14. Labour-Management Cooperation/Workers' Participation in Management – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 14

Labour-management Cooperation/Workers’ Participation in Management

Chapter Objectives

This chapter will enable students to:

  1. Explain the meaning and importance of workers’ participation in management
  2. Describe different degrees and forms of labour-management cooperation
  3. Understand the composition and functions of works committees and the causes of their limited success
  4. Explain the objectives, composition and functions of Joint Councils of Management and the reasons for their failure
  5. Describe the schemes of employees’ participation in management in public sector enterprises and government services
  6. Describe the main features of the schemes of workers’ participation in management in the private sector and reasons for their successful working
  7. Explain the main provisions of the Participation of Workers in Management Bill, 1990, and the reasons for its not being passed
  8. Examine the hurdles in the way of government-sponsored schemes of workers’ participation in management in the country

Advent of Whitley Councils

In the United Kingdom, the unprecedented success of joint consultation during the First World War period in maintaining industrial peace and improving productivity led to the realization of the usefulness of institutions of joint consultation on a permanent basis. The matter came up for deliberations before the committee on relations between employers and employees, popularly known as Whitley Committee. Whitley also happened to be the head of the Royal Commission of Labour (1929) in India.

The committee, which submitted its report in 1917 asserted that a permanent improvement in the relations between employers and employed must be founded upon something other than cash basis. The committee suggested that the employees should have a greater opportunity of participating in the discussion about the adjustment of those parts of industry by which they were most affected. It hoped that representative men in each industry, with pride in their calling and care of its place as contributor to the national well-being, would come together and apply themselves to promoting industrial harmony and efficiency and removing the obstacles that stood in the way. The committee recommended the formation of Joint Industrial Councils in well-organized industries, District Councils at the district level and Works Committees in industrial establishments—all consisting of representatives of employers and employees. These joint bodies were known as Whitley Councils—a name often used in India also in the context of participative management. The main objective behind the establishment of these councils was regular consideration of matters affecting the progress and well-being of the trade from the point of view of all those engaged in it, but in consistent with the general interests of the community. The recommendations of the committee, particularly in regard to the Whitley Councils also had their impact on the formulation of labour-management cooperation schemes in India for years to come.

It has been said in the beginning of Chapter 10 that the modern industrial relations’ scene has two important aspects: (i) cooperation and (ii) conflict. Chapters 10, 11 and 12 were devoted to a discussion of the problems arising from industrial conflict. This chapter discusses the problems of cooperation.

 

Conjunction

A word used by N. W. Chamberlain denoting a state of relationship under which the parties in industry, instead of offering their best, offer the least, in the absence of which, the relationship will break. In other words, the workers attempt to produce only that much which can keep them in employment.

That cooperation between labour and capital is the basic requirement for the successful functioning of modern capitalist enterprises, is a statement needing little further elucidation. That this cooperation is available only at a minimal degree is, also, a statement that can hardly be denied. Neil W. Chamberlain calls this sort of relationship ‘conjunction’, that is, a state of relationship under which the parties, instead of offering their best, offer the least in the absence of which the relationship will break. In other words, the workers attempt to produce only that much which can keep them in employment. Under the existing institutional arrangements, special efforts have to be made to induce them to put forth their best efforts for productive purposes.

In the case of self-employment, under which a person owns his own tools, premises, raw materials and also the final products, he always seeks to work at his best. Even where he does not own the tools—capital and obtains them on hire—he still exerts his best. But the moment capital becomes separated and is treated as an independent factor of production, the problem of motivating the worker becomes acute. What steps should be taken to generate, under the existing capitalist form of economic organizations, the energy, sincerity and enthusiasm which people display when they work on their own account? It is the search for the answer to this question that has led to the acceptance, formation, and implementation of many schemes, for promoting cooperation between labour and management in almost all industrially advanced capitalist countries. What was assumed, till now, to exist automatically is sought to be promoted today, deliberately and consciously. Such terms as ‘labour-management cooperation’, ‘workers’ participation in management’ and ‘joint consultation’ have become words of common parlance and no book on industrial relations is thought to be complete without a reference to them.

MEANING

The term ‘labour-management cooperation’ refers to the joint efforts of labour and capital to find out solutions and remedies of problems, common to both. Thus Ian Clegg says that ‘cooperation implies a situation where workers’ representatives are, to some extent, involved in the process of management decision-making …’1 Chamberlain holds, ‘Union-management co-operation represents joint decision-making in matters of admittedly common interests’.2 In contrast to collective bargaining, which involves joint decision-making in the matters of admittedly divergent interests, cooperation represents joint decision-making in matters of admittedly common interests. Thus, before such a cooperation can take place, each of the parties has to be convinced that in some defined areas, interests are in fact common; that by cooperating with the other in the decision-making process in this area, each would be promoting its own interests; and that by such cooperation, it will not become a tool of the other.

GOALS

Of the various goals and objectives of labour-management cooperation/workers’ participation in management, the following are prominent.

A Means of Increasing Productivity

It is said that the area of the most common mutual interest, where labour and management may cooperate consciously to the advantage of both, consists of promoting efficiency and productivity, eliminating wastes, reducing cost, and improving the quality of the product. In a word, it is in the common interest to increase the size of the cake, so that each of the parties may have a larger piece as its share. Dividing the cake may be a source of conflict but increasing its size represents a common interest. But here again, a number of questions arise. What is the guarantee that labour will get its share of the increased size of the cake? What will happen when increasing the size involves retrenchment, speed-up and increase in the work-load?

It is on such issues that many schemes of workers’ participation in management have foundered. If, however, methods satisfactory to the workers can be devised for sharing the gains of increased productivity, labour may willingly cooperate with the management in promoting the efficiency of the enterprise. The method can be on the basis of collective bargaining or legislation. Thus, a satisfactory collective bargaining relationship is a pre-condition to the success of the scheme of cooperation. It is collective bargaining that sets the terms on which cooperation takes place in the field of common interests, guaranteeing each its proper share in the fruits of cooperation or participation.

A Means of Promoting Industrial Democracy

Workers’ participation in management is also advocated as a means of promoting industrial democracy. It is said that workers should have a voice in the administration of the enterprise to which they belong. Industrial enterprises which furnish the material needs of the workers will also start giving non-material human satisfaction if workers acquire a say in the determination of the conditions, under which they work and live. This will lead to the achievement of industrial democracy which is a logical corollary of political democracy. Work under such conditions would become a source of satisfaction—both material and non-material. As political democracy is supported even though it may not be the most efficient way of organizing the affairs of a community, industrial democracy is also emphasized, though it may not necessarily lead to increasing the efficiency and productivity of the enterprise. Hence, workers’ participation in management is advocated to ensure industrial democracy for its own sake, irrespective of its influence, favourable or not, on the economic efficiency of the enterprise.

A Means of Avoiding Conflict and Friction

It is contended that a closer association between the workers and management leads gradually to the appreciation of the problems of one by the other, and the development of an accommodative frame of mind. Through labour-management cooperation schemes, the strength, influence and the knowledge of the unions and the experience and knowledge of the workers can be channelized into better purposes, rather than into undoing what the management does, as is often the case at present. The power, won by labour, from a reluctant employer is apt to be used more unscrupulously and with less constructive wisdom. On the other hand, a sharing of power with labour on a voluntary basis in recognition of the moral right of the worker to have it is likely to generate a responsive attitude.

The success of schemes of workers’ participation can lead to the elimination of many sources of friction between workers and employers, and may be conducive to the promotion of industrial peace. It is claimed that workers’ participation reduces their resistance to changes in industrial methods, introduction of new products and work-reorganization, and so on.

Thus, there are three important objectives of the attempts at promoting labour-management cooperation: (i) increase in the efficiency and productivity of the enterprise, (ii) creating and maintaining industrial democracy and (iii) preserving industrial peace. Though basically there is no fundamental conflict in the three goals mentioned here, occasionally, conflict may arise because of the divergent approaches of labour and management, to the schemes of workers’ participation in the management. Labour may be primarily interested in widening its area of control over managerial functions, whereas management may support the schemes primarily because they may lead to increase in efficiency and productivity. Hence, situations of conflict might arise in working out the implementation of the schemes.

TRADITIONAL FORMS OF CONTROL AND MANAGEMENT OF ENTERPRISES UNDER CAPITALISM

The significance of labour-management cooperation, which may vary from simple information-sharing and consultation to workers’ participation in management, can best be realized by contrasting it with the traditional form of control and management of industrial enterprises. Under capitalism, the laws relating to private property vest the power of control and management in its owners or their representatives. The absolute right of the owners to control and manage property is restricted by law in exceptional cases, where public interest is involved and that, too, to a very limited extent. The owners of business enterprises have traditionally been exercising the power to manage their employees and to decide, unilaterally, all questions relating to their hiring and firing, promotion, demotion, transfer or lay-off; the owners have also been deciding the methods and techniques of production, the nature and quantum of products, fixation of prices, and all other matters in respect of the administration of the enterprise. The advent of trade unionism and the institution of collective bargaining have encroached upon these traditional rights and powers but the basic principle still persists.

Arguments for the Owners’ Absolute Right to Manage

The owners’ absolute right to manage economic enterprises is justified on a number of grounds including the following:

  1. The golden rule of capitalism that ‘risk and control go together’ provides the most important justification. According to this rule, the owners of business enterprises subject their capital resources to unforeseen risks; the business venture may succeed and bring profits or it may fail causing bankruptcy. Therefore, the owners should have full freedom to manage their enterprises, unhindered by any outside control in order that the risk may be minimized and success assured. Any interference with their right is likely to cause dislocation.
  2. The maintenance and development of industrial efficiency demands that the managers should be able to take quick decision in the ever-changing market conditions. Any delay which may be entailed because of a long cumbersome consultative procedure in decision-making, may lead to serious economic losses. Therefore, the owners of enterprises should have the necessary power to make quick adaptations and take quick decisions, as and when so demanded. Thus, the exercise of the absolute power by the owners is thought to be a necessary condition for the maintenance of the economic health of the enterprise. It is said that the management of a large-scale business enterprise is necessarily authoritarian in character which does not lend itself to democratic control. There has to be a hierarchical organization with the decision-making power vesting at the top in the selected few, and compliance and obedience from the bottom.
  3. Finally, it is said that management of industrial enterprises today has become a highly skilled and technical job. The skill of managing enterprises comes only through long experience and training which, under the present social system, only a few can afford. Therefore, the owners of business enterprises or their legal representatives, who are in the best position to receive that training and pick up that experience, should possess full freedom to control and manage their property. It will not be in the interest of economic efficiency, if persons without training and experience are given the right to share the decision-making power.

