Reflections of guiding a Long Term Wage Settlement during Covid times

Being fair and firm within a democratic framework works to provide a harmonious industrial climate

I wish to share my recent experience of negotiating a Long Term Wage Settlement (LTS) during Covid times.

I had been advising a client, a major Off-the-Road Tyre manufacturing Company in deep Tamil Nadu during the last 10 years. The previous LTS which was for 3 years ended on 31st March 2020 when all a sudden Covid came with a lockdown. It was a period of uncertainty for all of us.

My client paid all their workmen their wages during the Covid lockdown and in particular the Migrants were paid their dues and also provided place of stay and food during this time.

When many a company immediately postponed their LTS as their business was affected, my client didn’t want to either delay or postpone.

However, we were beset with a problem in selecting the Majority Union amongst the 3 Unions which were operating in the factory. Friends please understand that there is no law on this in the State and we need to go by the Madras High Court judgments which had favoured two methods viz., the Labour Department officials conducting a personal verification of the trade union membership or by secret ballot conducted by the Labour Department Officials. However, the Labour Department by their own volition will not conduct except that there is a direction by the High Court.(Thankfully the new Industrial Code talks of recognition and brings in the concept of Council of union if there is no union with less than 51 % membership)

As the Lock down was in place and the Courts were not functioning we wanted to have a fair method which cannot be later questioned in a Court of law. I suggested a novel method of getting the People’s mandate on this through an Opinion poll i.e. whether the Management should ascertain the majority issue by adhering to a Court direction or else whether the Management can conduct a Secret ballot engaging a Third Party.

The People’s mandate was a clear 91 % verdict to go through a Secret Ballot using a Third Party, a Retired Labour Official. Despite the fact we had a challenge getting a person to our Plant as an E-pass was required; we could select a Retired Joint Commissioner who could get this pass.

We formulated the rules of election with all the 3 Unions with the Retired Joint Commissioner of Labour. It was a not an easy choice to be fair and firm as the Unions were competing with each other to get the status of recognition. It was an uphill task managing their emotions to conduct a fair election. The Union which was there from the beginning couldn’t get reconciled to participate in an election as it was so far an undisputed leader. They tried to put up as many tantrums as possible to thwart the election so that they can be chosen. But we had no choice as all 3 unions stated that they had the majority.

Some may ask that it is for the management to recognize the union with the majority members, can it not do so by its discretion? The answer to that is yes but that does not mean not recognizing a Union which really has the numbers. So in short it has to be done by fair means, as otherwise it would be a loss of credibility as well as can be questioned in a court of law.

I know for some in the business they go by the adage “Everything is fair in love and war” and they may not agree with me. There may be some genuine situations when the management has to use their discretion in not recognizing a majority Union as they maybe indulging in violence, and I am not saying that is wrong in such cases. I had witnessed from my days in UCAL Fuel Systems wherein I had employed a Proactive IR method with the ardent support of the Management of being fair and firm within a democratic framework. Believe me it had worked wonders in enhancing a good IR climate.

The elections were carried out taking into consideration all Covid protocols. The results were good in the sense that it gave a clear verdict of one Union gaining 54 % of the votes. The bitterness ended but the disappointment was writ large in their faces.

Our negotiations were conducted in a peaceful atmosphere with the recognized union knowing well that it had the mandate not by hook or crook but by fair means which gave it lot of strength.

The negotiated Wage increase from the beginning was based on productivity and increase was to put the workmen on reasonable standards of wages given in the industry. We could arrive at a consensus in a span of 3 months with a substantial increase. We had to decide the method of signing.

The Management decided to go for a Tripartite Settlement before the Joint Commissioner. Technically if the recognized union signs the settlement it will be binding on all workmen but we decided that we will advise the other 2 unions to also sign. Many felt that all 3 may not sign but thanks to the officer viz., the Joint Commissioner of Labour, the other 2 unions came forward to sign thus creating a harmonious ending.

Today the corporate world does not want the Company to be a battle field for unions nor is it interested in creating one-upmanship. It wants industrial peace. In my experience democratic values help in enhancing industrial peace.