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WORKERS’ PARTICIPATION IN MANAGEMENT

(I) (i) Introduction:


Worker’s participation is a system where and management share important information with each other
and participate in decision taking. It is distribution of social power in industry so that it tends to be
shared among all who are engaged in the work rather than concentrated in the hands of minority.
Thinkers like Comte and Owen advocated the participation of workers in management for achieving
distributive social justice. Karl Marx proposed complete control of the enterprise by workers and
socialization of the means of the production. Marx wanted trade unions to be developed as an
alternative for self-government. Thinkers favored guilds of all classes of workers should be controlled
under a charter from the state. With the outbreak of the First World War, an acute industrial unrest was
experienced. Labour was largely regarded as a “Commodity of Commerce” and exploited to the
maximum in England, West Germany, France and USA. The main concern of ideologists in advocating
workers participation in Management was the sharing of a part of managerial power with workers.
Various researches conducted at the Tavistock Institute, London revealed that autonomous and cohesive
work groups were more efficient and healthier. Increased use of technology in industry necessitated the
growing co-operation of workers because of the complex operations of production. The essence of
labour participation in management lies on the belief that workers are capable of taking part in decision
making. The workers will have the capacity to grow & learn and contribute significantly to the
enterprise both with hands and heart.
Three groups of managerial decisions affect the workers of any industrial establishment and hence the
workers must have a say in it.
• Economic decisions – methods of manufacturing, automation, shutdown, lay-offs, and mergers.
• Personnel decisions – recruitment and selection, promotions, demotions, transfers, grievance
settlement, work distribution.
• Social decisions – hours of work, welfare measures, questions affecting work rules and conduct
of individual worker’s safety, health, and sanitation and noise control.
Participation basically means sharing the decision-making power with the lower ranks of the
organization in an appropriate manner.

Definitions:
The concept of WPM is a broad and complex one. Depending on the socio-political environment and
cultural conditions, the scope and contents of participation change.
International Institute of Labour Studies: WPM is the participation resulting from the practices
which increase the scope for employees’ share of influence in decision-making at different tiers of
organizational hierarchy with concomitant (related) assumption of responsibility.
John Leitch: In the words of the John Leitch “the organization of any factory or other business
institution inti a little democratic state with the representative government which shall have both the
legislative and executive phases.
ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and
their representatives with the decision-making process, ranging from exchange of information,
consultations, decisions and negotiations, to more institutionalized forms such as the presence of

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workers’ member on management or supervisory boards or even management by workers
themselves (as practiced in Yugoslavia).
The main implications of workers’ participation in management as summarized by ILO:
• Workers have ideas which can be useful;
• Workers may work more intelligently if they are informed about the reasons for and the
intention of decisions that are taken in a participative atmosphere.

(I) (ii) Objectives:


According to Gosep, workers’ participation may be viewed as:
• An instrument for increasing the efficiency of enterprises and establishing harmonious relations;
• A device for developing social education for promoting solidarity among workers and for
tapping human talents;
• A means for achieving industrial peace and harmony which leads to higher productivity and
increased production;
• A humanitarian act, elevating the status of a worker in the society;
• An ideological way of developing self-management and promoting industrial democracy.

Other objectives of WPM can be cited as:


• To improve the quality of working life (QWL) by allowing the workers greater influence and
involvement in work and satisfaction obtained from work; and
• To secure the mutual co-operation of employees and employers in achieving industrial peace;
greater efficiency and productivity in the interest of the enterprise, the workers, the consumers
and the nation.

Importance:
1. Higher Productivity: The increased productivity is possible only when there exists fullest co-
operation between labour and management. It has been found that poor labour management relations do
not encourage the workers to contribute anything more than the minimum desirable to retain their jobs.
Thus participation of workers in management is essential to increase industrial productivity.
2. Greater Commitment: An important prerequisite for forging greater individual commitment is the
individual’s involvement and opportunity to express himself. Participation allows individuals to express
themselves at the work place rather than being absorbed into a complex system of rules, procedures and
systems. If an individual knows that he can express his opinion and ideas, a personal sense of individual
knows that he can express his opinion and ideas, a personal sense of gratification and involvement takes
place within him. I am sure you will agree that participation increases the level of commitment and the
employees start relating to the organisation.
3. Reduced Industrial Unrest. Industrial conflict is a struggle between two organised groups, which
are motivated by the belief that their respective interests are endangered by the self-interested behaviour
of the other. Participation cuts at the very root of industrial conflict. It tries to remove or at least
minimise the diverse and conflicting interests between the parties, by substituting it with cooperation,
homogeneity and common interests. Both sides are integrated and decision arrived at are mutual rather
than individual.
4. Improved Decisions. I am sure that you will agree that communication is never a one way process,
Also note that it is seldom, if ever, possible for managers to have knowledge of all alternatives and all
consequences related to the decisions which they must make. Because of the existence of barriers to the

