CHAPTER 10
Workers and Employees
Indian literature and movies are full of incidents related to labour disputes-migrant workers who
have come to the big city in search of a better life. Remember Amitabh Bachchan in Deewar?
He would light a bidi and sit on a charpoy after a hard day's work as a millworker. Bachchan
also played the role of a coal miner in Kala Patthar, a movie based on the 1970s disaster in
Chasnala when the coal mines were flooded with water. Another such film was Dilip Kumar-
starrer Sagina, a Hindi remake of the Bengali movie Sagina Mahato, which was based on the
labour movement of West Bengal in the 1940s.
These movies were slices of real history mixed with the spices of fiction to give a forceful
impact. Notwithstanding the story, almost all of them portrayed the class difference the rich
owners versus the poor workers. Since India became independent and the focus shifted to the
egalitarian values and equality from the British model of just maintaining law and order and
collecting revenue, the tussle between the rich and poor, particularly between the urbanized mill
or factory owners and the uneducated and unskilled labourers, compelled lawmakers to protect
the interests of the weak and downtrodden. Several tect have been made for this very purpose.
However, the educated classes, employed usually in the managerial and administrative roles,
typically did not get, and do not get the protection of the law. It is assumed that people
belonging to the educated class are empowered and can take care of their rights on their own.
The role of the courts in interpreting the labour laws in the country has gone through perceptible
changes from time to time with too much inclination towards the protection of labour rights at
one point of time, to a slightly more balanced understanding keeping in mind the interests of the
job-givers. With the economic liberalization in early 1990s, there has been a very strong
demand to liberalize labour laws in the country, which can make hiring and firing easy. Of
course, in a big country like India with massive unemployment and unthinkable poverty, there is
a need not to align with the full freedom of hiring and firing. There has to be a certain restriction
on the powers of the employers so that the workers can have a sense of safety and can always
consider the legal system in the country, howsoever slow it may be, to come to their rescue in
times of need.
It is interesting that not only in India but in developed countries such as the UK as well there is
need for the protection of rights of workers and at times when there are questions raised about
access to justice, the highest courts in welfare jurisdictions tend to open their doors freely and
easily to deprived sections. Let us examine a recent case.
UK SUPREME COURT: EMPLOYEES AND ACCESS TO JUSTICE, 2017
On 26 July 2017, the UK Supreme Court in a landmark judgment-Unison's case-gave
employees unimpeded access to employment tribunals. On the first reading, it appears
uninteresting. But it is really important, considering that we are talking about the United
Kingdom, the so-called Mecca of the rule of law.
It is easy to assume that access to justice in such a place would be easy, simple, inexpensive,
fair and unhindered. However, surprisingly and shockingly, employees were made to pay
through the nose-by a change in the law in 2013-for bringing any legal action against their
employers in an employment tribunal (ET), and in appeal in the Employment Appeal Tribunal
(EAT).
Four years ago, the government decided to make certain changes by bringing into force the
Fees Order, which required a claimant to pay certain fees-which was quite a substantial amount
for filing a case either in the ET or EAT. This sounds absolutely unbelievable for us in India as
employees are typically considered to have a relatively low bargaining power vis-à-vis
employers, and obviously cannot afford to pay substantial sums of money to get the matter
heard in a legal forum, But somehow such an order was made and executed for the last four
years or so. Prior to this order, employees were free to file without paying any fees. A small fee
as administrative charges, whether in India or the UK or anywhere else, can be justified. But the
government had brought in the Fees Order with the stated purpose of transferring the cost
burden of the tribunals from taxpayers to users.
Economically, it makes sense. However, seen in the larger context of governance and the
provision of justice to all, especially in an egalitarian society, this decision was catastrophic. And
the quick compilation of data proved so beyond any doubt. The number of matters filed by
employees in the last few years, both in ET and EAT, dropped ridiculously low, not because
employers started behaving magnanimously all of a sudden, or that no employee had
grievances but due to the high fees. This surely can't be said to be the purpose of any
legislative or executive action in a country working towards the cherished goal of public welfare.
In India, consumer courts and several other tribunals- including the equivalent of employment
tribunals in the UK such as labour courts and industrial tribunals-do not charge any fees. Who
pays for them? The taxpayers! Their existence and working is not simply evaluated on monetary
and economic terms. These institutions are not there for mere transactional purposes. They
undoubtedly are an integral part of the socioeconomic and legal fabric of the nation, providing
immense confidence to the common man. There is, thankfully, no question ever raised about
users defraying the expenses of their forbid it ever happens in the country.
working. God In the late 1970s, the Supreme Court of India opened its doors for everyone by
providing the simplest form of moving the higher courts-Public Interest Litigation. Obviously,
there are no fees to be paid. One really understands that at times it is a burden on the courts’
time and the judges have to exercise discretion to throw out frivolous matters and impose fines
on habitual filing of such petitions. But there is no blanket ban on filing, or an imposition of such
heavy fees that would defeat the very purpose of providing access.
