Article (August-2018)


Paradigm shift of industrial relations in India

Dr. Anupriyo Mallick

Designation : -   Faculty and Head-HR and OB

Organization : -  Eastern Institute for Integrated Learning in Management (EIILM), Kolkata


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The divide between brick and click industries is no longer the topic of an intense debate like it was a decade ago. In late 1990s and early 2000s, this was a great debate among the HR professionals from service/IT/knowledge industry on one hand and manufacturing HR professionals on the other. A new generation of HR leaders who had cut their teeth in the new age industries post liberalization had come to successfully occupy HR leadership roles and the rough and tumble of factory life was replaced by the paperless gleam of HR offices in IT parks. Years of strife, free economic growth continued and it seemed that Industrial Relations as a respected specialised discipline within HR was a thing of the past. IR was merely seen as adherence to labour laws and helping organisations stay compliant. While the practicing IR professionals and seasoned HR leaders never came around to accepting this, the focus within the large sections of HR fraternity clearly moved to managing the 'war for talent'.
Many large, multinational conglomerates were wiser as young professionals were still groomed by moving from a factory to a corporate role and thus developed into well - rounded HR professionals who drove a broader, more comprehensive agenda. But more often than not, the board room presentation by HR leaders was about talent management than industrial relations. Nothing wrong with that per se but the recent upsurge of industrial action in manufacturing industries is a reminder that the composition of employees in a manufacturing industry is diverse, requires sensitivity in approach, skillful handling and equal, pre-emptive focus on IR which if not done can simply destroy shareholder value.
In India Employer - Employee relation started with Industrialisation, at initial stages all employees were on permanent rolls of the company/organization (Few initial years as temporary and thereafter permanent employee/workers). But now the main focus in India is shifted from Employer - Employee relation to Employer - contractor (Contract Labour) relation to avoid the union related issues. Most of the companies are now outsourcing the manpower to 3rd party agency so that they can avoid union issues and complications. One thing is notable that the rate (Number) of dispute filing in Industrial court, Labour Court, Labour Office is drastically reduced since 80-90s as compare to 2016-17. It doesn't means that labours are not exploited in current scenario, where labour class is not interested as they work in contract and contractor is the supremo for them. They cannot catch - hold of Principle employer as there is no legal relationship set. Point to be noted here that most of the work is getting outsourced where contractor (labour supplier) class is getting benefit where employer is more comfortable as they can avoid unions.
Industrial relations tensions in India had never really gone away from the work place but various factors have contributed to the increased trend of labour unrest in last couple of years. In the last 20 years, after the opening up of the Indian economy, militant labour unrest had been on wane as political and legal support for it dwindled. Some years ago the acceptance of the need for contingent workers unwittingly paved the way for large number of contract employees being brought on board. These two factors coupled together became easy temptation for the management to push hard on discipline and productivity but the wages and dignity of workers did not rise in same proportion.

Industrial relations tensions in India had never really gone away from the work place but various factors have contributed to the increased trend of labour unrest in last couple of years. Engagement with industrial workers as an instrument of political mobilisation slowly came back. While these economic, political and societal factors indeed play a significant role, HR professional must focus, to begin with, on the basics.
Maintaining the right balance between productivity versus engagement, trust vs legalese and short-term versus long-term are the three essentials of strife free industrial environment.
Productivity versus engagement :
Far sighted organisations used last two decades of strife free industrial relations to build an environment of trust and inclusiveness among their workforce. The principles of treating employees with dignity, providing them safe workplace, fixing compensation on the basis of real time indexed wage data, having a people leadership trained cadre of first line supervisors and following the spirit of the law (for example, using contract labour only for non - core seasonal jobs) are foundations on which policies and practices should be built in a manufacturing organisation. It's also important for HR leaders in organisations to sensitize the senior management about the importance of pre-emptive actions for building a cordial industrial environment.
Trust versus legalese :
Sometimes, HR professionals too get caught in their own glory of having successfully built relations with the local labour authorities and they forget that the primary purpose of HR professions in manufacturing locations is to make sure that the workers are being treated fairly and in the spirit of building long term trust. How an organisation reacts at a time of crisis when a worker or his family needs help goes a long way in building trust. Organisations can just stick to the minimum compensation that the law prescribes in these situations but the penny really drops when the management goes beyond the dictates of the law to solve for the real need of the worker and his family.
Short term versus long term :
Management accounting prescribes business as a 'going concern'. HR professionals will do well to have a similar assumption in their approach to industrial relations issues. They should be custodians of worker's needs at manufacturing locations and encourage practices that ensure long-term continuity of business instead of short-term measures that can look appealing on the financial statements but can undermine business continuity. The informal contract between a worker and supervisor is increasingly getting based on equality rather than that of lord and master. Any potential for conflict must be seen and pre solved for in this context.
The task for HR professionals in manufacturing organisations is to create such a collaborative culture and build a growth oriented environment by, apart from other things, successfully arguing the case for investment in worker development programs and in driving a calendar of activities that channelise the energies of workers positively. Bad practices (for example, engaging contract labour for core work) and aged thinking (e.g. creating symbolic forums for worker participation in factory affairs) will have to be replaced with more contemporary approach to industrial relations.
Some would dismiss the theory that what's good for the workers is also good for the company as naïve but in long run, there is no bigger truth than that.