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upward flow of information in most enterprises, much valuable information possessed by subordinates
never reaches their managers. Participation tends to break down the barriers, and makes the information
available to managers. To the extent such information alters the decisions, the quality of decisions is
improved.
5. Human Resource Development. Participation provides education to workers in the management of
industry. It fosters initiative and creativity among them. It develops a sense of responsibility. Informal
leaders get an opportunity to reinforce their position and status by playing an active role in decision-
making and by inducing the members of the group to abide by them.
6. Reduced Resistance to Change. Last but not the least, it should be noted that changes are arbitrarily
introduced from above without explanation. Subordinates tend to feel insecure and take counter
measures aimed at sabotage of changes. But when they have participated in the decision making
process, they have had an opportunity to be heard. They know what to expect and why. Their resistance
to change is reduced.

(I) (iii) Essential condition for WPM:


The success of workers portion in management depends upon the following conditions.
• The attitude and outlook of the parties should be enlightened and impartial so that a free and
frank exchange of thoughts and opinions could be possible. Where a right kind of attitude exists
and proper atmosphere prevails the process of participation is greatly stimulated.

• Both parties should have a genuine faith in the system and in each other and be willing to work
together. The management must give the participating institution its right place in the
managerial organization of the undertaking and implementing the policies of the undertaking.
The labor, on the other hand, must also whole heartedly co-operate with the management
through its trade unions. The foremen and supervisory cadre must also lend their full support so
that the accepted policies could be implemented without any resentment on either side.

• Participation should be real. The issues related to increase in production and productivity,
evaluation of costs, development of personnel, and expansion of markets should also be brought
under the jurisdiction of the participating bodies. These bodies should meet frequently and their
decisions should be timely implemented and strictly adhered to. Further,
o Participation must work as complementary body to help collective bargaining, which
creates conditions of work and also creates legal relations.
o There should be a strong trade union, which has learnt the virtues of unit and self-
reliance so that they may effectively take part in collective bargaining or participation.
o A peaceful atmosphere should be there wherein there are no strikes and lock-outs, for
their presence ruins the employees, harms the interest of the society, and puts the employees
to financial losses.
o Authority should be centralized through democratic management process. The
participation should be at the two or at the most three levels.
o Programs for training and education should be developed comprehensively. For this
purpose, Labor is to be given education not to the head alone, not to the heart alone, not to
the hands alone, but it is dedicated to the three; to make the workers think, feel and act.

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Labor is to be educated to enable him to think clearly, rationally and logically; to enable him
to feel deeply and emotionally; and to enable him to act in a responsible way.

(I) (iv) Scope and ways of participation (Forms):


One view is that workers or the trade unions should, as equal partners, sit with the management and
make joint managerial decisions.
The other view is that workers should only be given an opportunity, through their representatives, to
influence managerial decisions at various levels.
In practice, the participation of workers can take place by one or all the methods listed below:
1. Board level participation
2. Ownership participation
3. Complete control
4. Staff or work councils
5. Joint councils and committees
6. Collective Bargaining
7. Job enlargement and enrichment
8. Suggestion schemes
9. Quality circles
10. Empowered teams
11. TQM
12. Financial participation

1. Participation at the Board level:


This would be the highest form of industrial democracy.
The workers’ representative on the Board can play a useful role in safeguarding the interests of workers.
He or she can serve as a guide and a control element.
• He or she can prevail upon top management not to take measures that would be unpopular with
the employees.
• He or she can guide the Board members on matters of investment in employee benefit schemes
like housing, and so forth.
The Government of India took the initiative and appointed workers’ representatives on the Board of
Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks. The Tatas, DCM, and a
few others have adopted this practice.

Problems associated with this method:


• Focus of workers’ representatives is different from the focus of the remaining members of the
Board.
• Communication and subsequently relations between the workers’ representative and the workers
suffers after the former assumes directorship.
• He or she tends to become alienated from the workers.
• As a result, he or she may be less effective with the other members of the Board in dealing with
employee matters.
• Because of the differences in the cultural and educational backgrounds, and differences in
behaviour and manners, such an employees’ representative may feel inferior to the other
members, and he or she may feel suffocated. Hence, his or her role as a director may not be
satisfying for either the workers or the management.
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• Such representatives of workers’ on the Board, places them in a minority. And the decisions of
the Board are arrived at on the basis of the majority vote.

2. Participation through ownership:


This involves making the workers’ shareholders of the company by inducing them to buy equity shares.
• In many cases, advances and financial assistance in the form of easy repayment options are
extended to enable employees to buy equity shares. Examples of this method are available in the
manufacturing as well as the service sector.
• Advantage: Makes the workers committed to the job and to the organization.
• Drawback: Effect on participation is limited because ownership and management are two
different things.