Thankfully, in about four years, the aberrational scheme to make sufferers and the weak pay for
getting their claims heard in a legal forum was held to be unlawful and quashed. It will send the
right signal to other jurisdictions globally, which often take a cue from British lawmakers.
Empowering the weak is one of the solemn reasons for the creation of any judicial or quasi-
judicial body. No one can deny it. It is, though, ironical that several forces, primarily politicians,
use labour unions for creating unrest for petty gains. Businesses thrive and survive on the hard
work of the labour force, and it is common knowledge that their remuneration is a fraction of
what the managers get. This basic fact can be used by crafty persons in various ways to
instigate unrest and demand their pound of flesh to douse the fire by mediating the dispute.
One of the great success stories of India's businesses has been Maruti; it went through some of
the worst labour disputes a few years ago.
MARUTI-SUZUKI AND WORKERS' STRIKE, 2011
In June 2011, Maruti found itself in serious trouble. On 4 June, 2500 workers at its Manesar
plant went on a strike, which continued till 15 June. Maruti had already suffered a loss of over
Rs 500 crore. Production had stopped completely. Its reputation as the leading car maker in
India had taken a beating.
Although the strike ended on 16 June, the inability of the Maruti management to anticipate the
workers' strike is surprising. Why didn't top-level officers know about the dissatisfaction among
the workers? If only they had foreseen it, preventive measures could have been taken and
things wouldn't have spun out of control. But there is also the possibility that they knew and did
nothing, which doesn't speak highly of Maruti as an organization. Or maybe by the time they got
to know about it, it was too late?
No matter what reason, it is the management that should be blamed. Consider the following
facts: about three decades ago when Maruti was scouting around for a global partner, Suzuki
came forward, and in a meeting between R.C. Bhargava and O. Suzuki, the latter emphasized
that they will collaborate only if the 'Japanese work culture' is observed in the organization. Left
with no choice, Maruti agreed. What did that mean? It meant adherence to time, adoption of
Japanese management techniques, same uniform and canteen for everyone, transparency,
access to the top management, conflict avoidance, cooperation, etc. The Japanese culture of
avoidance of disputes, conflicts and unpleasantness helped in creating a cordial relationship
between the management and the workers and resulted in
an unprecedented growth of the company. Unlike the American 'I will sue you' culture, Japan
follows the East Asian tradition of 'non-adversarial resolution of disputes'. Most of the
differences are settled amicably without going to a court of law. Even raising an issue and
creating unpleasantness is alien to their culture. At times it may be detrimental as has been
observed in the last two years at Toyota. The case of sudden acceleration in Toyota cars could
have been dealt with much better finesse had the supervisors conveyed the complaints to the
management in time. It was done only when things went out of hand and suits had already been
filed in American courts for exemplary damages. Even then, the management took a long time
to understand it fully and take corrective measures. Sony's recent invasion of privacy due to a
data breach reached American courts. It is surprising that it was not able to anticipate the legal
issues involved. It is quite possible that such issues might not have been raised in Sony's board
meetings just to avoid unpleasantness. But that does not help in the long run.
It is, therefore, essential to find the right balance between dispute avoidance and dispute
resolution. Avoiding a dispute so that there is no unpleasantness is not right. Avoiding a dispute
so that it need not be resolved at a later stage is desirable. However, it is expected that both the
parties are satisfied with the steps taken so that the dispute is not taken to a formal forum for
resolution. This is precisely the job of the top management. Dispute resolution requires time,
effort and money, and even then the result is not certain. Hence, before taking the matter to a
third party, it is always
advisable to settle it amicably. In the present case, the matter went far beyond the dispute-
avoidance stage. And this speaks volumes for a company that has practised and mastered the
Japanese style of dispute resolution for almost three decades.
The local government was involved and it is no secret that its action will be guided by local
sentiments and demands, and vote bank politics. Any elected representative wants re-election,
which means keeping the electorate happy, or at least not making them unhappy. Thus, in
negotiations with the management and the workers, the elected representative is expected to
side with the workers. What can the company do for him? Maybe some money for his
campaigning! But with media pressure and the new potent tool of Right to Information (RTI),
companies prefer not to entertain such requests. So the local politician is not expected to be
unbiased.
