taking place in modern management; giant corporation, considerable uncertainty, and ..... World War II witnessed another turning point in the history of industrial relations in India when an ordinance ..... New Delhi, Tata McGraw Hill, 1987.
WORKERS PARTICIPATION IN MANAGEMENT IN INDIA: PERSPECTIVE AND CHALLENGES OF THE NINETIES Debi S. Saini 1
Introduction Workers participation in management in India evoked considerable interest recently. The National Front Government included it in its election manifesto and showed its keenness to concretise it by enacting a law; and did in fact introduce a bill to this end in the Raiya Sabha, which is pending before it for its consideration. A similar attempt was intended by the Janata Party Government, during its tenure in the late nineteen seventies, but the Government fell before it could do so. Apart from a directive principle of state policy in the Indian Constitution to this end, workers ’ participation in management appears to be seeking a more concrete form in view of global developments in the sphere of industrial governance. Changing conceptual formulations in the theory of work, along with the changing needs and aspirations of the working people, have also contributed to the emergent thinking in this regard. Today ’s employees, especially those belonging to the younger generation, feel alarmed at the developments th at are taking place in modern management; giant corporation, considerable uncertainty, and change in technology. The emerging scenario threatens jobs and undermines the existing work patterns, which often lead to industrial conflict. Contemporary research evidence points to a decline in the average age of industrial workers, at present, to below forty years. Conversely, the levels of their education and technical competence are rising, leading to greater awareness. The workforce, thus, demonstrates a greater desire to be involved in these decisions which have implications on their careers. Workers perceive the existing reactive power of the trade unions, which they exercise through collective bargaining, not adequate enough to meet the challenges of changing work relations. Rather a positive initiative on their part by participating in entrepreneurial decisions at various forums is increasingly being realised. In view of the complexities of modern industrial environment, it is being felt that strategic indus trial decisions are too important to be left to the sole discretion of the management. It is also being felt that ‘though a reformed and extended system of collective bargaining must be the basis of a democratic strategy for industry, there should also be, where appropriate, an employee voice at boardroom level closely linked to collective bargaining but expressed in different institutional form (Radice, 1978: 115). This is considered as a Sina qua non for creation of a democratic industrial society. Ironically, the experience of the working of worker participation schemes in India has been quite unsatisfactory. Also, inspite of the concept having becoma a catchword, it remains inchoate and almost undefined, With the current speed of development of this concept, is appears that to get entrenched as a part of Indian industrial relations system, the participative management ideology has to fight a long struggle for its legitimacy. Nevertheless, labour scholars agree that industrial relations will eventually mo ve towards some form of industrial democracy, the form it will take, will be determined by a variety of factors and situational realities. Also, the changes that are taking place in this regard in the European industrial relations systems are bound to make an impact on their counterparts in the remaining part of the world, including India.
1
. Reader in Commerce, Delhi College of Arts and Commerce, University of Delhi. Netaji Nagar, New Delhi-110023, INDIA.
Parts of the contents of this paper are based on field research conducted for my Ph.D. thesis submitted to the University of Delhi (Faculty of Law), under the supervision of Professor Upendra Baxi: I feel grateful to him, Of course, he is in no way responsible for the views expressed here.
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The trade unions and the employers, however, are demonstrating mixed reactions to workers participation because of wider questions of interest relations and employer’s prerogatives being involved. This in fact has been, among others, one of the key reasons for its slow growth in India. An attempt is made in this paper to review the progress in the development of this concept, the real problem involved, and the challenges that the actors in the Indian industrial relations system face in the coming years to advance towards a more participatory industrial governance. The Concept The terms ‘workers’ participation in management’ and ‘industrial democracy’ are often used interchangeably, and also as synonyms (see, for example, Joseph, 1978; Ramsay, 1976; Sawtell, 1968; Virmani , 1978). However, the two, though quite inter-related, are not just the same. Industrial democracy should be looked as an equilibrium between the rights of the dominant industrial hierarchy and the rights of the employees with a broad social objective. Workers’ participation, on the other hand, should be viewed as only the means to attain the wider goal of industrial democracy, to denote the process by which employees can exert influence on the managerial decisions at various hierarchical levels in an organization (Saini, 1983). For a democratic strategy to be effective, it is essential that it genuinely changes the balance of power within an enterprise in favour of the employees collectives, and not merely give a democratic facade to an otherwise authoritar ian structure (Radice, 1978). The degree of participation may, however, differ in various situations, which may vary between information sharing on the one extreme and total self management by the workers on the other. Participation may take the form of information, consultation, joint decisions, equity participation or self management. Some writers consider even collective bargaining as a form of participation (see, for example, Verma, 1987; Monappa, 1985: 224; ILO, 1981: 22). However, it is difficult to agree with this position, particularly because participation postulates a commonality of purpose: a more effective, though democratic, working of the enter prise; collective bargaining, on the other hand, essentially involves pursuing adversarial interests by the parties, resulting in a compromise. The resolution of differences is determined by, inter alia, the relative power of