CHAPTER III CAUSES OF INDUSTRIAL DISPUTES. 3.1 Introduction. 3.2 Industrial Disputes-Causes. 3.3 Wages and Bonus. 3.4 Personnel and Retrenchment

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1 CHAPTER III CAUSES OF INDUSTRIAL DISPUTES 3.1 Introduction 3.2 Industrial Disputes-Causes 3.3 Wages and Bonus 3.4 Personnel and Retrenchment 3.5 Leave and Hours of Work 3.6 Violence and Indiscipline 3.7 Others 3.8 Incidence of Disputes through Economic and Non-economic CI-uses 3.9 Issues of Disputes Raised by Trade Unions 3.10 A Comparative Perception- Causes of Industrial Disputes 3.11 Results and Discussion 3.12 Ranking by the Workers 3.13 Ranking by the Employers 3.14 Ranking by the Trade Union Leaders 3.15 Ranking by the Labour Officials 3.16 Ranking by All Categories 3.17 Causes of Industrial Disputes- Inter Group Perception

2 INTRODUCTION Disputes between labour and Management is a universal phenomenon in developed and developing countries. There are various causes for industrial disputes. There is no one single cause. Disputes arise out of terms and conditions relating to employment, wages, bonus, rising cost of living and so on. As early as in 1931, the Royal Commission on Labour observed: "Although workers may have been influenced qby persons with nationalist, communist or commercial ends to serve, we believe that there has rarely been a strike of any importance which has not been due entirely or largely to 1 economic reasons." Low wages or wage-cuts in spite of rising prices and intolerable conditions of work have provoked a number of strikes in the country. Un-deserved punishments, mass discharges, assaults, abuses and misbehaviour have also led to several strikes in India, although instances have been found when workers had stopped work on petty quarrels or humiliations, as an excuse for respite from an unbearable situation. Other important causes are the absence of adequate machinery for collective 1. C.B. Namori.a & S. Mamoria, D y namic of Industrial Relations in India, Himalaya Publishing House,New Delhi, 1991, p.297.

3 76 bargaining and the absence of close contact and understanding between employers and workers. All these give rise to industrial disputes. This chapter deals with the various causes of disputes in the Cotton Textile Industry in the study area. 3.2 INDUSTRIAL DISPUTES-CAUSES Though there are many causes, industrial disputes can be classified under six major heads, according to Indian Labour Statistics. 1. Wages, 2. BonUs, 3. Personnel and retrenchment, 4. Leave and hours of work, 5. Violence and Indiscipline and 6. Others. 3.3 WAGES AND BONUS The most important cause for industrial dispute is the demand for higher wages. The workers and union leaders feel that the money-wage paid to the workers is not enough to ensure a decent living. Therefore they demand more wages to meet the increase in the cost of living. The importance of a need-based minimum--wage (NBMW) was discussed and approved in 1957 by all the major industrial relation participants, including the Government. The present

4 PA wage levels are well below the agreed minimum. The Government wage-fixing machinery as well as private employers 2 now regard the NBMW as largely irrelevant. As the Government and employers do not accept the NBMW and only offer lower wages, the workers' demand for higher wages becomes relevant. Also in recent years, the real wage in the Indian industry has declined or stagnated making employees and Unions demand more. The employers in turn have resisted the employees' demand because they want "to keep wages down in order to increase the competitiveness of their products in 3 international and domestic markets." Although India has a well-established system for linking pay increases to the cost of living and the system of dearness allowance, the effect of inflation is neutralised at below 100 per cent. So in order to get higher wages at the time of inflation, the workers resort to strikes and other methods, if their demands fail. 2. S. Venkata Ratnam, "Collective Bargaining Status and Prospectus in India", Indian Industrial Relations, (National Instute of Personal Management, India, 1981), pp V. Venkatachalam, and R. Singh, The Political and Economic and Labour Climate in India, (The Wharton School Industrial Research Unit, University of Pennsylvania, 1982) 1 p.61 and pp

