Dhyuti Final

DHYUTI 2015
Forum for Industrial Relations @ XLRI

Mission
To bring about a greater level of interaction between students, faculty and the industry and to create
awareness and passion about the field of Industrial Relations and Labour Law.
About Us
The Forum for Industrial Relations at XLRI (FIRE@X) is the committee for promotion of industrial relations at XLRI. It was founded as a discussion forum in 1996, which served as a platform for the dissemination of ideas and learning in the field of industrial relations, this advancing and satisfying the needs of
students. Over time, it took shape and has organized itself into a formal society that it is today.
The Team (2014-15)
Sumit Ragamayee Pragya Jojin Nayeera Ankit Varun

Anirudh Archit Suyash Aishwarya Arshnoor Sonali Sahil Naveen Hemanshu Mallika
DHYUTI 2015
Message from The Director
Dear Readers,
I am delighted to present to you the 10th edition of Dhyuti, the flagship magazine of Industrial Relations at XLRI. Dhyuti is
one of the premier publications of Industrial Relations, brought to you by team Fire@x at XLRI and is sought after by both
institutions and industries alike. The magazine is an attempt by the students to explore into the real world IR issues with a
perspective of their own.
This issue features excerpts of the ILO conference held at XLRI, which witnessed insights on Industrial relations from esteemed speakers and guests from across the country. It also features articles from academicians and students on various
other issues the present industrial relations scenario faces, with a special focus on the recent labour reforms. The magazine has been growing in its popularity over the years and I hope that the trend continues in the years to come. I wish the
Fire@x team all success in their future endeavours.
Warm Regards,
Fr. E. Abraham, S.J.
Director, XLRI
DHYUTI 2015
Message from The Dean
Fire@x, The Forum for Industrial Relations at XLRI has been one of the principle forces behind propagating the knowledge
of Industrial Relations within and outside XLRI. Fire@x boasts of several initiatives round the year and one among them is
the annual magazine, Dhyuti. This edition of Dhyuti contains articles from academicians and students on various challenges and opportunities in the industrial relations scenario, and on some of the burning issues in IR today, with a special focus
on the recent labour law reforms. It can be said that Dhyuti is a compilation of the views of some of the best and diverse
minds in the field of IR in India.
Dhyuti has been widely anticipated among professional circles primarily for the content that it brings out in the open. It
provokes young minds to think beyond conventions and voice their views in a changing environment. It is indeed a great
pleasure to see that Dhyuti delivers on all the above. It is crucial that team Fire@x continues their endeavor to promote IR
among all its stakeholders and tries to take Dhyuti and all their other initiatives to the next possible level.
I congratulate the team for the work done and wish them success in all their future endeavors.
Warm Regards,
Dr Pranabesh Ray
Dean, XLRI
DHYUTI 2015
Message from The Secretary
It gives me immense pleasure to present Dhyuti, Fire@x's annual magazine. A heartfelt thanks to all our collaborators who
made the magazine possible.
Its been an eventful year in Industrial Relations. The Modi movement and a spate of labour reforms have put IR on the nation's psyche. The ramifications of these changes are yet to be seen.
Fire@x too has had an eventful year. The ITC Munger trip, the Trial by Fire quizzing league, the Strike or Yield event and
the ILO conference in December have been successful. We have a lot to look forward to this year with the 7th national IR
Conference
in January.
With utmost humility, I would like to express my gratitude to our faculty coordinators, Prof. Pranabesh Ray, Prof,
P.K.Padhi, Prof Shyam Sundar, Prof. Santanu Sarkar and Prof. Raman who have offered unconditional help in every initiative of ours.
Happy reading!
Warm Regards,
Sumit Kumar
DHYUTI 2015
Table of Contents
The Right to Strike in Industrial Relations Meanings and Modalities
..07
Jerome Joseph
Are we IR Ready A Cover Story
...10
Anand Kolanukonda
Impact of Organization Behavior in Industrial Relations
...16
Tejesvi Dhankhar
2014-15 : The Year That Was
..20
Narendra Modi Labour Reforms and Their Impact
..22
Swati Sinha
Make In India More Than Just Labor Laws?
..26
Sarthak Gupta and Anubhav Agrawal

Unionization In Private Sector
..28
Ravi Bhargav S V
Make In India Is Our IR Setup Ready?
Varun Kumar Y
Labour Reforms By Modi
..30
..33
Yashu Sharma
DHYUTI 2015
The Right to Strike in Industrial Relations

Meanings and Modalities
Dr Jerome Joseph, Professor,
Personnel and Industrial Relations, IIM Ahemdabad
JustacasualperusaloftherelevantlawandtheThesaurustofigureoutwhatthewordstrikemeansyieldsthe
followingpicture:
Strike has been defined in Sec on 2 (q) of the Industrial Disputes Act as underStrike means a cessa on of work
by a body of persons employed in any industry ac ng in combina on, or a concerted refusal, or a refusal under a
common understanding, of any number of persons who are or have been so employed to con nue to work or to
accept employment. (01)
The Thesaurus has the following interpreta ons of the word strike:
Raid, a ack, assault, incursion, collide with, crash into, smash into these are one set of meanings of the word
strike.
Hit, beat, smack, sock, wallop, clobber, punch these are yet another set of meanings for the term strike.
And of course on more familiar ground, the word strike also signifies walkout, worktorule, go slow, industrial
ac on.
Interes ngly, there is another set of interpreta ons for the word strike discover, uncover, unearth.
The legal definition of the strike as in Sec.2(q) of the Industrial

Disputes Act 1947 suggests that the following elements determine whether a labour action is a strike or not:
Cessation of work.
The cessation must be by a body of persons employed in
any industry;
Those on strike must have been acting in combination;
Those on must be working in any establishment which can
be termed industry within the meaning of Section 2(j); or
There must be a concerted refusal; or
Refusal under a common understanding of any number of
persons who are or have been so employed to continue to
work or to accept employment;
They must stop work for some demands relating to employment, non-employment or the terms of employment
or the conditions of labour of the workmen.

The legal definition and the ingredients of a strike which flow
from the definition are however subject to the vagaries of
interpretative semantics in the wold of industrial relations
praxis. Little wonder then that any discourse on the right to
strike not only conjures up negative images when strikes are
often perceived as assaults on organizations and also stirs
up strong emotions especially when depicted as delivering an
unfair punch on the benevolence of the employer and the
goodwill of the ultimate customer. Or even when more often
than not, the strike is seen and projected as an incursion
into the prerogatives of employers, managements and commercial interests since employees when on strike walk out.
go slow, work-to-rule thus disrupting production, harming
productivity and reducing profitability.
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Illustrative of this view of the strike as reported is the case of German auto components giant Bosch and their experiences of industrial
relations turbulence in both their Bengaluru and Jaipur plants in
2014. Bosch Group Chairman of the Board of Management Volkmar
Denner had this observation on the situation faced by Bosch, "Today's
situation leads to low productivity, impacting competitiveness of our
plants. Our intention is to continue (investments) provided labour
conditions let us be competitive". (02) Not only is the concern with
productivity and competitiveness but there is also a veiled threat that
the use of strikes by the labour force could lead to consequences for
continued investments. "Today in the world there are many free trade
zones and they will increase. That means a country like India has to
be competitive with other countries, especially in Asia." This again is
a standard negotiations gambit of investors in todays environment
where industrial relations issues and experiences are linked to the
competitive interests of nations jostling for foreign direct investment. "We will keep investing in India but as I said with respect to
manufacturing everything rests on competitiveness as Bosch generally has international manufacturing network so every location has to
be competitive," Denner said. (02) Such statements can be read as
an articulation of a concern but also interpreted as a veiled threat in
which investments are contingent on the curbing of industrial relations activism. However, the Bosch experience uses the German
codetermination frame when Denner also adds. "In Germany also
we have strong unions and of course there are conflicting positions...
This is very natural and needs to be accepted by both parties but it is
always, i think, with the common understanding that we have to reach
common solutions. And second, the solution has to be such the company can still be competitive," (02) The approach is accommodative
but only so far as the accommodation does not impinge on the competitive dominance of the firm in the market place in terms of, quite
obviously, the uninhibited generation of surplus value. The industrial
relations strategy in this context is to deal with conflicts as a reality
to be acknowledged and confronted but by engaging unions within the
demarcated collective bargaining space, systems and substance.
Traditionally Bosch has very close and very good relations with the
employees. The current situation at Bangalore is a concern for us.
Taking into account that Bosch pays wages and benefits that belong
to upper band of wage standards, our expectation is that we will find
an amicable solution soon." (03) The foundation of unionmanagement relations is a form of economism which translates
into higher wages and benefits for workers relative to competition

with the management expectation that in return unions will be apolitical, non-confrontational and compliant.
Yet another instance is that of a sit-in strike as reported online at
Asti (AEIPL) which is a subsidiary of Asti Corp, Japan which produces
wiring harness, switches, controllers, and other automotive and electronics parts. It supplies to auto companies Suzuki Motorcycles,
Maruti Suzuki, Yamaha Motors, Omron Automotive, etc. with branches
in Japan, China, Vietnam and India. (03) The issues triggering the
unrest related to the prevention of union registration, termination of
union leaders to prevent unionization, and other employment matters
like payment of minimum wages and intensification of work pressure.
(03) The immediate trigger was the abusive behaviour towards some
women workers by supervisory and managerial staff. (03) Police
were called in but management conceded some of the demands to
avert further deterioration of the strike action. (03) The Asti worker
strike is distinguishable from the Bosch experience since the depiction has more explicit overtones of political consciousness where the
deployment of the strike is not only meant to redress worker grievances but also geared to raising political consciousness. This instance is a manifestation of the strike phenomenon which in and
through the worker-management dialectical struggle uncovers and
unearths the underlying exploitative and extractive nature of work

organization, structures and processes. The strike is not just an instrument of economism but also a means for conscientization of
the working classes towards emancipation from exploitative structures and regimes. A similar strike action at Baxter on February 19th,
2014 was also related to the travails of union formation to redress
worker grievances, which was again met predictably with transfers
and suspensions of union activists. (03) The resort to a strike while
addressing worker problems is also oriented to unearthing and
uncovering implicit agendas of managements with the larger pur-
DHYUTI 2015
pose of developing political consciousness related to regimes founded on exploitative regimes.