By locking horns with workers, the company's bargaining power has weakened. It is going
through losses, dissatisfaction among workers is brewing, competitors are rejoicing, local
politicians are demanding their pound of flesh, government officials are expressing their
helplessness-in most cases they are mere puppets in the hands of politicians, particularly those
of the ruling party-customers are getting impatient for timely delivery, suppliers are becoming
more demanding and the brand value is getting diluted. Uncertainty is taking its toll. Not at all an
enviable position for the market leader!
The labour law in India is basically meant to regulate the workforce, and also to protect workers'
interests. In August 2017, the Wage Code bill had been introduced in the Lok Sabha. It aimed to
consolidate four existing laws: the Minimum Wages Act, 1948, the Payment of Wages Act,
1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976, into a single
statute. Other important laws are: the Industrial Disputes Act, 1947, the Employees' Provident
Fund and Miscellaneous Provisions Act, 1952, the Employees' State Insurance Act, 1948, the
Workmen Compensation Act, 1923, and the Payment of Gratuity Act, 1972.
Too many laws for the regulation and welfare of workers are an important reason for labour
problems in India. There have been repeated demands by businesses as well as workers'
unions to simplify laws to make them more effective. Whatever the number of laws governing
workers is, it might be useful to exercise discretion and use common sense to instil confidence
in workers' mind rather than relying heavily on the black-letter law.
The best course available is to always avoid going to courts or other dispute-resolution forums
and settle the matter amicably by negotiating with the striking workers. Recourse to a legal
dispute resolution should be the last choice as matters might drag on for years with an uncertain
outcome. At times, negotiations fail and create problems for disputing parties as well as
consumers.
WHEN NEGOTIATIONS FAIL: TAKING THINGS TO A FLASHPOINT
In early September 2017, it was reported that in India the Director General of Civil Aviation-
DGCA-had threatened to ground 132 pilots and 430 cabin crew members for skipping the
mandatory alcohol test. In response, pilots and other staff associations counter-chreatened to
go on a strike causing difficulty for passengers and creating a problem for the country. At the
same time, there was failure of negotiation between the pilots in the UK and Thomas Cook, the
vacation- planning company.
Although the issues were different in the United Kingdom and in India, there was one similarity:
the aggrieved parties weren't able to effectively communicate their demands to their employers
which rejected their concerns as unrealistic.
Failing to compromise on mutually acceptable terms is largely because of higher ambitions,
which may be unrealistic. Often, the parties are not able to anticipate what the other may agree
to. Astute business leaders and trade union leaders, many a time, are not able to converge
simply because they have to satisfy not only the other party at the negotiating table, but also the
group of people that had sent them on their behalf. The top management of a company has to
ultimately satisfy the shareholders and trade union leaders have to willy-nilly satisfy each and
every member of the union; if they are not able to satisfy everyone, they should somehow muffle
the voice of dissenters.
This is practically the effort of the negotiators, and, ironically, it is their conflict of interest and
personal egos, which somehow create hurdles in the path of smooth and fruitful conversation.
This problem seems to simply vanish when negotiation takes place for one's own self- interest
and there are no two different objectives to be attained first, the stated group's interest, and
second, understated and hidden personal interest.
The exit clause in a number of contracts for employees at different levels in companies,
particularly at the top level, is a case in point. Usually, negotiations between the employer and
the employee, while leaving the organization, are successful, with the employer providing a safe
and respectable exit to the employee and the employee, in consideration, agreeing to maintain
confidentiality with regards to vital information that he may have been privy to. Interestingly, the
concluded terms in these types of negotiations are never put in black and white. They primarily
remain a gentleman's promise on the assumption that such a dialogue takes place between two
mature and highly evolved parties, both of them wary about keeping the understanding under
wraps.
It is only the witless who would like to bring things to a flashpoint while negotiating. Shrewd
individuals never ever let the matter go out of hand. Somehow, there remains a subtle control,
which is not at all visible to the uninitiated. The pilots' negotiations-both in India and the UK-will
possibly result in the softening of stands by both the parties. The Thomas Cook pilots' strike
was called off last year, and they took the arbitration route. Air India had requested the DGCA to
take a lenient view and had taken internal corrective measures. However, it is only after a
certain period of time that we get to know who really gained from such a negotiation. Candid
negotiations with clear objectives and stated goals are quite uncommon, and although they
might look straightforward, there could be
a political angle with some hidden agenda.b For discerning persons whose biggest assets are
moral flexibility and the ability to practically apply it in life, it maybe only after a reasonable
period of time that they prefer to spill the beans to create sensation and get free publicity. If
released in the form of a book, royalty too. Such people rely on public memory, which is
supposed to be short-lived.