5 78 The demand for bonus or for increase in bonus is another major reason for labour unrest. When an industry makes profit, the workers demand a greater share of the profit. The issue of awarding bonus to workers must be viewed as related to the wage scene, since the annual bonus could provide a vehicle for maintaining or improving the real wage. The 1965 Payment of Bonus Act regulates the awarding of bonus-incomes in India. This legislation was amended several times over the years. It introduced the notion of a mandatory guaranteed minimum of bonus at 8.33 per cent in A ceiling of 20 per cent is also included in the law. Now in the year 1994 bonus is fixed as ranging from per cent to 35 per cent including ex-gratia, while the quantum of bonus was fixed as per the provision of the Bonus Act with a 4 minimum of 8.33 per cent and a maximum of 20 per cent. A major goal in providing a statutory bonus payment was to eliminate or reduce conflicts that grow out of the failure by Union and employers to reach agreement on the bonus issue. However the bonus conflicts have not been totally eliminated. Whenever settlement could not be arrived on the quantum of bonus, the workers resort to strikes. Table 3.1 shows the total number of disputes based on Wages and Bonus. 4. The Hindu, Tuesday, December 14, 1993.

6 79 TABLE 3.1 Disputes Due to Wages and Bonus Disputes due to Disputes due to Bonus an Total Wage Bonus Wages Year Number of Percentag Disputes Total Percentage Total Percentage to total to total to total Source: Compiled from the Complaint Register in the Office of t Assistant Commissioner of Labour, (Conciliatio Textiles), Madurai.

7 80 Disputes relating to wages and bonus formed per cent in 1982 and per cent in Except in the last two years bonus accounts for more disputes than wages. The above findings confirm the findings of earlier studies like, 1. Mrs.P. Chakraborthy, Strikes and Morale in India Her Principal States, Calcutta, 1969, pp S. Nagaraju, Industrial Relation System in India, Chugh Publications, Allahabad, 1981, pp Dayal Sahah, Industrial Relations System in India- Study of vital issue, Sterling Publishers (F) Ltd., New Delhi, 1980, pp T. Sahapathy, Industrial Disputes in post-war years with reference to Madras State, An unpublished Ph.D., Thesis, Chidambaram, Annamalai University. 5. Verma Pramod, Industrial Conflict-A Statistical Analysis, Macmillan Company of India Limited, New Delhi, 1978, pp Asdhir Vijay, Settlement of Industrial Disputes in Cotton Textile Industry, with special reference to Punjab An Unpublished Ph.D., Thesis submitted to the Punjab University, 1980.

8 PERSONNEL AND RETRENCHMENT When the employers dismiss or demote any worker or group of workers, all the workers of the establishment join together against the employer and so dispute erupts. Table 3.2 shows the industrial disputes relating to personnel and retrenchment. TABLE 3.2 Industrial Disputes Due to Personnel and Retrenchment Total Disputes due to Percentage Year Number of Personnel and to total Disptues Retrenchment C Source: Compiled from the Complaint Register in Office of the Assistant Commissioner of Labour, (Conciliation, Textiles), Madurai.

9 Table 3.2 shows that the number of industrial disputes, due to "personnel and retrenchment" cause is almost large. It has fluctuated between per cent of the total in 1982 and per cent in These disputes are mostly backed by egoistic' motives, fellow--feelings and team spirit. These causes are an indication of the fact that proper and effective labour--management relations do not exist even now to the extent desirable. 3.5 LEAVE AND HOURS OF WORK Industrial disputes relating to leave and hours of work occur either for getting the number of hours of work reduced or for getting a holiday on some special or religious occasion. Sometimes, the workers go on strike because of the refusal of their leave or as a protest against keeping the factory open on holidays. Table 3.3 shows the industrial disputes relating to leave and hours of work in the study area.

