Managers: We Are Katti With You: A Narrative About Union - Management Conflict at Precision Parts Limited'

Managers: We are katti with you
A narrative about union – management conflict at

Precision Parts Limited`
Group 2
Dev Tolani PGP12252
Keshav Chawla 12259
Nitin Kharayat 12258
Shivani Gupta 12212
Himani Jariyal 12209
Case Background
• Precision Parts Limited (PPL) as a joint venture company between a Indian business group and a state government
• The group was particularly known for it’s patriotic roots and social commitments
• The group’s decision was to establish a auto-component business
• A veteran manager was identified as the CEO of the yet to be incorporated company. He was shifted to the group
headquarters as special duty officer and attached to the group chairman’s office
• The plant location was approximately 90 kms from the state capital
• Whose land was acquired had been agitating for better compensation for their land and reservation in future jobs
• After three years, the group HR initiated a group wide employee satisfaction survey (ESS)
• The overall scores of PPL were high in factors like pay satisfaction, work environment etc. – scores were lower in
worker participation, communication and representation
• Within six months, PPL Employees Union (PPEU) was registered under the Trade Unions Act 1926
For Partnering Companies
• Investors were offered an attractive basket of benefits

• Land at nominal rates
• Single window clearance
• Superior quality investor escort services so that the approval and setting up process was free from
bureaucratic and legal hassles
• Un-interrupted power and water supply
• Exemption from sales tax for ten years
• General industrial climate
• Growing political significance of the state in national affairs and quality of life.
Organization Composition
• The planned start up strength in middle and junior managerial levels were 52
• All management staff would be graduates/professionally qualified
• The nonmanagerial employees would be diploma holders or ITI trained
• The graduates/professionals would be the junior /middle management levels
• ITI/Diploma holders were the shop floor workers
• Though lower qualified employees could have been recruited at lower
wages, the company decided against it
PPEU
• PPL Employees Union (PPEU) was registered under the Trade Unions Act 1926
• The sole bargaining agent for workforce
• Union president was selected unanimously by workers
• General secretary and treasurer positions elections were held
• The management-union meeting will be held twice a year
• Union leadership will meet with HR department officials every month
• Union elections were conducted bi-annually
• The tradition was to close work for half day with full pay for union elections followed by the elected leaders meeting
the plant management
• Later in the evening they would travel by the company car to meet the CEO and other managers at the city office
Early Conflict
• Under the union – management agreement; workers who had to go to the city on work were eligible to claim an
allowance for lunch
• Few employees working in the offices or desks used to take lunch at 11.00 AM and then leave for the city.
They used to claim lunch allowance also
• Management had issued a general warning, since it amounted to double benefit but the practice continued
• Subsequently, five employees were identified and disciplinary action was initiated against them
• A section of employees wanted the management to drop the charges but the union president justified the
management’s action
• But the employees performance dipped and the chargesheet were filed against these employees
• Union warned of going to strike, which they later did
• Finally the settlement was reached, with unions managing higher raises and the management was able to push
through a VRS scheme
Further Disagreements
• Post VRS, union had indicated to the management the need for fresh employees in the company, against vacant posts
• Management was not keen to induct more fresh hands and instead indicated that they will be offering trainees contract
appointments for three years
• The training center was to be spun off as a profit center and the program will be on chargeable basis
• Immediately, the union advised all trainees not to accept the contract appointment and promised they will fight for the
cause of the trainees
• Three trainees who had opted for contact job were allotted to the machine shop and had to report for duty
• The union general secretary stood across the shop door and requested them to go back
• The duty attempted to take them through the cabin door into the shop
• The general secretary sprang behind the duty manager and pulled him back, both tripped and fell down
• The GS was terminated and staff who didn’t joined on time had to face pay-cut
Problems Solutions
1. How should negotiation takes place between the management and 1. Assistance of third party:
labour union?
 Conciliation and mediation
2. What charges should be levied against employees for conducting  Fact-Finding
Wildcat Strikes?
 Interest Arbitration
3. How can management back its core value of trust and integrity with a
dis-satisfied labour union?
2. Five years negotiation contracts

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A narrative about union – management conflict at

• Investors were offered an attractive basket of benefits

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