3. Participation through complete control:


Workers acquire complete control of the management through elected boards. The system of self-
management in Yugoslavia is based on this concept. Self-management gives complete control to
workers to manage directly all aspects of industries through their representatives.
Advantages:
• Ensures identification of the workers with their organization.
• Industrial disputes disappear when workers develop loyalty to the organization.
• Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of participation because the
workers do not evince interest in management decisions.

4. Participation through Staff and Works Councils:


Staff councils or works councils are bodies on which the representation is entirely of the employees.
There may be one council for the entire organization or a hierarchy of councils. The employees of the
respective sections elect the members of the councils. Such councils play a varied role.
• Their role ranges from seeking information on the management’s intentions to a full share in
decision-making.
Such councils have not enjoyed too much of success because trade union leaders fear the erosion of
their power and prestige if such workers’ bodies were to prevail.

5. Participation through Joint Councils and Committees:


Joint councils are bodies comprising representatives of employers and employees. This method sees a
very loose form of participation, as these councils are mostly consultative bodies.
Work committees are a legal requirement in industrial establishments employing 100 or more workers.
Such committees discuss a wide range of topics connected to labour welfare.
Examples of such committees are welfare committee, safety committee, etc. Such committees have not
proven to be too effective in promoting industrial democracy, increasing productivity and reducing
labour unrest.

6. Participation through Collective Bargaining:


Through the process of CB, management and workers may reach collective agreement regarding rules
for the formulation and termination of the contract of employment, as well as conditions of service in an
establishment. Even though these agreements are not legally binding, they do have some force. For CB
to work, the workers’ and the employers’ representatives need to bargain in the right spirit. But in
practice, while bargaining, each party tries to take advantage of the other. This process of CB cannot be

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called WPM in its strongest sense as in reality; CB is based on the crude concept of exercising power
for the benefit of one party. WPM, on the other hand, brings both the parties together and develops
appropriate mutual understanding and brings about a mature responsible relationship.
7. Participation through Job Enlargement and Job Enrichment:
Excessive job specialization that is seen as a by-product of mass production in industries, leads to
boredom and associated problems in employees.
Two methods of job designing – job enlargement and job enrichment – are seen as methods of
addressing the problems.
• Job enlargement means expanding the job content – adding task elements horizontally.
• Job enrichment means adding `motivators’ to the job to make it more rewarding. This is WPM
in that it offers freedom and scope to the workers to use their judgment. But this form of
participation is very basic as it provides only limited freedom to a worker concerning the method
of performing his/her job.
The worker has no say in other vital issues of concern to him – issues such as job and income
security, welfare schemes and other policy decisions.

8. Participation through Suggestion Schemes:


Employees’ views are invited and reward is given for the best suggestion. With this scheme, the
employees’ interest in the problems of the organization is aroused and maintained. Progressive
managements increasingly use the suggestion schemes. Suggestions can come from various levels. The
ideas could range from changes in inspection procedures to design changes, process simplification,
paper-work reduction and the like. Out of various suggestions, those accepted could provide marginal to
substantial benefits to the company. The rewards given to the employees are in line with the benefits
derived from the suggestions.

9. Participation through Quality Circles:


Concept originated in Japan in the early 1960s and has now spread all over the world. A QC consists of
seven to ten people from the same work area who meet regularly to define, analyze, and solve quality
and related problems in their area. These circles require a lot of time and commitment on the part of
members for regular meetings, analysis, brainstorming, etc. Most QCs have a definite life cycle – one to
three years. Few circles survive beyond this limit either because they loose steam or they face simple
problems. QCs can be an excellent bridge between participative and non-participative approaches. For
QCs to succeed in the long run, the management needs to show its commitment by implementing some
of the suggestions of the groups and providing feedback on the disposition of all suggestions.
Training in problem-solving techniques is provided to the members. QCs are said to provide quick,
concrete, and impressive results when correctly implemented.
Advantages:
• Employees become involved in decision-making, acquire communication and analytical skills
and improve efficiency of the work place.
• Organization gets to enjoy higher savings-to-cost ratios.
• Chances of QC members to get promotions are enhanced.

The Indian Scenario:


• Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.
• Experienced mixed results:
o M&M (jeep division) with 76 QCs has experienced favourable results.
 Technical problems got solved.
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 Workers got to get out of their daily routine and do something challenging.
• Trade unions look at it as: A way of overburdening workers, and
An attempt to undermine their role.