10 83 TABLE 3.3 Industrial Disputes Relating to Leave and Hours of Work Total Disputes due to Percentage Year Number of Leave and Hours to total Disptues of Work Source: Compiled from the Complaint Register in the Office of the Assistant Commissioner of Labour, (Conciliation, Textiles), Madurai. The issues relating to "leave and hours of work" also account for a fair proportion of industrial disputes, although the proportion of these disputes to the total declined from 1.25 per cent in 1982 to 0.55 per cent in Only in the year 1988, it went above 2 per cent. It may be said that since the factories are required to observe

11 84 regulations regarding hours of work and leave under the Factories Act, 1948, industrial disputes on this score are rather very few. 3.6 VIOLENCE AND INDISCIPILNE Frustrated in achieving their goal through legitimate means the workers or their organiations may resort to acts of violence, verbal or physical. The former includes raising Slogans, demonstrating, using filthy language, and so on. The latter includes throwing bricks and stones, murderous assault, rioting, causing damage or loss to property and sometimes endangering human lives. In the study area, violence and indiscipline' is not considered a cause for industrial disputes. It has occurred only in the years 1984, 1985 and It was very rare (Below 1%). 3.7 OTHERS Causes like absence of close contact and understanding between the employer and the workers, misbehaviour, mass assaults, and abuse or petty quarrels, can be included under this list. Table 3.4 shows the industrial disputes due to "Others".

12 85 TABLE 3.4 Industrial Disputes Due to "OTHERS" Total Disputes due to Percentage Year Number of Others' to total Disptues Source: Compiled from the Complaint:. Register in the Office of the Assistant Commissioner of Labour, (Conciliation, Textiles), Madurai. Industrial disputes under "Others" fluctuated between per cent in 1982 and 8.59 per cent in The term "Others" conveys the impression of being a residual category. It is revealed from the fact that between 8.59 per cent. and per cent of the disputes have always been due to "Others". These causes are manifestations of deep-seated frustrations of workers.

13 INCIDENCE OF DISPUTES THROUGH ECONOMIC AND NON-ECONOMIC CAUSES So far the causes for industrial disputes have been analysed on the basis of Wages, Bonus, Personnel and Retrenchment, Leave and Hours of work, Violence and in discipline, and others. Among the above mentioned causes for disputes, the first two namely Wages, and Bonus, can very well be stated as Economic Causes'. The remaining can be grouped under 'Non-economic Causes'. Table 3.5 shows the incidence of disputes through Economic and Non-economic causes.

14 87 TABLE 3.5 Economic and Non-economic Causes Year Economic Causes Non-Economic Causes Total Number (% to total) (% to total) of Disputes Source: Compiled from the Complaint Register in the Office of the Assistant Commissioner of Labour, (Conciliation, Textiles), Madurai. Non-economic causes have led to more disputes than economic ones. Under Non-economic Causes 'Personnel & Retrenchment' has led to more disputes. Mainly because of more number of disputes under 'Personnel & Retrenchment', Non-economic causes are the dominating ones as far as disputes are concerned. 3.9 ISSUES OF DISPUTES RAISED BY TRADE UNIONS Table 3.6 shows the percentage distribution of disputes raised by Trade Union in the study area.

15 88 TABLE 3.6 Issues of Disputes Raised by Trade Unions Union Wages Bonus Leave Personal Violence Others Total and and and inhours of Retren- discipline Work chment All Unions (13.92) (9.25) (23.33) (5.1) (11.20) INTUC (5.11) (2.64) (3.33) (5.45) 2.00 (50) (7.7) C I TU (47.17) (63.78) (36.68) (39.82) (32.75) HMS (4.83) (2.26) (10) (8.73) 0.85 (25) (8.13) AITUC (3.98) (1.6) (3.33) (2.90) (7.7) TNTUC (15.05) (13.2) (3.33) (17.09) 0.34 (25) (17.14) L PF (8.24) (6.6) (20) (16.36) (13.63) Other Union (1.7) (0.75) (4.56) (1.76) Total Number of Disputes Source: Compiled from the complaint Register in the office of the Assistant Commissioner of Labour,(Conciljatjan, Textiles), Madurai. Note: Figures in brackets indicate percentage to vertical total and others to horizontal total.