The Bajaj Chakan plant strike in June 2013 was also related to contract labour, wage parity between contract and regular workers,
work intensification, washroom breaks but the 50 day standoff did
not produce any outcomes except for management agreeing to open
negotiations. (04) This strike illustrates how militant management
practices like refusal to initiate talks, harassment of union activists,

state-management nexus, use of contract employees to break strikes
all combine together to even neutralize a 50 day standoff without any
significant outcomes for workers and unions, thus weakening the
current and future potency of union strike capability and member
strike propensity. Leveraging strike capability for the power demonstrability of union leaders also gets eroded in the process due to the
combined industrial relations power wielded by the statemanagement juggernaut. However, even when there is a setback like
in the Chakan strike deployment case from the perspective of trade
union consciousness driven labour action, this can still further the
development of political consciousness related to the workings of
exploitative- extractive regimes. Politically conscious leadership and
membership of unions are less likely to be demoralized by setbacks
to worker demands than leaders and members informed by
economism driven by trade union consciousness. The potency of
the strike in such a case appears to be in the mobilization for the
struggle rather than in the achievement of outcomes from such
struggles, although outcomes are important for the sustenance of
the morale of the members characterized by trade union conscious-
ness. The transformational dialectics of the transformation of consciousness from trade union economism to political conscientization
is the union leadership challenge in strike deployment capability towards political mobilization.
The four cases referred to in this discussion reiterate that strikes in
industrial relations are still a reality but that there are variations in
the meaning and modalities of the lived experience of the strike at the
point of engagement. The strike deployment capability of unions is a
function of two pursuits one characterized by economism referring to the struggle for better wages, better benefits and better
terms and conditions; the other characterized by the thrust towards
political transformation. Trade union mobilization informed by
economism only needs trade union consciousness. Since this is a
general condition of all workers who are constantly looking for bettering their working conditions, there is the ever present potential
for mobilization on these grounds. The use of the strike in this frame
revolves around the quest for economic gain realizable through institutional mechanisms like collective bargaining. However collective
mobilization for political transformation calls for the development of
political or social democratic consciousness for which economism
and trade union consciousness are only entry points. The use of the
strike in this frame revolves around the conscientization of the worker collectives towards political mobilization in the search for alternate modes of development characterized by social equity and economic justice.
References :
http://www.vakilno1.com/bareacts/industrialdisputesact/
industrialdisputesact.html
http://articles.economictimes.indiatimes.com/2014-10-30/
news/55595686_1_bangalore-plant-labour-unrest-jaipur-plant
http://maoistroad.blogspot.in/2014/02/india-workers-strike-in
-various.html
http://column.global-labour-university.org/2014/04/workersunrest-in-automobile-plants-in.html
https://sg.news.yahoo.com/india-braces-nationwide-strike210625779.html
DHYUTI 2015
ARE WE IR READY?
- A cover story
Anand Kolanukonda, XLRI
As India gears up to become the manufacturing des na on in the world, we try to examine if our industrial rela ons
mechanisms, the impact of recent moves to deregulate the labour markets, and analyse its alignment with our coun
trys strategic vision, and suggest some changes which might aid us in our cause.
While the implementations are yet to be assessed, the response to the sweeping labour reforms that were announced
this past year could be best summed up as polarising. Industry
leaders lauded these provisions for providing relief from a
highly stringent regulatory regime, government has touted this
to be the stepping stone into the manufacturing haven Make in
India campaign promised to deliver; while labour watchdogs
have cried foul, as many trade union leaders claimed that
these changes drastically undercut the bargaining power of
workers and have exempted a large portion of the organised
sector from even the most basic protections that were due to
them, which seem pretty ironic considering the fact that the
campaign is named Shrameva Jayate. Whatever be the arguments of each parties, one thing all do agree on is the fact that
some change was necessary. India needed to adopt serious
measures to remedy the dismal state of affairs of our labour
market, a highly unorganised sector where the labour laws,
though stringent only benefit a small portion of the population.
Also the flexible global supply chains that have been created to
take advantage of a liberalised economy and efficiencies of
production that are achieved by outsourcing of jobs to cheaper labour markets, have created a scenario where employment flexibility and responsiveness to market change have
become critical to success. To achieve this, changes are not
only required at policy level, but also in restructuring of the
various institutional mechanisms that are involved with the
labour market is also required. The basic aim should be to

create more jobs by helping creation of new firms and increase in size of firms, but also ensuring inclusive growth by
bringing a bigger chunk of the workforce into the organised
sector. So in light of these, let us analyse the current state of
affairs, and how we should proceed forward. We will try to
analyse what is essential for functioning of these markets
within the framework and how this, in addition to other socioeconomic factors will result in making the country better.
As liberalising labour reforms have been peddled as the panacea to remedy the stagnating growth of the country, we need
to understand the basic underlying assumptions for the
smooth functioning of such markets:
The market will be able to sustain in such a setting.
The resulting transactions in the market should be acceptable to all the players.
All the players will have the necessary information and
capability to arrive at an amicable decision.
It is also an implied certainty that the market is regulated by
demand and supply factors. If the demand is greater than the
supply, then the labour rent will be competitively calculated;
whereas when supply is more than demand, the market can be
cleared at very low prices, which might be detrimental to
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coverage of factories act from 10 to 20 workers in factories

with power and 20 to 40 in case of without power. Also a separate provision for similar exemptions for small scale industries from up to 14 laws is being considered, and states have
also been encouraged to come up with similar initiatives to
cut down the red tapism, and reduce redundancies, and reduce the various costs which are associated with the enactment of these laws. Also introduced were changes to the apprentices act, where employers can start training without
waiting for a government notification, and also the duration of
Labour Laws : The Indian labour market has been largely
apprenticeship has also been increased.
been on the regulated side of the spectrum, with the system
in place being hugely Tripartite. As market has not been left to
Inspector Raj : Another important focus area of reform proits own devices, the intermediary institutions play a very cruposals was the end of inspector raj. Self-certification has
cial role in deciding the fate of the market. This is especially
been introduced which has replaced nearly 16 forms. This has
true in the case of India where our various laws have ensured
drastically reduced the power of Employees Provident Fund
heavy regulatory, conciliatory powers are vested with the
Organisation (EPFO), the Employees State Insurance Corporagovernment, as is evident from chapter V-B of the ID act,
tion (ESIC), the Labour Welfare Department and other enwhich states that no industry with more than 100 workers can
forcement agencies. This has effectively brought an end to the
retrench a worker without prior government permission. The
surprise checks, as they will be replaced by randomised comimpact that these effects can have on the economy can be
puter checks, which will select an industry on the basis of
measured by three effects:
their compliance with self-certification, and will require reports to be filed within 72 hours, and any action will be initiat The increase in cost of labour
Increased rigidity in the system decreasing flexibility of ed only after scrutiny by a central agency. The UAN scheme
has been implemented which allows for portability of EPF aclabour adjustment
The expropriation effect, or the holdup problems that counts which might be a big boon for people who are changing
workers can cause to appropriate employers investment locations.
As is evident by the kind of changes that have been introonce they are sunk in, for e.g. Industrial disputes.
duced, the ambit of all the proposals en masse can be seem to
Of the three factors our laws have increased the rigidity in be favouring employers. The laws are aimed at providing lathe system by increasing protection of workers interest and bour flexibility and also reducing the expropriation cost, also
allows for high expropriation effects as well, as the dispute allows the companies to train the employees in new skills to
resolution, conciliation mechanisms are very place high ex- prepare them for an ever changing job market, reducing the
propriation costs on the employers both in the form of time dependency on ITIs and other such vocational training instiand money. The argument regarding our labour laws has been tutes. The closer scrutiny of inspection procedures should
that heavy restrictions have dissuaded companies from grow- reduce fishing expeditions and harassment by labour officials.
ing, or have led them to circumvent such restrictions by re- But giving a closer look, these reforms though issued in good
sorting to quasi-judicial measures, like heavy usage of con- faith, seem a bit short sighted and underserving. There are
tract labour, a point that has been validated by statistical large sections of workers that have been continually ignored
research as well (Besley and Burgess). Indeed 84% of Indian and were not provided any relief with the current set of
industries employ less than 50 workers, compared to 24% in changes as well. No protections or regulations have been put
china. As a result the industry remained underdeveloped and forward for contract labourers, who account for a huge chunk
labour got in formalised. These are the very arguments that of our workforce. Amendments to CLRA which were proposed
were used by the government as they increased threshold for by the Indian labour conference, which is a tripartite body
the workers and affect sustainability of the market. In this
case the intervention takes place in the form of regulators,
legislators other intermediary authorities to help sustain the
market, in which case industrial relations becomes a major
tool. The market operates within this HR-IR spectrum. In India
the labour market has been hugely IR driven for workers,
which has been identified as being a hindrance to industrial
growth. So to remedy these the government has made the
following changes.
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went largely ignored even though promises were made by the

