Special Article (May-2018)

 Special Articles

Article of the Month - May 2018

Indranil Banerjee

Designation : -   Sr. Manager (HR & Admn.)

Organization : -  CRM Cell, West Bengal State Electricity Distribution Co. Ltd., Kolkata


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Do we need Ombudsmen for our HR System?

Introduction :
A completely divided world we have. In one fold the HR catch lines the "Employee first" or "Employee as internal customer" and in other fold growing industrial relations conflicts issues out of "employee indiscipline". The magnitude of violence resulting out of industrial indiscipline that India incorporate has experienced in recent past may be termed as unprecedented. If any of those cases which cropped up in public is assessed, one distinctively common phenomenon would be noticed indifferent attitude of management rather than resolving any grievance often trying to resort and vendetta mode of handling cases.
Objective and Rationality :
The objective of study is to identify need of introducing ombudsman in dispute resolution framework in Indian context. The Indian experience of pendency of huge numbers of court cases at different levels of court often takes considerable time to identify civil and criminal liabilities. The employer - employee cases leads to unwanted tussle vitiating much needed stable work relation and this prompts to identify alternative dispute resolution mechanism; the rationality behind the study.
Research Methodology :
In order to identify the necessity of introduction of alternative dispute resolution framework the author used an empirical research by using evidences and gaining knowledge by means of direct and indirect observation or experience. The research involves study of various government report related to pendency of cases at various levels, dispersal of court cases out of labour issues at various parts of country. These secondary sources of data were used to identify the crux as well as volume of problem. The secondary data was used as foundation to design the survey used for collecting data through stratified random sampling, a method of sampling that involves the division of a population into smaller groups known as strata. Since the subject was critical in nature while collecting the data adequate measure was taken to reach out the representative population. Other than the statement of purpose the views of the participants were kept open so that various perspective of the topic is found. It helped to avoid repetitive reply, at the same time critical opinion over views of other participants were kept open, helping collection of quality inputs. In stratified random sampling, the strata are formed based on members' shared attributes or characteristics. The viewpoints of legal head, senior HR, business managers, representing public, private, academia, researcher, entrepreneur, consulting organization were called on pan India basis. While analyzing the data exploratory data analysis (EDA) was used for seeing what the data can tell beyond the formal modeling. The collected primary data was represented in percentage of population favoring as well as opposing the motion in a narrative manner covering the same as specialists' views.
The conceptual coverage of the study is covering all part of the country i.e. Universe of sampling and in order to reach out the representative population the objective of the survey was conveyed and views of only related persons were accommodated. The individual who participated in survey was considered as unit of sample. The 23 numbers of persons, definitely a small size of sample, participated in the survey covers different demography for maximum coverage helping deriving at a factual outcome.
Research Work :
Before the paper get into depth of the topic let us look into statutory angle of this collateral issue of dispute settling mechanism that currently the industries are having.
Within the statute dispute resolution machineries are in multi - fold in nature. It starts from internal conciliatory mechanism like Works Committee and may ends up by National Tribunal, if it involves issues of national importance or industrial establishment situated in more than one state. Other than the lower courts the dispute may also landed up at High Court of the states or Supreme Court of country. In India while regular courts are battling a huge backlog of cases, the cases in the country's labour courts are no exception. About 13919 cases (up to Nov'15) are pending with the Industrial Tribunal-cum-labour courts across the country with increasing trend pending cases were 13,694 and 13,722 in 2012-13 and 2014-15 respectively.
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As per the Industrial Disputes Act, 1947, Centre has set up 22 central governments Industrial Tribunals-cum-Labour Courts (CGIT-cum-LCs) in various states for the resolution of industrial disputes arising in central sphere. The reasons behind pendency include absence of affected parties at the time of hearing, parties seeking frequent adjournments to file documents and parties approaching High Courts to challenge orders of reference issued by appropriate government as well as those the Tribunals on preliminary points.