the parties. Therefore, whereas participation is seen as a means of creating and fostering a unity of purpose between the employer and the employees even when there is a conflict of interests, collective bargaining, on the other hand, emphasizes the centrality of continuing differences of interest between the parties (Virmani, 1988: 15). Goals of Participation One of the most important issues to be resolved in the area of worker participation is the goals that it intends to achieve. The goals may vary from increased productivity and industrial peace to ‘evolution of private industrial governments in industry’ (Selznick, 1969). In the Indian context, our ‘directive principles’ envisage developing a participatory society to realise egalitarianism as an end in itself. Worker participation can be a useful instrument in this direction. Morally, the democratic case wit hin industry has the same basis as democratic arguments elsewhere - that every individual ought to have a say in those decisions that affect his life (Radice, 1978). It is rightly argued, therefore, that the industrial workforce is not just producer of goo ds but is also a political system. Mamkoottam (1978: 41) notes: ‘Not only are the decisions made in industry of great importance to its members but also the experience of social relationships in the plant has a bearing on the perceptions of life outside.’ Thus, the social value of participation in industrial management is of paramount importance when questions of decentralization of power to people as an ideology are examined. Scholars have emphasized various other objectives of participation, like, a management response to crises in industry generated by the upsurge in labour power (Ramsay, 1977), a device of increasing production and productivity, transforming the agrarian population into an industrial workforce committed to the goals of industry (Aziz, 1980: 15), decentralization as opposed to concentration of power, redefinition of class relations (Krishna lyer, 1979: 86), a system of social relations in production and distribution based on equality and democracy of workers (Sethi, 1981: 62), prevention of alienation and exploitation, handling of resistance to change, an act towards implementing the Gandhian trusteeship principle (Ramanujam, 1990, Sethi, 1981) etc. From the Marxist perspective, participation is seen as a successful management practice, a means of strengthening the management control over labour in production process; and, therefore, all participation 2
schemes are in both intention and effect pseudo participation (Brannen, 1983 ), and only a device to stall the envisaged revolution. Now in a traumatically changeful society like India, where various instruments including workers ’ participation are being used to bring about socio-economic change, the initiative of the government is imperative. It is, however, essential that we articulate our go als of workers’ participation - even though, we may choose a hierarchy of goals. Not only that, we have to shape the required supportive struc tures for developing workers’ participation so as to be in consonance with those goals. Ironically, the official proclamations and our labour policy in India are quite at cross purposes. In its operationalisation, workers’ participation has been stressed more as an instrument to increase productivity and production, and to contain industrial conflict, rather than developing it as a ‘value for its own sake.’ This will be noticeable from the following description of events in the process of development of participation in other societies, and in India. Evolution The idea of workers’ participation in management evolved as a critical reaction to the industrial revolution, which has made industrial work routine, monotonous, and alienating for the working class. In Karl Marx ’s well-known words, industrial forms of work ‘mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into hated toil ’ (Marx, 1961: 645). During the First World War, governments of a number of countries sought cooperation of workers to meet their war needs. In 1919, the Federation of British Industries recommended that workers in every industry should be given the fullest possible voice in the conditions under which they were in England. Legislation was used in many European countries to establish ‘works councils’ around this period. Also, efforts began to be made in some parts of the world to induce employers to recognise workers ’ unions and negotiate with them, but the emphasis there was more on the clash of interests rather tha n on the commonality of them. After being in a state of a mere symbolic existence for some time, the idea of workers ’ participation in management revived during the Second World War in many countries again, with a view to be used as an instrument of enhancing war production. After the War was over, several countries retained or established ‘joint production committees’ either through legislation or otherwise. After its defeat in the War, West Germany evolved a system of co-determination. The socialist camp also demonstrated new developments when Yugoslavia chose to move away from the centralised planning model of U.S.S. R. to one of decentralised ‘Workers Self Management’, thus considerably enhancing the power position of the worker in his working milieu. The institution of joint stock company in the mean time was flourishing, giving rises to the creation of a dichotomy between the ownership and management, which resulted in the emergence of a class of professional management. As a corollary of this, the concept of ‘scientific management’ was developed by Frederick W. Taylor. The basic objective of his ‘scientific management’ was to develop science to replace the ‘rules of thumb’ which were then being used by managers. In this process, Taylor’s main emphasis was on two problems: How could work methods be made efficient, and how could men be motivated to work harder. He opined that people would only work at their best speed if they were assured a large and permanent increase in their pay. Taylor’s idea, however, was proved crude by the Hawthorne Experiments of Elton Mayo at the Western Electric Company in the U.S.A. in the nineteen twenties. Mayo’s research studies resulted in the evolution of human relations movement in management. Since the publication of Mayo ’s research, academics in the West undertook many studies to explain motivation of people in organizations, and als o to improve the quality of working life. In 1954, Maslow developed the concept of hierarchy of human needs. Later, his disciples, like McGregor, Herzberg and others, developed motivation theories and suggested restructuring of jobs so as to make them rich with challenge, and also to allow workers to participate in decisions affecting them. Thus emanated the movement of job enrichment, along with the democratic leadership styles, as parts of the philosophy of human resources development. 3