UPA regime on this as well. Also in the unorganised sector,
rural and women workers, who account for nearly 94% of our
workforce, no changes were proposed. Even for scheme
based women workers, who are largely responsible for the
implementation of various government schemes like Anganwadi Worker and Helper of the ICDS [Integrated Child Development Services] or the Accredited Social Health Activist
[ASHA] of the NRHM [National Rural Health Management], the
IKP [Indira Kranti Patham] or Grama Deepika workers of the
National Rural Livelihood Mission or the various Shiksha
Karmis were not considered workers and thus were denied
the benefits regular workers enjoyed such as PF, gratuity etc1.
So now lets look at the collective effect of the proposed reforms:
The labour law reforms: the idea that stricter labour laws
have been the reason for stunted industrial growth, especially
in the manufacturing sector, have arisen due to various empirical studies which have claimed that there is a direct correlation between the strictness of regulations in a particular
state (as labour is a concurrent item, individual states are
free to develop their own legislations), and the growth rate of
the state6. Evidence has also been linked to the inclusion of
chapter V-B of the ID act, another factor in industries dissuading from growth. But of late, many studies have found
that the empirical evidence suggesting a correlation between
the two are fragile at best5. The reason for this is that even
though tightened job security legislations were introduced,
the provisions were being circumvented as jobs were being
sub-contracted to smaller forms and large number of contract workers were being used, which allows companies to
expand as much as they want. Also, though companies have
stated that labour laws are restrictive, according to an IIC-
Fig 1 Ranking of perception of constraints (normalized to 100 for electricity) to

firm growth by manufacturing firms, by firm size
World Bank survey, other infrastructural and institutional

factors like availability of electricity, tax rates, corruption
have been rated as being bigger constraints. Even other developing countries, principally China, are considered to have
stricter regulations when compared to India9.
Even if they are considered to have increases the cost, the
direct labour cost increase is very minimal. As pointed out,
the minimum wages allowed are much less than China, and
the monetary penal provisions involved with non-compliance
of the various laws is very small. Only in the case of retrenchment is the cost a bit high as the employer has to give 3
months/1 month notice or wages in lieu thereof, but companies have already worked around that by hiring contract labourers.
So what is it in our current gamut of labour laws that is inhibiting growth? Of the three factors pointed out earlier, the
rigidity and the expropriation effect been the major results of
the labour laws currently in place in India. In regard with this,
both workers and employers have agreed that greater flexibility and specialisation of skills is critical in the current job
market. So even the market wants lesser influence of these
factors, but removing both dont seem to be resolving the
underlying issue. Therefore, the problem lies in the underlying
structure itself, i.e. the market. As government regulations
had created a market largely insulated from the supply demand dynamics. So it had existed in an industrial relations
environment, but instead of the two parties directly interacting with each other, they have been mediated through various
governmental mechanisms. Due to this the bipartite mechanisms have largely remained underdeveloped. As the markets
started to deregulate, this has created huge institutional
voids in the market. This model will correct itself when there
is a dearth of skills in the market and the employers are
Fig 2 Average ICA scores on perception of labor regulations
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Willing to decide prices according to the market rate, as does

happen in the software industry which saw a boom and was
the major growth factor in the last two decades. But for the
skills with an excess supply, such as manufacturing, textiles
and other low skill jobs, the intermediary mechanisms are not
developed well enough to sustain in absence of regulations. In
this scenario, the growth might not be inclusive for the workers at low skill levels. Also, doubts are cast over the employment generation capacity of such changes, as since the market has already moved towards cheaper alternatives like contract labour, the employers do not have any incentives for
moving to a more labour cost intensive system, when they can
replace it with technology and higher skilled labour in critical
processes and subcontracting the peripheral jobs. Historically, job growth in organized manufacturing is a small fraction
of overall growth of manufacturing sector, a trend which will
Fig 3a Increasing Contractualisation of Workforce over the decade
Fig 4 Capital Intensity of Production
continue with introduction of capital intensive methods of

production which will create a demand only for jobs with higher skills, leaving unskilled workers vulnerable, which might
cause a move to the informal sector or self-employment, a
trend clearly seen in the last two decades. Though it could be
argued that any growth of the sector will ensure huge expansion of overall employment of the sector and since saturation
is not a near possibility so market consolidation is unlikely,
even then most of the jobs would be for skilled workers, offering no reprieve to unskilled workers, who comprise of the
larger chunk of the market. The labour absorption capacity of
manufacturing sector is also questionable, as the historically
the capital to labour ratio has been increasing for all sectors,
a trend that may very well continue as firms have no incentive
to shift to labour intensive models now.
Fig 3b Increasing Contractualisation of Workforce amongst Labour Incentive

Industries
Fig 5 Percentage of registered factories inspected in India, 1986-2008
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For the growth to remain inclusive, the government has to

understand that any reduction in the regulatory authority of
the government has to be balanced with a proportionate increase in the empowerment of workers in representing their
own rights, essentially a bipartite model. Social security provisions, giving more power to trade unions to negotiate bipartite agreements with management, and changing the role of
the various regulatory and conciliatory institutions to promote the same will be a same in that direction. The regulations in this regard should be aimed at reducing the expropriation cost and rigidity, like amending chapter VB of the ID act,
and at the same time providing laws to safeguard the bargaining power of workers, like ratifying ILO convention 87 and
98, and the proposed amendments to CLRA Act which gives
increased power to negotiate with employers1. Bipartite negotiations will also ensure mutually agreeable terms which
might extend beyond monetary remunerations, and will give
an incentive for employers to hire a larger workforce instead
of utilising technology intensive systems. This should logically
follow from the fact that since the government wants the
market to dictate the terms, all it should ensure is that both
parties are in a position to do so. Government needs to stop
being a mediator, but only regulatory duties should be performed which should be limited to implementing safeguards to
the well-functioning of the system, like minimum wage provisions, ensuring basic facilities being provided at the workplace, and enforcing the same which brings us to the issue of
inspection. Harassment by inspectors was identified as a major pain point within the industry and there were many who
came out in praise of the same. But yet again, the statistics
show a different reality. The percentage of registered inspected factories has declined steeply since 1986, from
63.05% to 17.88% in 20087.
This can mean that either that officials are unable to perform
the requisite inspections or they are not performing their
duties due to their rent seeking behaviour. But the number of
inspectors has been constantly falling. In 2012, 3171 inspectors
were available to inspect 7.7 million establishments, an average of 2428 establishments per inspectors. Even at an average of 20 workers per establishment, this number is lower
than the minimum of 1:40,000 ratio of inspectors per working
population in under developed countries, as specified by ILO7.
So, the decision of government to move from this to a selfcertification model seems ill thought, as they effectively ren-
der the existing inspection bodies redundant. This is even

scary considering that the number of industrial accidents
have been going up.
Fig 6 Number of fatal injuries per one lakh work days worked in the manufacturing sector in India, 1980-2009.
So even if inspections had led to corruption and didnt actually

encourage compliance, allowing third parties to regulate the
procedure and allowing for self-certification is hardly the
solution, especially when the mechanism is severely understaffed to effectively fulfil its duties. Instead, the government
should try to staff its inspection authorities adequately, and in
case harassment is being cited as an issue, they can randomly allocate inspectors. Also a single inspection authority could
be created, as this is often identified as the biggest pain point.
This may be a difficult task as specialists from various departments will be required, and the inspection mechanisms
must be free from any external interference, but an issue as
critical as this cannot be left to self-certification. Government
should look into other alternatives that increase ease of compliance for the industries, and at the same time also ensure
that the entire system is completely autonomous.
Also in addition to these, there are other major sectors of
labour market where reform is desperately needed. In the
unorganised sector, the workers hardly have any job security
measures provided to them by law, a segment which accounts
for 94% of the workforce. Rural workforce, especially rural
women who work in scheme based jobs are denied any social
security benefits. A big chunk of the workforce in the organised sector, the contract labourers, are also in need of some
basic job and wage security measures as the contract workers at lower levels of skills are getting increasingly marginal-
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-ised. Provisions for them to be paid similar wages to regular