It is on the basis of the foregoing arguments that the absolute power of the owners of business enterprises is exercised and justified. Essentially, the power to manage flows from the right to own property. Therefore, management’s rights are basically property rights. However, gradually, the workers and the trade unions have not only challenged these management rights, but have also succeeded in restricting them and in participating in the managerial decision. The managements have been forced to share one right after another with the workers, but this is a forced sharing rather than a voluntary process.

 

‘Golden Rule’ of Capitalism

The ‘golden rule’ of capitalism asserts that ‘risk and control’ go together, meaning thereby that the owners of capital, who have to face unforeseen risks of incurring losses and even bankruptcy, should have the right to manage and control their business enterprises.

Arguments Against the Owners’ Absolute Right to Manage

Workers and unions have argued that the success or failure of a business enterprise is too closely linked with their own fate, to be left under the absolute control of the owners. In the event of its failure, the owner may lose his capital only, which may or may not mean his starvation, but the workers lose their jobs, their livelihood and their hard-learnt experience and skill. Therefore, they ask, ‘Who is more interested in the success of the enterprise, the workers or the owners?’ The workers accept that managing an enterprise is a skilled job, but the owner is not automatically a skilled manager. In the larger industrial undertakings of today, the real managers are not the owners. There is an industrial bureaucracy consisting of experts of various kinds which manages the undertakings today. If the owners, by virtue of their property rights, have the power to control this bureaucracy, the workers, by virtue of their right to jobs, should also have a voice in exercising this control.

Another line of argument advanced by workers and their unions is that, the right to manage an industrial enterprise does not imply the right to manage men also, whose cooperation is essential for the success of an enterprise. They take the argument to a higher ethical plane and contend that control and management of men must be based on their consent. The unilateral determination of the terms and conditions of employment by the owners means an imposition. Workers are human beings and as such they should have the right to participate in the determination of the terms and conditions of employment. Thus, there is no case for the owner’s absolute right to manage his enterprise in the interests of his profits only. If the goals of the management are so modified as to include the interests of the workers, the case for workers’ participation in the decision-making process is further strengthened.

Be that as it may, management’s rights are increasingly challenged and shared by the workers and their representatives. Many of the managements have, also, come to realize that it is much better to take voluntary initiative to enlist workers’ cooperation, rather than wait being forced by them.

There is a growing realization in management circles—workers and trade unions and governments—that it would be in the interest of all concerned if the two warring camps could give up their war tactics and join hands together in solving common problems. However, to the Marxists and others believing in the class nature of the capitalist society and in the ultimate end to wage-slavery and capitalism, this trend appears to be a symptom of class collaboration designed to emasculate the working class of its militancy.

DIFFERENT DEGREES AND FORMS OF LABOUR-MANAGEMENT COOPERATION/WORKERS’ PARTICIPATION IN MANAGEMENT

Workers’ participation in management/labour-management cooperation may take various forms and may be of different degrees. To mention a few, labour-management cooperation may take any of the following forms:

  1. Information sharing
  2. Problem sharing
  3. Joint consultation
  4. Workers’ participation in management

Information Sharing

Under this type of cooperation, the employer agrees or undertakes to keep the employees informed about business conditions and the general prospects of the company and about changes in the methods of production before they are put into effect. This practice of keeping the employees and their union informed of the economic position of the enterprise helps the union in formulating its policies and the workers in their attitude formation. It is quite legitimate to infer that, once the workers receive prior information of the changes in the methods of production and the economic difficulties of the enterprise, they would put forward their own ideas and suggestions which could receive due consideration by the employer.

Problem sharing

The second form of labour-management cooperation may relate to problem sharing. An employer faced with some problems may consult the workers and their union and seek their help in solving them. This sort of cooperation is specific and related to particular issues. However, the experience, thus, gained may result in a more formalized and regular structuring of consultation and advice. The relationship between the Amalgamated Clothing Workers of America and the clothing factories is an illustration of this type of experience. When some clothing manufacturers finding themselves in economic difficulties called for the union cooperation, the union and the various managements jointly succeeded in resolving the economic difficulties and thereby, laid the foundation of a more widespread cooperation between the union and the clothing industry.

Joint Consultation

Whereas the first two forms of labour-management cooperation may be of a temporary nature designed to get out of occasional difficulties, there may be formal and regular consultation between management and the workers represented by their union on all or some common issues as decided upon beforehand. It means consultation of the workers by the management before any decisions are made, so that the workers’ point of view could also be taken into account by the decision-making authority. This consultation also provides the management an occasion to explain its own aims and problems. The management retains its prerogative to manage—that is, the exclusive right to take decisions. It also has the clear and undivided responsibility for the results of its actions. When consulted, the workers and their unions may offer their suggestions and give their viewpoints, but cannot insist that their viewpoints be accepted. Consultation in this form does not imply joint decision-making. The management accepts the worker’s ideas and claims entirely on the basis of merit.

However, it should be mentioned here that in the process of consultation, the workers and their union acquire a definite status. It will be a rash and imprudent management which will summarily reject the opinions and viewpoints presented by strong and well-organized unions. What appears to be a mere consultation may acquire a binding character in course of time.

Workers’ Participation in Management

The final form of labour-management cooperation may provide for workers’ participation in management. Under this form, the process of decision-making becomes really joint and bipartite. Both the union and the management have a say in decision-making and they also undertake responsibilities for the result of their action.

Workers’ participation in management, in many cases, may imply a representation of the workers on the Board of Directors of a company, or it may simply mean the establishment of joint councils consisting of the representatives of the workers and the management. These councils are vested with the power to take final decisions on matters entrusted to them, either on the basis of bargaining or legislation.

Workers’ participation in management as a form of labour-management cooperation is quite different from the participation of the union through collective bargaining in the managerial decision-making process. The emergence of collective bargaining has enabled workers and unions to share the decision-making power of the management in many areas of the administration of an enterprise. Wages, working conditions, hours of work, hiring, dismissal, promotion, demotion, lay-off, retrenchment, job evaluation, fringe benefits, health, safety and welfare, and many other related matters are being decided on the basis of collective bargaining today. Management’s prerogatives in these areas no longer exist and what was formerly decided unilaterally by the management is now the subject matter of a bipartite decision. Further, the management’s prerogatives have an uncertain future. As the scope of collective bargaining widens, management’s prerogatives shrink.

But workers’ participation in management as a form of labour-management cooperation is different from participation on the basis of collective bargaining, not only because the subject matter of the former is different from that of the latter, but also because of the spirit which lies behind labour-management cooperation. In labour-management cooperation, the guiding motive is the improvement of efficiency and production, generally speaking, with a spirit of cordiality and goodwill. Whereas the sanction behind participation through collective bargaining is the relative coercive power of the parties concerned, the sanction behind workers’ participation as a form of labour-management cooperation, is the spirit of goodwill and cooperation.

The foregoing discussion gives an indication of the variety of forms and extent of labour-management cooperation. As cooperation is a voluntary movement, its forms depend upon the extent of the willingness to cooperate amongst the parties concerned and the needs of the particular industrial establishments, industries and the nation as a whole, at a particular time. Cooperation cannot be exacted under legislative powers and, therefore, it cannot be put into straight, uniform and standardized jackets, though attempts have been made to develop cooperation on the basis of legislation. Every establishment, every industry and every nation chooses its own form of workers’ participation. Hence, experiments in the field of workers’ participation in management differ from country to country. Even within the same country, its forms and levels are not the same for all plants or industries.

SCHEMES OF WORKERS’ PARTICIPATION IN MANAGEMENT IN INDIA

Labour-management cooperation/workers’ participation in management in India, has primarily been a government sponsored movement. Section 3 of the Industrial Disputes Act, 1947, empowered the central and state governments, in their respective jurisdictions, to make general or special order requiring the employer of an industrial establishment employing 100 or more workmen to constitute a works committee. The composition, functions and working of works committees have been discussed in detail subsequently in the chapter. In 1947 itself, the Industrial Truce Resolution adopted at the Industries Conference recommended inter alia the formation of Unit Production Committees in industrial establishments, for promoting the efficiency of workers and improving production. Under the Industrial Policy Resolution of 1948, the Government of India accepted in principle the establishment of bipartite production committees consisting of representatives of employer and workers. Subsequently, a model constitution for the establishment of Unit Production Committees and for enabling the existing works committees to function as Production Committees was adopted.

In 1958, an ambitious scheme of Joint Management Councils (JMCs) was introduced. Subsequently, forums of Shop Councils and Joint Councils were introduced under the old 20-point programme. In 1977, institutions of workers’ participation in management were established in commercial and service organizations in the public sector. In 1976, Article 43 A was inserted in the Indian Constitution under the Directive Principles of State Policy. The new Article provides that ‘the state shall take steps, by suitable legislation or any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry’. A new scheme of Employees Participation in Management for public sector undertakings was introduced in 1983. This scheme is still in operation in the country. Besides, schemes of workers’ participation have been in operation in some government services and in establishments of the private sector. In 1990, a comprehensive Workers’ Participation in Management Bill was introduced in the parliament, but it has not been passed as yet.

