Declining Labour Power and Challenges before Trade Unions: Some Lessons

from a Case Study on Private Sector Unionism

Debi S. Saini*
Abstract
In the era of globalization IR frameworks in the private sector are getting so structured
as to reflect emergence of increasing unitarism that is being promoted by employers
openly or covertly. This paper discusses the declining labour power in the private sector
in the new environment and the challenges that unionism faces in this regard. The
formulations are built on the basis of a recent case study of Honda Motorcycle and
Scooters India Ltd. (HMSI), Gurgaon, written by the author that involved a situation of
major IR violence in the course of industrial dispute processing. The paper acknowledges
that most organizations are using a mixture of hard and soft models of human resource
management (HRM) strategy as device for managing IR. However, in the present case
the adoption of such strategy was merely cosmetic or was not deployed effectively, that
eventually led to breakdown of IR. In view of these and other case realities, the paper
discusses five challenges faced by unionism, which include: need to look at private sector
IR realities differently from those in public sector; tapping the potential of political
affiliation of the union rather than looking at politicization as something undesirable;
focusing on ways to compel the state and its agencies to discharge its statutory
obligations of ensuring compliance of different labour laws including the Trade Unions
Act 1926; promoting alliance between main workers union and contract worker unions
to seek the support of the latter on a sustainable basis; and promoting collaboration
between union and management in implementing HRM strategy but ensuring the
workers interests.
Key words: Globalization, Human resource management, new industrial relations, Labour power,
challenges for unionism, India

I. INTRODUCTION
Globalization has substantially influenced the nature of industrial relations (IR) policies being
followed by employers, and reduced the power of trade unions. Some social scientists caution
that severe social tensions will result from acute economic inequality that will result from these
policies in the next few decades (Towers, 1997; Szell, 2001). They see a severe weakening of
countervailing power in society as well. The frameworks of IR of different organizations in the
new environment are being oriented to new business exigencies. Strategic shifts in
managements approach to manage IR are noticeable at covert as well as overt levels (Venkata
Ratnam, 2001; Saini, 2003). These are resulting in new types of negotiated settlements, which
reflect a greater degree of employee cooperation (Venkata Ratnam, 2003).

Professor and ChairpersonHuman Resource Management Area, Management Development

Institute, Mehrauli Road, Sukhrali, Gurgaon22001, HARYANA.

From the different types of IR models that are being followed by organizations, a shift of focus is
noticeable. As seen in Figure 1, one could think of eight broad typologies1 of IR dynamics in the
Indian context. The shift could be seen from different types of pluralist models to some or the
other type of unitarist IR or repressive pluralism.
I.Traditional Pluralism

II. Paternalistic Pluralism

III. Ambivalent Pluralism

IV. Repressive Pluralism

V. Coercive Unitarism

VII. Ambivalent Unitarism

VI. Paternalistic Unitarism

VIII. Neo-Unitarism
(IBM type Unitarism)

Fig. 1: Eight Broad Typologies of IR Models

In the era of globalization employers are trying to shift from the first four models of IR to the
last four, thus adopting policies of some kind of weak union model or no-union model. This
is done through the practice of HRM strategy, which is known to be becoming popular across
the world especially in multinational companies. Interestingly, however, the right of labour to
organize and bargain collectively remains intact in most parts of the world. But employers are
coming heavily on labours efforts towards unionization as they believe that trade unions
adversely obstruct managerial autonomy.
The new way of managing collective labour power through implementing the philosophy of
human resource management2 (HRM), or as it is often labeled as human resource development
(HRD) in the Indian context, emerged as the most effective way of promoting cooperative
unionism or in other words weakened unionism. One can notice that more and more
organizations are busy on working on policies that dilute union efficacy or result in wiping them
out altogether, and thus are making strategic shifts in their HRM policies. Of course, some in
India (e.g. the Tata Steel) manage union through carefully devised and implemented paternalistic
strategies.
Many British academics have argued that the new philosophy of HRM is wolf in sheeps
clothing, or iron fist with velvet gloves, or sugar-coated pills that lead workers to a state of
illusion about happiness and well being. Most such arguments are rooted in HRMs supposedly
debilitating role in promoting trade unionism. HRM also puts a covert pressure on workers to
endorse their consent to the employers new authoritarianism. It is argued that HRM leaves real
issues affecting working class unattended. Job and income insecurities, fear of substitution,
pressure to maintain existing life style, and the employers efforts towards individualization of
employment contract prevent workers from standing up to challenge the new workplace order.
All these are symptoms of weak labour power.
This paper discusses the declining state of labour power in the contemporary economic
environment and the new challenges that unionism faces in this era. The formulations are built
on a recent private-sector case study of Honda Motorcycle and Scooters India Ltd. (HMSI) made
by the author that involved a situation of major IR crisis (Saini, 2005). The paper acknowledges
that most organizations are using a mixture of hard and soft models of human resource
management (HRM) strategy as device for managing IR. However, in the present case the
adoption of such strategy was merely cosmetic or was not deployed effectively, that eventually
2