10. Empowered Teams:


Empowerment occurs when authority and responsibility are passed on to the employees who then
experience a sense of ownership and control over their jobs. Employees may feel more responsible, may
take initiative in their work, may get more work done, and may enjoy the work more. For empowerment
to occur, the following approach needs to be followed as compared to the traditional approach:
Element Traditional Organization Empowered Teams

Organizational structure Layered, individual Flat, team


Job design Narrow, single task Whole process, multiple tasks
Management role Direct, control Coach, facilitate
Leadership Top-down Shared with the team
Information flow Controlled, limited Open, shared
Rewards Individual, seniority based Team-based, skill-based
Job process Managers plan, control, improve Teams plan, control, and improve

Features of empowered or self-directed teams:


• Empowered to share various management and leadership functions.
• Plan, control and improve their work.
• Often create their schedules and review their performance as a group.
• May prepare their own budgets and co-ordinate their work with other departments.
o Usually order materials, keep inventories and deal with suppliers.
o Frequently responsible for acquiring any new training they might need.
o May hire their own replacement to assume responsibility for the quality of their products
or services
Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are empowering
employees – both frontline as well as production staff, and are enjoying positive results.

11. Total Quality Management:


TQM refers to the deep commitment, almost obsession, of an organization to quality.
Every step in company’s processes is subjected to intense and regular scrutiny for ways to improve it.
Some traditional beliefs are discarded.
• High quality costs more.
• Quality can be improved by inspection.
• Defects cannot be completely eliminated.
• Quality in the job of the QC personnel.

New principles of TQM are:


• Meet the customer’s requirement on time, the first time, and 100% of the time.
• Strive to do error-free work.
• Manage by prevention, not correction.
• Measure the cost of quality.

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• TQM is called participative because it is a formal programme involving every employee in the
organization; making each one responsible for improving quality everyday.

12. Financial Participation:


This method involves less consultations or even joint decisions. Performance of the organization is
linked to the performance of the employee. The logic behind this is that if an employee has a financial
stake in the organization, he/she is likely to be more positively motivated and involved.

Some schemes of financial participation:


• Profit-linked pay
• Profit sharing and Employees’ Stock Option schemes.
• Pension-fund participation.

Pre-requisites for successful participation:


I. The overall climate in the organisation should be favourable to workers’ participation. There
should be an attitude of mutual co-operation, confidence, and respect for each other. Management,
in particular, should be genuinely receptive to the labour’s ideas so that the latter can perceive
that their ideas are useful.
II. There must be sufficient time to participate before action is required; because participation in
emergent situations is hardly advisable.
III. The subject of participation must be relevant to the enterprise; it must concern something in
which both the parties are interested, otherwise the parties are likely to become indifferent to the
process of participation.
IV. The workers’ representatives should have the ability such as intelligence and knowledge, to
participate. It is not appropriate to ask workers to participate in technical aspects of the machinery;
but they can participate successfully in problems relating to their work. The contributions made by
the workers should be worthwhile and should benefit the workers in the long run. It should be in the
interest of the management as well! Now maintaining that balance is not that easy but
that is what experience is all about!!
V There must be effective system of communication. Both labour’s representatives and
management’s representatives must be able to understand each other and express themselves
without any inhibitions. The whole idea after all is to be able to speak out one’s mind and listen to
the counterpart’s point of view!
VI. Participation should not adversely affect the status or authority of the participants. Managers
will not participate, if their authority is threatened. Workers will hesitate in participating if they
think that their status is being adversely affected. In fact for worker’s participation to be effective,
both the management and the labour should get rid of their ego problems and share their ideas. I am
sure that you will agree that no get rid of their ego probl that you will agree that relationship can
continue for long if there are ego clashes. Both the parties should make efforts to come closer rather
than moving away.
VII. The financial cost of participation should always be lesser than the benefits-both economic and
non-economic-of participation. We all can understand the economic aspect but as far as the non-
economic part is concerned, it will depend on the organisations. What I can tell you at this point of
time is that the pains and pleasures should be matched! The pleasures should be much more as
compared to the pains.

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VIII. Participation should be within the framework of overall policy of the enterprise in question .I
am sure you will agree that every decision has to be in line with the Vision and Mission statements
of the organisation.

Limitations of participation:
Technology and organizations today are so complex that specialized work-roles are required.
• This means employees will not be able to participate effectively in matters beyond their
particular environment. Everybody need not want participation.
• The role of trade unions in promoting participative management has been far from satisfactory.
• Employers are unwilling to share power with the workers’ representatives. Managers consider
participative management a fraud.

(I) (v) Reason for Limited Success :


1. Firstly, the fundamental difficulties in the way lie in the concept itself. There is a basic conflict
of interests between the workers and the owners of the business enterprise. Participation involves
parting with power. Managements have been reluctant to part with their authority and prerogative to
manage the enterprises. Similarly trade unions have not been prepared to divest themselves of their
power manifested in bargaining and pressure.
2. Secondly, multiplicity of trade unions and factionalism has been a serious obstacle in the way of
workers’ participation in management. 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.
3. The government with its anxiety of 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. Many employers and trade unions still considers them as imposition
from outside. Its enforcement by law or compulsion would thwart the very purpose of scheme and
would act as serious constraint on its successful implementation.
4. Fourthly, both managements and trade unions have often complained of a plethora of joint
bodies in 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.
5. Another hurdle 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.
6. It is the government in India 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.
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.