Till that time, Brutus is an honourable man.
The top management in different companies, at times, may be indifferent to the problems of the
workers at the lowest level. Lack of concern does not only give rise to relationship issues within
the company, but may also adversely affect the relationship with the government and regulators.
Whether employees or contractors for big businesses, everyone should be treated fairly.
Pushing workers at the lowest level into legally defined silos- whether employees or contractors-
means differently for different companies. However, in the long run, it is better to listen to the
workers and align one's interest with theirs so as to arrive at a win-win situation. Taxi aggregator
Uber is facing serious problems, both with the drivers and the regulators.
UBER IN INDIA AND UBER IN LONDON: COMPLIANCE OR DEFIANCE
During the latter part of September 2017, eager observers expected an appeal to be filed by
Uber in a legal forum in London. But it didn't happen. With a stroke of a pen, on 22 September,
the London regulator for transport- Transport for London (TfL)-banned Uber from operating in
the city. It did not renew its licence to operate beyond 30 September.
It has been said that there have been several contentious issues between Uber and TfL., the
most important being questions of safety of passengers, lack of proper background checks on
the drivers, and in general, a feeling that the company had been a bit too casual, aggressive,
and above all, non-cooperative with the local administration. No government can tolerate such
an attitude. Given half a chance, governments and regulators will try their best to nail such
companies down, and Uber has undoubtedly been a victim of nonchalant behaviour, core issues
of safety and poor corporate social responsibility notwithstanding.
India is no stranger to Uber's high-handedness. A few years ago, there were cases of sexual
assault and other incidents related to the safety of passengers, besides the crucial issue of
pricing during rush hour-surge pricing- that put Uber on the radar of governments, particularly in
the National Capital Region (NCR). There was a knee-jerk reaction by the local government,
which resulted in a conciliatory approach by Uber and other taxi aggregators like Ola. However,
technology is still driving the demand curve whereas governance simply follows. With an
inconsistent and unclear approach by the government, Uber and similar cab aggregators are
changing the rules of the game. Unfortunately, people on the street are left with no option but to
use these services due to the lack of an accessible and convenient local transport system. The
situation is worse in the ever- expanding suburbs of the NCR.
The purpose of technological advancements is to make the life of people better and convenient,
with the provision of more affordable services. A century ago, only the filthy rich could have
afforded to have ice in their drinks in the summers, but now almost anyone can. Similarly,
commuting has been made simpler, more comfortable, safer from inclement weather, and also
more affordable. Using natural resources, including petroleum products, prudently obviously
makes it incumbent on us to share natural resources. There cannot be a better way of utilizing a
vehicle for more time and for more persons. It reminds one of the Benthamite principle of the
'greatest good for the greatest number'. Uber has many such arguments supporting its service
and business.
Hence, the march of technological advancement benefitting the people cannot be stopped
permanently, whether in Delhi-NCR or in London. Clouds of doubt can be cast upon the service.
But in a democratic set- up like Delhi-NCR or London, where public interest is paramount, the
government and independent regulators have to buckle down to strike a balance between the
larger interest and that of businesses. Arbitrarily shutting down any such operation is possible
only in a dictatorship, not in jurisdictions committed strongly to democracy and the rule of law.
Businesses and regulators somehow try to find a middle path through conciliation and softening
of stands. There is no place for obstinacy. Uber has realized this and is following a multi-
pronged strategy: diplomatic, political, legal, creating public opinion, and also showing
willingness to comply fully when absolutely necessary. For businesses, whenever there is a
choice between defiance and compliance vis-à-vis strong legal, regulatory and government
machinery, it is best to tilt as much as possible towards complete compliance.
It simply doesn't make sense for a business to be unnecessarily hawkish in huge markets that it
cannot afford to lose. London and Delhi-NCR provide massive business opportunities for Uber.
The company shall do well to comply with legal and regulatory requirements and cooperate with
local governments. This will be in the public interest too.
TAKEAWAY FOR MANAGERS
► Workers' interests in an egalitarian society need to be the ultimate test.
► Cordial relations lead to trust among management and workers. 31
► Heavy reliance by the management on the black-letter law usually boomerangs.
► Legislative action to keep laws updated to respond effectively to changes taking place with
time is
essential. ► Business managers should eschew from implementing
anachronistic laws.
► Getting the right to hire and fire is advantageous for
businesses, but workers should not be treated like numbers. They are, after all, human beings.
► Laws will always have limitations. Dialogue is the
answer.