The main schemes of workers’ participation in management, experimented in the country have been:

  1. Works Committee (1947)
  2. Joint Management Councils (1958)
  3. Board-Level Participation (1970)
  4. Shop Councils and Joint Councils under old 20-point Programme (1975)
  5. Unit Councils and Joint Councils in Commercial and Service Organizations in the Public Sector (1977)
  6. Institutions of Employees’ Participation in Management for Public Sector Undertakings (1983)
  7. Joint Councils in Government Services
  8. Institutions in some enterprises in the private sector. Pertinent aspects of the various schemes are discussed in the following few lines.
WORKS COMMITTEES (1947)

As stated above, Section 3 of the Industrial Disputes Act, 1947, has empowered the central and state governments in their respective jurisdictions to make general or specific order requiring the employers of industrial undertakings employing 100 or more workmen to constitute Works Committee. Accordingly, both the central and state governments have framed rules in regard to the formation of works committees, selection of representatives, periodicity of meetings, and so on. Apart from the statutory measures, detailed guidelines have also been provided on the basis of tripartite conclusions. Relevant aspects of the composition, functions and working of works committees are discussed below.

Composition

According to the Industrial Disputes Act, 1947, a Works Committee is to consist of representatives of the employer and workmen engaged in the establishment, so that the number of workers’ representatives is not less than the number of employer’s representatives. This means that the number of workers’ representatives in a Works Committee may exceed the number of employer’s representatives. The rules framed by the central and state governments, as also resolutions at tripartite forums, have provided details relating to the size, manner of election of workers’ representatives, tenure of members, periodicity of meetings and dissolution of Works Committee among others. In practice, there have been variations in the actual composition of these committees.

Functions

The Industrial Disputes Act, 1947, provides that a Works Committee is required ‘to promote measures for securing and preserving amity and good relations between the employers and workmen and, in order to achieve this end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters’. Apart from this legal directive, no guidelines regarding the functions of the works committees were available either under the rules or from other forums for quite some time. This led to confusion among the employers and trade unions as regards the specific areas in which these committees were to operate and the nature of their functions. Ultimately, the matter came up for consideration before the Indian Labour Conference, which in its 17th session held in 1959, constituted a tripartite committee to examine the working of the works committees and draw up guiding principles relating to their composition, functioning and other relevant aspects. Most of the suggestions of the committee were endorsed by the 19th session of the Indian Labour Conference held in 1961.

The Indian Labour Conference endorsed the view of the committee that it was not practicable to draw up an exhaustive list of the functions of works committees. The conference recognized that some ‘flexibility of approach’ was needed for allowing the system to work properly. However, the conference approved ‘illustrative lists’ of items which the Work Committee should normally deal with and those which it should not.

The illustrative list of items which the works committees will normally deal with is shown in Box 14.1.

Box 14.1

ITEMS TO BE NORMALLY DEALT WITH BY WORKS COMMITTEES

(i) conditions of work such as ventilation, temperature, lighting, etc., (ii) amenities such as drinking water, canteens, creches, medical and health services, (iii) safety and accident prevention, occupational diseases and protective equipment, (iv) adjustment of festivals and national holidays, (v) administration of welfare and fine funds, (vi) educational and recreational activities such as libraries, reading rooms, sports, games, community welfare and celebrations, (vii) promotion of thrift and savings, and (viii) implementation and review of decisions arrived at meetings of Works Committees.

The list of items which the Works Committees will not normally deal with is given in Box 14.2.

Box 14.2

ITEMS NOT TO BE NORMALLY DEALT WITH BY WORKS COMMITTEES

(i) Wages and allowances, (ii) bonus and profit-sharing schemes, (iii) rationalization and matters connected with the fixation of workload, (iv) matters connected with the fixation of standard labour force, (v) programmes of planning and development, (vi) matters connected with retrenchment and lay-off, (vii) victimization for trade union activities, (viii) provident fund, gratuity schemes and other retirement benefits, (ix) quantum of leave and national and festival holidays, (x) incentive schemes, and (xi) housing and transport services.

Working and Assessment

Although labour policy statements of successive 5-year plans and various forums stressed the need for strengthening and promoting this institution, in practice, works committees became increasingly ineffective. Ever since their inception, the number of works committees actually set up in industrial establishments has been much less than that required to be set up in compliance with the provisions of the Industrial Disputes Act, 1947. According to the Ministry of Labour, in 1999 the number of Works Committees formed in establishments under the central sphere was 881 of 1,287 required to be set up under the Act. The number of workers covered was 8.7 lakhs as against 13.5 lakhs required to be covered.3 Even where set up, they generally did not come up to the expectations. The assessments placed before the first National Commission on Labour (1969) pointed out that the failure of the Works Committees was due ‘partly to the fact that the committees are statutory, and thus an imposition on the employer, but mainly because the parties concerned do not evince sufficient interest in them’.4

In the evidence before the commission, the state governments expressed the view that the advisory nature of the recommendations, vagueness regarding their exact scope and functions, inter-union rivalries, union opposition, and reluctance of employers to utilize such media had rendered works committees ineffective. The employers’ associations attributed their failure to factors like ‘inter-union rivalries, union antipathy, and the attitude of members (workers’ wing) in trying to raise in the committee discussion on extraneous issues’.5 The trade unions held that conflict between union jurisdiction and that of the works committees and the unhelpful attitude of the employers had generally led to their failure. These views of the parties in industrial relations hold good even today.

The first National Commission on Labour made a mention of the factors which could ensure the effectiveness of these committees. These included: a more responsive attitude on the part of management, adequate support from unions, proper appreciation of the scope and functions of these committees, whole-hearted implementation of the recommendations and proper coordination of the functions of the multiple bipartite institutions at the plant level. After examining various aspects of the working of these committees and the views of the employers, trade unions and government, the commission recommended, ‘(i) Works committees may be set up only in units which have a recognized union. The union should be given the right to nominate the worker members of the works committee. (ii) A clear demarcation of the functions of the works committee and the recognized union, on the basis of mutual agreement between the employer and the recognized union, will make for a better working of the committee’.6

In spite of the governmental efforts to revamp the statutory forum, the institution has increasingly proved ineffective. Even today, the number of works committees established in the country is far short of the number required to be set up under the act. Even where established, most of them are either defunct or exist only in name.

JOINT MANAGEMENT COUNCILS (1958)

While efforts were in progress to activate the fading Works Committees, the government started looking for another non-statutory forum where the employers and workers could usefully deliberate on matters of common interest. The government’s Industrial Policy Resolution of 1956 came forward with a bold policy statement in regard to workers’ participation in management in the country. The resolution stated, ‘In a socialist democracy, labour is a partner in the common task of development and should participate in it with enthusiasm … . There should be joint consultation, and workers and technicians should, wherever possible, be associated progressively in management. Enterprises in the public sector have to set an example in this respect’.7 The second 5-year plan also recommended the establishment of councils of management consisting of representatives of management, technicians and workers in the larger industrial undertakings, but the working of the forum stipulated was almost unknown in the country. With a view to getting available materials on the subject, the Government of India sent a tripartite study group to a few industrially advanced countries of Europe—Great Britain, Sweden, France, Belgium, West Germany and Yugoslavia. The report of the committee recommended a non-statutory approach and warned against the dangers of copying from the more advanced industrial communities. The 15th session of the Indian Labour Conference, while accepting the recommendations of the study team, appointed a tripartite committee to work out details of the new scheme. The draft prepared by this tripartite committee was subsequently modified by two national seminars organized by the Ministry of Labour in 1958 and 1960. From the deliberations of the seminars also emerged a draft model agreement relating to the establishment of Joint Management Councils. The main features of the scheme of joint management councils emerging out of the recommendations of the study team, deliberations of the seminars and resolutions of the Indian Labour Conferences are explained below.

Objectives

The main objectives of the joint management councils comprise: (i) promoting cordial relations between management and workers, (ii) developing understanding and trust between them, (iii) augmenting productivity substantially, (iv) securing better welfare and other facilities for workers, and (v) training them to understand and share the responsibilities of management.

Composition

Joint management councils are to consist of equal number of representatives of management and employees not exceeding 12 in all, but not less than 6 in small undertakings. The employees’ representatives are to be nominated by a representative union, if any, where there is a law providing for the registration of the representative union. In case there are no representative unions but there is only one union well established, that union should nominate employees’ representatives. Where there are two or more well-established and effective unions, the joint councils will be formed when the unions themselves agree as to the manner in which representation should be given to employees. The trade unions, if they so feel, can nominate outsiders to the extent of not more than 25 per cent of the employees’ representatives.

If it is decided to constitute technical committees or sub-committees, their composition will be decided according to the need of the situation, and outsiders may be allowed to sit on these committees. Whether chairmanship of the Joint Management Council should be fixed or rotated should be left to the local agreement. There is also the provision of the recall of the members. The meetings of the councils are to be held during working hours and decisions are to be arrived by consensus and agreement.

Functions

The functions of the joint management councils are laid down in the Draft Model Agreement. Its preamble stresses the appreciation of the fact, that an increasing measure of association of employees with the management would be desirable and would help in: (i) promoting increased productivity for the general benefit of the enterprise, the employees and the country; (ii) giving employees a better understanding of their roles and their importance in the working of the industry, and in the process of production; and (iii) satisfying the urge for self-expression.

Section 4 of the agreement lays down that it would be the endeavour of the Councils: (i) to improve the working and living conditions of the employees; (ii) to improve productivity; (iii) to encourage suggestions from the employees; (iv) to assist in the administration of laws and agreements; (v) to serve generally as an authentic channel of communication between the management and the employees; and (vi) to create in the employees a sense of participation.

So far as the specific status and functions of the councils are concerned, they are consultative, information-sharing and administrative. These are specified in Box 14.3.

Box 14.3

SPECIFIC STATUS AND FUNCTIONS OF JOINT MANAGEMENT COUNCILS

  1. Consultative Functions: The Councils should be consulted by the management on matters such as (i) general administration of standing orders and their amendments, when needed; (ii) introduction of new methods of production and manufacture involving redeployment of men and machinery; and (iii) closure, reduction in or cessation of operations.
  2. Information-receiving and Suggestion-making Functions: The Councils would also have the right to receive information, discuss and give suggestions regarding the following matters:
    1. General economic situation in the concern

    2. Organization and general running of the undertaking

    3. The state of the market, production and sales programme

    4. Circumstances affecting the economic position of the undertaking

    5. Methods of manufacture and work

    6. The annual balance sheet, profit and loss statement and connected documents and explanation

    7. Long-term plans for expansion, redeployment

    8. Such other matters as may be agreed to

  3. Administrative Functions: The Councils would be entrusted with responsibility in respect of the following:
    1. Administration of welfare measures

    2. Supervision of safety measures

    3. Operation of vocational training and apprenticeship schemes

    4. Preparation of schedules of working hours and breaks and of holidays

    5. Payment of rewards for valuable suggestions received from employees

    6. Any other matter as may be agreed to by the council

In order to maintain a clear-cut distinction and avoid overlapping and confusion between the roles of the trade union and those of the councils, the draft agreement provides that all matters such as wages, bonus and allowances, which are subjects for collective bargaining, be excluded from the scope of the councils. Individual grievances are also excluded. In short, creation of new rights as between workers and management is outside the jurisdiction of these councils.