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(I) (vi) Suggestions for Improvement:
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 (as above). Efforts should be made to stir
up the management and workers at the local or enterprise level to understand the schemes and to derive
concrete benefits from them.
The government 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.

(I) (vii) Evolution of participative management in India:


The beginning towards WPM was made with the Industrial Disputes Act, 1947, which made Works
Committees mandatory in industrial establishments employing 100 or more workers. The Industrial
Policy Resolution adopted by the government in 1956 stated that there should be some joint
consultation to ensure industrial peace, and improve employer-employee relations. The functions of
both these joint bodies were to be consultative and were not binding on the management. The response
to these schemes was encouraging to begin with, but gradually waned.
• A study team was appointed in 1962 to report on the working of joint councils and committees.
The team identified some reasons for their failure.
o No concrete steps were taken to remove the difficulties, or change the pattern of
participative management.
• During the emergency of 1975-77, the interest in these schemes was revived by the then Prime
Minister by including Workers’ Participation in industry in the government’s 20-point
programme (refer for detail Page 246 of Industrial Relations, Trade Unions and Labour
Legislation by P.R.N.Sinha, Indubala Sinha, Seema Priyadarshini Shekhar).
• The government started persuading large enterprises to set up joint consultative committees and
councils at different levels.
• The Janata Government who came to power in 1977 carried on this initiative. It was again
emphasized by the Congress government who came back in 1979. This continued in a “non-
statutory vein” till the late 1980s, and the response from the employers and employees stayed
Luke-warm. Then, the 42nd Amendment to the Constitution was made.
• Now, Article 43-A reads: The State shall take steps, by suitable legislation, or in any other way,
to secure the participation of workers in the management of undertakings, establishments or
other organizations engaged in any industry. Thus, participative management is a constitutional
commitment in India.
• And then, on May 30, 1990, the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha.
o The bill requires every industrial enterprise to constitute one or more `Shop-Floor
Councils’ at the shop floor level, and `Establishment Council’ at the establishment level.
These councils will have equal representation of employers and employees. Shop-Floor
councils enjoy powers over a wide range of functions from production, wastage control to
safety hazards. The Establishment Council enjoys similar powers. The bill provides for the
constitution of a Board of Management of every corporate body owning an industrial
establishment.
o The bill also provides for penalties on individuals who contravene any provision of the
bill.
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In spite of all these efforts, only the government and the academicians have been interested in
participative management. But participative management is staging a comeback. The compulsions of
emerging competitive environment have made employee involvement more relevant than ever before.
Managers and the managed are forced to forget their known stands, break barriers, and work in unison.
Managers and workers are partners in the progress of business.

Conclusion
Management should be prepared to give all information connected with the working of the industry and
labor should handle that information with full confidence and responsibility. The workers should
become aware of their responsibilities. The leaders should initiate this in them. Similarly, the top
management should make the lower echelons to show a new attitude in the light of the new relationship.

CASE STUDIES
Workers' Participation at TISCO
Since Tata Iron and Steel Company are the pioneers in establishing joint consultation in India, it is
worthwhile to look at workers' participation at TISCO.
Closer association of employees with management at TISCO began in 1919 and was formalized in
August 1956. The purpose was to promote increased productivity, provide a better understanding to the
employees of their role and importance, and to satisfy the urge for self expression. The scheme as set up
at TISCO consist f a three-tiered system with joint department councils (JDCs) constituted at the
departmental level. Next, joint works councils (JWC) for the entire work, and at the top the joint
consultative council of management (JCCM). The specific functions of these three bodies were as
follows:

JDCs were “to study operational results and production problems, advice on the steps deemed necessary
to promote and rationalize production, improve productivity and discipline and economize cost.
Promotion of welfare and safety, encouragement of suggestions and improvement of working conditions
also fell within their purview.”

JWCs were “to discharge special function of reviewing every month the working of JDCs and other
committees such as Suggestion Box Committee, Safety Committee, Canteen Managing Committee, etc.”

JCCM was given the task of advising management on production and welfare and also looking at matters
referred to by JDCs and JWCs

In order to ensure that these committees did not overlap the functions of other committees, separate task
groups were formed. Special courses were offered to prepare both management and union representatives
to effectively utilize the facility. TISCO's experience with workers' participation has been satisfactory.

