Trade Unionism, Wage & Salary Administration in the Changing Industrial Scenario.

AuthorBose, Indranil


The gradual process of withdrawal of the state from economic activities, the surge of market economy, technological changes and forces of globalization, specially global production chains and business process outsourcing, have resulted in a situation where many started believing that trade union power is weakening. In the past, when the state pursued welfare policies in many countries, trade unions considered state as a dependable ally and started growing. When the state started pursuing a neutral policy, trade unions have become flat and stopped growing. When the state is pursuing policies to attract investors-not necessarily synonymous in all cases with anti-union policies-trade union density and their power and influence started declining and weakening. The rise of union power is almost synonymous with the growth of the modern factory in most cases. The decline in union density and power has become synonymous with the rise of service sector (Sheth, 1993). In countries like India, traditional service sector is unorganized and non-unionized. Modern service sector-especially information technology (IT) and information technology enabled services (ITES), retail, private sector insurance and banking and transport and tourism, for instance, and in the export sector in special economic zones are either nonunionized or marginally unionized. In the aftermath of dotcom bust in the early years of the 21st century and the subsequent global economic meltdown and down turn, the cost cutting measures which mostly hurt working class, the workforce in some of the sectors (specially IT and ITES) saw the need for unionization not so much for collective bargaining and wage increases, as for protection against pink slips and sudden and arbitrary, if not unfair, dismissals (Ramaswamy, 2017). The new generation workforce, which is more short-term and cash benefits oriented and the growth of female workforce in modern sectors also contributed to a fall in union density because these groups are generally found to be less prone towards collectivism and unionization and tended to be individualistic (Das Gupta, 2015). The new modern human resource policies in several firms, specially, the multi-national corporations and some private sector firms, also favored treating the new workforce as individuals and began to pursue policies, which had the intended or unintended effect of reducing unionization. The contemporary human resource policies usually favored individual contracts to collective contracts, direct to indirect participation and greater involvement of employees in quality circles, kaizen, 5S and such other techniques. There is also much hype about delegation, decentralization and devolution of authority and creation of semi-autonomous workplaces through empowerment, but as Chrys Argaris observed long back in 1970s, empowered by and large remained like the emperor's clothes. In addition, global competitive pressures and the emergence of global production chain triggered lower than normal wage increases in several unionized firms and transfer of jobs from high wage locations to low wage countries. That even the global unions through their solidarity and web-based struggles could not prevent this points to the declining power of unions in determining wages and working conditions. Further, the 3Ds-disinvestment, deregulation and decentralization-contributed substantially to the weakening of union power (Srinivasan, 2019). In several developing countries and emerging economies, including India, trade unions enjoyed more rights in private employment but found it more difficult to their assertion. Deregulation meant gradual withdrawal of the state in the economic spheres with trade unions being left to deal directly with the employers. With the state also assuming the role of an employer which is getting increasingly conscious about profits, the trade unions are left high and dry in the era of the market economy. Decentralization resulted in lesser coordination of trade unions at the level of the industry or sector or nation. When industrial action moved from sector/national levels to firm level, trade unions power to disrupt had shrunk and so were their influence. Technology, as in banks and printing industry, for instance, resulted in an increase in wages but decrease in control over jobs and trade union power (Raman, 2017).

Role in Wage Determination

Choices and options for trade unions, unions' impact on general wage levels, structure of wage packages, the spillover effect, role of unions in wage and salary...

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