Apart from the development of the institution of collective bargaining -- which was becoming a powerful engine for work place changes -- the need was being felt of direct involvement of the rank and file in the decision making process. It was being realised that this was an essential step towards improving the quality of working life and operationalising democracy in industrial governance. It came to be realised that the deeper the involvement greater is likely to be the job satisfaction. Apart from meeting his basic need s, work should be a major source of fulfilment to the workman. Psychologists established that positive work effects may motivate employees to get integrated with the organization, and also to participate actively in decision making when called upon to do so. To this end, two methods are particularly gaining prominence, whereby workers are directly involved in some kind of decision making activity. They are: team briefing, and quality circles. In the nineteen eighties, direct employment has become something of a growth industry as managements have increasingly sought to inform their employees of organizations’ positions in the market place, in an attempt to win their cooperation in achieving the process of change (Marchington, 1987: 164). In view of the emergence of a new workforce, which increasingly resists authoritarianism of the workplace, management executives have been pondering over the device of worker participation. They are coming to a realization that work life must change to cope with the problems of high rate of absenteeism, high labour turnover, declining product quality, and the emergence of a conscious workforce. Progressive employers no more link worker participation merely with the question of increasing productivity; rathe r they attribute to it a higher purpose. The above-mentioned developments have been taking place in the management theory. Governments also made contributions in various ways in developing this concept. In the United Kingdom, for example, the concept got impetus through meaningful joint consultation, particularly in the nationalized industries. Various Acts of legislatures for nationalization of certain industries have imposed obligations on managements to seek consultation with the concerned trade unions. This is done with a view to establishing a machinery for the production, and taking appropriate measures regarding the health, safety, and welfare of persons employed in the concerned industries, and for discussion of other matters of mutual interest. Even though, there have been cases of providing workers’ representative at the highest level of management in a body like National Steel Corporation, the most common form of participation, there, is at the plant level, which is primarily a bipartite arrangement. In spite of the Governmental efforts in the direction of worker participation, most of them lack pursuance of a cohesive and goal defined policy of developing this concept. However, at least in three countries: Yugoslavia, Israel and West Germany, clearly distinct ideological underpinnings ha ve shaped their models of workers’ participation. In Yugoslavia, it aimed at giving ‘ownership rights’, and in West Germany, ‘a perception of participation as a means of liberation of labour from exploitation and alienation, and an end in itself’ (Joseph, 1978). These countries have been consistently and systematically pursuing participation philosophy to realise their stated objectives. In the remaining part of the world -- barring the Western European countries, where also considerable progress has been made in its operationalization -- this institution is still being debated for its forms and objectives. Much of the existing schemes in this regard, there, are merely symbolic, and have not quite worked as positive instruments of changing the workplace environment. Workers’ participation in India: Historical and Contemporary Scene A quasi-systematic thinking in the area of evolving workers’ participation in India began with the enactment of the Industrial Disputes Act, 1947, which empowered ‘appropriate governments’ to require constitution of a ‘works committee’ in industries where 100 or more workers are or were employed on any day in the previous twelve months. But this Act did not identify the concrete objectives of these committees and mentioned them very broadly. Earlier, some informal consultation was made by employers in the textile industry in around 1910, when they were foreseeing growing trade union awareness. The Tata Iron and Steel Company (TISCO) organized a works committee consisting of the representatives of the management and the trade union, but this did not last long (Pylee, 1975). Around this period, Gandhiji initiated a new pattern of labour -management cooperation based on joint consultation and voluntary arbitration. The Royal Commission of Labour, 1929 also recommended constitution of ‘a larger body representative of both sides of the industry in the centre concerned ’ (Pylee, 1975: 25). World War II witnessed another turning point in the history of industrial relations in India when an ordinance (Rule 81A) under the Defence of India Rules (DIR) was promulgated to provide for the compulsory
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adjudication of both interest as well as rights industrial disputes in cases where parties fail to reach compromise. However, a tripartite national level body, the Indian Labour Conference (ILC), was constituted to deliberate on certain new labour and welfare legislation and methods of increasing production. After the enactment of the Industrial Disputes Act, the Indian Labour Conference, in November 1947, also accepted the principle of joint consultation and called upon the employees to set up the ‘works committees’ and ‘production committees’ with a view to promoting efficiency and labour-management harmony. In relation to its own employees, the Central Government also took initiative in setting up of a ‘joint consultative committee’. In 1950, the new Constitution came into operation. It provided for, among others, Panchayati Raj, through which each village was intended to be brought under self-government through elected members. Though not concretely mentioned, the thread of developing a participatory society in all spheres, including enterprise