INDUSTRIAL RELATIONS & LABOR LAWS

Case- “AIR INDIA: Grounded by strikes”

Under the supervision of-

Prof. Anubhuti Saxena

Submitted by-
Deepika PGFA2114
Sonakshi Rawat PGFA2152
Tanvi Jain PGFA2156
LAYOFF
Section 2 (kkk) of Industrial Dispute Act, 1947. A layoff is the temporary or
permanent termination of employment by an employer for reasons unrelated to the
employee's performance. Businesses typically resort to layoffs to cut costs, often in
response to a decline in demand for their products or services during an economic
downturn.

A layoff differs from a firing for cause such as unacceptable workplace behaviour, which

generally, does not qualify the fired worker for unemployment insurance.

Reasons of being Laid off:

o Cost Reduction - One of the main reasons why workers get laid off is because the
company decides to cut back on costs in some way. The need can arise from the fact
that the company is not making enough profits to cover its expenses or because it needs
substantial extra cash to address paying off debt.

o Staffing redundancies - Layoffs also occur when a company needs to eliminate some
positions due to over-staffing, outsourcing, or a modification to the roles. A company
may want to eliminate redundant positions in order to make its operations more
efficient.

o Relocation - Moving the company’s operations from one area to another can also bring
about the need to let go of some workers. Shutting down the initial location will not
only affect the workers who get laid off but the surrounding community’s economy as
well.

o Merger or buyout - If a business is bought out or decides to merge with another, the
change might lead to a change in the company’s leadership and corporate direction. If
there’s new management, the chances are that they’ll come up with new goals and
plans, and this can lead to layoffs. In such an instance, the new management will look
at every employee’s position, performance, and length of time spent with the company
so as to decide who they will lay off.

RETRENCHMENT
Retrenchment is one of the ways companies use to terminate employees when the
company is forced to downsize its number of employees.
The Industrial Dispute Act, 1947 deals with employment-related disputes in India and
Section 2(oo) of the Act states that ‘retrenchment means termination of service of a
workman by an employer for any reason whatsoever, otherwise than as a punishment
inflicted by way of disciplinary action. However, the following are not covered within the
meaning of employee retrenchment:
• Voluntary retirement of a workman.
• Retirement of workmen on reaching the age of superannuation if the employment
agreement contains a provision regarding superannuation.
• Termination of service of a workman due to the nonrenewal of employment agreement.
• Termination on grounds of continued ill-health.

Difference between Layoff and Retrenchment

• Layoff refers to the provisional termination of the employee, at the instance of the
employer. Retrenchment means involuntary separation of an employee due to the
replacement of labour by machines or the close of the department.
• The layoff is an action step, whereas retrenchment is a business strategy to reduce
company’s expenses.
• The layoff is defined in section 2 (kkk) of the Industrial Disputes Act, 1947.
Conversely, Retrenchment is defined in section 2 (oo) of the Industrial Disputes Act,
1947.
• The layoff is of a temporary nature, i.e., it is for a definite period, in which the
employees are recalled after the expiry of the term. As opposed to retrenchment, is
permanent in nature.
• After the declaration of layoff, the company’s operations stops because of the shortage
of raw material, the breakdown of machinery, economic recession and so on. On the
other hand, the operations of the company continue even after retrenchment is
declared.
• As soon as the layoff period is over, the employees are re-appointed to their previous
posts. Unlike Retrenchment, in which the employees are not taken back by the
company, once they are terminated.

AIR INDIA: Grounded by strikes

• Air India pilots struck work on 7th May 2012 over demands for better career
progression. Pilots went on medical leave as a mark of protest.

• Air India sacked 101 pilots, including 10 office bearers of the Indian Pilots’ Guild &
derecognized their union.

• The strike lasted for 58 days & was called off in early July 2012. Delhi High Court
asked the pilots to join back within 48 hours & also advised the management to
consider the grievances of the pilots & reinstate those whose services were
terminated.

1. No, it was not rational to have reported sick as it costed Air India a huge loss. It
affected the operations of seven prime international destinations in North America &
Europe. Moreover, it led to a daily loss to the tune of Rs.10-15 crores in addition to
the existing operating losses of Rs.21 crore. Overall Air India incurred a loss of
Rs.7,853 crores in 2011-12.
The Airlines was justified in taking action against the striking pilots, as they are the
highest paid employees of the organization, and the company faced huge losses
because of the strike they went on. The initial repercussions of the pilots calling in
sick affected 3 international flights. With around 300 pilots having reported sick, the
government was helpless and hence sacked off 10 of the striking pilots.

Moreover, it can be understood the root of the problem is with the untimely and
misjudged merger of the two airlines that has been the primary reason for the never-
ending ordeal of Air India. Measures have to be taken up so as to conclude the
misunderstandings between the management and the unions, if this is not feasible then
it is time that the Airlines split from their troublesome merger as suggested by
industry experts so as to the root problem will be hence solved. This will prove to be
rather beneficial to the airlines, the government and the public as well.

