenges
too. The aspirations and expectations of
the workforce is different from what we have witnessed in the past. The pressures of change are not to be seen
only amongst Professionals but also in the ‘Blue-coloured’ as we call
them. It is very common to hear of a
‘New’ and youthful Leadership taking over the helm. Rather than being taken by surprise –
shouldn’t we be preparing to deal with a changing scenario ? I recall some years back a colleague telling
me the ‘Blue-collar’ would show their fists, but the Professionals would speak
with their ‘Feet’ (leave).
have been reported cases of extreme violence that have caused tense moments. We have all read about the unfortunate
incidents of violence and everyone has denounced the same. The
unfortunate death of a fellow professional is sad – however we should really
see this as a rare exception. In my early days, a worker told me “I joined
as an Apprentice alongwith many of the other Workers. We eagerly work for building a career in this
Company. What drives us today to throw
stones and vent our anger at their very place and the Managers ?” This is a profound question if we keep our
immediate emotions away. Do we have all
the facts and answers ? Why do such
situations come up ?
major subject of debate has been around the use of Contract labour. It is a fact that there is Contract labour
working all across. The Government is
the largest user of Contract labour – in all its activities now. One of the major reasons for use of Contract
labour is the flexibility of manpower it provides in business cycles as well as
the cost advantage. However, as we all
know anything done in excess is bad. Whilst
companies have gained due to the use of Contract and Temporary labour, they are
expected to follow the statutory requirements.
We cannot flout the norms laid down and be exploitative in our
approach. Whilst legal experts will
advise arms length be maintained in dealing with Contract labour – atleast let
us have appropriate mechanisms for Contractors to follow. This is in our own interest. The discontent in Contract labour is
ultimately going to impact our Operations and profitability. So we cannot continue to ignore the
subject. Moreover, as the Principal
Employer, ultimate responsibility rests with us. The organized sector in our country is
reported at 7% of the total workforce.
In a way, this is where we focus all the time. The recent incidents have brought the
spotlight on Contract labour and we can expect developments taken place in this
the prevailing scenario – as Professionals, we will have to increasingly engage
with all our Employees. Dealing with the
Unions alone will not be enough. A
greater onus in communicating with each Employee is the imperative. We often forget that the Worker first becomes
our Employee and only then a member of the Union. Extensive training, Communication and
involvement is the key. No longer can
the HR initiatives be restricted only to the Managers, Career development is a
much felt need even at Worker level.
Regular and continuous communication with Workmen will make them also
appreciate the Management viewpoint. Or
else, in a crisis when we make attempts – there is disbelief and lack of trust. These thoughts I put forward for your consideration.
Labels: Contract Labour, Employee Relations, Industrial relations, Labour laws