led to breakdown of IR. In view of these and other case realities, the paper argues that the role of
the state is indispensable in salvaging labour power in any enlightened society; and also that the
new unionism faces a big challenge in reminding the state of its legal obligations to ensure
labour justice. The paper identifies some key challenges that unionism faces in view of the
working of new HR strategies by organizations today.
II. DECLINING LABOUR POWER IN THE NEW ERA IN VIEW OF EMERGING
REALITIES
Many factors explain the decline of labour power across the globe in the era of globalization.
They include: declining interest of the state in labour justice and its primacy on considerations of
productivity and efficiency; employers shifting tendency from adversarial to cooperative IR
leading to individualization of IR as seen in Figure 1; emergence of larger number of service
organizations including information technology (IT) and information-technology-enabled service
(ITES) organizations where it is comparatively difficult to organize the workforce; emergence of
gold-collared and knowledge workers who are less interested in unionization; employers
greater tendency to employ contract and casual labour rather than core workforce leading to
decline in organized sector employment; and increasing tendency of employers to employ labour
law consultants to commit unfair labour practices by giving them a gloss of legality (Saini,
2003).
The above-mentioned factors have also led to the adoption of new HRM strategy by most
organizations in their efforts to gain competitive advantage through people. Interestingly, HRM
strategy3 is being seen as a critical reason for decline of collective labour power. Strategic HR
interventions can be divided into two broad categories: instrumentalist (hard) and
empowerment (soft) (Saini, 2000). Hard HR interventions are generally resisted by employees
as they view employees as any other resource and often involve enhanced managerial control on
them. Hard interventions also envisage a greater degree of measurement of cost-effectiveness of
workers efforts. Empowerment4 HR interventions on the other hand involve trusting the
employees, ensuring transparency and fairness in the organizational working, and involving
employees in decision-making as individuals. But HR interventions in actuality are generally an
amalgam of hard and soft measures.
The protagonists of HRM claim that soft HRM strategies have a great potential of rendering
workplace justice as workers as individuals see such HR interventions as helpful in fulfilling
their individual needs of involvement, respect, and performance-related-pay. They also become
instrumental in a more efficacious realization of organizational goals. However, many Western
researches have begun to question these claims (Mabey et al., 1998; Legge, 1995). Some
scholars have observed that HRM philosophy is not basically antithetical to industrial pluralism;
rather it possesses the potential for absorbing industrial pluralism in its strides (Storey, 1995),
even as others have liked to write an obituary of IR in the contemporary context (See, for
example, Looise and Riemsdijk, 2001). The way pluralism seems to be reviving in the British
context consequent to some policy changes by the Tony Blair Government, however, gives
credence to Storeys formulations.
The ILO has also quite changed its objectives from its earlier position of promoting labour
justice through adversarial collective bargaining to primacy on availability of decent work to
men and women. This shift surely carries its approval of some degree of unitarism of the HRM
3

philosophy in case this philosophy can provide workplace justice without resort to invoking
collective labour power.
All these factors have led to decline in union density across the globe. Table 1 shows such
decline in some of the developed countries. It shows that Italy is the only country in this category
where the incidence of union density has increased. This may be so due to some countryspecific considerations. The decline noticeable is particularly steep in France, UK, Austria and
Germany.
Table 1: Percentage of Trade Union Members among Total Workforce in Selected
Industrialized Countries
Country

1970

1980

1990

1997

2003

Austria

63.6

59.6

56.2

46.6

35.2

Denmark

62.6

87.8

88.9

89.9

75.5

France

21.0

17.1

9.2

8.6

5.8

Germany

37.7

40.6

38.5

33.4

22.2

Italy

38.5

49.0

39.2

38.0

47.1

Netherlands

39.8

39.4

29.5

28.9

23.9

Norway

57.9

64.4

70.3

71.3

63.0

Spain

13.8

16.8

15.1

11.5

Sweden

66.6

78.2

82.4

86.4

78.0

UK
48.5
54.5
38.1
30.2
25.9
Source: Accessed on 12 January, 2006 from Cornell Institute of Industrial Relations (IR) Statistical Record on
Trade union Membership at http://www.ilr.cornell.edu/library/downloads/FAQ/UNIONSTATS2002.pdf

Labour power is declining in the Indian context as well. One of the key indicators of this decline
is the increasing degree of peripheralization leading to employment of contract, casual, part-time
and ad hoc workers. As shown in Table 2, the total employment in India in a period of 24 years
has increased from 286 million to 422 million at an average annual growth rate of 2.4 per cent
during the latest year 2003. But the growth rate in the organized sector employment is negative
in absolute as well as relative sense. The negative growth rate in this regard was 1.4 per cent in
the year 2003, which was so both in the public and private sectors.
Table 2: Trend in Labour Force Employment in India (No. in Millions )
Year
1981
1991
2001
2003
Total Population
Total Labour Force

679
-292
--

839
(2.4)
358
(2.26)
4

1019
(2.1)
412
(1.5)

1055
(1.7)
426
(1.6)

Total Employment

286
351
-(2.27)
Unorganized Sector
263.3
324.3
Employment
-(2.32)
Organized Sector
22.7
26.7
Employment
-(1.8)
Public Sector
15.6
19.1
-(2.2)
Private Sector
7.1
7.6

(0.7)
Note: Figures in brackets are average annual rate of growth.
Source: Economic Surveys of India.

