Instructions

Read the following case and choose the best alternative.

Chetan Textile Mills (CTM) has initiated various employee welfare schemes for its employees since the day the mill began its operations. Due to its various welfare initiatives and socially responsible business practices, the organisation has developed an impeccable reputation. Majority of the regular workers in Chetan Mills had membership of Chetan Mills Mazdoor Sangh (CMMS), a non political trade union. CMMS had the welfare of its member as its guiding principle. Both CTM and CMMS addressed various worker related issues on a proactive basis. As a result no industrial dispute had been reported from the organiza tion in the recent past.

These days majority of the employers deploy large number of contract labourers in their production processes. In an open economy survival of an organization depends on its competitiveness. In order to become competitive, an organization must be able to reduce cost and have flexibility in employment of resources. Engaging workers through contractors (contract labourer) reduces the overall labour cost by almost 50%. Indian labour legislations make reduction of regular workers almost impossible, but organisations can overcome this limitation by employing contract labourers. Contract labourers neither get the same benefit as regular employees nor do they have any job security. According to various recent surveys, government owned public sector units and other departments are the biggest employers of contract labourers in the country. Contractors, as middle - men, often exploit the contract labourers, and these government organizations have failed to stop the exploitation.

Over time CTM started engaging a large number of contract labourers. At present, more than 35% of CM’s workers (total 5,000 in number) are contract labourers. CMMS leadership was wary about the slow erosion of its support base as regular workers slowly got replaced by contract workers and feared the day when regular workers would become a minority in the mill. So far, CMMS has refused to take contract labourers as members.

Recently, based on rumours, CTM management started to investigate the alleged exploitation of contract labourers by certain contractors. Some contractors felt that such investigations may expose them and reduce their profit margin. They instigated contract labourers to demand for better wages. Some of the contract labourers engaged in material handling and cleaning work started provoking CTM management by adopting violent tactics.

Today’s news - paper reports that police and CTM security guards fired two or three rounds in air to quell the mob. The trouble started while a security guard allegedly slapped one of the contract labourers following a heated argument. Angry labourers set fire to several vehicles parked inside the premises, and to the police jeeps.

Question 1

In the wake of recent happenings, what decision is expected from CTM management? From the combinations given below, choose the best sequence of action.
I. Stop the current investigation against the contractors to ensure industrial peace; after all allegations were based on rumours.
II. Continue investigation to expo se exploitation and take strong actions against trouble makers.
III. Get in direct touch with all contract labourers through all possible means, communicate the need for current investigation to stop their exploitation, and convince them regarding CTM’s situation due to competition. Also expose those contractors who are creating problems.
IV. Promise strong action against the security guards who are guilty.
V. Increase the wages of contract labourers.

Solution

The very first step will be to get in touch with the contract labourers to explain to them the current situation with the competitors and the contractors.

Also, to ease their current situation with the labourers, they should immediately take some action against the security guards behind the firing. This will help boost their confidence in the CTM.

Thus, the correct option is D.

Question 2

In the current context, which among the following represent the most suitable reaction from CMMS leadership?

Solution

For any organisation with regular employees, it is not feasible, professional, and fair to offer memberships to contractual workers succumbing to their pressure. But in the case of an already escalated situation in CTM with the contractual workers, they have to woo them by representing their interests in order to halt any advent of a new union.

Thus, the correct option is C.

Question 3

Out of the options given below, which one would be the best policy decision by government at the national level?

Solution

Since if situations like this become prevalent in the other parts of the country, then it will dissuade the companies from investing; hence, the government have to intervene by setting up new committees to reduce such events in the future.

Also, it will help protect the rights of the contractual labours.

Thus, the correct option is D.

Question 4

The criminals in the surrounding area often took their cue from the situation in the mill, creating law and order problems outside the mill which would later make it difficult for workers to come to mill safely. Given the circumstances, identify the stakeholder that should be the immediate priority of CTM management.

Solution

It will be very prudent for the CTM management to make the contract labourers their immediate priority as it can stop the escalation of a very serious and self-sabotaging issue in its tracks. As it was only one contract labour who was beaten up by the security, the issue is still in a very early stage.

Thus, the correct option is E.