However, the data of Labour and Employment Ministry suggests that in the FY 2016-2017, the cities which have the maximum pendency in the country's labour courts are Chennai, Dhanbad and Ahmedabad, covering Southern, Eastern and Western parts of country. Chennai had the highest pendency with 2135 cases pending in its labour court. There has been a steep increase in the pendency of court at Chennai according to the union labour ministry's data; Tamil Nadu's capital city only had some 244 pending cases in the previous Financial Year (FY) of 2015-2016. Good thing is that out of the total 22 labour courts in the country, 13 recorded a reduction in pendency in the FY 2016-2017. These included the labour courts in West Bengal's Asansol, Uttar Pradesh's Kanpur and Lucknow, Madhya Pradesh's Jabalpur, Andhra Pradesh's Hyderabad, Odisha's Bhubaneshwar, Rajasthan's Jaipur, Kerala's Ernakulam, Gujrat's Ahmedabad and the two labour courts each in Maharashtra's Mumbai and Jharkhand's coal belt driven Dhanbad, covering whole map of the country. The five labour courts which performed best in disposing of cases were the courts in Ahmedabad, Jabalpur and Dhanbad at Western, Central and Eastern parts of the country. In FY 2016-2017, the court in Ahmedabad finished 597 cases followed by Jabalpur's court which disposed of 343 cases. One of the labour courts in Dhanbad ranked third in terms of its disposal as it disposed 206 cases in the FY 2016-2017. The above data also shows eagerness of both central and state governments to perform and provide a stable industrial relations platform across the country and attract investment.
It may be reiterated that the dispute resolution machineries are neither limited to process of conciliation nor adjudication by labour court, tribunal etc. One can get approach High, District and Subordinate courts before knocking the door of Supreme Court. Strikingly, the pendency of cases in the district and subordinate courts of the country has increased from 2.64 Crore cases in the year 2014 to 2.74 crore cases in the year 2016.
Generally, suing own organization by the employee is considered as the last resort. The employee related disputes which cropped up out of grievance and beyond count and effect thereof to the institution is innumerable and have telling effect to the industry, often detrimental to engagement, productivity, growth and investment. The HR manager who historically played the role of welfare, labour, personnel, industrial relation management or more cosmetic ethics management are basically to maintain industrial truce by providing a platform for general employee to share their concerns and perform employee advocacy role. However, a section of them for some time has started behaving like a hiring manager aligned with principle of "Hired to get fired". Rather than acting as "safety valve" to release the internal pressure of employees in this digital age become over - surveillant. We have the result is in our hand, the nation in one hand is experiencing assault of managers; some cases resulting into death. In other hand growing numbers of court cases lodged by employee against employer on being dissatisfied with internal discipline framework of the institution.
A section of internal framework of an institution related to discipline management like disciplinary authority, investigating officer, enquiry officer and presenting officer often played by HR releasing the employee advocacy role with few handpicked vested interest management witnesses etc. would often negates the viewpoints of so called delinquent person defending the case out of own analogy, cross examination, logic etc. This breed of HR prefers to corner the employee based on enquiry, evidences and deposition of management witnesses for obvious reasons. This culture of unprofessionalism even creates arrogance and challenges the employees to get justice from court involving time, money and energy. Rather than resolving, such breed of HR enjoys sadist pleasure sitting over institution resources at the expense of employee loyalty. Here comes the practical limitation of internal mechanism of discipline management that often rather than adopting "principle of logical conclusion" unfortunately uses "principle of dominance". Such HR system works to appease power centre of organization. This is one of the major reasons behind growing apathy/discontentment of general employees for HR of any organization. This journey from "Welfare office" to "Hate office" is evident from the numbers of murderous assault on HR manager that the country witnessed in recent time. Increasing court cases on employment issues is a major problem and deterrent to foreign investments. Out of this tussle workmen are spending huge behind counsel. Time for alternative thought.
Learning from International Practices :
The concept of Ombudsman at first originated in Sweden in 1809 more than two centuries ago. According to International Ombudsman Association (IOA) Standards of Practice they do not have any other role in the organization. The role may reports to the CEO or board of directors or it may works as government watchdog and plays the role of intermediaries between internal discipline framework of the institution and formal judiciary. In many countries the organizational ombudsmen receive complaints through alternative modes and channel. It is important to recognize that many new Ombudsmen roles have been established in private and public sector organizations. Depending on need of formation the roles of Ombudsmen often are :
1. The use of informal resolutions for complaints using tools like conciliation, mediation and negotiation.
2. The use of inquiries and structured investigations to determine whether a complaint is having any basis.
3. Recommendations to correct unfair situations both for individual and collective cases.
4. Extending assistance and exploring available options for resolving complaints through advice, referral and discussion.