workers or other similar provisions might go a long way in
providing them relief. It would benefit the rural workers and
contract workers if unions were allowed increasing powers
for collective bargaining, as these are the people who stand
more to gain from it. Presence of craft unions for rural workers might be a model which has greater chances of working
than the typical vertical unions, as difficulty in assembling and
taking collective action is a detriment to unionization here,
and necessary legal amendments to accommodate the same
could be made (currently craft unions generally work as associations and are not registered as trade unions.)
These provisions en masse, seems to be a gamble for the
government which, though will generate jobs, will be disproportionate to the highly skilled workforce and will not benefit
the lower end of the market, which is where the majority of
the labour supply lies. To ensure inclusive growth, where the
older workforce is not left marginalised and untouched by the
plethora of new opportunities, government has to also train
the unskilled workers, and also retrain the current skilled
workers as well, so that their skills stay relevant in a technology driven environment as well. It will also be a deterrent in
hiring contract labour as the level of specialisation required
will be high. Of course, none of these work in isolation. Major
infrastructural reforms need to be in place as they are identified as the principal deterrent to growth. Issues of corruption,
good governance and bureaucratic complacency will also
need to be resolved to be resolved for companies to operate
unhindered. If government can take into account these factors, and can provide benefits for the lowermost level of
workers, inclusive growth can still be achieved, and will definitely help in delivering a truly developed, global India.
References:
http://www.frontline.in/cover-story/labour-underattack/article6540729.ece
http://www.epw.in/web-exclusives/myth-inspector-rajindia.html
http://en.wikipedia.org/wiki/Indian_labour_law
http://www.crisil.com/pdf/corporate/
EmploymentInsight_CRISILResearch_Aug2011.pdf
Bhattacharjea, A. 2006. Labour market regulation and

industrial performance in India: A critical review of the
empirical evidence. The Indian Journal of Labour Economics, 49(2): 211-32.
Besley, T. and R. Burgess. 2004. Can regulation hinder

economic performance? Evidence from India. Quarterly
Journal of Economics, 119(1): 91-134.
http://www.foreignaffairs.com/articles/67874/michael
-spence/globalization-and-unemployment
CONTRACT WORKERS: THE NEED FOR COMMUNITY OF INTEREST PERSPECTIVE K.R. Shyam Sundar*
HELPING OR HURTING WORKERS?: ASSESSING THE EFFECTS OF DE JURE AND DE FACTO LABOR REGULATION IN
INDIA AHMAD AHSAN and CARMEN PAGS*
Chetan Agrawal.2013."The Effects of Liberalization on the

Indian Economy-A Labour Force Perspective"
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TO-B or not TO-B in Industrial Relations

Impact of Organization Behavior in IR
Tejesvi Dhankhar, XLRI
If I consider myself a warrior in the war of the Business world

then my Trisul would include Human Resources (HR), Industrial Relations (IR) and Organizational Behavior (OB). All 3 of
them are core courses that help an HR manager provide the
best to his/her company. A common myth is that IR includes
the hard skills while OB includes the soft skills. I am more interested in exploring the concoction that these two subjects
produce. Can we understand the IR of an industry using OB
theories? Let us find out
Hierarchy of Needs. Each human being has the strong urge to

fulfill their Safety and Belongingness Needs.
Being a part of a TU gives workers a feeling of protection from
any possible exploitation from the employer. The various acts
and the constant support of the TU leader give the worker the
confidence that there exists a structure solely for their wellbeing.
Being a part of this structure also gives them a sense of belongingness. They feel appreciated and important for being a
part of a TU and can constructively contribute towards the
welfare of their peers. It might also boost up a workers selfesteem because they get a chance to recover their lost moorings due to industrialization.
Another needs theory of OB can also explain the existence of a
TU.
The purpose of existence of Trade Unions clearly follows human psychology. The moral and ethical role is derived from
positive psychology. It talks about Compassion for the unfortunate. Trade Unions (TU) exist because workers feel that the
troubles that evoke their feelings towards fellow workers are
serious, they think that the sufferers' troubles are not selfinflicted, and can picture themselves with the same problems.
The psychological/ defensive purpose is reflected in Maslows
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gies are whether they are active, passive, constructive or

destructive. In this model, even if avoidance has its place, it
is typically a destructive behavior.
Collective Bargaining is an active & constructive strategy. The
contract / agreement after a successful CB leads to procedural justice. CB can be looked at as rituals of negotiation that
provide a cathartic effect on pent up tensions of both the
management and the union. The process is a joint responsibility in the form of Workers participation in Management.
Many more phenomenon in IR can be explained using OB concepts. The trick is in resolving and handling IR issues using
these concepts.
A trade union becomes obsolete if the management can efficiently provide for the needs of the workers. Empowering
workers and giving them a role in Decision Making will make
them feel power. This can be successfully attainted through
workers participation in management. Applauding workers
efforts in improving productivity of the organization goes a
long way in feeding their need for affiliation. Recognition and
appreciating workers will make them feel as an integral part
of the organization. They dont need a TU because they belong
to the organization. Promoting self-managed teams on the
shop floor versus mirco-management will also increase the
sense of belongingness. As the workers feel empowered and
an integral part of the organization their performance will
greatly improve. This improvement will fulfill their need for
achievement. All this can be achieved if the management is
cooperative and willing to give workers their due credit. Then
a worker should not feel the need to be a part of a TU.
If a trade union still exists, Healthy collective bargaining will
ensure fairness in the organization. The TU and the management can work together. They should not be seen as warring
entities but as representatives of two different cadres of
employees. Management education can help all of us coordinate our knowledge and create innovative solutions to age old
issues. All we have to do is keep an open mind and be willing
to change. I would like to end with my IR professors (Dr.
Pranabesh Ray) quote, Ultimately it is all about employees
The chief parameters of defining conflict management strate- DIGNITY.
McClellands Motivational Needs theory talks about the Need

for Power. Being a part of a TU may make a person feel that
their personal as well as social power has increased. With
increased power TUs can fulfill their political motives and also
be revolutionary in creating social change. With power comes
confidence, this confidence can eventually help the workers
elevate their status in the company and society. It also feeds
into their need for achievement. As they feel powerful they
are motivated to achieve. Being affiliated to a TU brings them
all three: power, achievements and affiliation.
Whatever the reasons for a TU Existence, they are an important part of the Indian industry. Naturally due to the nature
of the management and TU structure there are conflicts that
occur and need fast resolution.
Conflicts in Industrial Relations are explained using the Human
Relations Theory. It propagates that Conflict is an aberration
of human society. Total elimination of conflict is not possible
but it is possible to contain conflict within the broader framework of consensus and harmony. Conflicts occur because the
Industrial society treats workers as an isolated individual and
deprives them of all control over their environment. This loss
of mooring and control is a major source of conflict.
Organization behavior also talks about the wide range of conflicts people experience in organizations. These conflicts can
occur due to goal incompatibility, differences over interpretations of facts, & disagreements based on behavior expectations. The Runde-Flanigan model illustrates the conflict resolution strategies.
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References
books.wordpress.com/2012/11/20/david-mcclellandsthree-motivational-needs/
Maslow, A.H. (1943). A theory of human motivation. Psychological Review 50 (4) 37096. Retrieved from http:// Craig Runde and Tim Flanagan. Becoming a Conflict Competent Leader: How You and Your Organization Can Manpsychclassics.yorku.ca/Maslow/motivation.htm
age Conflict Effectively.
David McClellands Three Motivational Needs. Retrieved
Professor Pranabesh Rays IR Lectures.
from https:/ managementpocke-
Quiz-o-Mania
The field of industrial relations (also called labour relations) looks at the relationship between ________ and workers, particularly groups of workers represented by a union.
The system of resolution of Industrial Disputes prevalent in India is ______________
Labour relation is an important factor in analysing "varieties of ________", such as neocorporatism, social democracy, and neoliberalism.
A process in which a trade union and an employer negotiate, in good faith, the rights and obligations of a first
collective agreement or the renewal of a previous agreement.
Which Act of Parliament defines a `trade union and governs much of the law on industrial relations?
A form of union security agreement under which the employer agrees to hire union members only, and employees
must remain members of the union at all times in order to remain employed or an agreement requiring all employees to join the union if they are not already members.
What is the minimum number of members, a prerequisite, to register a trade union.
Which frame of reference views the natural state of organisations as one of harmony and cooperation?
In which year was the Minimum Wages Act was formulated?
Which is the approach which assumes that voluntary negotiations between employers and employees are a means
of settling disputes?
Which organisation has developed a voluntary code of practice relating to the use of disciplinary and grievance
procedures?
Which is a specific form of protest organized with the intention to prevent or dissuade the non-striking employees
from attending to their work during the strike period?
Answers (not in order)Capitalism, Collective Bargaining, Management, The Trade Union and Labor Relations (Consolidation) Act 1992, Seven,
1948, ACAS, Picketing, Tripartite system, Closed Shop, Giri Approach, Unitarism Perspective
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Word Search
Union with Sardar Vallabhbhai Patel as their first president.