Working

During early years of the inception of the scheme in 1958, a great deal of enthusiasm was displayed towards these councils, and the desirability of the extension of the scheme was emphasized at different platforms.

The second national seminar held in 1960, after reviewing the working of the Joint Management Councils for 2 years of their existence, reiterated their usefulness. The third 5-year plan also expected a good deal from these councils and considered workers’ participation in management essential for ‘the peaceful evolution of the economic system on a democratic basis’. The plan further hoped that such participation would throw up, in course of time, ‘management cadres out of the working class itself’, and would help ‘to promote social mobility which is an important ingredient of a socialist system’. The plan, therefore, recommended the establishment of Joint Management Councils in all undertakings found suitable for the purpose so that the scheme might ultimately become a normal feature of the industrial system. The Indian Labour Conference also adopted resolutions from time to time to encourage the formation of these councils. The fourth plan also emphasized the importance of workers’ participation as an essential functional link in the structure of industrial relations and suggested its extension to public sector undertakings also. In order to facilitate the implementation of the policy statements, the Government of India made some promotional efforts also. Thus, the Government of India made arrangements to draw up a panel of names from the organizations of employers and workers at various centres, with a view to advise Joint Management Councils in the event of difficulties. Besides, it also set up a tripartite committee on labour-management cooperation to advise on all matters connected with the implementation of the scheme. A special cell for the purpose was set up in the Ministry of Labour and Employment. Many state governments, on their part, entrusted the promotion of the scheme to special officers. Gradually, joint management councils came to be set up in both public and private sectors.

There had been a gradual increase, although very moderate, in the number of joint management councils till 1966, but since then the number recorded a decline. This is true both of the public and private sectors. However, if one were to take into account the number of undertakings in which JMCs could be set up, as per recommendations of the national seminars, 5-year plans and the Indian Labour Conference, one would find that only a very small percentage of the units could witness the functioning of these councils.

Number of Joint Management Councils Functioning During 1958–70

The number of Joint Management Councils in the public sector was less than 7 during 1958–60, 11 in 1961 and 15 in 1962. During 1963–70, the number of these councils in the public sector varied between 23 (1963) and 47 (1967). The number could not reach even the 50 mark in any year during 1958–70. However, in the private sector, the number varied between 16 and 23 during 1958–61. From 1962 onwards, there had been a gradual increase in the number, the highest being 97, recorded in 1966. Since then, there had been a decline in the number of these councils in the private sector. The number of Joint Management Councils in public and private sectors taken together was above 100 only in 1966, 1967 and 1968 and less than 100 in all the years under review. These figures are based on a reply to a question in the Rajya Sabha by the Deputy Minister of Labour on 4 June 1971.

A review report on the working of joint management councils for 1967 reveals that in most cases the size of the councils varied between 6 and 12 members—half being management’s representatives and the remaining half being workers’ representatives. Only in a few exceptional cases, the number of workers’ representatives exceeded that of the management’s representatives. The management’s representatives were invariably nominated by the management and the workers’ representatives by the unions concerned, but in some cases, the management nominated the workers’ representatives also.

In keeping with the provisions of the model constitution, the councils performed consultative, information-sharing, and administrative functions, but the subject-matters in all these fields widely varied amongst different councils. Some of the topics discussed by many of them included production and productivity, minimizing waste, gherao, welfare measures, blood donation, family planning, absenteeism and quality control. In some cases, questions of safety, canteen, house allotment, holidays, among others, were also discussed. While the deliberations of many JMCs were confined to the topics listed in the model agreement, others discussed many additional topics depending on the mutual consent of the parties concerned. A notable feature of the practice was that in most cases JMCs had been formed after written collective agreements between the parties. In spite of the regular directives from the government, the employers could not show much interest in establishing these councils in their enterprises. This has been true in both the public and private sectors.

Reasons for Partial Success

A glance at the number of undertakings having JMCs, available reports on their working, and pronouncements made by the employers and trade union leaders will clearly show that these councils, contrary to the expectations of the promoters of the scheme, could not make much headway. There was a great fanfare, show and publicity when JMCs were set up in the initial periods. However, as time passed, the scheme could not receive a willing acceptance even by those who had supported it earlier. The first National Commission on Labour in its report of 1969, also came to the conclusion ‘… the fact remains that the JMCs have not been a resounding success at any place either from the point of view of the employers or labour. If they had been, one or the other party would have worked for popularising it further’.8

Apart from the general handicaps underlying any such scheme of workers’ participation in the country discussed later in this chapter, there have been some particular obstacles in the adoption of JMCs and their smooth functioning. Some of the specific handicaps are listed below.

  1. Although representatives of the central organizations of employers and workers supported the scheme at national conferences and committees, they showed inadequate interest in making their affiliates enthusiastic about it.9
  2. Employers already having an effective system of consultation in their establishments, found a JMC in its existing form, superfluous.
  3. Many employers and trade unions became averse to having a multiplicity of joint bodies.
  4. In undertakings characterized by uncordial industrial relations, and absence of work committees or other joint bodies, grievance procedure or a recognized union, it was futile to expect the formation or smooth functioning of JMCs.
  5. Many trade union leaders thought that the JMCs diverted the attention of workers from other important issues such as wages, bonus and allowances, and others, and thus they were not enthusiastic about the success of the scheme.

Although, JMCs did not operate successfully in the country, the first National Commission on Labour hoped, ‘when the system of union recognition becomes an accepted practice, both managements and unions will themselves gravitate towards greater cooperation, in areas they consider to be of mutual advantage and set up a JMC’.10 There appears to be some force in the prediction of the National Commission on Labour that the system of compulsory recognition of trade unions will eventually accelerate the process of collective bargaining, and when collective bargaining is firmly established, the schemes of workers’ participation in management will find a favourable environment to operate.

BOARD-LEVEL PARTICIPATION (1970)

In 1970, the Government of India introduced a scheme of workers’ representatives on the Board of Directors of selected public sector enterprises, and nationalized banks. Although the scheme was considered a step forward in the direction of workers’ participation, it was soon realized that participation only at the top level was not adequate for an effective system of participative management. In most cases, the workers’ representatives have been unable to make any significant contribution in the process of decision-making as they often found their role as trade unionists, in conflict with that of board members.

WORKERS’ PARTICIPATION UNDER OLD 20-POINT PROGRAMME (1975)

In pursuance of the mandate under point 15 of the 20-point Programme of 1975 for the introduction of new schemes of workers’ association in industry, the Government of India framed a scheme of ‘Workers’ Participation in Industry at Shop-floor and Plant Levels’ on 30 October 1975. It was stated, ‘… it is only by providing for such arrangements for workers’ participation particularly at the shop floor and the unit level that the involvement of workers in the effective functioning of the unit and in improving production and productivity can be ensured’. The scheme was to be implemented through executive action in the first instance and legislation to be considered after adequate experience had been gained in the matter. The salient features of the scheme are explained below.

 

20-point Programme (1975)

A socio-economic programme introduced in 1975 at the instance of Indira Gandhi, the then Prime Minister, containing 20 specific measures, many of which are still in operation.

The scheme applies to the units of manufacturing and mining industries in the public, private and cooperative sectors, as well as to those run departmentally, employing 500 or more workers. The scheme provides for the establishment of Shop Councils at the shop/departmental level and Joint Councils at the enterprise level.

Shop Councils

The employer of every industrial unit employing 500 or more workmen is required to constitute a shop council for each department or shop, or one shop council for more than one department or shop, keeping in view the number of workers employed in different departments or shops.

Composition and Meetings

Shop Council is to consist of an equal number of representatives of employers and workers. The employer’s representatives are to be nominated by the management from amongst the persons from the units concerned. The representatives of workers are to be from amongst the workers actually engaged in the department or shop concerned. The number of shop councils and the departments to be attached to each council of the undertaking or establishment is to be decided by the employer in consultation with the recognized union or registered trade unions or with workers, as the case may be. The number of members of each council is to be determined by the employer in consultation with the recognized or registered trade union or workmen in a manner best suited to the local conditions in the unit, but the total number of members is, in general, not to exceed 12. In view of the existence of different practices in different industrial units, the scheme did not prescribe a uniform pattern of the constitution of shop councils, particularly in respect of the representation of workers. The management, in consultation with the workers, is to evolve the most suitable pattern of representation so as to ensure that the ‘representation of workers results in effective, meaningful and broad-based participation of workers’.

The decisions of the shop councils are to be on the basis of consensus and not by a process of voting. However, either party may refer an unsettled matter to the Joint Council for consideration. The decisions of a shop council are to be implemented by the parties normally within a period of 1 month. A decision of a shop council having a bearing on another shop or the undertaking or the establishment as a whole, is to be referred to the Joint Council for consideration and decision. A shop council is to function for a period of 2 years. The meetings of a shop council are to be held as frequently as necessary but at least once in a month. The chairman of the shop council is to be a nominee of the management, and the vice-chairman is to be elected by the worker members from amongst themselves.

Functions

A Shop Council is required ‘in the interest of increasing production, productivity and overall efficiency of the shop/department’ to attend to the matters specified in Box 14.4.