5. Identifying trends and patterns in complaints and make recommendations to address potential regular issues and influence improvements in practices to make it contemporary.
6. Identification of system deficiency to seek changes in the work.
7. Undertaking single investigation for multiple complaints about the same topic to avoid duplication and wastages.
8. Asking the complainant and institution to try to resolve complaints before commencing an investigation.
9. In case of identification of injustice, setting right in favour of complainant.
To ensure robust reporting of allegations of wrongdoing, a typical provides a safe and confidential channel for employees and third parties to seek guidance, ask questions, make comments and report suspected misconduct. The Ombudsman Program allows employees and, in some cases, others to ask a question or raise concern in complete confidence. The effort is much acclaimed as it is evident from case study of a global organization like United Technologies (UTC) where since its inception in 1986, the Ombudsman Program has received more than 1 (one) Lac of enquiries. The suggestions and requests made in the last five years have led to changes that make it a better company with a sense of positivity. Out of the recommendations the technology company came out with non-retaliation handbook with some practical tips for supervisors and examples of unacceptable conduct. Ombudsmen have helped employers resolve thousands of disputes as stated by an attorney who had worked for establishing ombudsmen for more than 10 years and confirm that this role can help defuse employee anger over an alleged incident, which could reduce an employee's incentive to sue. Internationally, in order to avoid consideration of Ombudsmen as agents of the organization the ombudsman should act independent, impartial and maintain confidentiality. They should not be allowed to :
1. Develop new or change existing policy, rule or administrative decision.
2. Establish executive decisions or determine rights and privacy.
3. Pressurize the organization or any person to implement its recommendations.
4. Conduct an investigation that requires administrative or judicial proceedings.
Thus, the organization requires putting appropriate limits to the role of Ombudsmen and then clearly communicating those limitations to the employees to avoid any gap of understanding. At the conclusion of an investigation, the Ombudsman may make formal recommendations like,
1. Refer the matter to another authority.
2. Rectify administrative actions.
3. Change administrative practice.
4. Reconsider the law that triggered administrative action or
5. Clarify the arrived decision.
The way forward :
Digital age definitely reduced HR's transaction activity to great extent but it also paved the way to disconnecting people. A bio-metric attendance system might have reduced daily morning chaos of HR but it also wiped out people to people contact and relationship building, helping stronger bonding of informal group, the heart of any organization. Any practicing manager would appreciate that there is no reason why a common employee would have a special place for his supervisor or HR, if the system is indifferent to appreciate the late reporting. In this backdrop, when in one hand the internal discipline management framework is losing its sign as the employees for whom it is negotiating it on sheer disbelief and in its other hand mounting pressure on judiciary for disposal of cases through time consuming formal process of conciliation and adjudication; it is perhaps appropriate time to give a rethought on entire existing HR framework of dispute and grievance settlement. If the organization really considers its employees as Internal customers why not like various other service industries develop an internal grievance redressal system and above that an appellate authority like Ombudsman, who will study all gamut, perspective, submission and would reach out to a decision reasonably, importantly humanly and not behave unilaterally. The role of ombudsmen as adjudicator in employer - employee relation is often considered as a hallmark of an ethical organization. It is a key component of an integrated dispute resolution system, on complaint system. There are many private companies, universities, non - profit organizations and government agencies having an ombudsman to serve internal employees, and managers and/or other constituencies. The role of ombudsman is structured to function independently. An Ombudsman assists with the fair and expeditious resolution of complaints in an impartial, confidential and independent manner. Ombudsman is not a representative of the person raising the complaint or the organization being complained about. A flexible model of such framework would be helpful to dispose the cases amicably, expeditiously and cost effectively helping diffusion of unwarranted industrial stress. This would also ensure releasing of pressure on the formal judiciary flooded with numbers of cases to some extent. Internationally, practice of ombudsman for ensuring employer - employee truce is highly accomplished but question is that if the same would be a business case for India for triggering policy changes and facilitate buy-in by all stakeholders.