16 89 It is seen from the Table 3.6 that out of 1924 disputes raised by Trade Unions, 551 disputes were due to personnel and retrenchment, 530 disputes were due to Bonus, 455 disputes were on other issue, 352 disputes were on wages, 32 disputes were on leave and hours of: 7 on violence and indiscipline. work and 4 disputes were A. DISTRIBUTION OF WAGE DISPUTES Out of 352 wage disputes raised by Trade Unions, per cent of the wage disputes were raised by CITU followed by TNTUC (15.05%), All Unions (13.92%), LPF (8.24%), INTUC (5.11%), HMS (4.83%), AITUC (3.98%), and Other Unions (1.7%). B. DISTRIBUTION OF BONUS DISPUTES Out of 530 Bonus disputes ra:ised by Trade Unions, per cent were raised by CITU followed by TNTUC (13.2%), All Unions (9.25%), LPF (6.6 0/0'), INTUC (2.64%), HMS (2.26%), AITUC (1.6%) and Other Unions (0.75%). C. DISTRIBUTION OF DISPUTES ON LEAVE AND HOURS-OF-WORK ISSUES Out of the 32 "Leave and Hours-of-work" disputes, per cent of disputes were raised by CITU, per cent by All Unions, 20 per cent by LPF, 10 per cent by HMS, 3.33 per cent by INTUC, AITUC and TNTUC.

17 90 D. DISTRIBUTION OF DISPUTES ON PERSONNEL AND RETRENCHMENT ISSUES Out of 551 personnel and retrenchment disputes raised, per cent were raised by CITU, followed by per cent by TNTUC, per cent by LPF, 8.73 per cent by HMS, 5.45 per cent by INTUC, 5.1 per cent: by All Unions, 4.56 per cent by Other Unions and 2.90 per cent by AITUC. E. DISTRIBUTION OF DISPUTES ON VIOLENCE AND INDISCIPLINE ISSUES Out of 4 disputes raised by Trade Unions on violence and indiscipline issues, 2 disputes were raised by INTUC, one by HMS and the other by TNTUC. F. DISTRIBUTION OF DISPUTES ON "OTHERS" Out of 455 disputes raised on other issues, per cent were raised by CITU, per cent by TNTUC, per cent by LPF, per cent by All Unions, 8.13 per cent by HMS 7.7 per cent by INTUC, AITUC each, and 1.70 per cent by Other Unions. It is found that the common causes of industrial disputes raised by Trade Unions were based on "Personnel and Retrenchment" issues. The issue of wages, allowances and

18 91 bonus, which relate to earnings and levels of living account for almost 882 disputes, per cent of the total number of disputes raised by Trade Unions. The personnel and retrenchment account for 551 disputes. it is also found that almost All Unions have raised more number of disputes on wage, bonus and personnel and retrenchment issues when compared with other issues. It is also found that most of the wage disputes, bonus disputes, leave and hours of work disputes, personnel and retrenchment disputes and other disputes were raised by CITU followed by TNTUC (Except leave and hours-of--work) followed by All Unions. Most of the violence and indiscipline disputes were raised by INTUC A COMPARATIVE PERCEPTION CAUSES OF INDUSTRIAL DISPUTES The causes of conflict between Labour and Management usually remain the same wherever capitalist economy prevails. Dr. Mukerjee observes, "The development of capitalistic industry which means the control of the tools of production by a small entrepreneur class has brought to the fore the actual problem of friction between Management and Labour 5 throughout the world." When people sell their services and spend their wor.king lives on the premises of the purchaser of those services, varying amounts of dissatisfaction, discontent and industrial unrest are likely to occur. 5. R. Mukerjee, Indian Working Class, Hind Kitabs, Bombay, 1951, p.372.

19 92 Employees are specially interested in higher wages, healthy working conditions,opportunity to advance, work-satisfaction, some voice in industrial affairs and protection against loss 6 of wages, over-work and arbitrary treatment. But when such things are denied they are forced to exercise their rights and stop working to make the employers understand their grievances and redress them. Often many causes, blended together, lead to a strike. But there is no single cause for an industrial dispute. The Labour Bureau has listed these causes as 1. Wages and Allowance, 2. Bonus, 3. Personnel and Retrenchment, 4. Leave and Hours of work 5. Viloence and Indiscipline and 6. Others. But this classification is not exhaustive. Hence to have a clear understanding of the causes of labour disputes in the Cotton Textile Industry in the study area, the researcher has made an attempt to identify the possible causes. Twelve causes have been identified. Here the perception of the workers, their Union leaders, the Management and Labour Officials were examined based on 12 possible causes of labour unrest. 6. R.A. Lester, Economics of Labour, Macmillan Company, New York, 1964, p.3.