Box 14.4

MATTERS TO BE DEALT WITH BY SHOP COUNCILS (1975 SCHEME)

  1. Assist management in achieving monthly/yearly production targets

  2. Improvement of production, productivity and efficiency, including elimination of wastage and optimum utilization of machine capacity and manpower

  3. Specifically identify areas of low productivity and take necessary corrective steps at shop level to eliminate relevant contributing factors

  4. To study absenteeism in shops/departments and recommend steps to reduce them

  5. Safety measures

  6. Assist in maintaining general discipline in the shop/department

  7. Physical conditions of working, such as lighting, ventilation, noise, dust, and so on, as also reduction of fatigue

  8. Welfare and health measures to be adopted for efficient running of the shop/department

  9. Ensure proper flow of adequate two-way communication between the management and the workers, particularly on matters relating to production figures, production schedules and progress in achieving the targets.

Joint Councils

A Joint Council is to operate for the industrial unit as a whole. The composition of the Joint Council, the period of its operation, and the decision-making process are similar to those applicable to a shop council. In a Joint Council, the chairman is to be the chief executive of the unit. One of the members of the Joint Council is to be appointed as its secretary. A Joint Council is to meet at least once in a quarter. The decision of the Joint Council is to be implemented within 1 month, unless otherwise stated in the decision itself.

Functions

A Joint Council is to deal with the matters specified in Box 14.5.

Box 14.5

MATTERS TO BE DEALT WITH BY JOINT COUNCILS (1975 SCHEME)

  1. Optimum production, efficiency and fixation of productivity norms of man and machine for the unit as a whole.

  2. Functions of a Shop Council which have a bearing on another shop or the unit as a whole.

  3. Matters emanating from Shop Councils which remain unresolved.

  4. Matters concerning the unit or the plant as a whole, in respect of matters relating to work planning and achieving production targets; more specifically, tasks assigned to a Shop Council at the shop/department levels but relevant to the unit as whole will be taken up by the Joint Council.

  5. The development of skills of workmen and adequate facilities for training.

  6. The preparation of schedules of working hours and of holidays.

  7. Awarding of rewards for valuable and creative suggestions received from workers.

  8. Optimum use of raw materials and quality of finished products.

  9. General health, welfare and safety measures for the unit or the plant.

The scheme also emphasized the need for an effective two-way communication and exchange between the management and the workmen. It would only be, then, that ‘the workers would have a better appreciation of the problems and difficulties of the undertaking and of its overall functioning’. Each unit was, therefore, expected to devise a suitable system of communication within the undertaking. The Works Committees set up under the Industrial Disputes Act, 1947, were to continue to function as usual.

UNIT COUNCILS AND JOINT COUNCILS IN COMMERCIAL AND SERVICE ORGANIZATIONS IN THE PUBLIC SECTOR (1977)

In view of the encouraging response to the scheme at the shop-floor and plant levels in the manufacturing and mining units, the Government of India decided in 1977, to extend the idea of workers’ participation to commercial and service organizations in the public sector having large-scale public dealings. This was done to improve customer services. The commercial and service organizations covered under the scheme included hospitals; posts and telegraph offices; railway stations/booking offices; government provident fund/pension organizations; road transport corporations; State Electricity Boards; banks; insurance; institutions like Food Corporation of India, Central Warehousing and State Warehousing Corporations; public distribution system such as ration/fair price shops, super bazaars; all financial institutions; research institutions; distribution, commercial and marketing organizations of oil companies; air and inland water transport; shipping lines, ports and docks; Handicrafts and Handloom Exports Corporation; State Trading Corporations; MMTC; commercial and training organizations of the central and state governments; municipal services; milk distribution services; irrigation systems, tourist organization; public hotels and restaurants; and establishments of public amusements, and so on.

The basic objective of the scheme was to devise ‘a system whereby mutual trust and confidence are created between the workers and the management which would help promote active involvement of the workers in the work process. It would also motivate the workers to put in their best efforts through greater job satisfaction so as to render better customer service’. It was realized that ‘the success of the scheme would primarily depend upon the extent of realisation on the part of the management that the workers can also contribute significantly for affecting improvements in the work process and also on the initiative and interest that may be taken by it in encouraging workers’ participation’. The scheme, which was implemented through executive action to begin with, was to be flexible and evolved at the initiative of the management keeping in view the nature of each unit. However, the councils envisaged under the scheme were not to acquire the role of bargaining committees.

The scheme was applied to the lowest units of commercial/service organizations in the public sector, employing 100 or more persons. An organization/service was, however, free to apply the scheme to its units employing less than 100 workers. The scheme provided for the constitution of Unit Council at the unit level and Joint Councils at the division/regional/zonal level or in particular branches as considered necessary. The desirability of setting up an apex body for the entire organization or service would be considered after getting enough experience from the working of the Unit or Joint Councils.

Unit Councils

A Unit Council was to be set up in each unit of the organization/service employing 100 or more persons to discuss day-to-day problems and find solutions. Wherever necessary, a composite council could be formed to serve more than one unit or a council could be set up department-wise to suit the particular needs of an organization/service. The details concerning composition of the Unit Council, the decision-making process, the procedure for implementing the decisions, the reference of an unresolved question to the Joint Council, and the selection of chairman and vice-chairman were similar to those applicable in respect of the Shop Councils, set up for manufacturing and mining industries under the original scheme.

Functions

The main functions of the Unit Councils are shown in Box 14.6.

Box 14.6

FUNCTIONS OF UNIT COUNCILS IN PUBLIC SECTOR (1977 SCHEME)

  1. To create conditions for achieving optimum efficiency, better customer services in areas where there is direct and immediate contact between the workers at the operational level, and output including elimination of wastage and idle time and optimum utilization of manpower by joint involvement in improving the work system.

  2. To identify areas of chronically bad, inadequate or improper service and to take necessary corrective steps to eliminate the contributing factors in order to improve methods of operations.

  3. To study absenteeism and recommend steps to reduce it.

  4. To maintain discipline in the unit.

  5. To eliminate pilferage and all forms of corruption and to institute a system of rewards for this purpose.

  6. To suggest improvements in physical conditions of working such as lighting, ventilation, dust, noise, cleanliness, internal lay-out of counters, setting up of kiosks and customer service points, and so on.

  7. To ensure proper flow of adequate two-way communication between the management and the workers, particularly matters relating to the service to be rendered, fixation of targets of output and progress in achieving these targets.

  8. To recommend and improve safety, health and welfare measures for efficient running of the unit.

  9. To discuss any other matters which might have a bearing on the improvement of performance of the unit for ensuring better customer service.

Joint Councils

A Joint Council was to be formed at every division/regional zonal level or in a particular branch of an organization/service if considered necessary. The details concerning the composition, tenure, conditions of membership, selection of chairman, appointment of secretary, frequency of meetings and decision-making process of Joint Council were similar to those of the Joint Council formed for industrial undertakings. The number of Joint Councils to be set up for different types of services rendered was to be decided by the organization/service concerned in consultation with the recognized union, registered unions or the workers, as the case might be.

Functions

The functions of the Joint Councils in the commercial and service organizations are shown in Box 14.7.

Box 14.7

FUNCTION OF JOINT COUNCILS IN PUBLIC SECTOR (1977 SCHEME)

  1. Settlement of matters which remained unresolved by the Unit Councils and arranging joint meetings of two or more Unit Councils, for resolving inter-council problems.

  2. Review of the working of the Unit Council for improvement in the customer service and evolving methods for the best way of handling of goods, traffic, accounts and so forth.

  3. Unit level matters which have a bearing on other branches or on the enterprise as a whole.

  4. Development of skills of workmen and adequate facilities for training.

  5. Improvement in the general conditions of work.

  6. Preparation of schedule of working hours and holidays.

  7. Proper recognition and appreciation of useful suggestions received from the workers through a system of rewards.

  8. Discussion of any matter having a bearing on the improvement of performance of the organization/service for ensuring better customer service.

The general guidelines pertaining to the composition, the need for an effective communication and the procedural matters were the same as applicable to Joint Councils under the scheme of 1975. Although, soon after the announcement of the scheme, such forums came to be set up in a number of commercial and service organizations in the public sector, most of them became defunct within no time and many others disappeared soon.

SOME SUBSEQUENT DEVELOPMENTS

As mentioned in the beginning of the chapter, in 1976, Article 43A was inserted in the Indian Constitution under the section on Directive Principles of State Policy. These principles simply provide directives and guidelines to the state for adopting particular measures and are not mandatory as the Fundamental Rights are. The Directive Principles are not ‘justiciable’ but are ‘fundamental in governance of the country’ and it is the duty of the state to apply these principles in making laws. Article 43A provides that the state shall take steps, by suitable legislation or any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry.

Varma Committee (1977)

In 1977, the Government of India appointed a committee under the chairmanship of Ravindra Varma, the incumbent Minister of Labour to (i) study the existing statutory and non-statutory schemes of workers’ participation in management, (ii) recommend an outline of a comprehensive scheme of workers’ participation, especially keeping in view the interests of the national economy, efficient management and workers, and (iii) recommend the manner in which concept of ‘trusteeship’ and workers’ participation in ‘equity’ could be given a practical shape.

The committee, which submitted its report in 1979, recommended a three-tier system of participation and suggested legislation for the implementation of the scheme. The committee also recommended an optional scheme of equity participation and specified in detail the areas of operation of the various forums stipulated under the recommendations. The recommendations of the committee were considered in 1980, by the Labour Ministers’ Conference which generally endorsed the recommendations. However, owing to sharp differences of opinion relating to a few pertinent issues such as procedure to be followed in the selection of workers’ representatives, the matter was left to the government for decision. No serious effort was, however, made to implement the recommendations of the committee.

SCHEME OF EMPLOYEES’ PARTICIPATION IN PUBLIC SECTOR UNDERTAKINGS (1983)

After reviewing the progress of various schemes of workers’ participation in management, a new scheme called Employees’ Participation in Management was formulated in 1983. The scheme, which is also currently in force, is applicable to all central public sector enterprises except those which are specifically exempted. The scheme envisages the constitution of bipartite shop-floor and plant level forums and, wherever possible, establishment of board-level forum also. The salient features of the scheme are described below.