403
(1.5)
375.2
(1.6)
27.8
(0.4)
19.1
(0.0)
8.7
(1.4)

422
(2.4)
395
(2.6)
27.0
(-1.4)
18.6
(-1.3)
8.4
(-1.7)

Decline in organized sector employment and union membership is noticeable in the Indian case
as well; presently a mere 7 per cent of Indian workforce working in the organized sector which at
one time was higher than 10 per cent; and a major portion of them belongs to public sector
employees. The gradual erosion of union membership in India can be seen from table 3. This
table shows the total number of unions registered, the total number of unions submitting returns,
and the membership of unions submitting returns. The table shows that the decline is noticeable
both in the number of unions submitting returns as well as the total membership of these unions.
It is clear that during the year 2001, as against 65264 registered unions not even 10 per cent
submit the statutory returns required to be filed under the Trade Unions Act, 1926 (TUA). Only
5693 have filed returns under the TUA; and the total membership of these unions during the
same year has declined to 4.45 million.
Table 3: Growth of Workers Trade Unions & Membership in India
Year

Trade Unions on
register

Trade Unions
Submitting Returns

Membership of Unions
Submitting Returns ( ' 000)

1987

48529

10953

7935

1988

49255

8668

7055

1989

51449

9674

9262

1990

50797

8386

6931

1991

52773

8351

6094

1992

54885

9073

5739

1993

54969

6776

3129

1994

56044

6265

4093

1995

57163

8048

6516

1996

58206

7229

5594

1997

59875

8774

7373

1998

61199

7291

7229

1999

64040

8061

6394

2000

65286

7231

5417

2001*

65264

5693

4454

Source: Ministry of Labour and Employment, Government of India.

It is thus noticeable from tables 1 to 3 that labour power is declining across the globe as well as
in India. One way of weakening labour power is the use of some specific personnel practices. In
most small and medium enterprises (SMEs) employers have a tendency to adopt harsher
personnel practices including violation of labour laws. This is often done with state supporting
the employers initiatives and looking the other way when labour law violation is seen as taking
place. In most large enterprises and the MNCs the HR models are either soft in actuality or are
merely facades of soft projections. The HMSI case being narrated in section III is one involving
just a faade of a soft HR model. In the next two sections, we will discuss the HR model adopted
by HMSI and how it worked in actuality.
III. THE HMSI CASE5
The Honda Motorcycles and Scooters India Ltd. (HMSI) is a wholly-owned subsidiary of Honda
Motor Company Limited (HMCL), Japan; the latter is the largest manufacturer of two-wheelers
at the global level. HMSI was established on 20th October 1999, and employed about 3000
employees in all in its plant at Manesar Gurgaon. It provided many welfare benefits to its
employees, and also met its liabilities under different labour laws. The human resource (HR)
policies of HMSI are in alignment with the philosophy of its parent company, HMCL, which
includes two fundamental beliefs: 1) respect for individual differences; and 2) the three joys: the
joy of buying; the joy of selling; and the joy of manufacturing. The HR policies of HMSI, among
others, include constituting some committees by the management consisting of workers and
management representatives. The companys three-monthly newsletter focuses on targets, safety,
achievements concerning quality, safety and training programmes on defensive and safe driving
of two-wheelers; thus highlighting managements concerns and not issues that workers consider
important.
Workers perceived unfair treatment for the first time in November 2004, when they were offered
by the management a Diwali6 gift of Rs. 600. They thought that keeping in view the fact that
their company was a well-known MNC they deserved much better treatment on that occasion.
This feeling got accentuated with other acts of arbitrariness and nepotism practiced by Indian
managers in HMSI. They also felt aggrieved at the idiosyncratic attitude of a Japanese VicePresident (Production) who one day kicked a worker (though it was partly a friendly kick) who
was slightly late in joining work after the tea interval. The discipline enforced on workers was
6