20 RESULTS AND DISCUSSION In order to identify the imi:ortant causes of industrial disputes in the study area, a list: of 12 most probable causes was drawn up and the respondents were asked to mark four causes in order of priority. The ranked results of the responses by workers, Trade Union Leaders, Management. and Labour Officials and all the categories combined together are presented in the ensuing Tables RANKING BY THE WORKERS Table 3.7 exhibits the ranks assigned by workers to causes of industrial disputes.

21 TABLE 3.7 Ranking by Workers of the Causes of Industrial Disputes 94 Frequency of Priority Causes Total Rank First Second Third Fourth Score* Priority Priority Priority Priority 1. Wage (26.62) 2. Allowances (12.19) 3. Bonus (16.07) 4. Retrenchment (32.71) 5. Personnel (6.75) 6. Leave and Hours of-work Non-implementation of awards and agreement (2.76) 8. Unfair Labour Practices ( Non-implementation of Labour Laws ( 0.45) 10.Inferior treatment (0.07) 11. Inadequate social security measures (0.84) 12.Vio]ence and Indiscipline (0.03) *The first priority was given the score of four and the second, third and fourth the scores of three, two and one respectively. Ranking was worked out on the basis of total score. (Figures In parenthesis indicate the percentage of each item to the total score of column 6).

22 95 The four important factors as viewed by the workers, according to their ranks are 1) Retrenchment 2) Wages 3) Bonus and 4) Allowances. 5th rank is given to personnel. Leave and hours-of...-work and violence and indiscipline are not perceived to be the causes of industrial disputes RANKING BY THE EMPLOYERS Table 3.8 shows the ranks assigned by employers to causes of industrial disputes.

23 96 TABLE 3.8 Ranking by Management of the Causes of Industrial Disputes Frequency of Priority Causes Total Rank First Second Third Fourth Score* Priority Priority Priority Priority 1. Wages it (26.04) 2. Allowances (21.04) 3. Bonus (28.96) 4. Retrenchment (9.17) 5. Personnel (4.38) 6. Leave and Hours of-work (0.83) 7. Non-implementation of awards and (0.21) agreement 8. Unfair Labour Practices (4.79) 9. Non-implementation of Labour Laws (2.29) 10. Inferior treatment (0.42) 11. Inadequate social security measures (1.25) 12. Violence and Indiscipline (0.63) *The first priority was given the score of four and the second, third and fourti the scores of three, two and one respectively. Ranking was worked out on thi basis of total score. (Figures in parenthesis indicate the percentage of eaci item to the total score of column 6).

24 97 The Management perceives Bonus, Wages, Allowances and Retrenchment as four major causes of industrial disputes. They consider Non-implementation of awards and agreement, Inferior treatment, Violence and indiscipline and Leave and hours-of-work as the least important causes of industrial disputes RANKING BY THE TRADE UNION LEADERS Table 3.9 shows the ranks assigned by the Trade Union Leaders to causes of industrial diputes.

25 TABLE 3.9 Ranking by the Trade Union Leaders of the Causes of Industrial Disputes Frequency of Priority Causes Total Rank First Second Third Fourth Score* Priority Priority Priority Priority 98 I. Wages (16.57) 2. Allowances 6 8 IC) (11.86) 3. Bonus (24.29) 4. Retrenchment (30.14) 5. Personnel (7.29) 6. Leave and Hours - - I of-work (0.57) 7. Non-implementation of awards and 13 7 (1.86) agreement 8. Unfair Labour Practices (4.43) 9. Non-implementation of Labour Laws (1.14) 10. Inferior treatment (0.71) 11. Inadequate social security measures (0.86) 12. Violence and - Indiscipline (0.29) *The first priority was given the score of four and the second, third and fourth the scores of three, two and one respectively. Ranking was worked out on the basis of total score. (Figures in parenthesis indicate the percentage of each item to the total score of column 6).

26 The four important factors as perceived by the Trade Union Leaders are Retrenchment, Boiitis, Wages and Allowances. It is similar to the views of workers. Violence and indiscipline and Leave and hours-of..-work are considered as the least important causes of industrial disputes. 315 RANKING BY THE LABOUR OFFICIALS Table 3.10 exhibits the ranks assigned by the labour officials to causes of industrial disputes.