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From 1957 to the middle of 1972 JDCs have discussed a total of 14,104 suggestions of which 70.3 per
cent have been implemented. These suggestions have covered a wide range of topics and issues, but the
most important point to remember, perhaps, is that the councils have been successful in involving
workers equally in the process of production.

WORKER PARTICIPATION
Review of Judy Mailer (1992) – Conflict & Co-operation; case studies in worker participation
(Johannesburg: Ravan Press).
Bill Freund
If there is a distinctive call within the socialist project in South Africa that comes out of South African
experience, it is the call for worker participation. Few, if any, demands for nationalization or any sort of
restructuring of the firm, lack such a call. This stems to a large extent from the experience of the trade
union movement in the 1980s, from the emphasis that it has laid on worker democracy and on the
challenge to management prerogative on the shop floor. To some degree, this pressure has been met by
a reformist response from South African management, which this book attempts to assess.
As Judy Mailer explains in this useful study, sensitivity to the issue of worker participation is not due to
the force of South African politics alone as to a more basic contradiction in industrial capitalism
generally, one that is becoming rapidly more salient as the industrial character of production shifts in
the late-twentieth century. Capital 'needs to organize the forces and relations of production in a way that
develops the social productivity of labour as much as it alienates it' (p5). Just as the slave system came
up against the impossibility of the whip getting workers to produce with any efficiency or
involvement so capitalism is now coming up against the limits of what the Taytorist regime can extract
in terms of its own needs for extended accumulation. For capital, the challenge lies in finding a means
of involving workers in their own exploitation in such a way as to create a co-operative structure where
authority is diffused and involvement maximised without giving away real power. For labour, the
challenge is increasingly one to find ways of using the openings in new techniques and structures that
will benefit workers and genuinely democratise power. Mailer feels there can be no rejection of this
challenge: 'labour needs to take advantage of capital's contradictory needs in the workplace so as to
benefit workers' (pl4). Most of this book consists of three case studies, well-enough known in the
business literature but all of which the author has researched herself, which tend to demonstrate the
limited possibilities thus far of worker participation in the South African context. Jabula Foods, an
unprofitable and probably overmanned producer of basic dried foodstuffs on the east Rand, is the most
negative example of the three. Worker participation here is artificial and superficial. Management
interest in participation is reduced by the nature of the plant and labour process which offers little scope
for empowerment of workers through enskilling. Worker views of management are extremely harsh and
best expressed in terms of knock-out struggle. A strongly supported union is constantly engaged in
challenges over the basic content of work, not unmarked by violence. Management are very anxious to
destroy 100 TRANSFORMATION 20 (1992) union power and continue to rely significantly on white
skilled and supervisory labour which is deeply antagonistic to union militancy. In this context, head

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office plans for worker involvement in production can have little purchase even though ownership links
Jabula to the generally more liberal Premier group.
Volkswagen S A benefits from the sophistication of a very successful international operation. Some
aspects of consultation and involvement have been enacted effectively at the Uitenhage plant while
acceptance of trade unionism as a permanent feature of society is more widespread amongst
management However, conflictual relations are still heavily dominant and attempts to imitate the
smooth flow of goods and people which has given the Japanese car industry such an international edge
have not amounted to much. Although pay is good by local standards and there is a tendency for
workers to stay on the job for many years, workers have to support a wide number of dependents,
diffusing their prosperity enormously and the character of NUMS A democracy tends to empower the
most politically militant and active who know how to make a meeting work in their interests.
Management in the end see the union as the chief 'stumbling block' to creating a rational production
system and there is some co-operation but little love lost between what clearly remain two antagonists.
It makes a superb case study of the very contradictions that Mailer highlights and would repay a much
longer investigation.
Finally, Mailer discusses the unusual case of Cashbuild where worker participation has been quite
successful. Cashbuild is a network of autonomous shops that sell building materials to a mainly
township clientele outside the main urban centres. Its workforce is small and very differentiated
between sales and labouring staff; trade union involvement is of little or no importance. High language
of participation in Cashbuild has a distinctively South African and paternalist ring but it has achieved
some acceptance amongst workers for a variety of participatory structures. Perhaps most crucially,
workers seem to accept the idea of the pay packet being related to the success of the branch they work
in. Mailer is reluctant to celebrate Cashbuild's success, given her strong union commitment and the
reality that management power is not seriously affected by the participatory structures in Cashbuild, but
is probably on strong ground in pointing to the limited applicability of such a model to the industrial
forum. Nonetheless, the Cashbuild way probably is as close a model to a South African prototype of Far
Eastern production culture as one could find. Mailer has done a valuable service in looking at industry
in a way that statistical analyses of economic trends would never succeed in doing. She exposes the
shallowness and contradictions in management participation strategies on the one hand and the deep,
even violent gulf that exists between capital and labour in many contexts. She suggests that the way
forward is a slow and rocky one, although she necessarily has to factor out the question of political
change at the top. But it is a way that has to be forged if South Africa's uncompetitive industries,
operating with far too little diffusion of managerial and technical skills, not geared to mass market
consumption and at first sight textbook examples of the stark class conflict envisioned in The
Communist Manifesto, will learn to operate more effectively in the sphere of world competition.
TRANSFORMATION 20(1992) 101