System of settlement followed in India.
Any person who supplies workers to other organisation.
________ refers to the cessation of work in order to get a bargaining position.
_________ refers to a type of strike action in which the strikers call in sick.
A system whereby an employer regularly deducts a portion of an employee's wages to pay union
dues or initiation fees.
First organisation in India to introduce 8 hours working system.
Industrial ___________ is a governmental judiciary body which rules on labor or employmentrelated matters and disputes.
A union of unions is called a ________________
The largest trade union federation in the world is based in ___________
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2014-2015 : The Year That Was

Fire@x, The Forum for Industrial Relations at XLRI has been at the helm at organizing various activities all year round
aimed at promoting the interest for Industrial Relations among the students of XLRI and the other top MBA schools
across India. The year 2014-15 began with the guest lecture by Mr.Amit Malik, CHRO, Aviva Life Insurance India Ltd. The
agenda of the lecture was to equip the students with expert knowledge about Industrial Relations in the Service sector.
The students were exposed to a variety of case studies which consisted of our experts real-life experiences and
workplace dilemmas.
XLRI Jamshedpur and Fire@x also conducted the first ever seminar which was in collaboration with the International
Labour Organization. The seminar was based on the theme of Labor Laws and Governance Reforms in India in the era of
globalization. The seminar saw participation from some very eminent personalities, belonging to fields as diverse as
Academicians, Trade Union Representatives and Representatives from ILO apart from the student community. Some of
these guests included Mr. Raghwan, Asia Pacific Desk Officer, ILO ACTRAV, Bureau for Workers Activities, Geneva,
Professor Dev Nathan, Dr. Pravin Sinha from Indian Industrial Relations Associations, Professor Praveen Kumar Jha
from Centre for Informal sector & labour, Mr. Chandrashekhar Prakash Singh and Mr. Shyam Sundar Sharma, both
Trade Union representatives, Ms. Ramapriya Gopalkrishnan from Madras High Court, Ms. Christine Nathan from ILO
ACTRAV, Bangkok and several other guests and delegates. The seminar also saw an extremely lively interactive session where members of the audience, including the future managers of tomorrow pose some extremely relevant questions to the panelists. All in all, the seminar marked a first of its kind association between two very well established
bodies, namely XLRI and ILO.
The second visit to ITC Munger (450 km from Jamshedpur) was organized successfully on 6th November 2014. The
visit was conducted for the second year in succession and is now becoming one of the most sought after events for
XLRI students. The students got to witness the life in ITCs tobacco factory and also got to interact with several Trade
Union leaders. The management also shared its best practices and organized several games between ITC employees
and the XLRI students. The event was a perfect mix of learning and fun for the students.
Fire@x also conducted the first management quiz league, a series of 3 quizzes over the course of 2 months. The quizzes were in the form of crossword, Build the connect and trivia pertaining to Industrial Relations. The event witnessed
participation from top 30 B schools in India and was a widely appreciated.
Among other events of Fire@x were the events conducted during Ensemble 2014. Apollo, the new simulation event was
a first of its kind event where students had bargain among themselves. Strike or Yield, the flagship event witnessed
participation from top 20 B schools in India. Fire@x continued with its regulars such as the icebreaker event, monthly
IR magazine Samhita and the yearly magazine Dhyuti.
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Glimpses : Year 2014-2015
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Narendra Modis Labour Reforms

and Their Impact
Swati Sinha, XIMB
Abstract
Mr. Narendra Modi launched a series of labour reforms as a part of his Make in India campaign. Primarily, amendment has
been made to three labour laws namely, the Factories Act, 1948; Apprentices Act, 1961; and the Labour Laws (exemption from
furnishing returns and maintaining registers by certain establishments) Act, 1988. His major labour reforms include Universal
Account Number scheme for all provident fund contributors that would allow portability and online tracking of provident fund
benefits; Shram Suvidha online portal that would allow employers to file a self-certified single compliance report for 16 Central labour laws; end of Inspector Raj wherein units for inspection would be picked by a computer lottery from the database;
apprentice Protsahan Yojana and Rashtriya Swasthya Bima Yojna. With the new reforms, industrial regulations would become
more automated and transparent. They would help in streamlining the cumbersome compliance process, make the inspection
system more transparent and data driven and address the issue of skill gap faced by many Indian enterprises currently. The
new reforms aim to create a conducive environment to do business. It would also encourage setting up of new factories thereby creating more jobs.. The reforms would make a dent in the complex bureaucratic web of Labour Laws implementation in India. They can be seen as a jolt to an otherwise complacent trade unionism that has evolved in an unscientific, haphazard and
defiant manner over decades. There is still a need of some big ticket changes in labour laws primarily related to Industrial
Disputes Act, 1947; Contract Labour Act, 1970; and the Trade Union Act, 1926. With the wind of change blowing in the form of
current and prospective reforms by Mr. Narendra Modi, these can be considered as small steps towards the changing dynamics within IR.
Narendra Modis Labour Reforms and Their Impact

As a part of his Make in India Campaign, Mr. Narendra Modi lishments) Act, 1988. His major labour reforms include:
rolled out a series of labour reforms during the Deen Dayal 1. UAN (Universal Account Number) scheme UAN would
Upadhyaya Shramev Jayate Karyakram organized by the Minisbe provided to all provident fund contributors that would
try of labour and employment. Primarily, amendment has been
allow portability and online tracking of provident fund benmade to three labour laws namely, the Factories Act, 1948;
efits.
Apprentices Act, 1961; and the Labour Laws (exemption from
furnishing returns and maintaining registers by certain estab- 2. Single window compliance - Mr. Narendra Modi launched
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an online portal named Shram Suvidha that would allow

employers to file a self-certified single compliance report for
16 Central labour laws. This would facilitate a common window
for online registration of units, filing of annual returns, reporting of inspections, and redressal of grievances. A unique
labour identification number or LIN would be allotted to each
employer after registration.
3. End of Inspector Raj The Prime Minister aims to replace
the Inspector Raj system with a system based on trust and
responsibility. Once an employer registers his/her unit on
the online portal, a computer lottery would pick up the units
for inspection from the database. A Central Analysis and Intelligence Unit would be set up to analyze data to decide the
units for inspection. The area of inspection would be divided
into three parts: mandatory (extreme situation), optional
(system-generated) and compliance-based. Labour inspections by four central agencies; EPFO, Employees State Insurance Corporation, Central Labour Commissioner and Director
General of Mines Safety; would be based on this list.. After
inspection, the inspectors would have to upload their reports
within 72 hours with the reports not being allowed to be modified later.
4. Apprentice Protsahan Yojana - To support the youth who
undergo vocational training after completing class 10th and
graduating from Industrial Training Institutes across India,
the labour ministry would reimburse manufacturing units, 50
percent of the stipend paid to them during first two years of
their training. The government in august 2014 passed the Apprentice (Amendment) bill in Lok Sabha to amend the Apprentice Act, 1961 so as to increase its span to more number of
trades.
5. Rashtriya Swasthya Bima Yojna Smart cards of the
workers in unorganized sector would be linked to two social
security schemes.
The pilot programs would be launched in central agencies and
PSUs.
Critical Analysis
The Provident Fund scheme has about 80 million members.
UAN scheme would help in automation of PF contributions and

claim settlements. Thus, when the employees change job, it
would make movement of social security funds easy. Today,
more than Rs. 27,000 crores is lying unclaimed in PF accounts because of complex bureaucratic procedures. UAN
scheme would address this issue by facilitating online tracking. However, the scheme does not take care of the vulnerability of the contract and casual workers in this regard who
are uncertain about their PF dues and even suffer from nondelivery of the dues. Another issue is that there is a need of a
well designed and structured IT infrastructure to facilitate etransactions.
The single window system would reduce the unnecessary burden on the employers by streamlining the cumbersome compliance process. Under the current system, the employers
had to manually file the return which was time consuming.
This system would also reduce the duplicity in records. E.g.
Currently, the labour law compliance aid is being provided to
1.3 million companies but after incorporation of the new system this figure is expected to reduce to 70,000-80,000.
It would also make the inspection system more transparent
and data driven. Currently, units for inspection were selected
arbitrarily by the inspectors, without any objective criteria,
allowing inspectors to harass unit owners and even exploit
them in cases of violation of rules. This scheme would curb
the bullying power of the inspectors and would also address
the issue of false complaints made by union and workers.
Lack of adequate manpower in the labour departments made
conducting inspections very difficult. E.g. Haryana government has 11 inspectors for over 1200 units. At present 175,000
inspections are carried out by 8,000 inspectors in a year.
Also, inspection rates (proportion of registered factories that
have been inspected) have declined from 63% in 1986 to 18%
in 2008. The new inspection system would help the labour
department in better management of the affairs thereby increasing their efficiency.
The onus of this scheme would lie on the citizens thereby
bringing in accountability. However, there is a flip side to this
story also. By misusing the provision of self certification,
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Industries may certify without complying which may go unchecked for a long time until the lottery picks up the non complying unit for inspection. Moreover, if labour inspections
were centralized with the visits being controlled in any manner, including control over visit timings, it would directly
violate ILO Labour Inspection convention 81. According to this
convention, the ratifying countries (which India is) would create a labour inspection system free of external influences
wherein inspections could be held at any time and any place.
The apprentice scheme is aimed to address the issue of skill
gap faced by many Indian enterprises currently. The scheme
would increase apprenticeship coverage to 2.3 million from
the present 490,000. The scheme would support 100,000
apprentices up to March 2017. In the wake of amendments
being made to this act, the unions fear legitimization of exploitation of the apprentices by the employers. Under the new
amendments, penalty for violation of the act has been reduced. Also, employers are empowered to start training in a
new trade without waiting for a government notification. Union contention is that this would lead to trainees being employed for long durations on amount less than the minimum
wages.
The trade unions are even opposed to certain amendments in
the Factories Act. E.g. the amendment bill proposes to raise
the number of workers for the purpose of applicability of this
act from 10 to 20 in factories operating with the aid of power
and from 20 to 40 for those operating without aid of power.
Unions contention is that because of this a lot of workers
would be excluded from the purview of the act.
Changing IR environment
ation in the organized sector. The new reforms aim to create