Findings of Research Work :
A qualitative survey was conducted by the author. In order to capture viewpoints of Academics, Practitioner, Entrepreneurs the excerpts of the theme was shared through social media. The author used personal wall of his Facebook accont and also shared the same across members of closed WhatsApp HR group and invited relevant person to comment up to 30th November 2017. Considering the critical issues involved in the theme, the feedbacks were awesome. The participants had shown deep interest to the theme by posting their viewpoints more than once covering various perspectives of the subject. A total response of 23 nos participants only 4 nos. thought that current system of discipline management and/or follow up grievance management is fair enough and any immediate changes is not warranted. Before we get involved with critical analysis with the viewpoints of people favoring the motion in Indian context, let us see the opinion of 4 nos. professional that had participated in the survey and negated the motion leaving beside whopping 83% in favour across the ages of professional.
The comment of one of the participants of survey currently having engagement with a national repute B-School first drew attention to report of Forbes mentioning India as most corrupt country in Asia, the same participant is of the opinion that Corporate & HR are no different, hence the ombudsman may not be ethical too. He further questions that if it was not then what?
Echoing the above, another participants who also remain closely associated with a national repute HR body stated that if the Ombudsman model was successful in segments implemented (like banks and insurance) the number of cases in courts and consumer forum wouldn't have been on the rise. The person was of the opinion that the existing systems were adequate. Reacting to comments in favour of motion the participant added, "...as aptly pointed out by others; the ailment lies in the behavior dimension to render it an effective proposition."
One veteran HR professional having multi facet experience of more than 25 years confirms availability of legalized form of the internal relationship between employee and employer in organized industries as contract between them for serving in the interest of each other. He enlightens by saying that employee - employer disputes could be out of several typical aspects including lack of transparency among them, dominance of one side often termed as coercion, misunderstanding of terms of services, penetration of external forces from any side and silo culture of the organization etc. The perspective of differences marks the intensity of differences. Therefore, it seems that constitution of ombudsman will seldom fulfill the need of replenishing the differences among employer and employee. Our need is transformation of cultural approach of the organization. It may be organized or unorganized sector.
A mid - forties aged participant having 20 years of experience in both public and private sector and currently pursuing own consulting firm stated, “Not feasible practically as the system, structure, processes etc. related to the people function is utmost complex and more so in the context of settings in our country. In service industries like hotel, logistics, BPO etc. grievance redressal system may exist but outcome is blurred in most cases and employees are too dissatisfied”. The same participant was aggressive of own deliberation by saying that in India we are forcibly named the Personnel function as HR. Does HR in true sense exist in majority of organizations? Job ads for HR mention what not but when one steps in, the reality is something different. Hope, most HR friends will agree the reality is something else than it generally is portrayed. The participant advised all to watch the session on IR by Dr. TV Rao on You-tube video and suggested that business owners have to embrace the line stated therein. Dr. Rao mentioned that a typical worker spends almost his life in a single organization. But the organization does too little for the matter he termed as worker affairs. This is reality in majority of organizations. However, organizations are busy on the executives whose tenure is doubtful! The participants brought an example of strategic IR is his own case mentioned by Mr. Abhijit Bhaduri when he was with the Tata group when he reportedly had made friendship with the children of the workers who stayed in the company quarters and through this strategy he could positively influence the workers. It is evident that although the 4 (four) participants negated the motion but their feedbacks collectively were sense of desperation to break the shackle as they were not happy with current state of culture. The few of comments favoring the motion that were captured by survey initiative are as follows :
