Union Demands Rejected: What Steps Can We Take Next with Management?

Dear Seniors, I request you to give guidance on the charter of demands presented by our union. Kindly inform me of the options available to the union leaders if the management is unwilling to accept their necessary demands. Additionally, please advise on the subsequent steps we should take to address this situation with the management/HR.

Thank you,
Srinivas Babu

Understanding Industrial Relations and Collective Bargaining

Industrial relations is a key aspect of human resource functioning, and collective bargaining is part of the IR process. The submission of the charter of demand by the union is the first step towards the process of collective bargaining. After the collective bargaining process, if there is an agreement between the management and the union on some or all issues, then such an agreement culminates into a settlement in terms of Sec. 2(p) of the ID Act. If the management does not accept these demands, then it is construed that there is a difference or dispute between the management and the union regarding the issues raised in the charter of demands, and such a difference/dispute is termed as an industrial dispute in terms of Sec. 2(k) of the ID Act.

Steps in the Industrial Dispute Process

The union can then raise an industrial dispute before the conciliation officer (Asst. Lab. Commissioner) under Sec. 12 of the ID Act, inviting his interference to conciliate on the matter. The conciliation officer then initiates the process of conciliation by summoning both parties, hearing them, and making an effort to settle the matter. If both parties agree to settle the matter before the conciliation officer, then the settlement is called a settlement arrived at during the course of conciliation in terms of Section 2(p) of the ID Act and is binding on all workmen in terms of Sec. 18(3) of the ID Act.

If no settlement is arrived at, the matter will be referred to the Government, which may refer it to the Labour Court/Tribunal for adjudication.

Hope this clarifies your doubts.

Regards,
B. Saikumar
In-House HR & IR Advisor

The Role of Adjudication in Industrial Disputes

Mr. Saikumar has given a graphic presentation of the happenings if the process of collective bargaining fails. Of course, adjudication is the ultimate process of resolution for any industrial dispute. However, it always carries with it the weight of third-party intervention by means of modified conclusions based on the Industrial Adjudicator's perspective of the issues referred. It may later impose introspection in the minds of the disputants, making them realize that they could have been a bit more liberal earlier in understanding each other's difficulties. That's why, in conciliation circles, it is said that a worst settlement is, at times, better than the best award.

Challenges in Negotiation

My dear Srinivas Babu, you have mentioned that the management is not at all accepting the union's much-needed demands. So, in effect, there is no bargaining at all—just the management rushing through the charter of demands, ascertaining what is crucial to the union, and saying no—that's all. Sorry, it is not negotiation. On the other hand, it is like a gentleman seated high on an elephant's back asking a bystander below to give him a glass of water. Negotiation cannot be linear. It has to criss-cross through the various positive alternatives available.

Evaluating Repercussions

Try to evaluate the repercussions—conceding to the demands subject to convincing modifications favoring both parties or fighting it out without knowing the exact outcome under a strained relationship with the other partner in production, viz., the workmen.

Regards,

From the union's perspective, all the contents of a charter of demands are valid because the submission of the charter of demands, either for the first time upon the union's recognition as a bargaining agent or at periodic intervals arising out of the expiration of earlier settlements, affords them an opportunity to put up new demands necessitated by the present circumstances and to press for certain demands rejected by the management earlier. The union office bearers, apart from their genuine interest in the welfare of the workers, out of the necessity to consolidate their position, would deliberately put up more demands. Some demands may be mere distractions, such as asking for employment opportunities for the wards of retiring workers, while others may not be an issue resolvable by the management, such as seeking exemption from professional tax. These demands would have been intelligently interspersed with genuine demands. However, as a seasoned management representative, you can easily distinguish them.

From the management's perspective, demands whose acceptance will increase productivity, ensure a reasonable hike in the real earnings of the workers on par with industry and regional average, reduce indirect financial commitments, promote goodwill in the long run, etc., would be considered valid.

From the union's perspective, all the contents of a charter of demand are valid because the submission of the charter of demands, either for the first time on the union's recognition as a bargaining agent or at periodic intervals arising out of the expiration of earlier settlements, affords them an opportunity to put up new ones necessitated by the present circumstances as well as to press for certain demands rejected by the management earlier. The union office bearers, apart from their genuine interest in the welfare of the workmen, out of the necessity to consolidate their position, would deliberately put up more demands. Some demands may be mere clap-traps, such as asking for employment opportunities for the wards of the retiring workmen, while some others may not be part of an issue resolvable by the management, such as seeking exemption from professional tax. These would have been intelligently interspersed with the genuine demands. However, as a seasoned management representative, you can distinguish them very easily. So, from the management's perspective, those demands whose acceptance will increase productivity, ensure a reasonable hike in the real earnings of the workmen on par with industry-cum-regional average, reduce indirect financial commitments, promote goodwill in the long run, etc., would be valid.