governance, ran through the entire scheme of the Constitution (Saini, 1973). The Constitution accepted a democratic-socialist model. It provided ‘directive principles of state policy’ in Chapter IV to be the key instruments for transforming a feudal, medieval, hierarchical Indian society into an egalitarian social order. The Constitution of India thus aimed at furthering the goals of a social revolution or attempt to foster revolution by establishing the conditions necessary for its achievement (Austin, 1966: 27). The constitutional philosophy later came to be translated in the Government’s plan documents. The First Five Year Plan emphasized that workers’ right of association, organization, and collective bargaining is to be accepted without reservation as the fundamental basis of mutual relationship between labour and management (Government of India, 1952: 49). In the Second Plan, the emphasis shifted from collective bargaining to workers’ participation. The Industrial Policy Resolution of 1956 stated that ‘in a socialist democracy labour is a partner in the common task of development and should participate in it with enthusiasm’ (Government of India, 1956: 49). The resolution felt the need for joint consultation between management and workers with a view to maintaining industrial peace and developing healthier industrial relations. The Second Plan gave a more concrete shape to the goals of participation rather than being just a mere device for ‘increasing production, improving quality, reducing cost and eliminating waste’. (Government of India, 1956: 577). Subsequently, a study group was sent to grasp the experience of participation in European countries which made recommendations about the setting up of Joint Management Councils (JMCs). Its recommendations were discussed at the 15th Session of the Indian Labour Conference (ILC) in 1957. A tripartite sub-committee was set up as per the recommendations of the ILC which laid down the criteria for selection of enterprises where JMCs could be introduced (Sheth, 1972). A concrete scheme of JMCs was launched in 1958 on a voluntary basis. Three sets of functions were envisaged for the JMCs: information-sharing, consultative, and administrative. The role of information-sharing was provided on economic questions, such as technology, market, profits, development, production programme etc. The Council was expected to make suggestions after considering the information received. The role of consultation was conferred in matters such as administration of standing orders, changes in production methods, and reduction and cessation of production. The Council’s administrative responsibility was in respect of safety, welfare, training programmes, working schedules, holidays etc. It was clearly stated that all matters falling in the domain of collective bargaining were outside the jurisdiction of the JMCs. The sub-committee was later reconstituted as the ‘Committee on Labour Management Cooperation’ to advise on all matters pertaining to the scheme. However, in spite of a considerable enthusiasm in launching the scheme of JMCs, it was noticed that the scheme was not successful. In 1962, a study group appointed by the Ministry of Labour admitted that both ‘works committees’ and JMCs had failed in India. The National Commission on Labour (NCL) too corroborated this finding but hoped that ‘when the system of union recognition becomes an accepted practice, both managements and unions will gravitate towards greater cooperation in the areas they consider to be of mutual advantage and set up a JMC’ (Government of India, 1969: 345). Many studies by academics also reported their dismal performance (see, for example, Kannappan, 1968; Tanic, 1969; Sheth, 1972; Alexander, 1965; Pandit, 1962). An important extension of the concept of workers’ participation was its experimentation at still higher levels: appointing workers’ representatives as members of the Board of Directors especially in public enterprises. Later in 1973, the rules framed under the Banking Companies Acquisition and Transfer of Undertakings Act, 1970 provided for one worker-director on each of the boards of nationalised banks. Another high powered Expert Committee on Companies and MRTP Acts, set up by the Janata Government, recommended that a provision be made in the
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Companies Act for providing workers’ representation on the board level in companies employing 1000 or more workmen (excluding casual/badli workers)(Government of India, 1978). During the emergency (June 1975 to January 1977), the Central Government framed another scheme of workers’ participation: ‘joint councils’ with equal representation from employer and employees at the shop as well as the plant levels in all manufacturing and mining industries with more than 500 workers. The government desired that these forums be used for increasing the production, productivity and the overall efficiency of the enterprise. Once again, the issues of collective bargaining were excluded from these forums. Another scheme for workers’ participation was introduced in commercial and service organizations having large-scale public dealing. During the emergency, an important landmark was made in further promoting the concept. The Forty Second Amendment to the Constitution, through Article 43A, provided for workers’ participation in management as a directive principle of state policy. After the Janata Government came into power in 1977, its immediate task in labour matters was revival of the tripartite Indian Labour Conference, which had been abandoned six years ago. The ILC set up a ‘Committee on Workers’ participation in Management and Equity’, which suggested a three-tier system through passing of a law. The Committee recommended that the issues relating to new technology, product mix, or expansion schemes be discussed and decided at the Board level. The Committee also suggested that collective bargaining matters be separated from workers’ participation, and that the workers’ participation scheme should not replace the conflict resolution machinery. The Committee also laid down the detailed functions of the councils at the shop floor and plant levels. Moreover, it recommended that workers’ representatives at the participative forums should be selected through secret ballot. Further, an organization was suggested, both at the central as well at the state levels, to monitor the implementation and working of the scheme. However, the Janata Party Government fell before the scheme could be processed further. With the change of the government at the Centre in 1979, faith in