very strict; they were often given sermons on their work behaviour, which they did not like.
While Japanese top management had cross-cultural misunderstanding about Indian workers
psyche, Indian managers were practicing favouratism and hierarchical authoritarianism against
them. The workers also noted a high wage difference in HMSI and the Hero-Honda7 for the same
work. So they started a campaign for registering the union, and made demands by submitting to
the management a demand charter. The management tried in vain its level best to stop union
formation and registration. The concerned registrar of trade unions denied union registration on
the frivolous ground that registration would vitiate the peaceful atmosphere in the Gurgaon
industrial region, which was a patently illegal reason. Eventually, the union registration took
place in May, 2005 with the active intervention of Mr. Gurudas Gupta, a Member of Indian
Parliament, who belonged to the Communist Party of India (CPI). He was an office bearer of its
trade union wing, AITUC (All India Trade Union Congress). Some usual IR tactics were adopted
by both sides, which heightened the tension in IR climate. There were also some cases of minor
violence by workers at the workplace.
The worst happened in the short IR history of HMSI when a violent battle was fought between
the HMSI workers and the local police on 25 July, 2005 at the office of the Deputy
Commissioner (who is Chief of the civil administration) of Gurgaon district where workers had
gone to protest against the alleged highhandedness of the HMSI management in, what they
described as, collusion with the state administration. This resulted in severe injuries to some 70
workers. The Indian multi-channel TV news network telecast the violence on workers almost
live. Due to workers representatives pressure on the government, the state Chief Minister was
directed by the Congress (the ruling party) President Mrs. Sonia Gandhi to facilitate a settlement
between the HMSI management and its workers. On July 30, 2005 an agreement was arbitrated
by the state chief minister, which provided that the striking workers would resume duty from 1st
of August 2005, suspended workers would be taken back on duty, and that workers would not
raise any new demands with financial implication during the next one year. The management
was concerned at not just the losses but also at the magnitude of alienation amongst the workers
and the violence perpetrated on them by the police.
In the post-July 25 scenario, the management allowed several concessions to workers on many
fronts. The union office bearers were allowed to do full-time union work. Despite the losses,
workers could secure an impressive amount of money from management as bonus for the year
2004-05. The managements allegiance to soft model of HRM strategy was more of merely
rhetoric as it had taken the workers for granted. It is only in the post-July 25 scenario, that the
management started sending managers to attend management development programmes (MDPs)
in areas such as inter-personal skills; team-building, negotiation, and conflict management. It
decided to appoint a Senior ManagerIR. Union office-bearers were given training by the HR
department on building cooperative IR.
The interesting thing about the HMSI case is that the company wanted to pursue a non-union
model without implementing its projected HRM strategy. It thought that its policy of paying
slightly higher wages than the average in the automobile industry in Gurgaon region, providing
same uniforms for all employees, and offering attractive welfare benefits to its employees would
be good enough to secure their commitment to the company. The Japanese top management left
HR issues to be handled by senior Indian managers who were basically production specialists,
and were not experts in handling IR issues. Also, the hierarchy-ridden Indian managers were
insensitive to issues that concerned the common workers. The management was caught unawares
7

when it found that the accumulated grievances led workers to become very hostile and form a
union with the help of the AITUC, which is the trade union wing of a political party that is a
partner in the ruling coalition at the central level i.e. United Progressive Alliance (UPA).
Managements in India often succeed in breaking workers unity in most union-organization
situations with the help of state government agencies and using the legal system to their
advantage. But in the present case that could not happen. Saini (2006) has noted that this is
happening at a large scale in the industrial belt of Panipat as wellanother industrial town in
Haryana, where even medium firms with nearly 500 workers have been violating most labour
laws with impunity; nor are union leaders operating in that region able to unionize the workers in
the Panipat handlooms exports sector. In the HMSI case, the power struggle between labour and
management led to a violent battle between the workers and the police that resulted in the
causing of considerable loss to the company. The central government was compelled to come to
the rescue of the working class due to the coverage of the media and the pressure of the CPI.
The company suffered a loss of Rs. 1.3 billion; and saw the emergence of a strong union.
But keeping in view the totality of the HR practices that the company was following, there was a
wide gulf between its projected HR policies and actual practices. The managers conducted
themselves like autocrats, abused their authority, imposed unreasonable restrictions on employee
movement, refused leave even in genuine cases of leave, threatened the workers of termination
from service, etc. The employees were not treated with dignity or even as people.
In the present era of globalization there is a trend to treat labour as a dispensable commodity.
Large-scale use of contract8 and casual labour has been taking place at quite an extensive scale.
These categories of workers had lent a supportive hand to the workers struggle, without which
the core workers would have found it difficult to win their battle against managements
repression. When workers gave a call for strike, there was almost complete shutdown. Thus, the
help lent by contract and casual workers also proved crucial for shaping of the conflict
generation in this case.
IV. TRADE UNION DYNAMICS IN THE HMSI CASE AND THE EMERGING IR
REALITIES
.
The HMSI case clearly shows the presence of Tayloristic working conditions in the company
before the trade union came into existence, which became balanced after the July 25 scenario.
The unions absence aided the pursuit of discriminatory personnel policies, especially by the
Indian managers, which sowed the seeds of discontent among workers. This shows that even in
MNCs the relevance of trade unionism should not be considered as a thing of the past.
From employers point of view, a union is almost always considered as undesirable as it is seen
as weakening managerial prerogatives and bringing in inflexibility in organizational working. It
is viewed as carrying the danger of destroying the established relationships and old loyalties.
Union demands are mostly perceived as excessive and frivolous. Thus, the union symbolizes
resistance to managerial unilateralism. Confrontation, suspicion and hostility at the time of the
entry of a union in a non-unionized organization, as was so in the HMSI case, are therefore
naturally expected. These dynamics actuate the management to adopt tactics for weakening the
union strength or prevent it from coming into existence.

