How Can We Handle the Termination of a Key Contract Worker Without Disrupting Harmony?

We have around 40 contract laborers. Currently, they are attempting to form a union, with one particular contract laborer playing a crucial role in this initiative. The company is considering terminating this individual, who is a key person in the production line, without negatively impacting the company or its environment.

Question on Termination Process

My question is, how can we terminate him in a manner that ensures the company's environment remains healthy and harmonious, and production is not adversely affected?

First, you have to check his local contacts with the other unions. Then, you will personally assess his image among other workers. Why are other employees listing him in the company? After that, you can issue a simple show-cause notice for reasons such as late coming, being found sleeping, wrong production, bad behavior, or lack of teamwork. However, before issuing such a notice to him, seek the confidence of management/MD only.

Regards,
Naveen Chahar

Dear Parimal, I can simply say that when a company or business entity makes a worker indispensable for the organization, the organization simply becomes captive and handicapped.

Forming a Union: Legal Considerations

Forming a union is neither illegal nor an offense in any court of law; workers have every right to form a union.

Avoiding Unfair Labor Practices

As far as removing the said worker is concerned, you should ideally not engage in any falsification. Such actions will be construed in court as an unfair labor practice, and the matter will become entangled.

Regards

Naveen Chahar, before advising anything, please consider the aspect of humanity. Do you have any information about the situation there? How many hours are the contract laborers working? What facilities are being provided by the contractor? Are the contractors paying minimum wages or not? What problems are the workers facing there?

Guidance on Issuing a Show Cause Notice

How can you guide on issuing a show cause notice for issues like late coming, being found sleeping, wrong production, bad behavior, and lack of teamwork? Forming a union is not illegal, nor is it an offense in any court of law. The site form is created for everyone to seek justice; please ensure that is done.

Dear Parimal,

If the contract labor is working under a registered contractor, you should not issue any show cause notice, termination, or retrenchment to him. Issuing a notice to him would imply that he becomes a direct employee of yours, potentially entangling you in legal problems. A show cause notice or termination/retrenchment notice itself implies that you are engaging him as a direct employee, creating an "employer-employee" relationship, rather than a principal employer-contractor-contract labor relationship.

If the contractor is registered, direct the contractor to issue a notice through him. It is advisable not to involve yourself directly in written communication. Please clarify whether the contractor is registered or unregistered, or if the salary is dispensed by you or the contractor. Based on that, I will respond accordingly.

Regards,
D. Pannerselvam
[Phone Number Removed For Privacy Reasons]

Mr. Pannerselvam is correct. In this case, the immediate employer is the contractor, and you are only the ultimate employer. If you wish to terminate him, you cannot do so directly. According to the ID Act, any termination other than superannuation, voluntary retirement, and dismissal from service under disciplinary grounds amounts to retrenchment. This can only be done with prior permission from the state government if the factory employs 100 or more workers. In that case, you must pay retrenchment compensation at the rate of 15 days for every completed year of service. It is unclear how many workers are deployed in your factory.

To avoid the provisions of retrenchment, he can be removed on disciplinary grounds. However, this process must be initiated by the immediate employer, i.e., the contractor. He must follow the complete disciplinary proceedings, including issuing a charge sheet, conducting an enquiry, issuing a second show cause notice, etc. Remember that a worker cannot be dismissed on trivial grounds.

Regards,
D. Phani Kumar
DGM- HR
Vasavadatta Cement
(B.K. Birla Group of Companies)
Sedam, Gulbarga Dist. Karnataka.

Formation of a Union

Formation of a union is neither a sin nor a criminal act. Let them form and deal with it. That is the right thing to do.

Role of Principal Employers

Principal employers cannot and shall not initiate action on a contract worker. They can intimate the contractor who, in turn, should act.

Regards,
Sivasankaran

Formation of a Labor Union

Formation of a labor union is not an offense; rather, it is a legal right of every worker. If a union works in a positive and democratic manner, I would say it's a boon for any organization.

As far as the removal of workers through a contractor is concerned, you cannot take direct action against them; let the contractor take such steps.