workers’ participation was again demonstrated. The Sixth Five Year Plan endorsed the need for a three-tier legislative scheme of workers’ participation but at the same time underscored the need for effective arrangements for the training of workers, and the managerial and supervisory personnel, so as to motivate them in making the scheme a success. The Central Government introduced a new comprehensive three-tier scheme on voluntary basis on December 30, 1983. This scheme covers all central public sector undertakings, except those specifically exempted by the concerned administrative ministry. The functions of the participative forums have been made more comprehensive. At the shop floor level, the participative forums will look into a wide range of functions such as production facilities, storage facilities in a shop, material economy, operational problems, wastage control, hazards, safety problems, quality improvement, cleanliness, monthly targets and production schedules, group working, welfare measures related to shop etc. At the plant level, the participative forums will look into certain specified functions in operational, economic and financial, personnel, welfare, and environmental areas. At the board level, the workers’ representatives will participate in the usual functions of the board. A special function was assigned to the board: reviewing the work of the shop and plant level participating forums. Under this scheme, only 109 of the 203 operational public sector enterprises have set up shop/plant level fora. Also, 48 enterprises have adopted a modified version of the scheme, whereas the scheme has not been adopted at any level in 46 of the enterprises. The only public sector enterprise, to adopt the board level participation, other than the banks, is the International Airport Authority of India (Government of India, 1990). Although the above scheme is applicable to all the central public sector undertakings, the state governments have been requested to introduce in their own public sector undertakings, and also to encourage the private sector to implement the scheme. The Bhopal Gas Disaster of 1987 led to a substantial amendment to the Factories Act, 1948, whereby, inter alia, one section was added to provide for the workers’ participation in safety management through the constitution of a ‘safety committee’ consisting of equal number of representatives of the workers and the management to maintain and review proper safety and health at work (section 14G). The manifesto of the National Front Government included labour participation in management as one of its programmes. Almost immediately after the assumption of office in 1989, the new Government tried to evolve a 6
consensus on the strategy towards operationalizing its intention. It organized a high level seminar on the subject which was attended by employers and managers, union leaders, union ministers, political leaders and labour bureaucrats. The Government also tried to hold a series of ‘echo seminars’ throughout the country as an exercise in developing a consensus. In early 1990, a Bill was introduced in the Rajya Sabha, which aims to establish a statutory framework for industrial democracy. This Bill provides for ‘shop floor councils’ and ‘establishment councils’ in which the employer and workers would be represented equally. The Bill also provides for 25 per cent representation of ‘workers’ and ‘other workers’ on the board of management. Initially, there was a talk about employee sharing of ownership, but it was later dropped, While the government which piloted this bill has fallen, the bill is still pending before the Upper House of the Parliament. Its fate will depend upon the approach of the new government that will be formed after the June, 1991 elections. In the light of these historical developments, we shall consider the hurdles involved. Problems in Participation The very fact that quite a few schemes of workers’ participation were framed, one after the other, demonstrates that participation has not made much headway in this country. A common stereotype often cited for this state of affairs is the reluctance of managements to encourage it. However, this area is a very complex one, the determinants of its success being a variety of endogenous and exogenous variables. The ILO also admits: “there is no participation system which does not give rise to problems, and it is unanimously agreed that, in this field, as in many others, there are no ready-made solutions. Participation institutions are complex, and always came into existence and developed against a specific historical, political, economic, social and cultural background, which is never quite the same elsewhere” (ILO, 1981: 201). Nevertheless, it has to be admitted that the development of industrial democracy should seek its genesis in a property developed industrial relations framework; the two problems, therefore, have to be studied together. The following impediments to its development need attention in India. Firstly, as per the Government’s official thinking on workers’ participation, it is primarily looked as an instrument of improving productivity and efficiency. It exhorts people to work hard and apply re straint in making economic claims in the interest of the greater good of the society. Our planners thought that participation will give a feeling to the workers that they are building in their own way a ‘progressive state’ (Government of India, 1956: 572) and will also fulfil their urge for self expression to compensate for any feeling of loss in material benefits. The 1975 scheme also envisaged that the joint councils will be used for ‘increasing production, productivity and overall efficiency of the enterprise.’ In fact, in the past, workers’ participation has been emphasized only during ‘economic crises’ (Sengupta, 1981). In the three oft-cited models of workers’ participation: Yugoslav, West German, and Israeli, however, three specific ideological underpinnings emerged as their raison d’etre of the participation schemes. In fact, many Indian scholars have even argued for adoption of one or other of these models i n some modified form (see, for example, Sethi, 1981; Virmani, 1988). In spite of repeated exhortations to the working class for accepting the official policy, the trade union behaviour demonstrates that the preaching of Nehru-Gandhi heritage of responsible trade unionism have proved an empty rhetoric. The Indian industrial relations atmosphere is surcharged with antagonistic attitude, mistrust, and suspicion between the workers and the employers on the one hand and between the trade unions and the labour department on the other. Consequently, the degree of incongruence between the perceptions of the rank and file, who put primacy on their self interest, and the official proclamations is very high. Also, wherever implemented, the employers and managers have also invariably adopted a paternalistic attitude to this concept, as if participation rights are granted as concessions to the working class. In order to be functional, it is essential that the goals of these schemes adequately motivate the concerned actors to accept them; and, therefore, there is a need to clearly redefine the goals of participation. Thus, it is essential that the workers and trade unions should be convinced that the Government’s intention is to develop ‘democratic governance of industry as a value in itself.’ Secondly, a review of successful experiences of workers’ participation schemes in management at the global level (excluding the Yugoslav, West German and Israeli schemes) shows that much of these -- particularly team briefing (i.e. information sharing with working groups) and quality circles -- are all management 7
initiatives, because they have been used as efficiency devices. However, when participation schemes are used for a higher purpose, enacting a law on the subject essentially involves using law to eventually bring about a change in social and economic relations. While law is always considered a poor instrument of social change, it is at the same time necessary to promote an awareness of industrial democracy amongst the actors in the system. Even though, anti-untouchability, anti-bonded labour, and anti-dowry laws may not have quite succeeded in achieving their goals, but their utility in creating an awareness is undoubtedly significant. Social change instruments may not necessarily be chosen on the basis of popular opinions. They are based on superior values like human dignity, equality, and natural and social justice. Therefore, while enacting a law on participation in the Indian context -where voluntary schemes have proved ineffective -- is essential, efforts should be to first remove other dysfunctional features of the present system. Thirdly, the only major statutory provision at present in India is the constitution of works committees consisting of equal number of representatives of the employer and the workmen. Empirical evidence suggests that the working of these committees is far from satisfactory. Neither the workmen nor the trade unions have shown any interest in their constitution. Also, all state governments have not issued notification for their constitution. Instances of managements using these committees for ulterior purposes have been many (Saini, 1991). In one instance, management made works committee-members to agree to rationalisation scheme. The same was challenged by the trade union. The Supreme Court of India had to clarify: “Works committee was not intended to supplant or supersede the unions for the purpose of collective bargaining, they are not authorised to consider real or substantial changes in the conditions of service, their task is only to smooth away frictions that might arise between the workmen and the manag ement in day-today work. By no stretch of imagination can it be said that the duties and functions of the works committee included the decision on such an important matter as the alteration in the conditions of service by rationalisation.” (Northbrook Jute Company v. Workmen, (1960) I Labour Law Journal, 580 (Supreme Court) The Supreme Court also made it clear that a works committee cannot consider important matters like employment or non-employment which include the case of dismissal, or the case of re -employment of retrenched workmen, or questions involving pay scales or dearness allowance etc. In fact, in a large number of cases, particularly in concerns in the private sector and having paternalistic managements, works committees are being used as instruments to stall formation of unions even though such a practice should clearly fall in the category of unfair labour practices on the part of employers, as enunciated in the Industrial Disputes Act, 1947 (Saini, 1991). It is for these reasons that workers rarely demand creation of works committees in those organizations where they have not been created. But this situation is attributable to the contradictory Indian labour policy. Fourthly, the trade unions in India are known to suffer from multiplicity, in ter-union and intra-union rivalry, weak financial position, politicisation of objectives, outside leadership, and the lack of a law on recognition. Also, particularly in the unorganized and semi -organized sector (which some times includes establishments employing even more than 1000 workmen), they face hostile and autocratic management which is often in collusion with the bureaucracy and even the political executive (Saini, 1991). This leads to the emergence of puppet unions, and corrupt trade union leaders who compromise workers interest in return of personal or political gains. The system of compulsory adjudication of both the interest as well as rights disputes, in its working, has demonstrated a total juridification of the industrial relations system. In fact, this juridification is number one enemy of developing healthy trade unionism (Saini, 1991; Clark and Wedderburn, 1983). Critical issues in collective bargaining versus workers’ participation in management cannot be articulated unless trade unions are made viable and strong. While multiple and political unionism has come to stay in India, an atmosphere has to be created to facilitate stronger trade unions in the given envi ronment. It is hoped that as unions become more mature and stronger, a greater degree of unification of the existing union structures will eventually take place. But, till the existing archaic system of compulsory adjudication exists, not much achievement can be expected in this regard; for this institution has had the most debilitating impact on the labour power in India (Saini, 1991). Fifthly, another reason for the failure of participation structure in India is the unwillingness of the employers to sit with workers as copartners in the industrial venture, and the consequent apathy of the workers to involve themselves in such arrangements. Consequently, sharing of corporate informations with the employees does not take place. In fact, this problem is notic eable even in the British system because the employers suspect that the informations may be used by the trade unions against the management in the collective bargaining forum (Virmani, 1988; Marchington, 1987). This is a very complex matter, and is in 8