a conducive environment to do business. It would also encourage setting up of new factories thereby creating more jobs.
Industrial regulations would become more automated and
transparent. The reforms would make a dent in the complex
bureaucratic web of Labour Laws implementation in India.
There would be reduction in paper work, cumbersome processes which in turn would increase the efficiency and functioning of the labour department as well as the industries.
However, better implementation of the schemes is very important.
Some experts are of the view that since the current reforms
have been rolled out without consulting the trade unions, it is
a dilution of tripartite mechanism. But this can be seen as a
jolt to an otherwise complacent trade unionism that has
evolved in an unscientific, haphazard and defiant manner over
decades.
There is a need of some big ticket changes in labour laws
primarily related to Industrial Disputes Act, 1947; Contract
Labour Act, 1970; and the Trade Union Act, 1926. E.g. Chapter
5B of ID act makes lay off and retrenchment of the workers
nearly impossible even though the company is nearly bankrupt. There are several such redundant clauses and provisions in various acts which hinder smooth and free functioning of the enterprises. These have to be addressed. The government has announced that work was in progress on reforms in the area of child labour and the micro, small and
medium enterprises sector. With the wind of change blowing
in the form of current and prospective reforms by Mr. Narendra Modi, these can be considered as small steps towards the
changing dynamics within IR.
According to World Bank,

References:
India has one of the worlds
most rigid labour markets. Paper titled Indian Trade Unions On the Brink of Extinction? by Dr. E.M Rao, published in Personnel Today,
India needs fewer and simVol.19, July-September, 1998
pler laws. The Archaic labour laws, instead of pro- Article PM Narendra Modi announces labour reforms to
tecting the welfare of
boost ease of business, by Somesh Jha, Business standworkers have actually hurt them by leading to lesser job creard
24
DHYUTI 2015
Article Narendra Modi to launch three key labour reform
initiatives.html
initiatives, by Prashant K Nanda, http:// Article Labour under attack, by T.K Rajalakshmi, Frontline
www.livemint.com/Politics/DM4LuIBfnYMIuRgVjbFk7O/
Narendra-Modi-to-launch-three-key-labour-reform- Article Modi rolls out labour reforms, The Hindu
Rise of Individualism - IR Concept
h p://labourbureau.nic.in/idtab.htm
BasedonprovisionaldatasourcedforJanuaryAprilovertheperiod201315.
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MAKE IN INDIA: MORE THAN JUST

LABOUR LAWS?
Sarthak Gupta & Anubhav Agrawal, XLRI
With the Modi Government working on making India a manufacturing hub, is the focus on the field of labour law sufficient, or is a conscious decision required to make it an all-inclusive movement?
India is dreaming big and ambitiously. With the launch of the

Make in India campaign, it has set its eye on becoming a
manufacturing superpower to fulfil the aspirations of its huge
working population. It is expected that the campaign will create 9 crore jobs in the next decade and raise the contribution
of manufacturing sector from 15% to 25% of GDP. However,
the success of this initiative is dependent on many factors,
one of the most critical being the way in which the foreign
capital can be attracted to the Indian market. The Central
Government plans to create an air of confidence for the foreign investors through effective governance, faster decision
making, tax reforms and better policy environment.
In a plan to directly target these issues, the Union Government plans to overhaul the archaic labour laws of the country.
With labour being the most important factor, it will take much
more than fancy campaigns and slogans like Shramev
Jayate to turn the tables in favour of the campaign. Indian
labour laws are extremely restrictive as they lay out rigid
provisions for Government approval in cases of hiring and
firing and closure of industrial establishments employing
more than 100 workers. Even with case of contract labour,
CLRA requires a prior 21 day notice for changing nature of
work. These restrictions act as a big hurdle and deterrent for
investors to deploy new technology or dismiss workers. This
has forced the employers to try and circumvent the written
law and heavily rely on contract labour. An important point is
raised as to how much at the ground level tweaking labour
laws would favour investments. For example, Chapter V-B of
the ID act requiring government permission on lay-offs, retrenchment and closure applies to only about 2.4% of employees as a stunning majority is in unorganized sector and majority firms exist below the 100 mark figure.
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DHYUTI 2015
The Centre has taken key initiatives like easing the compliance burden through self-certification on Shram Suvidha
Portal and attacking the inspector raj by introducing IT infrastructure for greater accountability and transparency.
Much has also been said about the government deciding to
make its stance clear by concentrating on worker welfare by
fixing a minimum pension under Employees Pension Scheme,
making Provident and Pension Funds portable; and increasing
the maximum work hours in Factories Act to raise productivity.
The ongoing hype about the labour laws, however, is just the
tip of the iceberg. It is widely believed that not only does India
need to work on these laws, but also needs to bring down the
cost of investment and tax burden in the country, needs to
develop the right infrastructure and also develop skilled labor
force to be able to support the growth that will be brought
about by this project. Delay in clearances owing to environmental issues, high interest and land acquisition costs can
spoil the party sooner than later. The Indian Government has
taken serious efforts in this direction by working towards the
amendments of certain acts.
On the tax front, India is optimistically looking forward to implement GST by 2016 which is poised to solve the issues of tax
leakages and cascading impact of taxes. The move to reduce
corporate tax to 25% over the next four years and relaxation
of custom duties on major raw materials has been commendable. The cost of capital is expected to come down with easing
inflation and RBIs acknowledgement of the same as seen in
the two subsequent rate cuts in 2015. This has been well
complemented by Governments bold measure to amend and
undo the land acquisition act. With the Lok Sabha passing the
Apprentices (Amendment) Bill, 2014, the way has been paved
for an increase in the availability of better skilled workforce.
The industry has been given greater flexibility in hiring of apprentices and the apprentices themselves have been given an
elevated status by linking their wages with those of the semiskilled industrial workers and providing them with better
leave benefits that are similar to the regular workers in the
organized sector. Allowing the industries to hire non-engineer
apprentices as per nature of the job is another step that empowers the sector. Finance Minister Arun Jaitley in the budget
2015-16 went all out to boost this by launching the National
Skills Mission, allocating funds to improve employability and
setting up institutes to enhance reach.
Apart from this, the Government needs to bolster infrastructure including transportation, power, water and land like China with no scope for any delays on account of lethargic bureaucracy or ministry clearances especially environment. The
Government has to rely on private investments in railways,
power generation and roadways to ensure hassle free operations to the industry. With Prime Minister Narendra Modi himself spearheading the campaign and leaving no stone unturned to showcase to the world Indias prospects, the future
for the Make in India campaign looks bright.
The Modi Government has taken serious efforts in its endeavour towards transforming India into a manufacturing hub but
a lot remains to be done. The initiative would require serious
commitment, disciplined approach and crucial support from
all stakeholders including political parties, trade unions and
the industry. It urgently needs to address the key issues of
labor laws, tax reforms, infrastructure and skilled manpower
simultaneously and comprehensively before the campaign
loses momentum and falls prey to skepticism and populism.
References:
http://articles.economictimes.indiatimes.com/2014-09-
25/news/54317795_1_pm-narendra-modi-growth-pmoindia
http://www.eastasiaforum.org/2014/11/12/no-easy-task
-for-indias-labour-reforms/
http://en.wikipedia.org/wiki/Make_in_India
http://www.financialexpress.com/article/economy/bjpruled-goa-slams-centres-move-to-dilute-factoriesact/40517/
http://indiabudget.nic.in/budget.asp
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UNIONISATION IN PRIVATE SECTOR