Composition

Both the shop and plant level forums consist of representatives of management and workers in equal numbers. The size of the forums will vary between 10 and 20, depending on the size of the workforce in the undertaking. The exact number of the members in the forum will be decided by the management in consultation with the trade union leaders in the undertaking. The representation of workers on the forums will cover different categories of workers, for example, skilled and unskilled, technical and non-technical. Personnel holding position of management will be excluded, but supervisory categories such as foremen and chargemen will be covered. The management and trade union leaders are required to ensure that there is adequate representation of women where they constitute 10 per cent or more of the total workforce.

Functions

Shop-level Forum

The areas of deliberations of shop-level forums include production facilities, storage facilities in a shop, material economy, operational problems, wastage control, hazards, safety problems, quality improvement, cleanliness, monthly targets and production schedules, cost reduction programme, formulation and implementation of work-system and design, group working, and welfare measures related to the shop.

Plant-level Forum

The plant-level forums are to deliberate in operational, economic and financial, personnel, welfare and environmental areas.

The operational areas of the plant-level forums include (i) evolution of productivity schemes, (ii) planning, implementation, fulfilment and review of monthly targets and review, (iii) supply of materials and shortfalls, (iv) storage and inventories, (v) house-keeping, (vi) improvement in productivity, (vii) encouragement to suggestions, (viii) quality and technological improvement, (ix) machine-utilization, knowledge and development of new products, (x) operational performance figures, (xi) matters not resolved at the shop-level or those concerning more than one shop, and (xii) review of the working of the shop-level bodies.

The economic and financial areas of deliberations at the plant-level forum comprise: (i) profit and loss statements and balance-sheets, (ii) review of operating expenses, financial results and cost of sales, and (iii) plant performance in financial terms, labour and managerial costs, market conditions, etc.

Personnel matters to be dealt with by the forum include (i) absenteeism, (ii) special problems of women workers, (iii) initiation and supervision of workers’ training programmes and (iv) administration of social security schemes.

The welfare areas cover (i) implementation of welfare schemes, medical benefits and transport facilities, (ii) safety measures, (iii) sports and games, (iv) housing and township administration, (v) canteens and (vi) control of gambling, drinking, indebtedness, and so on. The environmental matters include (i) extension activities and community development projects and (ii) pollution control.

Board-level Forum

At the board-level forum when constituted, workers’ representatives will participate in all the deliberations of the board. The board-level forum can also review the work of shop and plant-level forums.

The scheme also envisages the establishment of a tripartite machinery in the Ministry of Labour for monitoring the implementation of the scheme, and also for reviewing its working from time to time. The scheme did not suggest the adoption of legislation immediately, but such a step could be considered after adequate experience had been gained in the working of the scheme. The state governments were also requested to introduce the scheme in their own public sector undertakings. In 1995, ‘out of 236 central public sector undertakings which have been monitored, 110 enterprises have implemented the 1983 scheme or earlier schemes of the Ministry of Labour at the shop floor and plant level, 63 enterprises have their own participative forums, 18 enterprises could not implement the scheme due to problems regarding method of representation of workers and 23 enterprises could not consider the scheme suitable as they have non-manufacturing units and employ only a few employees’.11 However, in view of the adoption of new economic and industrial policies in 1991, which is characterized by privatization, liberalization and globalization and consequent measures of disinvestment of equity of selected public sector undertakings and squeezing of the areas hitherto reserved for the public sector (for details see Chapter 5) and many other related developments, it will be futile to expect a satisfying future of the scheme.

JOINT COUNCILS IN GOVERNMENT SERVICE

A proposal to set up a type of machinery on the pattern of Whitley Councils for government departments was recommended by the Second Pay Commission which also recommended provision of compulsory arbitration.12 After accepting the recommendations in principle, the Government of India took action to set up a machinery for joint consultation and arbitration in consultation with the representatives of the employees. The object of the scheme was ‘promoting harmonious relations and for securing the greatest measure of cooperation between the government in its capacity as employer and the general body of its employees in matters of common concern and with the object further of increasing the efficiency of public service’. The success of similar schemes in railways, posts and telegraphs and defence establishments also provided an impetus. A voluntary scheme was eventually drawn and put into operation in October 1956. The main features of the scheme are explained below.

 

Whitley Council

A joint labour-management body, the formation of which was recommended in 1917 by the Whitley Committee, a parliamentary committee of the British government. Whitley Councils operated on three levels: National Joint Industrial Council, District Joint Industrial Councils and Works Committees. These groups were to be made up of an equal number of representatives from each group, and were to deal with all problems affecting the industry. These councils had written constitutions stating the functions, objectives, eligibility for membership and other related matters.

Coverage

The scheme covers all regular civil employees of the central government other than those (i) in classes I and II (except Central Secretariat Services and comparable services in the headquarters organization of the government); (ii) persons in industrial establishments employed mainly in managerial or administrative capacity; and (iii) those who being employed in supervisory capacity draw salary in scales going beyond the prescribed maximum, and employees in Union Territories and police personnel.

Structure

The scheme provides for the formation of a national council, departmental councils, regional and office councils. Each council consists of nominees of the government who form the official side and representatives of the unions or associations of employees recognized for the purpose.

Functions

The scope of the councils include all matters relating to conditions of service and work, welfare of the employees, and improvement of efficiency and standards of work. However, so far as the questions of recruitment, promotion and discipline are concerned, consultation is to be confined to matters of general principles only. The schemes further provide for limited compulsory arbitration on pay and allowances, weekly hours of work, and leave of a class or grade of employees. The Board of Arbitration set up in 1968 functions within the administrative control of the Ministry of Labour. The arbitration award is binding unless rejected by the Parliament.

The national council deals with matters affecting central government employees generally and those relating to two or more departments not grouped together in a single departmental council. A departmental council generally deals with such matters which affect the employees in the department concerned.

JOINT COUNCILS IN RAILWAYS, POSTS AND TELEGRAPHS, AND DEFENCE ESTABLISHMENTS

Joint consultative machineries combining in them functions of ‘cooperation, consultation, discussion and negotiation’ have been in operation in Indian Railways, Posts and Telegraphs and Defence establishments even prior to the establishment of Joint Councils in pursuance of the recommendations of the Second Pay Commission. In practice, however, the main function of the joint machineries in these industries has been that of negotiating for resolving differences or disputes.

Railways

In the Indian Railways, a Permanent Negotiating Machinery (PNM) was set up in 1952 with the consent of both the All India Railwaymen’s Federation and the National Federation of Indian Railwaymen. The main objective behind the establishment of the PNM was ‘maintaining contact with labour and resolving disputes and differences which may arise between them and the Administration’. The PNM has a three-tier structure, that is, (i) at the railway level—the recognized unions have access to the district/divisional officers and subsequently to officers at the headquarter of the railway concerned; (ii) at the next tier, matters not settled at the district/division level are taken up by the respective federations with the Railway Board; and (iii) if agreement is not reached between the federation and the Railway Board and the matters are of sufficient importance, reference may be made to an ad hoc tribunal composed of representatives of the railway administration and workers, presided over by an impartial chairman.

Posts and Telegraphs

In the Posts and Telegraphs Department there are standing arrangements under which employees’ demands and difficulties are discussed periodically at the divisional and circle levels. Matters not settled at these levels are taken up by the central union to the Posts and Telegraphs Boards.

Defence Establishments

A Joint Negotiating Machinery was set up by the Ministry of Defence in 1954 in order to promote settlement of disputes between the administration and civilian employees in defence establishments. This scheme has also a three-tier set up. The three levels are: (i) the unit/factory depot level, (ii) the level of DGOF/naval headquarter/air headquarter/command headquarter/DTD and (iii) the Ministry of Defence level.

WORKERS’ PARTICIPATION IN THE PRIVATE SECTOR

Here, it is necessary to discuss briefly the efforts of some management and unions in the private sector who initiated labour-management cooperation schemes even prior to the efforts at the governmental level. These schemes have been the outcome of comprehensive collective agreements reached between the management and labour.

Labour-management Cooperation in TISCO

By their supplemental agreement of 8 January 1956, the Tata Iron and Steel Company Ltd. and the Tata Workers’ Union agreed to set up the following joint councils in order to provide for a closer association of employees with the management:

  1. Joint Departmental Councils
  2. Joint Works Council for the plant as whole
  3. Joint Town Council
  4. Joint Consultative Council of Management at the top-most level

The company and the union agreed that the representatives of employees to these councils were, in the first instance, to be nominated by the union, but steps were to be taken, gradually, to introduce the principle of election by a secret ballot. The representatives of the management were to be nominated by the management.

Joint Departmental Councils

The agreement provides for the setting up of a Joint Departmental Council in each department of the works. Such councils consist of 2 to 10 representatives of management and an equal number of representatives of the works-employees, depending on the size of the department. The representatives of the works-employees are nominated by the union from among the employees of the company. The functions of these councils are shown in Box 14.8.

Box 14.8

FUNCTIONS OF JOINT DEPARTMENTAL COUNCILS IN TISCO

  1. To study operational results and current and long-term departmental problems; to advise on steps necessary at the departmental level; to promote and rationalize production; improve methods, lay-out and process; improve productivity and discipline; eliminate waste; effect economies with a view to lowering cost; eliminate defective work and improve the quality of product; improve the upkeep and care of machinery, tools, and instruments; promote efficient use of safety precaution and devices; promote employees’ welfare and activities like sports and picnics; encourage suggestion; improve working conditions and better functioning of the department.

  2. To implement the recommendations and decisions of the Joint Consultative Council of Management or the Joint Works Council as approved by the management.

  3. To refer any matter to Joint Works Council for their consideration and advice.

Joint Works Council

The agreement provides for the establishment of Joint Works Council consisting of 12 representatives of the management and an equal number of representatives of the employees. The representatives of the employees are to be nominated by the union from amongst the employees of the company but exclusive of those covered by the Joint Town Council except that one such representative may be an officer of the union, who is not the employee of the company. The representatives of the management are to be nominated by the management.

The functions of the Joint Works Council are the following:

  1. The same as those of the Joint Departmental Council at the works level.
  2. To plan and supervise the work of the following committees within the framework of duly approved budgets and company rules and procedures:
    1. Central Canteen Managing Committee
    2. Welfare Committee
    3. General Safety Committee
    4. Safety Appliances Committee
    5. Suggestion Box Committee
  3. To follow up the implementation through the appropriate Joint Departmental Council of its recommendations or decision approved by the management;
  4. To refer any matter to the Joint Consultative Council of the Management for their consideration or advice;
  5. To advise on any matter referred to it by the Joint Departmental Councils or by the Joint Consultative Council of Management.