HMSI apart, the general trend in the new era is that while in smaller organizations employers are
becoming far more authoritarian with employees in case of larger organizations, efforts are being
made to promote a kind of new unitarism at the workplace, which involves use of HRM strategy
to promote a seeming commonality of interestsinvolving a mix of hard and soft HR
interventionswhich aims, among others, to dilute the influence of the trade union (Saini, 2000;
Saini and Budhwar, 2004). These efforts help individualization of IR and dilution of trade union
strength. An increasing use of post-Fordist production system is noticeable in todays era of new
technology. This means a greater emphasis on logistics, and a comparatively lesser concern for
human relations that is increasingly going down. The departure from confrontationist style to
collaborative style of industrial relations is visible on quite an extensive scale.
The case narration clearly shows the managements keen concern for union avoidance. In the
process, it committed many unfair labour practices, which were well within the knowledge of
state agencies involved in this dispute. Somewhat similar instances in other states reveal that
labour and general administration has been showing hardened stances in its anxiety to woo
investors. No governmentnot even a government led by the left coalitionis willing to give a
pro-worker impression in addressing labourmanagement strife. The undue delay in union
registration and the frivolous reasons given for state inaction in this regard explain such concerns
of the state governments.
But then, what explains the states coming to the rescue of HMSI workers and eventually forcing
the management to condone the supposed acts of violence and indiscipline committed by the
workers and the union leaders? The police brutality created enormous sympathy from the public
and the media for the agitating workers. Due to the pressure put on it by the CPI the government
had to show consideration to the interest of workers and take some action against the
administrative officials. On the states part, this was necessary to show to the media that the
government cared for the working class. Thus HMSI workers and their union scored a moral
victory and earned public sympathy.
The covert state support to management in general has helped the latter to manage IR issues the
way it likes. In the HMSI case, management allowed the workers grievances to pile up; when
they wanted to have them processed through a union that they formed, the management colluded
with the state agencies to deny them registration of their union on illegal and frivolous grounds,
thinking that in the process it would be able to break the spine of the workers unity. It
committed many other illegal acts in this regard. For example, the management offered the
workers a compensation package on the condition that they would not form a union, and the
suspension/termination of services of workers who took active part in getting the union
organized, were not lawful acts on the part of the management. These are gross violations of the
provisions of the Trade Unions Act 1926 and schedule V of the Industrial Disputes Act, 1947.
The State (political executive, administration, police) came to the aid of HMSI management in
its efforts to discipline workers and resist union formation. All this however strengthened the
linkage between the union and the AITUC. Today, states priorities are more focused on
efficiency, higher growth in GDP, and foreign direct investment rather than social justice. The
present state of apparent cooperation in IR is symptomatic partly of a covert pressure on workers
of the states indifference to their cause. The Indian data on industrial conflict shows that
mandays lost due to lockouts is much higher than those due to strikes (Datt and Sundharam,
9

2006: 699). Thus, in a way the state assists capital in violation of trade union rights of the
working class and dilution of labour standards.
In the Western context, while some scholars are writing the obituary of IR thanks to the role
being played by strategic HRM in the present era of globalization (Looise and Riemsdijk, 2001),
others do not see HRM as essentially anti-union (see, for example, Storey, 1995). The latter
category of scholars has argued that trade unions and HRM strategy can survive as compatible
entities in workplace settings. But as shown by the HMSI case, in actuality most employers in
the context of developing countries including India consider union as hindrance. In such a
situation, it is difficult to build sustainable cooperation between the two sides. Companies like
those belonging to the Tata Group are able to build cordial relations with their unions due to their
willingness to give space to unions point of view.
V. CHALLENGES FOR UNIONISM IN THE NEW ERA: SOME LESSONS FROM THE
HMSI CASE
The most important source of labour power in any country is a facilitative IR law and its
effective working. This branch of law enables labour to organize itself, struggle to secure social
and industrial justice and prevent commission of any unfair labour practices on the part of the
management and workers in the course of processing their differences. Therefore, the Trade
Union Act, 1926 and the Industrial Disputes act 1947 are legal instruments that confer important
legal rights on labour. It is important to ask how did these laws work in the HMSI case from the
view point of workers, and what can one learn from it. The connected issues can be discussed as
follows:
Firstly, it is important to note that we need to distinguish between the role of trade unions in
public sector and private sector. Often, most of the criticisms of trade unions that are applicable
to public sector may not apply to private sector unionism. For example, speaking of the problems
of trade unionism in India, Sheth (1994: 132) notes:
The existing trade unions are characterized by fragmentation, divisiveness, internecine
conflicts, rivalries, scramble for leadership within unions, dependence on political
patronage, and favours from employers in pursuit of short-term goals of specific
segments of employees. These forces have failed collectively in representing employees
interest as they usually fail to agree on their diagnosis of given situations and strategy for
dealing with them.
Also, Davala (194: 42) writing in general about trade unions makes similar general observations
when he remarks: The strategies of Indian trade unions have been essentially confrontationist in
nature. They have been protest-and-agitation-based. No doubt, one of the reasons for
sluggishness of the public sector in India has been the excessive job security enjoyed by the
workers due to union protection. Often, unions in public sector have espoused workers causes
that would not be tenable on merits. But this is much less so in the case of private sector, where
most unions are on the defensive in the era of globalization. If a powerful union does come into
existence in a private sector organization, it brings some sense of security amongst workers
which may adversely affect production. But any enlightened IR system can not be built on
repressive peace. Forced peace through coercion is likely to be more productive; but it may not
be desirable. In fact, the objective of a union is to demand labour justice. Therefore, it is
10