Ravi Bhargav S V, XLRI
In light of the retrenchment in TCS, should the government be a stakeholder in the redressal mechanisms of the service sector?
Unions have asked retrenched employees from the IT sector to
consider forming unions in light of pink slips being handed over
to many.
This was amidst news reports that TCS was retrenching about
25,000 employees in the designation of Assistant Consultant
and above to pave way for approximately 35,000 freshers as
meeting in this regard. The latter had acknowledged that IT is

not exempted from the Industrial Disputes Act, 1947, which
implied that all retrenched employees have a right to raise an
industrial dispute in case of retrenchment without notice
served.
While terminating an employee is a prerogative of the company,
absence of a regulating mechanism makes one fear victimization. Traditionally Trade Unions have been viewed as problemcreators by managements in various companies. While Article
19 1 (c ) of the Indian Constitution gives one the right to form
associations and unions, the service sector has always prided
itself as a place where effective grievance redressal mechanisms are in place, eliminating the need for government intervention. But a retrenchment on such an allegedly massive
scale, is bound to raise eyebrows. Especially when Ajoyendra
Mukherjee, TCS EVP & Global Head HR commented that the
hiring target was 35,000 for the fiscal year ending March 31,
2015, the reality was camouflaged.
part of its cost-cutting measure.
A worker is defined as one who is employed to perform any
A group of retrenched employees from TCS had formed Welfare manual, skilled, unskilled, technical, operational, clerical or
Association of IT Employees (WAIT) and had been called by the supervisory work for hire or reward.but does not include
Deputy Labour Commissioner, Telangana for a conciliatory one who being employed in a supervisory capacity, draws
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DHYUTI 2015
wages exceeding 10,000 rupees per mensem according to ciliation officers to cater to the rise in disputes. Also the conciliation officers views could be taken as a reference for
further processes like those in an Industrial Tribunal or Labour Court. A deadline for disposal of cases must be enforced
along with mandatory adjudication if the parties are unhappy
with the system and awards. Attention must be paid to the
service sector as it employs the maximum number of people
in todays world.
the Industrial Disputes Act, 1947. So does this imply that entry
level engineers in companies like TCS fall under the definition
of workman?
The act was formulated to protect against victimization of
labourers in mines, factories and other public utility services
and offer a legitimate conduit for grievance redressal. This
makes the appropriate government (State or central) a
stakeholder in any employee-related decision made by the
managements of those companies. This led to resentment
among industry leaders who felt that there was no space for
free decision making as the governments permission had to
be sought for laying off or retrenchment. Such decisions were References
made mostly based on industry dynamics and hence the tedious process was slightly irksome.
http://www.thehindubusinessline.com/features/
The Rajasthan governments amendment to the ID Act to insmartbuy/tech-news/tcs-retrenchment-labour-deptcrease the limit to 300 workers from 100 was welcomed by
meets-sacked-staff/article6861426.ece
the industry but the trade unions, predictably opposed it. Un http://www.thehindubusinessline.com/features/
der this amendment, companies can close down units where
smartbuy/tech-news/court-stays-termination-of-tcsthe number of workers employed is less than 300, without
staff/article6785746.ece?ref=relatedNews
seeking governments permission. Previously, permission was
not granted by the government on the grounds of public inter- Taxmanns Labour Laws 2014 edition
est and fear of being termed unpopular. Caveats to prevent http://knowledge.wharton.upenn.edu/article/india-modi
misuse could be introduced so that interests of all stakehold-government-labor-law-reform/
ers are taken into account.
One solution could be to increase the number of posts of con-
29
DHYUTI 2015
Make in India: Is Our IR Setup Ready?

Varun Kumar. Y, XLRI
Prime
Minister
Narendra
Modi has
pitched
the ambit i o u s
Make in
India
campaign
to transform India into a manufacturing hub for the world, on the lines
of what China has achieved over the last two decades. It
hopes to create much needed jobs in a country with more
than 65% below the age of 35. By 2020 the average age is
expected to be 29. So such initiatives, especially in the manufacturing sector are welcome, since the sector has largely
registered little to no growth in recent decades. The fiscal
2013/14 was one of the worst years in terms of manufacturing growth in more than 14 years. The recently published Economic Survey, 2014-15, by the Finance Ministry more or less
confirms this fact, with many of the major industries like
steel, cement and refinery production posting lower growth
than the previous years.
So the scenario seems ideal to push for rapid regulatory reforms to enable investors to setup ventures in the country.
While the economic logic behind projecting India as a manu-
facturing exporter for the world in the current global scenario has been under the spotlight, there are other deep lying
issues regarding our labour scenario that need probing.
Firstly there is the issue of labour reforms that have been
hinted at by the government and asked for by the industry, to
free up the rigid labour market and make it more flexible.
Admittedly some aspects of our labour law framework are
dense and anachronistic with lack of uniformity, many of them
carried over from the British rule. Some sections like the
infamous Chapter - VB of the Industrial Disputes Act, have
been enforced during the darkest phases of our democracy.
The entire idea behind the push for righting such perceived
wrongs is to generate more investments into our industrial
sector, which will create more jobs.
While these might appear to be stifling the entrepreneurial
instincts of would be employers or detriments to growth
among SMEs, we have to look at the day-to-day workings of an
establishment to see if these laws need reforms so badly. The
premise being here is that these laws are actually enforced,
that employers and employees stick to the laws and diligently
report any mishaps. But the evidence suggests otherwise.
The proportion of inspected factories has steadily declined
over the last 30 years, from about 63% in 1986 to 17% in
2008. This could be attributed to our poor data collection to
30
DHYUTI 2015
some extent, but it does paint a telling picture about the way
things work in the field. The last couple of years have seen
over 50 strikes with many of them concerned with trying to
stymie the scourge of contract labour and the various complexities it entails. Employment of contract labour, though
sanctioned by law, the ways it is carried out in our industries
is barely legal and almost unethical. Any expansion in our
manufacturing sector is bound to bring in more unorganised/
contract labour into it. Though the official figures peg the
proportion of informal labour at about 63% of our workforce
(World Bank Development Report, 2010), experts estimate it to
be at least 90%. This brings in further complexities, since our
existing labour laws do not concern themselves with the
rights and welfare of these employees.
One of the major strike notice in recent times has been the
Coal India strike of late 2014 which was called off on its second day in January, 2015. The issue was with the sale of government stake in Coal India to private investors. Their fear is
with job security, since there might be a restructuring that
might follow such a shake-up. A point to note here is that Coal
India workers are among the least productive in similar firms
in China and the USA. Part of it could be attributed to technological advances. But it is questionable as to why this issue
rarely comes in to the picture during such negotiations. The
Make in India does call for the skilling of our workforce to be
on par with the rest of the workforce. How justified then, are
the unions in calling for a strike on frivolous grounds, grounding the entire organisation with a permanent workforce of
286,196, and about 65,000 contract workers?
Is this the approach that would transform India into a manufacturing hub for the world? China which is the current such
hub of the world, has been experiencing troubles over the last
5 years with its labour force. Concerned with the pitiful human exploitation that routinely takes place in its factories, the
Chinese government imposed stricter regulations on employers in the country, with sweeping laws ranging from minimum
wage to settlements of disputes back in 2007. It has been
consistently making these regulations tighter towards the
goal of making the life of a worker easier. Many social security obligations have been imposed on foreign employers. Similarly in the USA, many social commentators are calling for
greater Union participation in determining employment terms,
after a quiet 40 years. While the rest of the world is waking up
to the importance of labour relations, we seem to be going
behind.
It is clear that though reforms are needed in areas of labour
law, our policy makers might be going about it in the wrong
way. India is among the countries that spend least on social
services and security. We need greater social security obligations on our employers to ensure human development, not
lesser.
Source: http://www.china-briefing.com/news/2014/06/03/china-asean-wage-comparisons-70-production-capacity-benchmark.html
31
DHYUTI 2015
whole logic of creating more employment?

A single cycle of reforms or amendments will not solve the
problem. There is no silver bullet solution to an issue as deep
running and institutionalised as this. In the past, reforms have
taken place in a sporadic and episodic manner, reflecting
crises and divergent responses of individuals to policy problems. A key objective for any future policy should be to institutionalise the process of institutional change, so that a continuous process of improvement of institutions takes place at all
times regardless of whether there is a short-term crisis
and regardless of the persons making decisions.
References:
Dr. Vivek Patwardhan http://
hrblog.vivekvsp.com/2014/12/labour-law-reforms-havealready.html, accessed on 07-03-2015

K R Shyam Sundar (2014), The Myth of Inspector-Raj in
We cannot shirk from such responsibility and take care of the

India, Economic and Political Weekly, Vol - XLIX No. 42,
social and income security of the existing workforce before
October 18, 2014
delving into labour market reforms. We need open social dialogue among all the constituents to identify necessary chang- http://in.reuters.com/article/2015/01/07/coal-indiaes, not behind-the-curtain followed by unilateral declarations.
strike-idINKBN0KG1SV20150107 accessed on 07-03-2015
The last couple of years have opened our eyes to rising discontent among workers in various plants of the country,
which was largely ignored over the last two decades. Very
recently the knowledge sector has also taken to the roads to
demand justice, in the case of the late 2014 layoff of TCS employees. If we do not concern ourselves with much needed
discussion over our regulatory framework governing our
labour relations, what might have been the perfect recipe for
turning around our economy, could end up being a recipe for
disaster.
Dr. Vivek Patwardhan, recently wrote in his blog, questioning
the need for reforms when the original laws themselves do so
little to stop employers from doing away with them. With the
expected change in the ID act, raising the threshold for permission to close down to 300, many ER experts believe that
there will be a spate of closures. Doesnt it run counter to the
32
DHYUTI 2015
LABOUR REFORMS BY MODI