Joint Town Council

The Joint Town Council consists of equal number of representatives of management and employees. The employees’ representatives are to be nominated by the union from among the employees of the company in the town, medical health departments including the education department, except that one of such representatives may be the officer of the union who is not an employee of the company.

The functions of the Joint Town Council are as follows:

  1. To advise on steps necessary to promote, rationalize and improve output and methods of work, reduce costs, improve quality, effect economies, reduce waste and ensure improved working conditions and better functioning of the organization as a whole.
  2. To advise on social welfare activities in the town within the framework of duly approved budgets and company rules and procedures.
  3. To follow up the implementation of its recommendations as decisions approved by the management.
  4. To refer any matter to the Joint Consultative Council of Management for their consideration and advice.

Joint Consultative Council of Management

The Joint Consultative Council of Management also consists of representatives of management and employees in equal number. The representatives of employees are to be nominated by the union from amongst the employees of the company except that not more than two of such representatives may be officers of the union, who are not the employees of the company.

The functions of the Joint Consultative Council of Management are as shown in Box 14.9.

Box 14.9

FUNCTIONS OF JOINT CONSULTATIVE COUNCIL OF MANAGEMENT IN TISCO

  1. To advise management on all matters concerning the working of the industry in the fields of production and welfare.

  2. To advise management with regard to economic and financial matters placed by it before the council, provided that the council may discuss questions dealing with general economic and financial matters concerning the company, which do not deal with questions affecting the relations of the company with shareholders or managerial staff or concerning taxes or other matters of confidential nature.

  3. To consider and advise on any matter referred to it by the Joint Works Council or the Joint Town Council.

  4. To follow up the implementation through the Joint Works Council or the Joint Town Council of any recommendations made by it and approved by the company.

The agreement between the TISCO and Tata Workers’ Union providing for the closer association of workers with management is the most detailed of all such agreements in the country. As TISCO has been the largest single employer in the private sector, it is natural that in such a large organization, relations become more formalized and standardized.

The arrangement of joint councils is hierarchical with the Joint Departmental Council at the bottom and the Joint Consultative Council of Management at the top, with information and recommendations flowing both ways.

The joint councils are essentially advisory in nature; their functions being to advise the management, and the company has reserved to itself the right to accept or reject the recommendations and suggestions of the joint councils. However, it should be noted that it is not the formal constitution and functions of the councils but the spirit in which they work that ultimately determines their effectiveness in guiding the management. In practice, most decisions of the councils are enforced by the management.

Labour-management Cooperation in the Indian Aluminium Company

By their agreement of 31 August 1956, the Indian Aluminium Company Ltd. Belur Works and the Indian Aluminium Belur Works Employees’ Union decided to set up a joint consultation machinery. The parties, realizing that the solution of problems and settlement of disputes and grievances can be best achieved by joint consultation which also contributes towards better understanding and relations, agreed to set up five joint committees as:

  1. Joint Personnel Relations Committee
  2. Joint Production Committee
  3. Joint Job Evaluation Committee
  4. Joint Standards Committee
  5. Joint Canteen Committee

Composition and Functions of the Committees

The first three of these committees consist of equal number of members nominated by the company and the union. For the last two, the principle of equality of representation is not mentioned. These are to consist of competent representatives nominated by the company and the union. These committees are consultative and advisory in character and have no executive authority. They study and discuss problems and advise the management accordingly.

Joint Committees in TELCO and Tata Motors Ltd.

The settlements reached between Telco and Telco Workers’ Union from 1982 onwards provided for the establishment of a number of joint committees, most of which were retained in subsequent settlements reached between the Tata Motors Ltd. and Telco Workers Union. These are described in Box 14.10.

Box 14.10

JOINT BODIES IN TELCO/TATA MOTORS LTD.

  1. Joint management council

  2. Joint divisional councils

  3. Joint departmental councils

  4. Divisional grievance committees

  5. General safety committee

  6. Canteen advisory committee

  7. House allotment committee

  8. General welfare committee

  9. Medical advisory committee

  10. Central works committee.

The Central Works Committee is concerned mainly with the speedy redressal of grievances. The management and the union have agreed to cooperate in a manner that the joint committees meet regularly and function effectively as per their constitution.

Forums of workers’ participation in management on the basis of collective agreements/settlements have also come to be established in a number of other companies in the private sector such as Larsen and Toubro Ltd. and Bata Shoe Company.

PARTICIPATION OF WORKERS IN MANAGEMENT BILL, 1990

One of the items of the manifesto of the United Front of the political parties, which dislodged the Congress (I) government at the centre in 1989, was the adoption of legislation for ensuring an effective participation of management in industry. Accordingly, a Bill, known as ‘Participation of Workers in Management Bill’ was introduced in the Rajya Sabha on 30 May 1990. This was the first comprehensive legislative effort towards the promotion of workers’ participation in management in the country. The Bill became a subject of discussions at various forums, and while discussions and comments were in progress, the United Front government at the centre fell. The Bill could not be passed as yet, but it represents an important aspect of governmental policy in regard to promotion of workers’ participation with an element of compulsion. The contents of the Bill are described below.

Objects and Reasons

The objects and reasons of the Bill state:

  1. Article 43A of the Constitution requires the state to take steps, by suitable legislation or any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry. So far, all the schemes pertaining to participation of workers in management have been non-statutory. At present, there is no central law on the subject. The non-statutory schemes have not been able to provide an effective framework for a meaningful participation of workers in management at all levels.
  2. The Bill, inter alia, intends to:
    1. Provide for specific and meaningful participation of workers in management at shop-floor level, establishment level and board of management level in industrial establishments;
    2. Provide for formulation of one or more schemes to specify detailed criteria such as the manner of representation of workmen on the shop-floor and establishment level councils, and of workmen and other workers on the board of management, nomination of representatives of employers on the shop-floor and establishment level councils, procedure to be followed in the discharge of the functions by a council, the manner of filling the vacancies amongst the chairpersons and members in respect of shop-floor and industrial establishment councils and conducting their business;
    3. Provide for the principle of secret ballot for determining the representation of workmen on the shop-floor and establishment level councils, and of workmen and other workers on the board of management;
    4. Provide for rules to specify the power an Inspector may exercise, the number of members on the Monitoring Committee and the manner in which they shall be chosen and so on.
MAIN PROVISIONS OF THE BILL

The Bill envisages a three-tier system of workers’ participation in management in the form of

  1. Shop-floor Council
  2. Establishment Council
  3. Representation on the Board of Management.

Shop-floor Council

The Bill provides for the constitution of Shop-floor Council in every establishment in accordance with the rules made by the Central Government.

Composition

A Shop-floor Council is to consist of equal number of representatives of employers and workmen. The number of members is to be determined by the government in consultation with the employer, after taking into account the total number of workmen in the shop-floor, the total number of employer’s representatives in the shop-floor and the number of levels of authority in the shop-floor.

The employer’s representatives in a Shop-floor Council are to be nominated by the employer. The representatives of workmen are to be elected by workmen of the establishment by secret ballot or nominated by registered trade unions as specified in the scheme. The chairperson of the Shop-floor Council is to be chosen by and from amongst the members themselves. The tenure of a Shop-floor Council is 3 years. A Shop-floor Council will meet as and when necessary, but not less than three times in a year.

Powers and Functions

The powers and functions of Shop-floor Councils as envisaged in Schedule I of the Bill are the same as those specified for shop-level forum under the Scheme of Employees’ Participation in Public Sector Undertakings (1983).

Establishment Council

An Establishment Council is to be set up in every industrial undertaking at the establishment level. The provisions of the Bill relating to the composition, number of representatives of employer and workmen, method of selection of members, selection of chairperson, tenure, periodicity of meetings and others are similar to those applicable to Shop-floor Councils.

The powers and functions of the Establishment Councils as envisaged in Schedule II of the Bill are the same as apply to the plant-level forums under the Scheme of Employees’ Participation in Public Sector Undertakings (1983).

Representation on Board of Management

The Bill also provides for the representation of workmen and other workers on the board of management of every corporate body owning an industrial establishment. The representatives of workmen are to constitute 13 per cent and those of other workers 12 per cent of the total strength of the board of management. The representatives of workmen on the board are to be elected by secret ballot or nominated by registered trade unions and those of other workers by secret ballot or in a manner laid down in the scheme. The term of office of these representatives on the board will be 3 years. The Board of Management is empowered to review the functioning of the Shop-floor and Establishment Councils.

Other Provisions

The Bill provides for the constitution of a monitoring committee for reviewing and advising upon matters arising out of the administration of the Act and rules. The Monitoring Committee will be tripartite in nature consisting of representatives of government, employers and workers. The Bill also seeks to delete Section 3 of the Industrial Disputes Act, 1947, which deals with Works Committee. The detailed schemes of participation are to be framed by the central government but the rules can be made both by the central and state governments, in respect of establishments in their respective jurisdictions. The Bill also provides for the appointment of Inspectors and specifies penalties for violating the provisions of the Act.

The Bill has not been passed till date. However, it is still in the process of examination in the Ministry of Labour. A large number of notices for amendment of different provisions of the Bill were received from several members of Rajya Sabha. In 1994, the Bill was referred to the department-related Parliamentary Standing Committee on Labour and Welfare for examination and report. The committee suggested that the government might review the Bill taking into account the need for incorporating necessary amendments in the context of the changing socio-economic scenario of the country. In 1998, the newly constituted committee desired that ‘comments may be invited afresh from the employers and trade unions on the Bill and amendment notices’.13 In view of obvious hurdles in the way of participative management, especially on a statutory basis, it is difficult to predict the future of the Bill.