important that one refrains from uncritically mixing issues in unionism in public sector and
public sector. The HMSI union, even though was guided by an outside federation, could not be
charged with the criticisms that Seth (1994), Davala (1994) and others have attributed to unions
in general. And, it is a challenge before Indian trade unions to clarify to the public in general
through their actions that issues in private sector are not just the same as they are in the public
sector.
Secondly, it is important to understand that unionism and politics have a symbiotic relationship.
Often, scholars, academics, professionals, jurists and others have vehemently repeated that
involvement of politicians in unionism is not a desirable thing and must go lock, stock and
barrel. The Indian IR literature is replete with exhortations for freeing the unionism from the
political parties It should be however noted that in most countries of the world politics and
politicians have an important role to play in labour movements. This is more so in countries of
Europe, which are still able to follow the principles of welfare state despite crises in it caused by
globalization. Supporting the inevitability of politics in trade unionism, Ramasawmy (1997: 19)
quotes Alan Flanders, an acknowledged British IR expert, thus:
Everywhere trade unions have been compelled to engage in political action to obtain
enough freedom from legal restraint to exercise their main industrial functions.trade
unions must be involved in politics in order to establish and maintain the legal and
economic conditions in which they can flourish. It makes the term non-political union,
taken literally, a nonsensical description; there is no such animal.
In the UK, even though Tony Blairs reforms since 1997 have not led to reversal of Thatchers
economic policies, he did bring many IR reforms at the instance of the UKs trade union
federation, the Trade Union Congress (TUC), which have been admired by the working class in
general. In the Indian case as well, it is the politicians who helped in developing a
comprehensive set of labour legislation in early years of Indian Independence and after. It is
indeed futile to decry political involvement in unionism in India, given the political structure of
Indian democracy where a large number of politicians have their roots in unionism. It is
important to note that in the case of HMSI as well, the political affiliation of the unioneven
though it was not quite directplayed a key role in the success of its workers struggle. It was
surely not an easy thing for workers to risk their job and fight for their working class rights. But
the support of AITUC gave them some semblance of security.
No doubt, it was the AITUC, which played the role of the chief architect of workers struggle
at different levels. Of course, given the structure of trade unionism in India, with problems of
multiplicity and political interference being important issues, AITUC must have been waiting for
the opportunity. Since the UPA government at the centre has CPI as a coalition partner, this fact
helped the workers a great deal in fighting the managements plan of marginalizing the
unionization efforts. The position of HMSI workers in forming a union looked very difficult in
view of the prevalence of a higher degree of unitarist IR in the Gurgaon region, the states
increasing indifference to issues of social justice, and governments priority of encouraging more
and more of foreign direct investment (FDI) so as to contribute to its export promotion model.
But the support of AITUC indeed proved critical. It first helped the workers in registration of
their union, which was denied to them on extraneous and illegal considerations. It then helped
them by guiding their struggle against union repression at the hands of the management, state
agencies as well the police. It must therefore be conceded that given the multiple political
11

structure of India, and the power enjoyed by the political parties in sensitizing the state agencies
against union repression, especially if the concerned political party is in a position of power, it is
futile to talk of non-political unionism. As has been the case in most such struggles (e.g. see,
Saini, 1997 and 1995), it would have been very difficult for the workers to win their point of
view. Therefore, political unionism is a source of strength for the Indian workers, and unions
need to learn to tap this source of power in an appropriate way.
Thirdly, under the Indian IR law framework, the state exercises very significant powers. If
these powers are exercised on irrelevant and extraneous considerations, that may destroy the
spirit of IR laws from workers point of view. The legal framework of IR in India is so structured
that the state powers in it are exercised largely through various provisions of the IDA and the
TUA. The state also has general powers in IR in the name of maintaining law and order in public
interest. The Indian Constitution guarantees freedom of association to all citizens, and the TUA
envisages union-formation rights to workers employed in industry. In the present era of
globalization, the obstacles being created by the state in the way of implementation of these
rights are at the level of exercise of its executive powers. Researches have revealed that when
union rights are violated the state often looks the other way and is not interested in performing its
statutory duty of safeguarding the interest of the workers by implementing the labour laws; for it
has a higher concern for organizational flexibility, efficiency, and the interest of foreign direct
investment; all these values are considered more important in the name of facilitating the exportpromotion model of economic development.
The HMSI case amply shows indifference of state agencies, which the workers fought through
involving the AITUC leadership. So the union in todays context has to focus its energy on
confronting such state lawlessness, and by compelling the state and its agencies to discharge its
statutory obligations under labour laws with the help of politicization of unionism.
Fourthly, the issue of core workers and contract workers is a delicate one. There is a wide
difference between the wages of core workers and contract workers. The latter category of
workers are not considered as employees of the principal employer as there is a contractor in
between who employs them to render a service to the former. Originally, the intention of the
Contract Labour (Regulation and Abolition) Act 1970 (CLA) was that contract labour would be
employed in those operations that are not of perennial nature. The current legal position about
the employment of contract labour is that it can be employed in any operations including core
operations unless it is specifically prohibited under the CLA by the appropriate government in
a particular operation. Many state governments have prohibited contract labour in very few
operations. Often, contract labourers are employed under a sham contract9 which if brought to
the notice of a court can lead to regularization of contract workers for violation of the CLA. But
most such contracts are continuing as per collusions between the employers and state agencies,
and often due to the indifference of the trade unions. Only two state governmentsi.e. the
Government of Andhra Pradesh and the Government of Gujarathave succeeded in effecting
amendments to the effect that a contract worker can not be employed in core operations. Such
amendments help in preventing excessive exploitation of contract labourers. In the HMSI case,
the contract workers supported the cause of the main workers. The union leaders admitted that
without their support it would have been very difficult for them to succeed. Contract workers
knew that in any case they would be removed to other sites of the contractors after six months
a practice that is rampant in employment of contract labourso they supported the genuine
demands of the striking workers and also went on strike in their favour. Interestingly, even the
12