fact intertwined with the question of delimiting the areas of participation and bargaining. Sixthly, it is well-known that in spite of a vigorous participation by the trade unions in the contemporary debate on workers’ participation, they pay lip sympathy to its actual acceptance. Their most important contribution is to perpetuate the .STATUS QUO, whereby they are able to retain their inevitabilities in the industrial relations system. Thus, participation remains more in theory than in practice. They project a feeling that collective bargaining can in itself be a system whereby the workers through their unions can have a say in the affairs of the management. Also, all the previous schemes drew almost a dichotomy between the bargainable issues and joint management (participation) issues, in practice, this distinction could not be sustained; participation forums, thus, have been found to be converted into mini -negotiating committees. This is the most problematic area which will have to be encountered for any succe ssful working of a participation scheme; otherwise we will find that the proposed scheme too will be an exercise in futility. Undoubtedly, this issue will require structural change in the present arrangements. Interestingly, lessons could be learnt from the historical developments consequent to the introduction of co determination in West Germany when members’ interest in the trade unions started reducing and the union membership too began declining. A feeling grew amongst workers that they could negotiate their problems themselves. This compelled the unions to shift their role from that of an adversarial relationship in the collective bargaining system to a positive role of enriching workers ’ lives, welfare activities, and workers’ skills for participative forums through training (Virmani, 1988). Thus began decentralization of the trade union power through co-determination whereby trade unions confined their role primarily to macro level issues of wages and working hours, and problems of day-to-day working of the enterprise became the sole domain of work councils. In case, an issue remains unresolved at the participation forum, the matter, unlike in India, does not go to the negotiating table but a higher forum called ‘joint mediation board’ which too is a part of the participation mechanism. Strikes are not allowed on these issues, and both parties are bound by the decisions of the board. The successful working of co-determination in Germany, a system which is cited as a model everywhere, is attributable to the above-mentioned points. In fact, it is being realised even in the working of the British system of participation, which is quite analogous to its Indian counterpart, that a clear distinction is difficult to maintain between the negotiating and consulting bodies which proves advantageous to management. This explains the ambivalence, or even hostility in certain cases, of the British trade unions to participation because they fear role conflict. This situation leads a British scholar to remark: “…. a participation package can be bought off the shelf, but whether or not they work depends upon the quality of management-employee relations within the undertakings upon the history of previous dealings, the levels of trust, and above all on the commitment of management to making the system more effective” (Marchington, 1987: 182). Even though experimentation in participation arrangements is being made all over the globe, its success will primarily depend, inter alia, upon resolving the equation of workers’ participation versus collective bargaining. Political and legal intervention has to play a major role in this direction, apart from the re-thinking on the part of trade unions and managements. Seventhly, the stereo-type that elections breed bickerings and groupism has gained firm grounds in the Indian system of industrial relations. This is largely due to the thinking of the Indian National Trade Union Congress which has been consistently harping on verification of membership as a method of determining bargaining agents. Ironically, even the protagonists of secret ballot -- the Janata Dal Government -- shied away from operationalizing it in their election of the President of the Janata Dal for the very same reasons that were given by the INTUC. Interestingly, the same government projected its determination to secret ballot in the matter of selecting workers representative to participation forums. Such an attitude to elections is inexplicable in a democracy that has worked for more than forty years. A strong political will is essential for overcoming this vital problem. Lastly, one of the key requirements of the success of worker participation is education of both the workers as well as the trade union leaders. The existing half-hearted attempts in this direction aim at increasing productivity by improving labour-management relations rather than preparing workers for effective participation in management. The education schemes should aim at inculculation in workers attitudes and values that will be conducive to promotion of industrial democracy. While the key responsibility in this regard has to be of the trade unions, the Government has to come forward in a big way because unions in India have, inter alia, a major problem of weak finances. Some people even suggest a joint educational programme for labour and management, which will bring about attitudinal changes, on both sides and create mutual trust (Ramanujarn, 1990). The planners, government and 9
the bureaucrats have to demonstrate a political will to reorganize the existing scheme on workers’ education by giving it priority. The Bullock Committee in England has recommended setting up of Industrial Democracy Commission to act as a watch dog of development of industrial democracy. Further, it suggested treasury grants in addition to the efforts made by unions. The Committee also envisaged that worker acquaintance is needed in the area of, inter alia, presentation of financial information, basic economics, management information and control system, and some aspects of company law. In the Indian context, even a good working knowledge of labour laws will be essential while educating workers to this end. Challenges In view of the problems discussed above, a wider look is needed to the problems involved in the coming years if worker participation is to succeed. Many of the problems have been raised previously. But they have to be again raised, debated, and articulated without which it is futile to pursue the democratisation of workplace. The posterity will have to address to the following questions: 1.