Regards,
Kamal

I live in a very different place: Madison, Wisconsin, USA. Maybe my opinions and observations do not apply.

The Role of Unions in the Workplace

Seventy years ago, my father was instrumental in forming a union in a factory. At the time, it was ugly: beatings, firings, hatred. Over the years, the union prevailed, and things settled down.

Benefits of Union Formation

Thirty years later, the owners came to my father and thanked him for creating the union. The union helped stabilize the workforce, aided in team building and morale. Negotiating contracts with one consistent entity increased productivity and profits.

Employer-Union Relationship

If you are a good employer, you will have a good union. If you are a bad employer, you will have a bad union. Good luck.

Establishing a trade union is always beneficial for both employees and employers. A registered Trade Union is not an illegal association; they must adhere to certain rules and regulations as per the Trade Union Act.

However, just because one person is active in the process of establishing a trade union, termination is never a good idea. Encouragement is always better in this case because a trade union is never going to harm the organization. On the other hand, not only will you have more transparency, but by encouraging, you are also strengthening the relationship with the workers. Semi-skilled laborers are more emotionally responsive than analytical. Therefore, I suggest being a part of the establishment of the Trade Union so that from the beginning, you are assuring them of your support and treating them well. As part of the management, you must think of a win-win strategy and be a diplomat.

As you mentioned yourself, he is productive, and when you are searching for reasons to terminate him, it shows he is neither against the organization (being productive and active) nor would he form a bad union (being hardworking and not illegal). So, when such a person is a leader, it boosts other workers to follow his steps in productivity.

Think over it carefully and realize the advantages compared to the disadvantages when you are making decisions of that sort because you are not only affecting yourself but also giving a wrong image of management towards workers and, importantly, his daily food.

Thank you.

Regards,

BSSV

"To do injustice is more disgraceful than to suffer it."

The contract labour system is meant for the convenience of the employer to avoid union and other related issues. When it goes off track, it can become a headache. You cannot terminate contract labour directly. The contractor should release the labour belonging to him. Otherwise, you have to terminate the contractor itself and engage a new contractor.

Regards,
D. Gurumurthy
LL. HR & IR Consultant
Hyderabad.

It is surprising to note that the company has a contract laborer in a key position on the production line that they are hesitant to change. First, train some more people under the guise of general training activities. No person should become indispensable to the company. It would be poor planning to allow dominance by anybody.

Try to find out why the laborer is attempting to create trouble. Observe him and try to change his mental attitude. If all else fails, then keep him under watch and build up a case against him that can withstand scrutiny and provide the firm with a good reason for removal from the job. If he is a contractor's man, gently and carefully try to have him replaced by the contractor.

We had the same problem in our organization five years back. We don't engage contract labor ourselves, and hence we took it up with the contractor who engages such contractors who go against the principal employer.

As rightly said by Priya Panneerselvam, you need not take any direct action against the workman but through the contractor who engages him.

I have come out of that organization now, but the sequence of incidents still remains vivid in my mind. Statements such as starting up a union are not illegal, and all may be good just to talk... only the person who handles the labor problem alone knows the difficulties. Hence, no management will take such matters lightly.

We called the contractor who engaged him and compelled him to remove this worker. We asked the security not to give an entry pass to this workman. As rightly opined by another member here, we have to ascertain the background behind that person, his basic nature/character, and support within and outside the industry. We have to look for the person who is holding the strings.

We sought the help of our unions, contractors, local elite, police, and those who can influence that person. At last, we were successful in stopping the formation of contractors' union.

Regards,
Ganesh Ramachandran

Your advice is ill-advised. Forming a Union is a lawful right of the workers under the Trade Union Act. All organizations have Trade Unions, yet they are functioning normally.