trainees too supported the cause of the main workers. In fact, very recently in October, 2006 the
HMSI union reciprocated the earlier helpful gesture of contract workers by compelling its
management to indirectly help in the revision of wage rates of the contract laborers by entering
into fresh contracts with the contractors. It was so done similarly in case of contractors workers
at Hero-Honda, where contract workers had gone on a 4-day strike.10 So, trade unions need to
vigorously ask for the passage of a law by Parliament to the effect that contract labour should not
be allowed in any of the core operations.
Fifthly, union recognition is a very complex issue. It is well known that barring in few states
the legal framework of IR does not provide for any legal remedy if the employer refuses to
recognize a union of its workers. In actuality, recognition can be gained by a union only through
a show of its strength. It has been held by the higher judiciary that recognition questions are not
industrial disputes under the IDA, and can not be adjudicated by tribunals or labour courts
constituted under the IDA. Researches have revealed that a large number of unions in the private
sector get wiped out in the process of seeking recognition, as a good number of ULPs are
committed by the employers during the process of giving and denying recognition (Saini, 1997
and 1995); and the labour departments and adjudicatory bodies have not been able to enforce this
legal protection satisfactorily. It has also been argued that in countries that provide for statutory
union recognition, there is greater likelihood of union survival and higher union density (DArt
and Turner, 2003); therefore, the passage of such a law in the country will not only show states
serious commitment to the cause of social justice and collective bargaining but will also help
unions survive the onslaught of employers against them. In the case of HMSI as well the workers
narrowly escaped defeat on this front, but for the support received from the AITUC. The real
challenge before the Indian trade unionism is to successfully fight for a law on trade union
recognition. The proposed law should provide for adjudication of the recognition issue in case an
employer does not recognize a union voluntarily.
Finally, implementation of a well-developed HRM strategy by an employer, which is
considered a strategic choice for gaining competitive advantage, necessitates a shift from
adversarial IR to cooperative IR. That unions can play a positive and cooperative role was
evident in the efforts of the union leaders when on 2 September 2005 HMSI union office bearers
went to each department to pacify the workers when a fresh incidence of friction between
workers and some managers had cropped up in the post-violence IR scenario at the company.
The union leaders also said that they felt committed to their company and were seeking respect
from managers, but only 20 per cent of whom, they thought, actually treated them so. They
ensured that the work went on smoothly despite some problems in superiorsubordinate relations
in one department of the company. They could do so because they were in a powerful position
after having won the initial struggle of union-formation and recognition. Fortunately, the HMSI
workers and the union also seem to be restrained in their attitude and behaviour rather than be
exuberant to exploit the popular public sentiment for any short-term gains. Workers were in an
open mood to collaborate in re-building the broken trust. By adopting a mutually
accommodating approach and openly dealing with the conflict as and when it evolves, they are
prepared to quickly restore equilibrium. It also signifies the need for both sides to play a
synergistic role in IR. So it is a joint responsibility and challenge before the management and the
union to nurture this kind of cooperation which is surely possible in the era of new IR.

13

VI. CONCLUSION
Keeping in view the model of development that the Indian state has adopted, it is very likely that
the state and its agencies will provide a greater degree of covert state support to the cause of
employer-sponsored unitarism in IR through its executive branch i.e. the power of labour
department, police power, and administrative bureaucracy. The globalization philosophy as well
as the indifference of the state put unions in a tight spot, which will see themselves slipping into
a situation of ghetto unionism (i.e. unionism shrinking in only few sectors). To safeguard their
interest in the coming times, unions have to redefine their structures and role. They have to
engage themselves in internal dialogue and in elaborating worker-oriented meanings of concepts
such as flexibility, security and opportunity that are being shown to workers as methods of
promoting the trickle down (Hyman, 1999); and adopt more thoughtful methods of their
acceptance by employers, workers and the state. All that will not be possible unless workers are
able to resist exploitation. Employers often resort to questionable practices under the garb of
practicing commitment and empowerment models of HRM strategy.
At the same time, unions need to understand the changed position of employers in the new
economy. They must support such initiatives in the organizational interest but must remain
cautious and firm on resisting labour exploitation. But as the HMSI case would show, the
partnership role as per the spirit of HRM philosophy is possible only if there is transformation in
the managements beliefs and approach to labour, which was clearly seen as missing in the
HMSI case as they took the workers for granted. It is easy to blame workers and unions for noncooperation. And, managements designs of covert exploitation and practice of neo-Taylorism
are often overlooked. The HMSI case shows the challenges that unionism in the new era faces in
the private sector. The challenges are especially severe in view of the state indifference to its
cause despite the constitutional and other legal protection for freedom of association and labour
justice. Unionism has to rise to the occasion if it wants to save itself from steep decline.
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ENDNOTES
1

