Transcript Chapter Twelve

LEGAL ASPECTS OF
WORKPLACE RELATIONSHIP
Law of the land influencing Labor relations
(Labor Act/Rules, Trade Union Act/Rules, Arbitration act)
Disciplinary measures & it’s impact.
What ?
 A trade union or labor union is an organization of workers that
have banded together to achieve common goals such as better
working conditions.
 The trade union, through its leadership, bargains with the
employer on behalf of union members and negotiates labour
contracts with employers.
 This may include the negotiation of wages, work rules, complaint
procedures, rules governing hiring, firing and promotion of
workers, benefits, workplace safety and policies.
Union-Management Relations …
 Labor Union
 An organization of workers acting together to negotiate
their wages and working conditions with employers
 Union-Management Relations
 The dealings between labor union and business
management, both in the bargaining process and
beyond it
The Historical Development …
 Early history
 Craft union
Organization of skilled workers in a single craft or trade
 Limited to a single city.


Knights of Labor
the largest and one of the most important American labor
organizations of the 1880s.
 promoted the social and cultural uplift of the workingman,
rejected socialism and radicalism, demanded the eight-hour day,
and promoted the producers ethic of republicanism

 In USA
1790 Skilled Craftsman
 In India
1850 (gained momentum after 1920)
 Trade Union Act 1926
 France, Germany
 In Nepal
1870 onwards
1946 All Nepal Trade Union Congress
 Evolution of contemporary labor organizations

Industrial Union


An organization of both skilled and unskilled workers in a
single industry
Congress of Industrial Organizations (CIO)

Formed by industrial unions
Historical Overview of Unions
Sources: U.S. Bureau of Labor Statistics, Dictionary of U.S. Labor Organizations, 1986–1987; www.aflcio.org;
Statistical Abstract of the United States, 2001.
Trade Union Situation in Nepal
 Until the latter half of 1980s, Nepali state remained hyperactive
in the sphere of production, distribution, regulation, circulation
and control.
 In 1990, Nepal witnessed a change in the polity—from
partilessness to multi-party, competitive election, provision of
human rights, constitutional monarchy and sovereignty of
people.
 The Privatization Act 1991, New Industrial Policy 1992,
Industrial Enterprises Act 1992, Foreign Investment
and Technology Transfer Act 1992 were passed to
liberate the economy from politics and society and
make it competitive to participate in the opportunities
offered by globalization.
Politics of Workers Welfare and Their
Situation
 In the 1990s there have been noticeable developments in
the promulgation of acts. Labour Act 1992, Transportation
Act 1992, Child Labour Act 1992, Trade Union Act 1993,
Working Journalist Act 1994 and Labour Court Regulation
Act 1995 have been promulgated.
 A tripartite National Advisory Board was established in
1994.
 Labour Relations Committees have been constituted and a
Labour Court was established on January 15, 1996 to
settle industrial disputes.
Origin of Trade Unions in Nepal
 There were no trade unions in Nepal before 1945 as the
country was under the family rule of Ranas.

 Nepal had followed closed-door economy having almost no
relations with the outside world.
 In 1946 All Nepal Trade Union Congress (ANTUC) was
formed.
 In 1947, Biratnagar Workers Union (BWU) was set up.
 In March 1947 the first workers’ movement took place at
Biratnagar for the establishment of democracy.
 In 1951 ANTUC and BWU became united and
formed the first trade union federation in Nepal.