The representative of a public sector major at apex court is of the opinion that different organizations have internal Grievance Redressal system for the organization, e.g. First level at shop floor/site office and other at corporate level. This helps to redress Grievance of employees to reduce conflict between employees and employer. Provision of Ombudsman is there for a specific industry under specific regulation for the concerned industry, e.g. regulation for electricity industry, telecom industry, banking industry etc. Position of Ombudsman has been introduced to settle the dispute/Grievance before it reaches to Court. So, Ombudsman is a forum in between organization and court instituted as per specific regulation for the concerned industry which is supported by provision of the related Act. Thus, concept of instituting Ombudsman for dealing grievance/disputed of internal customers similar to external customers may be helpful to settle disputes/grievance of employees before it reaches to Court. It will help to maintain congenial working environment in the organization which will facilitate improving productivity. This requires amendment of the Act meant for the particular industry and relevant regulation of introduced by the concerned regulatory commission, if formed. Participating in the online debate on  Facebook wall of author, the Ex legal head further added that the Ombudsman being an arbitrator, a neutral person, independent from the disputing parties need not be an HR professional to redress the dispute between an employee and management as Judge or Advocate who deal with such matters in Courts. HR professional of an organization is part of the management and so, it will be ethical to have a provision to refer the dispute to an independent forum for a settlement in a logical manner expeditiously without any bias avoiding the time consuming process adopted in courts. At present there is no provision of Ombudsman for settlement of disputes between an employee and organization. The participant cautioned by stating that the organization may not agree to have any provision of Ombudsman as they may think that it will curb its authority and reiterates that discipline management is a well established process maintained by every organization. Appointment of an Ombudsman may be thought of as an extension of Grievance Redressal process for employees by the organization.
One lady research scholar cum practicing manager opined that she believes that when it comes to situations of disputes or misconducts that need to be dealt by the HR dept or through the disciplinary mechanism, there is a high chance of bias as perceived by the aggrieved parties. She explained that the HR manager concerned or the disciplinary authority concerned is always viewed by the aggrieved as management. Thus, if the tussle is between the employer and the employee, it is better to hand it over to a neutral party as it leaves less chance for the aggrieved to challenge the decision. An Ombudsman or any other quasi-judicial body/forum will always be viewed as more just by the aggrieved employee than the HR manager of the same organization. Another HR manager of around 10 years experience while agreeing the idea of introducing ombudsman for truce management questioned that who would be fitting as Ombudsman for employment issues. He stated that the disciplinary proceeding is a running procedure and it is time tested and required too. He added that disciplinary proceeding is initiated from management end but what about the instrument of an employee if s/he wants to raise an issue against management. He questioned the set procedure of doing so, apart from association and union forum of conventional industries. He welcomed the motion and suggested that the process of implementing Ombudsman is to be refined and researched thoroughly for best outcome.
A senior HR of a multinational business organization conforms to the idea and recommended for adoption by the organization where cases are more. Another senior management HR of a leading international steel manufacturer echoed stating it as a "Nice idea". An executive with background of computer science suggested adapting the policy by the organization. One entrepreneur calling the motion a good and healthy discussion added several dimensions by stating that HR is more a practice unlike other stream such as marketing, finance and operation, that is the reason where impact of HR decision has a long term effect within the function of any organization so it is taken very seriously across all the domains and sectors. He drew attention especially at the evolution of HR practices in the service sectors and nonprofit sector. He conveys that on these where all the innovative practices have evolved over the period of times because unlike manufacturing these sectors gave the space and time to experiment. So in HR, every idea should be tested and monitored very closely to evaluate its impact in the long terms before it is implemented to produce result which actually help to achieve the objective of any successful organization. He added that as far as ombudsmen is concerned, it should be tried and tested but as suggested by many other participants, these should be people from outside organization and from subject matter specialist, for example if there is a charge of Sexual Harassment against anybody a person from marketing cannot do much but if there is an allegation of corruption and bribery, a person from finance should be considered similarly for data theft a person from data security background should be in the panel.
Limitation :
Although the effort was exerted by the author to reach out various parts of the country but due to limited response of the population sample size remained small. The study by and large limited to participants of neighboring coordinates of City of joy, Kolkata. The study may better be regarded as a pilot study. A larger sample size of population covering the sample universe may provide us a comprehensive perspective. However, the same requires greater effort involving considerable resources and time.