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COLLECTIVE BARGAINING

(II) (i) Meaning:


Collective bargaining is process of joint decision making and basically represents a democratic way of
life in industry. It is the process of negotiation between firm’s and workers’ representatives for the
purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two
parties to reach an understanding acceptable to both through the process of discussion and negotiation.

ILO has defined collective bargaining as, negotiation about working conditions and terms of
employment between an employer and a group of employees or one or more employee, organization
with a view to reaching an agreement wherein the terms serve as a code of defining the rights and
obligations of each party in their employment/industrial relations with one another.

Collective bargaining involves discussions and negotiations between two groups as to the terms and
conditions of employment. It is called ‘collective’ because both the employer and the employee act as a
group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an
agreement involves proposals and counter proposals, offers and counter offers and other negotiations.

Thus collective bargaining:


• is a collective process in which representatives of both the management and employees
participate.
• is a continuous process which aims at establishing stable relationships between the parties
involved.
• not only involves the bargaining agreement, but also involves the implementation of such an
agreement.
• attempts in achieving discipline in the industry
• is a flexible approach, as the parties involved have to adopt a flexible attitude towards
negotiations.

Importance:
Collective bargaining includes not only negotiations between the employers and unions but also
includes the process of resolving labor-management conflicts. Thus, collective bargaining is,
essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of
introducing civil rights in the industry, that is, the management should be conducted by rules rather than
arbitrary decision making. It establishes rules which define and restrict the traditional authority
exercised by the management.

Importance to employees
• Collective bargaining develops a sense of self respect and responsibility among the employees.
• It increases the strength of the workforce, thereby, increasing their bargaining capacity as a
group.
• Collective bargaining increases the morale and productivity of employees.
• It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged.
• Effective collective bargaining machinery strengthens the trade unions movement.

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• The workers feel motivated as they can approach the management on various matters and
bargain for higher benefits.
• It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for
the adjustment of wages and employment conditions to economic and technological changes in
the industry, as a result of which the chances for conflicts are reduced.
Importance to employers
• It becomes easier for the management to resolve issues at the bargaining level rather than taking
up complaints of individual workers.
• Collective bargaining tends to promote a sense of job security among employees and thereby
tends to reduce the cost of labor turnover to management.
• Collective bargaining opens up the channel of communication between the workers and the
management and increases worker participation in decision making.
• Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance to society
• Collective bargaining leads to industrial peace in the country
• It results in establishment of a harmonious industrial climate which supports which helps the
pace of a nation’s efforts towards economic and social development since the obstacles to such a
development can be reduced considerably.
• The discrimination and exploitation of workers is constantly being checked.
• It provides a method or the regulation of the conditions of employment of those who are directly
concerned about them.

(II) (ii) Functions or Type of Activities:


A collective bargaining process generally consists of four types of activities- distributive bargaining,
integrative bargaining, attitudinal restructuring and intra-organizational bargaining.

Distributive bargaining:
It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries
and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss. This is most
commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is
enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to
get as much as they can for themselves. In general, distributive bargaining tends to be more competitive.
This type of bargaining is also known as conjunctive bargaining.

Integrative bargaining:
This involves negotiation of an issue on which both the parties may gain, or at least neither party loses.
For example, representatives of employer and employee sides may bargain over the better training
programme or a better job evaluation method. Here, both the parties are trying to make more of
something. In general, it tends to be more cooperative than distributive bargaining. This type of
bargaining is also known as cooperative bargaining.

Attitudinal restructuring:
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility
between labor and management. When there is a backlog of bitterness between both the parties,
attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops
a bargaining environment and creates trust and cooperation among the parties.

Intra-organizational bargaining:

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It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with
the workers and management. Even within the union, there may be differences between groups. For
example, skilled workers may feel that they are neglected or women workers may feel that their
interests are not looked after properly. Within the management also, there may be differences. Trade
unions maneuver to achieve consensus among the conflicting groups.

(II) (iii) Process of Collective Bargaining:


The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for negotiation.
In this phase both the employer’s representatives and the union examine their own situation in
order to develop the issues that they believe will be most important. The first thing to be done is
to determine whether there is actually any reason to negotiate at all. A correct understanding of
the main issues to be covered and intimate knowledge of operations, working conditions,
production norms and other relevant conditions is required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process
well begun is half done and this is no less true in case of collective bargaining. An environment
of mutual trust and understanding is also created so that the collective bargaining agreement
would be reached.

