White-collar employees are left to fight on their own in case of mass retrenchment, unlike their manufacturing counterparts. Should there be a union to ensure them a fair deal?
The ‘Union Leader’ has been portrayed in a different light in various eras of Indian cinema. In the 1960s and 1970s, he was the hero fighting for justice for his co-workers, while in the late 1980s, and all over the 1990s, the union leader was the villain. This union leader is now a rare breed in movies.
Was it a stereotypical approach or a real change in the mindset? In the last two decades, we have moved from being a manufacturing-led economy to an IT/telecom/e-commerce/services-led economy.
The common man is no longer the blue-collared mill or factory worker. Instead, he is now the white-collar employee who goes to an air-conditioned office. These educated employees do not need a union, as they are well aware of all their rights.
Is it so? It may be true to some extent, but not always.
Even white-collar employees are vulnerable. One needs to rethink on all the layoff/mass retrenchments that have become staple news. In such scenarios, these white collars are left on their own to negotiate with the organisation. What has not changed over the years is probably the relationship between the employee and the employer.
Cisco, Dell, Twitter, Ericsson, Flipkart, Microsoft and even Apple have let go of a significant number of their employees in the recent past. One may argue that it’s a strategic business decision but for employees it can be a life-changing event.
An ‘association’ or a ‘union’, whatever the name may be, but the white collars definitely do need a combined voice for support.
As per Article 19 (g), white-collared workmen and professional staff have a fundamental right to form an Association (hence a union).
Adil Malia, group president-HR, Essar Group, who has been a labour lawyer, a strategic business leader and an IR practitioner (handled settlements and strikes with late Dr Datta Samant), opines, “Employers will not stand much of a chance for success should they prefer to challenge the formation of their Associations by arguing to the effect that such association of white-collared professional workmen is principally against the interest of the management’s unfettered right to conduct its business, and hence, its status be struck-off.”
Likewise, provisions of Sections 2(g) and 2 (h) of The Trade Unions Act, 1926, which defines ‘Trade Dispute’ and ‘Trade Union’ respectively, when interpreted in light of ratios of cases, leaves no doubt that such an association/union of white-collared professional job holders would find suitable protection under provisions of The TU ACT, 1926.The definition of ‘workmen’ under the TU Act is much broader and wider than is defined under Sec. 2(s) of the Industrial Disputes Act, 1948. Such an association of white-collared professional workmen, would therefore get necessary protection under The TU Act. Airline Pilots’ Guilds are a Union. Bank Officers too have a union and to that extent it is a well settled principle in law that their right to form an association under the Constitution of India is a Fundamental Right and that they can also be registered as a trade union under the TU Act,1926.
“However, the only aspect to be borne in mind is that the nature of jobs they hold, sometimes includes duties, which could be ‘dominantly’ regarded as being supervisory or managerial in nature. In that event, protection from the ID Act would not be available to them,” says Malia.
However, they would still continue as citizens of India to be protected under Article 19 (g) and can form a constitutionally valid association and can also form a Trade Union.
Getting over the paranoia
Malia is of the view that a strong and positive white-collared union is not to be viewed negatively, unless the purpose and intention of blocking such a union is covert and unfairly aimed at exploiting their terms of employment, conditions of service or position in law.
However, at times, the roles they perform and the jobs these white-collared professional associates undertake are closer in nature to the kind of duties that the management fulfils.
“Given that situation, most organisations would not choose to have their management cadres unionised. As they have a potential to jeopardise the strategic working, it is desirable for these leaders to think differently and not behave as if they are mere extensions of clerical/blue-collared workmen and their attendant work ethics. “To that extent, it is better that the white-collared executives are non-unionised,” Malia says.
Ravi Mishra, regional HR Head – South Asia & Middle East, Birla Carbon, feels that unionisation certainly impacts performance, be it the blue collar or the white collar.
Take for instance, the blue-collar workforce wherein, the reason that organisations are moving from workers on payroll to contract labour, and now towards outsourced jobs, is because of the laid-back performance and complex issues with the unions.
Mishra says, “Why contract labour came into existence is because the regular company workers were not performing up to the mark, while companies had to face various conflicts with the unions. So organisations were bound to reduce the workmen on the rolls and to bring in manpower on contract. Likewise, if there are similar traditional unions in the white-collar workforce, then gradually organisations will begin looking at outsourcing projects, wherever possible.”
On the other hand, the professional white-collared associates can lose trust in the management if the latter exploits the vulnerabilities of its professional white-collared cadres by not handling its economic ‘stress-time solutions’ with care. “This is the first domino. It would naturally create insecurity in the entire cadre of such professionals, who thence would seek protection from the strength of the guild,” Malia opines.
Although unionisation, as established earlier, is legal and fundamental for any cadre of working professionals, it is also true that unionisation impacts performance as workers tend to take shelter in the fact that the unions will protect their jobs whatsoever.
Mishra explains that the moment you unionise, the workers get into a laid-back mode as they feel that they have someone to represent them in the courts and their job is assured. This impacts their performance, which then makes organisations take alternative measures, such as outsourcing the work.
“In many of our plants, we are even reducing contract workers and are outsourcing certain jobs to agencies. Unionisation of the white-collar workforce may also result in reduction of direct employment,” he shares.
It may be in the interest of the employees in the short run but in the longer run it will not prove beneficial for either the organisations or the workers.
Another belief is that it will be demeaning for the white collars to unionise. “If one is competent enough one will find another employer in case of a mass retrenchment decision. Unions are for those who do not want to work,” is the rationale.
However, organisations also need to keep in mind that people are their greatest asset. In times of economic difficulties and a slow down for businesses, retrenchment seems to be the way out for saving costs. But it can be done in a way that does not blow off the world for the people affected. This is where HR managers also have a role as employee advocates.
They need to fulfil this requirement even at the cost of incurring the displeasure of their line managers. They should, therefore, use their influencing skills and impress upon their operating business managers to be graceful, and if possible, sweeten the offerings whilst downsizing, retrenching or laying off people.
Malia believes that, understanding the insights of people and providing them an enabling environment and a positive culture-based on trust, security and integrity is the way to motivate and engage them to maximise their contributions. This is the strategic purpose for which managing harmonious and positive employee relations becomes very necessary.
If the white-collared professional knowledge workers, with the potential to create differentiated value, feel insecure or unsafe either due to disconnection or due to disengagement caused by poor handling of their relationships at work, then the desired value cannot be created. In Malia’s words, “The very purpose of a business would fail.”
To that extent, managing harmonious employee relations is critical to any business environment, and effective leaders always keep a close eye on keeping this relationship positive.