Yashu Sharma, XLRI
Finally a push for labour reforms reported The Hindu Business Line on October 23, 2014. The much anticipated & talked
about reforms brought programs like Apprentice Protsahan
Yojna, Revamped Rashtriya Swasthya Bima Yojna etc. Under
the umbrella of Shramev Jayate (work alone triumphs). In an
effort to add fuel to the march to make Make in India a success, the government launched these reforms, promising to
end the inspector raj and increase the ease of doing business in India.
Shram Suvidha Portal, created by the Ministry of Labour &
Employment, is a unified portal which will support primarily 4
organizations under its tutelage; Office of Chief Labour Commissioner, Directorate General of Mines Safety, Employees
Provident Fund Organization & Employees State Insurance
Corporation. The portal will provide Unique Labour Identification Number (LIN) aiding online registration. The same portal
will also be facilitating transparent central labour inspection
scheme for random inspection of units. The generation of list
of inspections would be computerized centered on risk-based
objective criteria with the mandatory uploading of reports on
the portal within 72 hours. In all, the government aims to
reach up to 6 lakh firms & simplify the compliance process by
allowing them to file online compliance for almost 40% of
labour laws. Further, Apprentice Protsahan Yojna is expected
to impact existing 28,500 establishments nationwide which
are covered under Apprentices Act 1961 and more importantly, bring a greater number of establishments & youth under
the umbrella of this act. The government plans to do so by

sharing 50% of the stipend of as many as 100,000 apprentices covered under Apprentices Act 1961 spread over two and a
half years. More steps include a Universal Account Number
scheme to enable hassle free access to Provident Fund &
revamped Rashtriya Swasthya Bima Yojna for workers in the
unorganized sector.
This push for reforms is primarily a drive to create a more
enabling atmosphere to do business in India. Center for its
part, is vying for greater speed and transparency in the system, however the impact of these reforms depends significantly on the initiatives of the state government. Being a concurrent issue, the success of these reforms hangs in balance
as its the states that have to ensure the percolation of these
reforms to the bottom of the pyramid. The government wants
to encourage a healthy competition between the states which
would push them to come up with reforms in the legislature
on their own, which has been the case with Rajasthan & Madhya Pradesh, who recently introduced their own set of reforms by relaxing ID Act, Factories Act and CLRA. Uttar Pradesh, Himachal Pradesh, Haryana & Maharashtra are all contemplating the introduction of similar reforms. According to
Modi, this will be followed by an era of cooperative competitive federalism as the states will race to increase industrialization & investments which will give impetus to the growth of
the state. The idea is that such a system allows for flexible &
need-based reforms.
33
DHYUTI 2015
As the time passes & BJP gets a hold over greater number of
states, one can expect more pro-activeness from states &
increased sync between centre & state policy formulation.
The industry has shown its concern for the simplification of
procedures for some time now. Multiplicity of labour laws has
always been a thorn in the growth of industry and the problem
is further compounded with red tape & inspector raj. Industrial federations argue that due to increasing competition,
they must continuously innovate and improve for which they
need control over hiring & the firing of their employees. Small
and med i u m
enterprises, in
particular, have
been the
relieved
with the
advent of
these reforms as the reform will lift considerable weight of
compliances on them allowing them to compete better in the
market.
Measures like self-certification in some areas, restrictions on
powers of labour inspectors & modernization of labour laws
are aimed at improving the ease of setting up new businesses
and the operating & exiting concerns. Incremental measures
on such fronts is expected to improve the ease of doing the
business in the country. Its a well-established fact that China
has been a warmer destination for business establishments
due to its flexible & friendly labour laws. Whereas India has
been tagged with restrictive labour laws which not only deter
the entry of industries, but also their expansion.
However, such claims have been widely refuted by trade unions. They are arguing that in a campaign to simplify the procedures, these reforms have rendered 40 central & nearly
150 state laws redundant. The basis of argument is that these
reforms are aimed at making hiring & firing easier for establishments depleting the strength of labour. While the government is moving all guns blazing for making the environment
conducive for establishments, they have been ignorant to-
wards long standing demands of trade unions like ratification

of ILO conventions 87 & 98 or mandatory recognition. Also,
their demands pertaining to simplification of laws for small &
medium enterprises have been ignored. The negative response to the reforms from trade unions has been unanimous, including trade unions, which have ideological affiliations with BJP. Regarding the Apprentices Act, unions claim
that establishments would abuse students fresh out of ITIs
while paying them bare minimum wages. The problems with
the reforms are further compounded as unions complain lack
of consultation with them & little consideration to their demands. Another pain point has been rights of women, particularly in unorganized sector being left out of the ambit of discussion. The rights of both men & women working in unorganized sector have clearly been ignored. Unorganized sector
is perhaps the most exploited segments of labour and due to
lack of unionization, is rarely represented.
The reforms, despite opposition are a step in a positive direction. Being a labour surplus country with demographic dividend, government ought to make policies that allow its people
to exploit their strengths. The Indian service industry has
been booming for some time now, but its time that the manufacturing sector picks up the pace for which an impetus from
government is much needed. However, despite the positives,
the government has been ignorant towards issues which desperately need its attention. While the government embarked
on a movement to make the environment more compatible for
establishments, the rights of the unorganized labour should
have been a talking point for the government. After-all, lives &
rights of the voiceless must not be lost in the noise of propaganda.
References:
http://www.thehindubusinessline.com/opinion/finally-a-
push-for-labour-reforms/article6528145.ece.
h t t p : / / l a b o u r . g o v . i n / c o n t e n t / e K r a n t i /
inspection_units.php.
http://www.bbc.com/news/world-asia-india-31274460.
http://www.thehindubusinessline.com/opinion/finally-apush-for-labour-reforms/article6528145.ece.
http://www.frontline.in/cover-story/labour-under-
attack/article6540729.ece.
34
&
Present
NATIONAL
IR CONFERENCE 2016
Event theme:
Changing Labour Market and Industrial Relations,
Changing times: Make in India and Ensuing Labour Reforms
The National Level Industrial Relations conference conducted by FIRE@X, will be hosted this year at XLRI, Asias premier
institute for Personnel management and Industrial relations. A premier student organised event in the field of work and
employment relations in the Indian academic event calendar, this conference provides a common platform for stalwarts
from various managerial roles in Industry, legal practitioners, renowned academicians and students from some of the best
institutions of higher learning across India to discuss and explore the various challenges and opportunities presented by
the changing industrial and employment relations landscape in India and beyond. The thematic conference, scale IR event in
the country , will consist of paper presentations, panel discussion forums and speaker sessions by some illustrious personalities in the field.
Glimpses from the 6th National IR Conference
DHYUTI 2015
Forum for Industrial Relations @ XLRI Email us at : fire@xlri.ac.in
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DHYUTI 2015

Forum for Industrial Relations @ XLRI

Forum for Industrial Relations @ XLRI

The Team (2014-15)

Sumit Ragamayee Pragya Jojin Nayeera Ankit Varun

Message from The Director

Forum for Industrial Relations @ XLRI

Message from The Dean

Forum for Industrial Relations @ XLRI

Message from The Secretary

Forum for Industrial Relations @ XLRI

Narendra Modi Labour Reforms and Their Impact

Sarthak Gupta and Anubhav Agrawal

Forum for Industrial Relations @ XLRI

The Right to Strike in Industrial Relations

The legal definition of the strike as in Sec.2(q) of the Industrial

or the conditions of labour of the workmen.

Forum for Industrial Relations @ XLRI

into higher wages and benefits for workers relative to competition

unearths the underlying exploitative and extractive nature of work

Forum for Industrial Relations @ XLRI

pose of developing political consciousness related to regimes founded on exploitative regimes.

practices like refusal to initiate talks, harassment of union activists,

Forum for Industrial Relations @ XLRI

labour market is also required. The basic aim should be to

Forum for Industrial Relations @ XLRI

coverage of factories act from 10 to 20 workers in factories

Forum for Industrial Relations @ XLRI

went largely ignored even though promises were made by the

Fig 1 Ranking of perception of constraints (normalized to 100 for electricity) to

World Bank survey, other infrastructural and institutional

Fig 2 Average ICA scores on perception of labor regulations

Forum for Industrial Relations @ XLRI

Willing to decide prices according to the market rate, as does

Fig 3a Increasing Contractualisation of Workforce over the decade

Fig 4 Capital Intensity of Production

continue with introduction of capital intensive methods of

Fig 3b Increasing Contractualisation of Workforce amongst Labour Incentive

Fig 5 Percentage of registered factories inspected in India, 1986-2008

Forum for Industrial Relations @ XLRI

For the growth to remain inclusive, the government has to

der the existing inspection bodies redundant. This is even

So even if inspections had led to corruption and didnt actually

Forum for Industrial Relations @ XLRI

-ised. Provisions for them to be paid similar wages to regular

Bhattacharjea, A. 2006. Labour market regulation and

Besley, T. and R. Burgess. 2004. Can regulation hinder

Chetan Agrawal.2013."The Effects of Liberalization on the

Forum for Industrial Relations @ XLRI

TO-B or not TO-B in Industrial Relations

If I consider myself a warrior in the war of the Business world

Hierarchy of Needs. Each human being has the strong urge to

Forum for Industrial Relations @ XLRI

gies are whether they are active, passive, constructive or

McClellands Motivational Needs theory talks about the Need

Forum for Industrial Relations @ XLRI

The system of resolution of Industrial Disputes prevalent in India is ______________

What is the minimum number of members, a prerequisite, to register a trade union.

In which year was the Minimum Wages Act was formulated?

Forum for Industrial Relations @ XLRI

Union with Sardar Vallabhbhai Patel as their first president.

Forum for Industrial Relations @ XLRI

2014-2015 : The Year That Was

Forum for Industrial Relations @ XLRI