3. Propose: This phase involves the initial opening statements and the possible options that exist to
resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of
messages takes place and opinion of both the parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the
time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place.

5. Settlement: Once the parties are through with the bargaining process, a consensual agreement is
reached upon wherein both the parties agree to a common decision regarding the problem or the
issue. This stage is described as consisting of effective joint implementation of the agreement
through shared visions, strategic planning and negotiated change.

Collective bargaining consists of negotiations between an employer and a group of employees that
determine the conditions of employment. Often employees are represented in the bargaining by a union
or other labor organization. The result of collective bargaining procedure is called the collective
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bargaining agreement (CBA). Collective agreements may be in the form of procedural agreements or
substantive agreements. Procedural agreements deal with the relationship between workers and
management and the procedures to be adopted for resolving individual or group disputes.

(II) (iv) Pre-requisites for Collective Bargaining:

• Employer’s recognition of the trade union.


• Bargaining must precede other measures:
o Neither party should take any unilateral action.
o Results of bargaining should be awaited.
• Employers’ and employees’ attitude calls for a change:
o The workers and the employers should be quite clear that they are not looking for third party
intervention in the form of litigation and adjudication.
o They want to sort out their differences in a peaceful way.
• Top priority to plant level bargaining:
o The representatives of the employees must have a firm resolution to have an agreed solution to
their individual matters.
• Negotiations on differences:
o Both the parties should negotiate on their points of differences or demands with the sole purpose
of making an agreement.
• Reliance on facts and figures:
o In order to make the negotiations result into success, the workers and the management agents
must rely on facts and figures to substantiate their claims.
• Giving up unfair labour practices.
• Written agreement:
o The final decisions should be incorporated in a written agreement.
o The agreement should include the validity of the agreed matters as also the frequency of its
review.
• Progress review:
o Agreements should not be signed and forgotten.
o During their implementation, regular meetings should be held between the representatives of
both the parties to watch the progress of the implementation. This way any changes, adjustments
and amendments can be effected.
• Respect of agreement:
o Both the parties must respect the agreement and see that it is implemented in a fair and justifiable
manner.
• Arbitration provision:
o The agreement must include an arbitration clause.
o Whenever the parties have any differences pertaining to the interpretation of the terms and
conditions, the arbitration clause can be resorted to.

The Indian Scenario on CB:


• In India, trade unions gained prominence much later – only after 1900.
• In 1918, Gandhiji - as the leader of the Ahmedabad textile workers – advocated the resolution of conflict
through CB agreements. But the idea gathered interest only after the Second World War.
The Government of that time took steps like setting up of machinery for negotiations, conciliation and
arbitration.

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• The trade union movement and also CB agreements became popular after Indian independence. Moving
from agreements at the plant level, such agreements spread to industries such as chemicals, petroleum,
tea, coal, oil and aluminum.
• In ports and docks, banking and insurance, collective agreements were arrived at, right at the national
level.

Assessment of Collective Bargaining in India:


Other than in Ahmedabad and Mumbai, so far, collective agreements have not made much headway in India.
Reasons:
o Lack of statutory recognition of unions by the country as a whole.
o Lack of provisions requiring employers and workers to bargain in ‘good faith’.
o The historical problem of ‘lack of trust’ between the parties

Causes of limited success of CB in India:


• Problems with unions:
o CB mainly depends on the strength of unions.
o Weak trade unions cannot initiate strong arguments during negotiations.
o Not many strong unions in India.
o Indian unions are bogged down by the problems of: multiplicity, inter and intra-union rivalry,
weak financial position and non-recognition.
So, unanimous decision is unlikely to be presented at the negotiating table.
• Problems from Government:
o The Government has not been making any strong efforts for the development of CB. Imposition
of many restrictions regarding strikes and lockouts has removed the `edge` of the CB process.
• Political interference:
o Interference of political leaders in all aspects of union matters has increased over the years.
Almost all unions are associating themselves with some political party or the other.
• Legal problems:
o Now that adjudication is easily accessible, the CB process is losing its importance.
• Management attitude:
o In India, managements have a negative attitude towards unions.
o They do not appreciate their workers joining unions.

Suggestions for better functioning of CB:


The Indian Institute of Personnel Management has offered the following suggestions:
A progressive and strong management that is conscious of its obligations and responsibilities to the
various stakeholders.
A truly representative – enlightened and strong – trade union should come into being and should
function on strictly constitutional lines.
There should be unanimity between labour and management on the basic objectives of the organization
and a mutual recognition of their rights and obligations.
When there are several units of the company, there should be a delegation of authority to the local
management.
A fact-finding approach and a willingness to use new tools should be adopted for the solution of
industrial problems.

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