RECOMMENDATIONS OF THE SECOND NCL (2002)

The second National Commission on Labour (2002) has recommended the coverage of workers’ participation in management under labour relations legislation. The commission held, ‘With globalization the time has come when we cannot leave the question of participative management to be determined by the management or the trade unions. We believe, therefore, that the time has come for the Government to enact a law to provide for participatory forums at all levels keeping in mind the necessity to ensure that the responsibility and freedom to take managerial decisions are not fragmented to the detriment of the enterprise, the social partners or society at large’.14

HURDLES TO WORKERS’ PARTICIPATION IN MANAGEMENT IN INDIA

The foregoing discussion on the various schemes of workers’ participation in management in the country clearly reveals that most of them have proved ineffective in achieving the objectives for which they had been set up. It has also been explained that they have generally been government-sponsored schemes launched primarily on non-statutory basis, but threats of statutory compulsion have been emphasized from time to time. Numerous factors have been responsible for the failure of the schemes, many of which have been explained in the relevant sections. It is proposed here to make a mention of the more glaring of the factors and forces that have hindered the growth of participative management in the country.

  1. Firstly, the fundamental difficulties in the way of workers’ participation in management lie in the concept itself. There is a basic conflict of interests between the workers and the owners of business enterprises. It is futile to expect that employers and trade unions, who wage a battle around a bargaining table, will sink their differences and become partners in the same enterprise on another table. Participation involves parting with power. This applies to both management and trade unions. Managements have been reluctant to part with their authority and prerogative to manage their enterprises. Similarly, many trade unions have not been prepared to divest themselves of their power manifested in bargaining and pressure and cooperate with management by entrusting decision-making to forums of cooperation,15 although quite a number of them consider workers’ participation an instrument of promoting industrial democracy. The conflict of interests and goals bedevils the working of schemes of workers’ participation in management.
  2. Secondly, multiplicity of trade unions and factionalisms has been a serious obstacle in the way of workers’ participation in management in the country. In view of the claims and counter-claims, apathy and willingness, hostility and cooperation displayed by rival unions or their factions, designation of workers’ representatives on the participative forums often becomes a very difficult task. Different unions and their factions have different perceptions of participation and, very often, there are overt clashes in their stand. Even G. Ramanujam, the then general secretary of INTUC, while addressing a seminar in 1982 admitted, ‘for the successful implementation of a participative management scheme, existence of multi-trade unions is a big hurdle’.16 The All India Organisation of Employers in a seminar held in 1987 suggested an amendment of the Trade Unions Act, 1926, ‘to contain proliferation of trade unions’.17
  3. Many employers and trade unions in the country have considered the various schemes of workers’ participation in the country, as having been imposed on them by the government. The government, with its anxiety for maintaining cordial relations between labour and management, increasing production and productivity, achieving planned targets and accelerating the pace of economic and industrial development, came forward with different schemes of workers’ participation in management, at different intervals of time. In spite of the general acceptance of the importance of these participative forums, many employers and trade unions still consider them as an imposition from outside. Experience has shown that where the schemes have been the outcome of collective agreements, they have been more successful. ‘Any scheme of workers’ participation involves attitudinal change, both for workers and employers and, as such, should be voluntary. Its enforcement by law or compulsion would thwart the very purpose of the scheme and would Act as a serious constraint on its successful implementation’.18
  4. Fourthly, both managements and trade unions have often complained of a plethora of joint bodies in the Indian industries, for example, works committees, joint management councils, shop councils, unit councils, plant councils, establishment councils, canteen committees, production committees, safety committees, welfare committees, grievance committees and so on. Thus, it is natural for them to become bewildered by this multiplicity of joint bodies. Very often, there is confusion and duplication of functions.
  5. Another hurdle in the way of workers’ participation in management in the country has been lack of specific arrangements for sharing the gains of participation. Workers are assured in a vague manner, that they would gain if production increases and quality of products improves as a result of participation, but vague and remote expectations cannot be expected to enthuse the workers. A prior arrangement for sharing the fruits of participation is a necessary condition for the success of the scheme on a lasting basis. Such an arrangement will give a definite assurance to the workers that they would not have to fight round the bargaining table for a share in the gains of participation.
  6. The idea of workers’ participation in management in India does not appear to be the result of an inner urge on the part of the employers and workers. There is a greater realization in the government circles of the utility of workers’ participation in management than among employers and workers. That is the reason why it is the government which is more anxious for the establishment of the schemes of participation than the parties which have to work them out. However, displaying an attitude of cooperation with the government in maintaining industrial harmony, most national organizations of employers and trade unions supported the schemes at the national forums, but they have generally failed to enthuse their affiliates about the usefulness of the schemes. The various schemes experimented within the country are mostly for the shop, plant and enterprise levels in which the primary and local unions have to play the main role. In view of their indifference towards the schemes, it is futile to expect their smooth establishment and functioning.
  7. Lastly, it has also been realized that lack of education and training with regard to the content, process, utility and other relevant aspects of participation have also proved an impediment to the growth of workers’ participation in the country. The success of the scheme depends, in large part, on an unbiased understanding of the problems of the enterprise and appreciation of the views of one party by the other, but such a condition is hardly prevalent in industrial enterprises in the country. That is why, the Central Board for Workers’ Education has started undertaking special training and education programmes for promoting workers’ participation in management in the country.19

For the successful initiation and functioning of the institutions of workers’ participation in management, serious attention has to be given to the removal of the hurdles mentioned above. Effort should be made to enthuse the management and workers at the local or enterprise level to understand the schemes and to derive concrete benefits from them. The governmental efforts should be confined to giving guidelines and to remove the impediments in the way, for example, reducing trade union rivalry by amending trade union laws, regulating procedural aspects of collective bargaining, expanding workers’ education programme and evolving a system of sharing the fruits of participation.

SUMMARY
  1. In contrast to collective bargaining which involves joint decision-making in matters of admittedly different interests, labour-management cooperation/workers’ participation in management represents joint decision-making in matters of admittedly common interests.
  2. The main goals of labour-management cooperation/workers’ participation in management are (i) increasing productivity and efficiency, (ii) promoting industrial democracy and (iii) avoiding conflict and friction.
  3. Different degrees or forms of labour-management cooperation comprise (i) information-sharing, (ii) problem-solving, (iii) joint consultation and (iv) workers’ participation in management.
  4. The main schemes of workers’ participation in management sponsored by the government in the country have comprised (i) Works Committees (1974), (ii) Joint Management Councils (1958), (iii) Board-level Participation (1970), (iv) Shop Councils and Joint Councils under old 20-point Councils in Commercial and Service Organizations in the Public Sector (1977), (vi) Institutions of Employees’ Participation in Management for Public Sector Undertakings (1983) and (vii) Joint Councils in Government Services. The Participation of Workers in Management Bill, which could not be passed, envisaged a three-tier system in the forms of (i) Shop-floor Council, (ii) Establishment Council and (iii) Representation on the Board of Management.
  5. Schemes of workers’ participation in management worked out under collective agreements/settlements have been operating successfully in quite a few industrial establishments in the private sector. Of these, the schemes in operation in the TISCO are particularly significant. The main joint bodies functioning in the company are (i) Joint Departmental Councils, (ii) Joint Works Council for the plant as a whole, (iii) Joint Town Council and (iv) Joint Consultative Council of Management at the top-most level. A number of joint bodies have also been functioning in the Tata Motors Ltd. and Larsen & Toubro Ltd.
  6. In 1990, the participation of workers in Management Bill was introduced in the Rajya Sabha. The Bill, which has not been passed, provides for a three-tier system of workers’ participation in management consisting of (i) Shop-floor Council, (ii) Establishment Council and (iii) Representation on the Board of Management.
  7. The main hurdles in the way of workers’ participation in management in the country have been (i) reluctance of both management and trade unions to part with their power, (ii) multiplicity of trade unions and factionalism, (iii) general feeling among many employers and trade unions that the schemes have been imposed by the government, (iv) state of confusion resulting from the existence of numerous joint bodies in industries, (v) uncertainties involved in regard to sharing of the fruits of increased productivity and participation, and (vi) lack of awareness among workers regarding the benefits of the schemes.
QUESTIONS FOR REVIEW
  1. Explain the concept of workers, participation in management and its benefits.
  2. Describe the various degrees and forms of labour-management cooperation.
  3. Present a comparative picture of the composition and functions of Works Committees and Joint Management Councils.
  4. Give a brief description of government-sponsored schemes of workers’ participation in management in the country.
  5. Describe the salient features of schemes of workers’ participation in management in private sector undertakings and explain the reasons for their successful functioning.
  6. Summarize the provisions for the Participation of Workers in Management Bill, 1950. What can be the reasons for delay in its adoption as an Act?
  7. Examine the hurdles in the way of effective implementation of government-sponsored schemes of workers’ participation in management in the country.
KEY TERMS

 

Conjunction

Golden rule of capitalism

20-point programme

Whitley Council

Case Study 1

Nature of functions of Joint Management Councils

The Model Agreement resulting from the deliberations of the sub-committee constituted by the Indian Labour Conference in 1957 specified a number of functions of the Joint Management Councils. These included such areas as: (i) welfare measures, (ii) general economic situation of the concern, (iii) administration of standing orders, (iv) new methods of production and manufacture, (v) state of market, (vi) annual balance sheet, profit and loss statement, (vii) vocational training and apprenticeship, (viii) supervision of safety measures, (ix) plans of expansion, (x) closure or cessation of operations and (xi) schedules of working hours and breaks.

Questions

In what areas were the councils expected to perform consultative functions?

What were the areas expected to be covered under the information-receiving and suggestion-making functions of the councils?

How will you identify the areas in which the councils were to perform administrative functions?

Case Study 2

What are the types of joint bodies in industry?

A number of joint bodies with various names have been in operation in the country. These include: works committees, joint management councils, joint departmental councils, joint town council, canteen committee, general safety committee, joint production committees, shop councils, unit councils, permanent negotiating machinery, joint works councils, welfare committee and board-level participation. Many of these have been government-sponsored, while others were set up under collective agreements/settlements in the privately owned enterprises.

Questions

What joint bodies have been constituted under labour law?

What bodies have been constituted under government-sponsored schemes?

In what ways are the government representatives associated with the government-sponsored bodies?

How will you identify the joint bodies in operation in the private sector enterprises?