Interpretation & Conclusion :
Till the time organization would be existing there would tussle in employer - employee relation. The formal internal dispute resolution machinery has its own limitations. One participant of survey raised question about the mechanism available to the employee to raise issues against management. It is more so important since rising issues at statutory and judiciary end is resource and time consuming and in a model employee relation framework that an organization strives for, does not have any real space. Here comes the thought of develop and use of an alternative dispute resolution (ADR) framework by creating a layer of Ombudsman. If it is used sensibly, could provide options for employee with concerns. Additionally, the role could offer provides mediation to facilitate conflict resolution, assists those who feel harassed and discriminated against, helps enable safe upward feedback, coaching on ethics and other management issues. Overall, the organizational ombudsman helps employees and employers to deal with concerns and complaints with important skills that includes active listening, inviting submission and opinion of both parties, communicating successfully with a diverse range of people, remaining non judgmental, having the courage to speak up and address problems at higher levels within an organization, problem solving, analytical ability and most importantly conflict resolution skills through engaging and trust building. A specific career background or academic degree is less important than acquiring and demonstrating the skill set described above. The role in case of necessity can definitely call for subject specialist reports as even formal judiciary calls.
Suggestion & Recommendation :
The Ombudsmen are supposed to offer their services free of charge so that remain accessible to individuals who could not afford to pursue their complaints through the courts. Here comes point of dilemma; that who will bear administrative cost to run such forum. Is it the organization, the employee, the employees' body, the employers' body or the State? In case it is internal forum of organization, sanctity of the role would always be questionable and no real help is expected in the given mindset of both parties. An important function of Ombudsman is the exercise of discretionary powers. The discretionary powers are really vast and how to use these powers depend upon the person concerned and in case the role remains organization funded use of such discretionary power would again be always questionable and may interpreted as corruption, negligence, inefficiency, misbehavior etc. Since the role involves adjudication, the ombudsmen usually have the power to make recommendations which are binding on the bodies in their jurisdiction unless successfully challenged through the courts of law. Reform of labour legislation of the country is waiting now for a considerable period and since the country is striving for investment facilitating growth it is right time for new vision for a conducive, matured and forward looking employee relation canvas. Rather than charging the cost of the ombudsmen service to either of parties, the State should come up to shoulder the responsibility with some alternative revenue model. It is to reiterate that as an independent and neutral employee, the organizational ombudsman should have no other role or duties. This is in order to maintain independence and neutrality preventing real or perceived conflicts of interest, reason a state funded framework is a better proposition. Rather than volunteering the organization to explore to implement such framework a statute may bring up by the legislature so that the relevant industry or sector is obliged to participate in the framework. Country's judiciary shall be benefited as the framework would definitely ease up pressure to a considerable extent.
The author advocates creating a 3-tier model of framework.
1. First at Organizational level,
2. The next at Industry level, as first appellate and
3. The final one at Government level of country either at State or Center, as second appellate; depending upon specific requirements.
At organizational level the role would involve a designated neutral or impartial dispute resolution practitioner whose major function is to provide independent, impartial, confidential and informal assistance to managers and employees. The first appellate, at Industry level the designated role should be from alternative organization and should not have any bearing with organization associated with complaint. The second appellate obviously at government level would act as a layer before formal judiciary where stakeholders of the organization can approach for dispute resolutions in case they are not satisfied with the outcome of first appellate level. The model could be considered as an integrated dispute resolution system, or complaint handling system having national presence inviting uniformity in approach of grievance handling of internal customer i.e. employees.  By virtue of protected and highly placed role the framework could emerge as effective to help effect change in policies, procedures, systems or structures that are problematic for employees or inefficient for the organization. As rightly stated by participants of survey a thorough research is required before the role is put in practice, including constitution of regulatory commission for the purpose.
Acknowledgement :
The author acknowledges the contribution of participants for the on-line survey with special mention of Dr. Subrata Chattopadhyay, Dr. Siddhartha Pandey, Mr. Subrata Chowdhury, Mr. Rajib Kumar, Mr. Neeraj Modi, Mr. Rajesh Tripathi, Mr. Abhijit Saha, Mr. Tirthankar Sinha, Mr. Banibrata Banerjee, Ms. Abhinanda Bhattacharya and Mr. Sabyasachi Hazra.