The six typologies in Figure 1 can be explained as follows: traditional pluralism in block I refers to a situation
where unions and management conduct themselves close to the way their positions are envisaged in the classical
Oxford school of IR i.e. both parties are strong and exercise their power and countervailing power in the course of
playing the game of IR in adversarial ways. The settlement depends upon the needs and power position of the parties
concerned. In case of paternalistic paternalism as shown in the second block, the management tries to dilute the
hostility of the union through effective practice of paternalism including employee care. The Tata Steel in India is a
good example of managerial paternalism. The management takes special care to keep the union/s in good humour
and largely succeeds in its plans in this regard. This company has not had any strike since 1958; It is believed that
sustained practice of paternalism by the company has facilitated industrial peace in this company (Pandey et al.,
2005; Mamakoottam 1982). Ambivalent paternalism, as mentioned in the third block represents a situation where
the managements attitude towards the union is largely repressive but occasionally relenting. The management deals
with the union in an opportunistic way depending upon its needs and the unions power since the union is presumed
to be less powerful than the management, the latter is able to exploit this situation. Most unionized Indian companies
in the private sector are seen as following this model.
Repressive pluralism as seen in Block IV represents a situation where the powerful management uses all possible
ways to deny any countervailing power whatsoever to the union/s; it may even take the state support in committing
unfair labour practices against the union. The union does try to fight for its rightful place in IR but eventually finds
itself too weak to do so. The management is able to repress union activities successfully through legal as well as
extra-legal means. Unionization attempts that are made by workers in an organization for the first time mostly end in
the sixth typology of coercive unitarism; in some situations, however, the union is able to fight long-drawn
recognition battle but without much success. This is often the fait of unions in situations of repressive pluralism.
Sometimes the management pursues a strategy of keeping itself union-free not through any repression but through
practice of a well-articulated soft HRM strategy (Saini, 2000; Saini and Budhwar, 2004). And, it is able to do so
successfully, as employees voluntarily decide against forming a union. Normally, such organizations pay high wages
and/or follow empowerment and commitment strategy very efficaciously. Hero-Honda (Gurgaon), IBM, Motorola,
Nokia are some of the examples of practice of neo-unitarism of this category. Coercive unitarism in the last block
represents a situation in which the management is able to repress assertion of any labour rights due to the weak
collective power of labour; which may be due to high incidence of unemployment and underemployment, state
indifference to social justice issues, corruption of labour machinery, inability of the unions to protect labour rights,
or some such related factors. Consequently, workers fear losing their jobs in case they indulge in union activities or
feel that it is going to be a useless exercise in view of social structuring.
2

HRM has been defined as A distinctive approach of employment management which seeks to achieve
competitive advantage through the strategic development of a highly committed and capable workforce, using an
integrated array of cultural, structure & personnel techniques(Storey, 1995).
3

HRM strategy seeks to change behaviour and attitudes through HR interventions so as to promote competitive
advantage for the concerned organization. Each organization may have its own requirement about the required
behaviour that is sought to be shaped through HR interventions.
4

Empowerment model of HR is also sometimes referred to as commitment model.

This narration of the HMSI case is a brief summary of its fuller version that can be seen in Saini (2005).

Diwali is the biggest and the most important festival of Hindus, who constitute more than 80 per cent of the Indian
population. It is celebrated as per the Hindu calendar, and mostly falls in the month of November every year.
Festivities include gift exchanges and purchases of new clothes and household items. Employers usually give ex16

gratia gifts to their employees. Often, unpleasant feelings surface due to low amount of the ex-gratia payment.
Hence, the festival is important from the view point of Indian IR.
7

Hero-Honda is a joint venture between Hero Group and the Honda Company. In a way, Hero-Honda is a
competitor of HMSI. The former produced the same product as those of the latter.
8

Technically, contract workers can not raise an industrial dispute with the principle employer; for as per the Indian
law their labour rights are mostly exercisable against the contractor only.
9

A sham contract is one where a worker is shown as contract worker but in actuality does work for the principal
employer. He does the work in such a way that it would be considered that he is an employee of the principal
employer. In sham contract situations, the matter has to be taken to an appropriate court which can order that due to
the situation of sham contract, such workers would stand absorbed as core workers of the principle employer.
10

Hero-Honda, Gurgaon plant, employs around 4,000 contract workers who went on strike for 4 days from 10 April
2006. Their demands included: wage hike, job regularization, extra casual leave and medical benefits at par with the
permanent workers. Most of them have been working there for the last 7 to 8 years. A contract worker in HeroHonda is paid between Rs. 4000-6700 per month as against Rs. 30,000 per month for a permanent worker
performing almost the same job. Finally, the labour department and the management were forced to come to the
table. On 14th April, a tripartite settlement was arrived at, as per which some of the demands were met. The
agreement included a 30 per cent hike in wages, two days of casual leave every month, and medical benefits in
accordance with the company rules, and issuing identity cards.

17