27 100 TABLE 3.10 Ranking by the Labour Officials of the CdLISE?S of Industrial Disputes Causes Frequency of Priority Total Rank First Second Third Fourth Score* Priority Priority Priority Priority 1. Wages (37.14) 2. Allowances (17.14) 3. Bonus Retrenchment Personnel (24.29) Leave and Hours of-work 7. Non-implementation of awards and agreement 8. Unfair Labour - - Practices 9. Non-implementation of Labour Laws Inferior treatment Inadequate social - security measures - : (12.96) (8.58) 12. Violence and Indiscipline - 0 *The first priority was given the score of four and the second, third and fourth the scores of three, two and one resp ectively. Ranking was worked out on the basis of total score. (Figures in parenthesis indicate the percentage of each item to the total score of column 6).

28 1031 The labour officials consider Wages, Bonus, Allowance, and Inferior treatment as the four important causes of idustrial disputes RANKING BY ALL CATEGORIES Table 3.11 exhibits the ranks assigned by all the categories to various causes of Industrial disputes.

29 102 TABLE 3.11 Ranking by the Respondents of All Categories Percentage obtained In the case of Causes Total Workers Manage Rank Trade Labour Percentage ment Union Officials Leaders I. Wages ' 1 2. Allowances Bonus Retrenchment Personnel Leave and Hours of Work 7. No n-implementation of awards and agreement 8. Unfair Labour Practices Non-implementation of Labour Laws Inferior treatment Inadequate social security measures Violence and Indiscipline *The Table aims at standardising the priorities of all inveter vlewees,percefltage obtained for each reason in all four categories i.e.,workers, Management, Trade Union Leaders, and Labour Officials were added and totals in all respect of all twelve causes were ranked.

30 103 Table 3.11 reveals that "Wages", "Bonus", "Retrenhment:", "Allowances", "Personnel" and "Inferior Treatment", got the "first", "Second". "third", "fourth", "fifth" and "sixth" ranks respectively. The other causes "Inadequate social security measures", "unfair labour Practices", "Nonimplementation of awards and agreement", "Non-implementation of labour Laws", "Leave and hours-of-work" and "Violence and indiscipline" got lower rankings CAUSES OF INDUSTRIAL DISPUTES - INTER-GROUP PERCEPTION The rank correlation co-efficient of causes of industrial disputes between workers and Trade Union Leaders, workers and Management, Management and Trade Union Leaders are calculated and they are presented in Table TABLE 3.12 Causes of Industrial. Disputes - Inter-Group Perception Inter group Rank Correlation. 'R' Co-efficient Between workers and Trade Union Leaders 0.972* Between workers and Management 0.755* Between Management and Trade Union Leaders 0.825* *Significant beyond 0.05 level.

31 104 The value of correlation co-efficient (R = 0.972) between the workers and Trade Union Leaders shows significant and positive correspondence as to the causes of industrial disputes. The degree of importance of certain items, however varied, both Union and workers gave first preferece to Retrenchment. Workers ranked 'Wages' as the second important factor while the Union Leaders considered it third. They considered Bonus the second important: factor. The value of correlation co-efficient (R = 0.755) between the responses of workers and Management shows a significant and positive r elationship. Both the parties CI perceive Wages, Allowances, Bonus and Retrenchment as constituting some of the important causes of industrial disputes. The value of correlation co-efficient (R = 0.825) beween the replies of Trade Union Leaders and Management also indicates a significant and po:dtive correspondence. The Management attached more importance to bonus (1st rank), whereas Trade Union Leaders attached more importance to Retrenchment, as is evident from the rank assigned.

32 105 The results of this study reflect the fact that the Retrenchment and economic factors are given supreme importance by workers, Unions and Management. Other important factors are Personnel, Non-implementation of awards and agreements, Unfair laabour practices and Inadequate social security measures. Leave and hours of work, Violence and Indiscipline, Inferior treatment are assigned relatively much less importance. Thus this analysis reveals the difference and similarities in perception of labour disputes among Management, Unions, worker; and Labour Officials.