IR of TCL

IR problem at TATA CHEMICALS Limited
Abstract:
The case examines the industrial relations problems at TATA CHEMICAL PLANT at Kolkata, an Indian
joint venture of TATA group and Hind Lever Ltd. The case discusses the various reasons, which led to the
dispute between the management and the employees of Kolkata. It elaborates the incidents, which led
to the strike and lockout at the company.
The case highlights the growing number of instances of clashes between the employees and the
management of companies in India, which is often guided by external parties such as trade unions and
political parties.
Issues:
» » Understand the factors that lead to strikes and lockouts at a factory and the impact of such
happenings on the employees and the company.
» Study HR policies adopted by organizations to prevent labor unrest at the workplace.
» Examine the role played by the top management in ensuring peaceful working environment.
» Analyze the role of external parties such as trade unions; political parties etc in disturbing the working
environment in a company.
Case Details:
On January 08, 2006, Tata Chemicals Ltd joint venture company, Tata Chemicals Ltd declared a
lockout at its plant in kolkata. The lockout came after two days of agitation by the plant's employees
against the dismissal of 6 workers by the management. The strike was the outcome of an incident that
occurred in February 2004 when the management suspended 15 employees on the grounds of
disrupting work and for unruly behavior. In 2006, Tata Chemicals Ltd dismissed three of these fifteen
employees after a year-long investigation and appraisal of their performance. The management stated
that the 6 employees had been dismissed due to their indiscipline and poor performance.
In response to the company's decision, the employees belonging to the Tata Chemicals Ltd
Employees' Union CITU, which was supported by the left front party, decided to go on strike.
Industry analysts opined that the strike at Tata Chemicals Ltd raised doubts about the success of the
European style of management in the Indian context. They also recalled the July 25, 2005 incident at the
Hoogly plant of Coke, a wholly-owned subsidiary of West Bengal Govt., when there were violent
protests from workers, disrupting production at the plant . These incidents served to underline the fact
that it was essential to ensure sound industrial relations for the smooth continuation of operations and
the safety of management, workers, and the plant of companies.
Commenting on the growing incidents of discord between management and workers, Mr. Vikas
singh, Chairman of the Asia Heavy Chemicals Group, a heavy Chemical manufacturer, said, "This incident
has brought to light the need to look at labor laws afresh. We cannot have archaic labor laws in a
liberalized economy. Compare China and India not just on infrastructure but also on labor laws. It is
much more liberal there (despite the Communist regime).Liberal labor laws are not about hire-and-fire
at will but about more room for contract labor with a tenure of, say, three years or so, and more
temporary workers. If there is a feeling that minimum wages are low, the government must work
toward increasing them.
From the time it started production operations in 2000, Tata Chemicals Ltd had a history of
disturbed relations between the management and the workers. Prior to the strike and lockout in January
2006, the plant had experienced three other strikes: two in 2001, and a strike and a lockout in 2002 that
lasted for almost two months. The first strike at Tata Chemicals Ltd began in April 2001, and it went on
for about two days. The second one was in June the same year. In 2002, the company decided to call the
workers in two shifts to meet the increased demand for the company's cars. The first shift at Tata
Chemicals Ltd started at 8 AM and ended at 4 PM. The workers in this shift were asked to work overtime
for four hours between 4 PM and 8 PM.
On January 05, 2006, Tata Chemicals Ltd's management dismissed 6 workers out of the fifteen that
had been suspended in February 2004. According to the management, the three workers, Prasanna,
Sridhar Dhote, and Satish, had been dismissed as the year-long investigations carried out by Tata
Chemicals Ltd had proved that they were guilty of misconduct which included violent behavior,
disruption of work, and assault on a supervisor.
Tata Chemicals Ltd's management presented the labor issue before V N Hittanagi, the Deputy Labor
Commissioner (DLC) of Kolkata (Region II). The management, however, maintained that it would not go
back on its decision on not reinstating the dismissed workers. On January 09, 2006, the representatives
of Tata Chemicals Ltd., HLL, and the CITU were asked to present their case before the office of the DLC at
a conciliatory meeting.
On January 20, 2006, in a sudden turnaround, Tata Chemicals Ltd's management announced in the
local newspapers that it would lift the lockout. In an advertisement, it said that it was happy to
announce that the lockout would be lifted from January 21, 2006 onward. However, the workers
reporting for duty were asked to sign an undertaking to maintain good conduct. Commenting on the
decision, Shankar said, "The management has decided to lift the lockout in response to the request of
several employees who have expressed willingness to resume work.
Tata Chemicals Ltd did not face any major problems due to the strike of the workers and the lockout
at its plant, having ensured that the market supply was not affected by either. Tata Chemicals Ltd. had
made appropriate arrangements to meet the market demand for its products in the event of the talks
failing between the management and the union.

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IR problem at TATA CHEMICALS Limited

» Study HR policies adopted by organizations to prevent labor unrest at the workplace.

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