 The World Federation of Trade Unions (WFTU) in
1953 granted membership to ANTUC.
 After the democratic change of 1950, the freedom
of association allowed the opportunities to many
voluntary organizations in the country and the
workers, too, felt the need to be united under one
umbrella to fight against the exploitation of the
management and the government.
Major Federations …
 Nepal Trade Union Congress (NTUC) was established in 1947 with
the objectives of promoting workers rights. Affiliated to Nepali
Congress.
 Democratic Confederation of Nepalese Trade Unions
(DECONT) is established on May 1, 1997 after it broke away from
NTUC.
 General Federation of Nepalese Trade Unions (GEFONT) was
established in July 20, 1989 with four founder federations: Nepal
Independent Workers Union (NIWU), Independent Transport Workers’
Association of Nepal (ITWAN),Nepal Independent Workers’ Union
(NIHWU) and Trekking Workers’ Association of Nepal (TWAN). It is
affiliated to CPN-UML.
 All Nepal Revolutionary Trade Union Federation affiliated to
Maoist.
Process of Union Formation …
 There are three tiers of Union.
 At enterprise level, formation of union requires minimum of 10
persons. Not allowed to participate in more than one union.
 At Trade Union Association level, 5000 members from 20
districts (not less than 100 person from each district) are required
to form a union. Fifty-enterprise level union can form a National
Level Union. Those outside enterprises, such as trade, commerce,
self-employment or service sector can also form a union if they
have 500 members and enter into agreement for this purpose.
 At Federation level, 10 national level unions out of which 6 should
be from organized sector can form Trade Union Federation.
Nepal & Core Labour Standards
 Nepal became the member of International Labour
Organization in 1966. Until now, it has ratified the
following seven conventions:
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Discrimination ( Employment and Occupation) convention No.
111
Equal Remuneration Convention no. 100
Minimum wage Fixation Convention No. 131
Weekly Rest convention No. 14
Tripartite Consultation Convention No. 144
Right to Organize and Collective Bargaining Convention No. 98
and,
Minimum Age Convention 138.
The Unionization Process …
 Why some employees join unions
As a way to combat alienation and loss of personal
identity from dull and repetitive jobs
 Due to the perception that union membership
increases job security
 As a way of expressing dissatisfaction with one or
more elements of the job
 Due to personal background (family history of union
membership)
 As a requirement to keep a job under provisions of
the labor contract between the union and the firm

Unionization process
Personality, Interest,
Preferences
Employment /
Psychological Contract
Satisfaction
Work Situation
Influence of
Management
Dissatisfaction
Attempt to Resolve
Situation Individually
Union Instrumentality
Unionization
Strategic Choices before Managers ..
 Whether organization should be union free or allow
unionization.
 If decided for union free, take step to keep it away.
 If unionization allowed, type of management union
relationship should be decided.
 Negotiation tactic should be decided.
Strategies for Remaining Union Free
Effective
Supervisor
Effective
Recruitment and
Selection
Effective Training
and Development
Open
Communication
Planning
Union Free
Effective
Remuneration
Effective Personnel
Research
Healthy and Safe
Working
Environment
Effective ERM
Union-Management Contract
Issues
 Employee pay
 Forms of pay
Direct compensation: wage or salary and benefits
 Deferred compensation: pension and retirement


Magnitude of pay
Parity with local and national industry pay levels
 Real wage protection through cost-of-living clauses
 Financial condition of employer
 Cost-sharing for benefits

 Employee pay (cont’d)

Pay determinants
Management seeks to tie wages to each employee’s productivity
 Unions feel this creates unnecessary competition and usually
suggest pay according to seniority
 Management seeks to constrain benefits to only some
employees
 Unions want equal application of benefits

 Security

For the individual
Job security: Protection against the loss of employment
 Seniority

 Management rights
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The firm wants to control whom it hires, how work is
scheduled, how discipline is handled
Unions seek to control these matters
Some union executives have been given seats on corporate
boards of directors
Union Security …
 Closed Shop
 The company can hire only union members.
 Union Shop
 The company can hire nonunion people but they must join the
union.
 Agency Shop
 Employee who are not member of union must still pay union
dues.
 Open Shop
 The workers decide whether to join union or not.
Labor Act …
 Employment and Job security
 Working hours
 Remuneration
 Minimum wages
 Payment, Period,
 Health and Safety
 Welfare arrangements
 Conduct and Penalties
 Settlement of Labor disputes
Trade Union Act …
 Registration of Trade union and Trade union
Federation.
 Operation, Management and Recognition of Trade
union
 Trade Union Merger