2. As a result of the ongoing strike by Air India pilots, the airline has been obliged to
reduce the number of flights it operates to several overseas destinations, in particular
those to North America and Europe. The financially troubled national airline suffered
daily losses of approximately Rs. 10-15 crores and operating losses of Rs, 21 crores as
a direct result of the protest. As a result, I do not believe for one second that the long
period of time that the pilots went on strike and pretended to be unwell while the court
ordered them to return to work is in any way justifiable. Because of this, not only is it
an issue for the corporation, but it is also a problem for the passengers, who have had
to lose a significant amount of business and other operations because pilots for
various flights have failed to show up. The pilots could have rather talked to the
upper-level management through a trade union or a spokesperson, and they could
have put forth their view point and the problems that they are facing as a result of the
 merger. Additionally, they could have put across their demands in a more organised
format in order to actually create an impact and find a solution to their demands.

3. Suggestions:
The following measures should be taken to achieve harmonious Employer-Employee
Relations in Air India Airlines:

Sound Personnel Policies:

The policies should be framed in consultation with the employees and their
representatives if they are to be executed successfully and unambiguously so that there is
no confusion in the mind of anybody. Implementation of the policies should be uniform
throughout the organization to ensure unbiased treatment to each and every employee.

Strong and Stable Union

A strong and stable union is essential in Air India Airlines for harmonious Employer-
Employee relations. The employers can facilely neglect a weak union on the pretext that
it hardly represents the workers. Therefore, there must be strong and stable unions in Air
India to represent the majority of workers and collaborate with the management about the
terms and conditions of employment

Mutual Trust:
Both management and labour should support in the development of an environment of
mutual cooperation, self-reliance and admiration. Management should adopt an impartial
attitude and should acknowledge the rights of employees. Similarly, labour unions should
encourage their members to work for the common objectives of the organization. Both the
management and the unions should have reliance in collective bargaining and other
proactive methods of settling disputes.

Workers’ Participation in Management:

The participation of workers in the management of the industrial unit should be
encouraged by making effective use of works committees, joint consultation and other
methods. This will improve communication between managers and workers, increase
productivity and lead to greater effectiveness.

Mutual Accommodation
The employers must be familiar with the right of collective bargaining of the trade
unions. In any organization, there must be an immense stress on mutual accommodation
rather than conflict or rigid attitude. One must clearly understand that conflicting attitude
does not lead to harmonious Employer-Employee relations; it may promote union
aggressiveness as the union responds by engaging in pressure tactics. The management
should be eager to co-operate rather than threaten the employees.

Government’s Role:
The Government should play an effective role for promoting
industrial peace. It should make law for the compulsory recognition of a representative union in e
achindustrial unit. It should intervene to settle disputes if the management and the workers are
unable to settle their disputes. This will reinstate industrial harmony.
Progressive Outlook:
There should be progressive outlook of the management of Air India. It should beware of
its duties and responsibilities to the employees, the passengers and the nation. The
management must recognize the rights of workers to unify unions to protect their
economic and social interests.

Conclusion:

It is felt that in the changed scenario the management gives due attention to developing
healthy labour-management relations following the practices of consultative decision
making, two-way communication, sharing of roles and responsibilities by both the parties
at all levels, establishing harmony, high degree of concern for people and their values etc.
Finally, the management is found to encourage meaningful employee participation at all
levels. It can be seen that Air India suffers from heavy losses, and also the relations
between the employer and employees are not very cordial because of the flash strikes,
delay in payment of salaries, mismanagement and poor working conditions. There’s a
need that the Air India Airlines must have potential human resource policies and sound
industrial relations that help the organization to attain its goals, enable it to employ the
skills and abilities of the workforce efficiently, assist to bring about employee’s job
satisfaction and self-actualization and establishing and maintaining harmonious
Employer-Employee Relation which are essential for the Industrial Peace. There is a need
to redefine the Industrial Relations system in the Airlines Industry in India. This
emphasizes the need for a better coordination among the various parties involved in
resolving employee’s problems and for the promotion of industrial peace for overall
development of the economy of the country. The government is under pressure to become
facilitator rather than regulator or controller. The role of government should not be
laissez-faire but pro-active in case of employees availing VRS, suffering due to lay-off,
retrenchment, closure and outsourcing. Creation of alternative employment opportunities,
extending social safety net and providing
rehabilitation measures will be more helpful in removing the insecurity and anxiety from
among the working class and developing better labour relations system in the state. Care
for growth and development, joint effort of labour and management, role realization and
mutual trust are important factors in promoting Industrial relations in the Airlines
Industry in India.

“Therefore, it can be understood the root of the problem is with the untimely and
misjudged merger of the two airlines that has been the primary reason for the
never-ending ordeal of Air India. Measures have to be taken up so as to conclude
the misunderstandings between the management and the unions, if this is not
feasible then it is time that the Airlines split from their troublesome merger as
suggested by industry experts so as to the root problem will be hence solved. This
will prove to be rather beneficial to the airlines, the government and the public
as well.”