Management's Perspective on Union Demands

Many thanks for your inputs on the matter. You rightly mentioned that from the union's perspective, all the demands are valid for them. But if we see from the management's perspective, should we entertain such demands that are not relevant to the working conditions or payment of wages or any matter connected with employment? For example, if there is a colony of the company and workers have been provided with family accommodation, should any matter pertaining to facilities at the colony, if included in the charter of demands, be entertained by the management? Please advise.

Kind Regards,
Rajendra

What I provided is knowledge on the subject, and what Mr. Umakanthan provided is wisdom. Mr. Umakanthan is right in saying that a worst settlement is always better than a technically sound award. After a protracted and acrimonious adjudication, you may find that you would be better off by settling the dispute across the table.

Collective Bargaining and Industrial Relations

Collective bargaining is recognized as a vital and potential means of maintaining harmony in industrial relations. The Industrial Disputes Act seeks to provide a statutory flavor to all those sincere efforts to resolve disputes and differences through deliberations between the management and the union by defining a settlement under Sec. 2(p) and Sec. 12. It also makes available the services of the Government to the parties to the dispute to resolve it, lending a binding force to them under Sec. 18 of the ID Act.

In fact, the ID Act provides as much sanctity to a settlement through conciliation as to an award, as observed from Sec. 18. Thus, a cryptic reply of 'NO' to the charter of demands is not negotiation and not collective bargaining. Therefore, grasp this spirit to resolve the disputes through dialogue amicably. Adjudication shall be the last resort.

Thanks, Mr. Umakanthan, for providing a right and practical perspective on the issue.

Regards,
B. Saikumar
In-House HR & IR Advisor

Thank you, Mr. Saikumar, for your compliments. I really owe them to the resourceful questioners who, by their constant nagging for clarity, bestow ample opportunity to people like us to refresh ourselves.

Understanding "Demand" in Industrial Relations

Coming to Rajendra's latest question, let me first explain what the term "demand" means in the industrial relations context. Here, demand refers to a formal request by labor regarding some employment issue capable of redressal by the positive action of the employer. At times, it can be vice-versa too. When the employer or the management straight away rejects them or scales down the importance of the issues raised on monetary and other constraints, the issues partake the character of disputes. Thus, a dispute is the metamorphosis of a live unsettled demand.

Types of Industrial Disputes

These industrial disputes could be classified into:
(1) Interest Disputes
(2) Grievance Disputes
(3) Disputes over Unfair Labor Practices
(4) Recognition Disputes

Simply put, Interest Disputes, which are otherwise called "Economic Disputes," are concerned with the establishment of new terms of employment conditions. Grievance Disputes, also called Rights Disputes, arise against the act of the employer over the non-employment and conditions of labor, such as dismissal, discharge, retrenchment, payment of wages, overtime, seniority, transfer, promotion, demotion, etc. Disputes over unfair labor practices enumerated in Sch. V of the I.D. Act, 1947, can also be raised by the trade unions. Finally, Recognition Disputes arise when the management refuses to recognize a trade union for the purpose of collective bargaining, and the genesis of this type of dispute is purely psychological and attitudinal. Though the Code of Discipline, 1953, emphasizes the procedure for recognition, judicial pronouncements are not in favor of the trade unions. Except for the State of Maharashtra, if I am correct, there is no separate law on this subject matter.

Now, Rajendra, analyze the issue of seeking improvements in residential accommodation provided for by the management and its inclusion in the Charter of Demands.

Yes, Maharashtra has provided a statutory procedure for the recognition of trade unions through the MRTP & PULP Act. I guess Madhya Pradesh (M.P.) has the M.P. Industrial Relations Act, but I am not sure whether it provides for the recognition of trade unions. In other cases, it is the code of discipline that operates as a guide in matters of trade union recognition.

Thanks for the input.

Regards,
B. Saikumar
In-House HR & IR Advisor

Understanding Collective Bargaining and Counter Charter of Demand

Charter of demands is the right of the union, and we call it "Collective bargaining." Legal standing has clarified some of the matters. My request is to prepare a Counter Charter of Demand, which includes your (Management's) desired positions, such as efficiency, discipline, and cost-effective/optimization solutions.

I hope you understand what I am trying to communicate.

Regards,
Gajendra Harishanker