@Parimal It seems that you have missed the crux of the problem. Firstly, the anti-Union mindset is disturbing you the most. Without delving into the cause of why they want to form a Union at all, you cannot get rid of the issue. After all, what the company earns is owed to the worker, and the company should take good care of its workforce. A content workforce works better for the productivity and profitability of the company. By trying to remove the kingpin, you will be creating more trouble. You should provide benefits to the workers linked to good productivity based on Quantity and Quality (Q&Q). Please remember the lowly paid worker may find a job at that salary elsewhere, but your company cannot obtain the trained HR force at that price. By adopting a policy of vendetta, you will only trigger a chain reaction that will be unhealthy for your company. It is not a good HR practice.

Talk to the Leader

Talk to the Workers

Talk to Each Individual Worker

Know the Cause of Their Resentment

Satisfy the Cause

Keep each worker content and discourage them from indulging in anti-company activities. Some call it the divide and rule policy, but give it a humane touch. I am sure that your company needs to rethink the Management-Worker relations and step up efforts to keep the other demands (non-financial) of the workers satisfied. A disturbed worker disturbs others, impacting a slide in the company's performance.

Harmonious industrial relations cannot be formed by firing a workman; it will only create a negative image, which is not good for productivity. Without understanding the situation, it's not correct to comment on this situation.

Regards,
Santosh Joshi
(MLL & LW)

Handling Labor Union Challenges Through Effective Communication

As advised, the labor union can be tackled through ongoing communication with the contractor only. It is also advisable to talk and find out their genuine requirements and try to meet them. Proper verbal mutual communication can help solve most problems. I can give you my example.

My boss received a letter of complaints from the Labor Commissioner with an instruction to attend his office on a designated date. This was a new development to me. So, my boss asked me to handle the issue. I went to the Labor Commissioner's office to attend the meeting on the specified date. I saw a few union leaders there as well. The Labor Commissioner posed certain difficult questions about the problems faced by the labor. I immediately replied that the union leaders had never contacted me with any problems, and that was the truth. The Labor Commissioner had no reply. In fact, he scolded the union leaders for bypassing me. I invited them to my office the next day.

The union leaders came to my office the next day. I offered them a seat in my office along with a cup of tea and biscuits. I talked very nicely and promised all help. That was the first and last meeting with them. We never received any more letters from the Labor Commissioner thereafter. They never caused any issues with me since I was always on speaking terms with the labor, showing sympathy and practical empathy. I used to have collective discussions with the labor once every month. And that is the trick.

Ops115 has offered a good case study. I really appreciate your effort and approach towards the problem. Probably, it may help Parimal to resolve his problem.

Since the case is emulated by your contractor employee, you should have an immediate meeting with your vendor and try to find the reason for the eruption. Once the reason is clear, you may be able to find the best solution for this. Suppose the reason is related to contract labor grievances, let the contractor play the lead role in this. Be a mute spectator in this act and take the confidence of the vendor that there is no havoc in operations.

Thanks,
Vinayak

Dear Parimal, Mr. Surinder Bhanot has provided the best tip to you! The rest depends upon the attitude of the management.

Before engaging contract labor, you must reach a mutual agreement. According to the agreement, you should advise him, or if he violates it, then you can terminate the contract. Ensure that you provide genuine reasons for any termination. The formation of a union is a legal right, and even if the laborers form a union, you are obligated to address their concerns. It is crucial to first consider their problems.

Regards,
V. SUBBARAO
[Phone Number Removed For Privacy Reasons]

Formation of a Union

Formation of a union is not illegal and is not against the law. First, determine if the contractor is registered. If the contractor is registered, ask the contractor to resolve this matter. Avoid issuing any written letters. Contract labor cannot form a union against the company. I believe the contractor will be able to resolve this matter easily.

It is illegal to try to stop the formation of a union and rather unethical to do so. A healthy relationship between management and the union is always beneficial for the growth of the business. Not always is a union detrimental to the interest of the company. As very rightly pointed out by the worthy member, Mr. Surinder Bhanot, "If you are a good employer, you will have a good union. If you are a bad employer, you will have a bad union." It is true you should fear the unity of employees if you are a bad employer, but if you are not, you should welcome it.

You have not clarified whether the person in question is employed by you on a contract basis or engaged by the contractor. The dispensation in either case is different.

Regards,
S.K. Johri