Impact of Globalization on Union of Sales Representatives in Pharmaceuticals Sector.

AuthorMandal, Sritama


Health and wellbeing are the third most important goals of the sustainable development goals 2030 propagated by the United Nations (United Nations Report, 2018). The pharmaceuticals industry serves an important role in realizing this objective. It is also a significant contributor to the nation's economy by creating employment and adding to the export earnings. The Indian pharmaceuticals industry is on the advent of becoming a major global market by 2020. The pharmaceuticals exports stood at US$19.14billion in fiscal 2019 as compared to US$ 17.28 billion in the previous year.

The sector accounts for nearly 2.4% of global pharmaceuticals market in terms of value and 10% in terms of volume. Many experts believe that the industry has the potential to grow at an accelerated 15%compound annual growth rate in the near future (India Brand Equity Foundation Report, 2019). India contributes 13.7% to the global pharmaceuticals and biotechnology workforce (Business-Standard, 2017).

In recent times the pharmaceutical industry is undergoing a host of policy changes such as:

* The present government has promised to make legal arrangements to ensure doctors prescribe generic drugs which could hurt the profit margins of big drug companies.

* In countries like India price of drugs is a sensitive issue. The current government levies 12% GST in some category of drugs and 18% GST in few other categories. GST is levied on life-saving devices and implants.

* The government has announced in the union budget (March 2018) to extend the facility of recruiting workers on fixed-term employment to all sectors to improve the ease of doing business (Notification No. G.S.R. 235(E), 16.3.2018).

Under such a macroeconomic framework every pharmaceutical company is facing stiff competition and is striving to capture greater market share. As a result, there has been enormous pressure on every sales employee. Additionally, the pro-employer outlook of the government and judiciary is making the employment situation more precarious. There have been instances of unlawful termination of sales employees in Tripura, UP and MP (FMRAI News, February,2018), violation of the Sales Promotion Employees(Conditions of Service) Act, 1976 (SPE Act) by multinational companies (FMRAI News, April, 2018), disproportionate recruitment of female candidates, privatization of public sector drug company, installation of GPS to track every movement of sales employees (FMRAI News, March, 2018). The practice of adjustment sales where the sales employees are forced to pay from their own pockets to meet the monthly targets, management practice of changing the nomenclature of the new recruits to keep them out of scope of SPE Act etc. are quite common.

In such a context one of the promising craft unions, Federation of Medical and Sales Representatives' Associations of India, emerged as savior. After a long journey of five and a half decades, it has proudly announced one lakh membership in 345 subunits in December 2017 (FMRAI News, January 2018). It's not only the sheer number rather the trust that the employees have in the union, on the leaders, across the nation. During the initial phase of FMRAI's struggle, Sales Promotion Employees (Conditions of Service) Act, 1976 (SPE Act) was enacted by the Parliament and implemented countrywide. The Act brought the sales promotion employees under the cover of Minimum Wages Act, 1948, Industrial Disputes Act, 1947, Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972, and Maternity Benefit Act, 1961. The Act also provided for leave, appointment letter and maintenance of registrar.

The struggle of the Association continued for removal of wage ceiling and statutory work rules. The SPE Act had undergone amendments in 1987. The wage ceiling was removed. The macroeconomic picture in India has undergone a sea change post-liberalization. A plethora of pharmaceuticals companies invested in the market. There has been major expansion of Indian pharmaceuticals market in terms of production and trade. Nevertheless, many multinational companies subjected themselves to downsizing to remain competitive. There has been increasing trend among MNCs to replace regular labor with casual labor to reduce cost.

To keep pace with the neo-liberal trend, to attract foreign funds, the outlook of government and judiciary also underwent a transformation. They shifted the stance from pro-labor approach to employer friendly approach. It got reflected in various policies and judgements of High Courts and Supreme Court. (Steel Authority of India Ltd. & ... vs National Union Water Front ,2001; Union of India &Ors vs Vartak Labor Union on 4 March, 2011)

With this dynamic background; FMRAI also adjusted its struggle movement. It demanded for effective enforcement of SPE Act, framing of statutory working rules, and extension of SPE Act to other industries (FMRAI News, November, 2010).

The current labor ministry has initiated the process of codification of fortyfour labor laws into four codes; code on wages, code on industrial relations, code on social security and code on safety, health and working condition (Press Information Bureau, Ministry of Labor & Employment, 05.09.17). The emergence of such codes may repeal the SPE Act, 1976. The impact of abrogation of one such relevant law for the profession is uncertain, especially when the code on industrial relations has put a limitation on the right to form unions and power of representation of such bodies which is certainly non-democratic (The Hindu, Business Line, 21.07.19).

Being a craft union, FMRAI is facing certain other challenges. In many cases, the management is not willing to negotiate directly with FMRAI members, as they do not represent the particular organization. So, it is trying to build company specific councils for settlement of employment terms. Secondly, the members of FMRAI are competitors to each other in the sales field; but the association has to unite the employees of different organizations to put forward common agendas.

Motivation for the Study

With the changes in the employment relationship domain, the trade unions and associations are facing a multitude of challenges globally. For example, in OECD countries the average union density was 21% in 1999 which declined to 16.7% in 2014. The general trend and other challenges including union density figures in India indicate an optimistic picture. The union density in the regular salaried employee category has increased from about 34.13% in 2008 to 38.3% in 2012 (Pal, 2008; NSSO, 2012). The trade union membership stood at about 100 million in 2013 (Menon, 2013). This statistic is likely to be an underestimate as it represents only membership of 10 largest national union bodies and does not incorporate those of several thousand politically independent enterprise level unions (Government of India, 2018). Some studies indicate toward growth of union density along with the expansion of working population in India (Desai, 2015). Hence, considering the union density figures, it would not be judicious on the part of domestic business and MNCs to overlook trade unions as a spent force.

The trade unions are also adapting to neoliberal economic policies; shifting the focus from political patronage to mobilization of rank and file members (Badigannavar, 2016). As a result, the industrial relations environment in India is treading a rather conflicting way (Badigannavar, 2017; Beale, 2017). Most of the empirical works on Indian employment relations has been conducted from a labor economist's view point; analyzing employment/ unemployment, income, poverty and industrial output (Papola et al., 2007; Ahsan & Pages, 2009). Considering the issue from a mobilization perspective might direct new dimensions. Moreover, the forces of various macroeconomic, social, political and psychological factors acting in the pharmaceuticals sales arena, provides a rich background for studying this phenomenon.


To explore the factors associated with employment conditions of sales promotion employees in pharmaceuticals sector that is driving union commitment.

To study the strategies of the association in mobilizing movements.

Theoretical Underpinning

According to the mobilization theory (Kelly, 1998), workers join union and participate in collective action when there is a shared sense of injustice. The perception of injustice comes when there is some serious breach of promise made by either the firm or government or both. Union offers a common platform where workers, socially interact with...

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