Situational Analysis

ABCX is an oil and gas company that has hired contract workers from the company CVQ
India Limited. CVQ has been in a business relationship with ABCX for a long time . CVQ has
had trouble with its workers for quite some time. The workers have been demanding better
wages and have used several avenues to approach the issue and get CVQ management to
negotiate. In October 2008, CVQ had reached an agreement with the union which the
company failed to honour, followed by another settlement reached in January 2010 with
the help of RLC, which CVQ also did not abide by. Following failed negotiations and
unresponsive trade leaders and RLC, the workers lost faith in the union leaders and formed
a new union, called ABCX Contract Employees Union, Dehradun. The new union has been
engaged in negotiations with CVQ. They have approached the RLC, the CLC and even the
Dehradun High Court but the workers feel that the situation has become untenable and
have decided to go on strike. ABCX has tried to be supportive of the workers, but them
being CVQ’s employees, it has not been able to do much. Now, with the impending strike,
ABCX management is worried that their operations will be affected and the agitation could
also spread to their premises. The management is trying to find ways to calm the workers
and work out a solution in order to keep things under control.

Problem Statement
ABCX is facing a potential strike by its contractual workers hired from CVQ India Limited.
This could disrupt their services and also the agitation could spread to their premises. The
company is looking for ways to calm down the situation and reach a settlement before the
strike is scheduled.

Evaluation of Alternatives
The evaluation of alternatives should be on the following factors:
 Mitigating Financial Response
The final action plan should ensure that the services of ABCX are not affected.
 Ethicality
The final action plan should ensure that the workers are treated fairly, so such
situations are avoided in the future.
 Legal Abidance
The settlement reached should be legal so that it is enforceable and can be upheld in
court.
Based on the able evaluation criteria, we have evaluated the following alternatives:

 ABCX should approach the court to get a injunction order, asking the workers and
the contractors to refrain from any such unwanted activities. This won’t calm
the situation down as none of the workers’ demands will be met and also
might tarnish the image of ABCX in the eyes of the workers, harming future
negotiations.
 ABCX should offer to sit with the workers and to meet their demands in a reasonable
way. The company could offer to pay some of the money owed and dock that
amount from its payment to CVQ. This will show goodwill towards workers and will
go a long way in calming the situation and might ensure that the services are not
disrupted.
  ABCX should use its business leverage to get CVQ at the table and commit to a final
settlement. The only issue with this plan of action is that the workers might not trust
any offer made by CVQ as the management at CVQ has failed to honour their past
commitments.

Action Plan
 ABCX Management should meet the trade union leaders and hear out their
grievances at the earliest.
 The company should offer to meet some of the more reasonable demands regarding
payments without going through CVQ.
 The payment of 72 lakhs, part of which has been made by CVQ, should be paid to the
workers immediately. The amount can be docked from the payments made to CVQ
in the future.

Recommendations
 ABCX should use its leverage with CVQ to get them to the table and negotiate an air
tight agreement about the payment to workers.
 ABCX should add a fair wage clause to all their future contracts with companies
providing contractual labor.
 ABCX should open a channel to communicate with the union regularly, so that future
situations do not become so untenable before they are addressed.

SWOT Analysis

Strength Weakness
No legal exposure. Little control over labor relations
Low cost option. Might be held responsibe for shortcomings of the
Easy to manage workforce depending on market middle contractor
situation

SWOT

Oppertunity
Renegotiate contracts with contractors, including
clauses for fair pay
Create a better system for handling comtractual
labor grviences
Threat
Possible Disruption of Services due to labor strike
Hard to company reputation due to actions
beyond the company's control