2.
3.
4.
5.
6.
7.
8.
The forum works committee has to be reviewed in view of its ineffectiveness, lack of interest on the part of trade unionists, and the misuse of some unscrupulous employers as a device to stall formation of unions. No second thoughts are needed on the inevitability of law on workers ’ participation, as the same would quite be in consonance with the spirit of democratic and pa rticipatory way of life enshrined in the Constitution. Though, working of the system would require a high level of motivation of the actors in the participation system, designing of appropriate system would be essential as a first stage. The proposed law should be supplemented by removal of the contradictions in the Indian labour policy, mentioned above. It is important to understand that since participation may be possible only with the flourishing of professional management, the nuisance value of autocratic and paternalistic managements can be counteracted only by strong trade union movement. For this, wider questions of dejuridification of the industrial relations system will have to be examined on a priority basis for developing environment whereby the parties can fully appreciate the value of participation. The five year plans have put greater emphasis on participation mechanism to be used as instruments for increasing production and productivity. The National Front Government has underlined ‘a culture of participatory decision making and a sense of belonging with the enterprise ’ as the goal of workers’ participation in management. The working of the future labour policy shall have to adhere to such a goal because productivity-linked participation has proved to be a mere rhetoric. A review of two of the most successful workers’ participation experiments of the world -- Yugoslav and West German -- reveal that the Yugoslav system of worker self management postulate no collective bargaining, and in case of West German co-determination, trade unions’ role has considerably changed from a purely adversary power group to an assimilation of it with a positive role of making workers better performers at the participation forums. Unless dichotomy between negotiation and participation is strictly adhered to, the future of worker participation in India is quite bleak. Since Indian trade unions suffer from the weakness of poor finances, they cannot effect ively organize workers education on their own. It is, therefore, worthwhile to consider levying of a cess on the value of industrial production to finance a state-created autonomous agency for managing worker education on a priority basis. The rulers have to set examples by resorting to, and encouraging the use of, elections for selecting representatives for various forums, to be followed by workers. They will have to be viewed more positively than has been the case so far. Appropriate changes shall have to be effected in the corporate laws to ensure accountability of managements in operationalising the legislative intent.
References
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Pylee, M.V.: Workers’ participation in Management, Myth and Reality. New Delhi, N.V. Publications, 1975. Radice. G.: Industrial Democrats. London, George Allen & Unwin, 1978. Ramanujam, G.: ‘Labour Participation in Management’ in Indian Express, New Delhi, February 10, 1990: 6. Roethlisberger, F.J. and W.J. Dickson: Management and the Worker. Cambridge Ma, Harvard University Press, 1939. Saini, D.S.: ‘Industrial Democracy: Law and Challenges in India’, Indian Journal of Industrial Relations, 19(2) 1983: 191. Saini: ‘A Socio-Legal Study of Compulsory Adjudication in Industrial Relations’, Thesis submitted to the University of Delhi (Faculty of Law) for the award of Ph.D. degree. 1991. Selznick, Phillip: Law, Society and Industrial Justice. New York, Russell Sage Foundation, 1969. Sengupta, Anil K.: New Generation of Organised Workforce in India: Implications for Managements and Trade Unions. Paper presented at ‘National Seminar on Industrial Relations: Coming Decade’, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi, August 1989. Sengupta, Anil K.: ‘Workers’ Needs, Expectations and Participation: The Indian Case’, in Sethi et al., 1981: 71. Sethi, Krishan C.: ‘Workers’ participation in India - An Analysis and Prospects’, in Sethi et al., 1981: 48. Sethi, Krishan C., Anil K. Sengupta, Stanislav S. Grozdanic and Vladimir Stambuk (eds.): Self Management and Workers’ Participation-Indo-Yugoslav Experience. New Delhi, Standing Conference on Public Enterprises (SCOPE), 1981. Sawtell, R.: Shaping Our Industrial Future. London, The Industrial Society, 1968. Sheth, N.R.: The Joint Management Councils. New Delhi, Shri Ram Centre for Industrial Relations and Human Resources, 1972 Tanic, Z.: Workers’ Participation in Management: Ideal and Reality in India, New Delhi, Shri Ram Centre for Industrial Relations, 1969. Taylor, F.W.: Scientific Management. New York, Harper, 1947. Thakur, C.P.: ‘Public Enterprises and Workers’ Participation in Management’ in C.P. Thakur and K.C. Sethi (ed.), Industrial Democracy: Some Issues and Experiences. Shri Ram Centre for Industrial Relations and Human Resources, 1973. Verma, Pramod: Labour Economics and Industrial Relations. New Delhi, Tata McGraw Hill, 1987. Virmani, B.R.: Collective Bargaining vs. Workers’ participation in Management. New Delhi, Vision, 1988.
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