A. Replacement of striking workers in US :
In the U.S., as established in the National Labor Relations Act there is a legally protected right for private sector employees to strike to gain better wages, benefits, or working conditions and they cannot be fired.
Striking for economic reasons (i.e., protesting workplace conditions or supporting a union's bargaining demands) allows an employer to hire permanent replacements. The replacement worker can continue in the job and then the striking worker must wait for a vacancy.
But if the strike is due to unfair labor practices (ULP), the strikers replaced can demand immediate reinstatement when the strike ends.
Does same law exists in India?
B. Is replacement of striking workers allowed in India?
We have on going strike by union workers who 2-3 times wages than minimum wages. Company is decided not to accept there demand for further increase till market uncertainty is over in our product line and certain stable turnover is achieved.
Hence, we have hired new permanent employee and running the plant smoothly. Is there any restrictions on hiring replacement workers (as it is claimed by union)?
C. Is it compulsory to give employment to striking workers if there is no vacancy?
Now as and when striking workers ends the strike, we shall have double manpower. In this situation, we need to remove newly appointed employees (who have already completed 6 months) or ask striking workers to wait till further vacancies are there.
Which is legally correct strategy?
From India, Nashik
1In the U.S., as established in the National Labor Relations Act there is a legally protected right for private sector employees to strike to gain better wages, benefits, or working conditions and they cannot be fired.
Striking for economic reasons (i.e., protesting workplace conditions or supporting a union's bargaining demands) allows an employer to hire permanent replacements. The replacement worker can continue in the job and then the striking worker must wait for a vacancy.
But if the strike is due to unfair labor practices (ULP), the strikers replaced can demand immediate reinstatement when the strike ends.
Does same law exists in India?
B. Is replacement of striking workers allowed in India?
We have on going strike by union workers who 2-3 times wages than minimum wages. Company is decided not to accept there demand for further increase till market uncertainty is over in our product line and certain stable turnover is achieved.
Hence, we have hired new permanent employee and running the plant smoothly. Is there any restrictions on hiring replacement workers (as it is claimed by union)?
C. Is it compulsory to give employment to striking workers if there is no vacancy?
Now as and when striking workers ends the strike, we shall have double manpower. In this situation, we need to remove newly appointed employees (who have already completed 6 months) or ask striking workers to wait till further vacancies are there.
Which is legally correct strategy?
From India, Nashik
Indian laws is not not so explicit to cover all types of strikes. There are different rules for govt. & quasi-govt. establishments and public utilities. There are sectors to which the Trade Union Act is applicable. Govt./industries in the essential services like aviation, railways, postage, communication, road transports, electricity & water, milk and other essential commodities supplies etc have statutory guard under the Essential Services acts enacted by central & state govts. In respect of these establishments courts may pass orders making the strikes illegal and thus the employees involved face disciplinary under the respective rules. There are only a few instances wherein striking workers were removed for having taken part in the strike/absenting from work. In most of the cases strike days are treated as absent days and no wages are paid. At the same time there are also instances where striking workers though removed but taken back/reinstated with back wages/without a break. Most of the strikes are demanding better wages, amenities, bonus etc. In all these cases verdict of the courts shall rule.
From India, Bangalore
From India, Bangalore
Thanks for your inputs.
But question is if strike is for increasing wages (already our wages of striking workers are in range of Rs.25000 to 35000 per month) which company can not afford, what choice a management has?
1. Close the company since workers are on strike.
2. Run the company by employing new employees, if available at lower cost, in place of striking employees.
If we choose to run factory with new employees, they shall become permanent after statutory period of employment with us. If strike is withdrawn by striking workers, how can we keep both workers? If we dismiss new workers, they can go to court for justice.
Please understand the situation well and advise.
From India, Nashik
But question is if strike is for increasing wages (already our wages of striking workers are in range of Rs.25000 to 35000 per month) which company can not afford, what choice a management has?
1. Close the company since workers are on strike.
2. Run the company by employing new employees, if available at lower cost, in place of striking employees.
If we choose to run factory with new employees, they shall become permanent after statutory period of employment with us. If strike is withdrawn by striking workers, how can we keep both workers? If we dismiss new workers, they can go to court for justice.
Please understand the situation well and advise.
From India, Nashik
1. It appears to me your query is an outcome of a negative approach. I couldn’t guess what drives your workers to go on strike. Have they issued any strike notice? If so was any wage negotiation initiated by you and did it fail? Why you think of an extreme decision like closure ? If you have not initiated any negotiation so far and a revision is due now you should as well commence. A wage revision is a matter which has a direct bearing on the Co’s financial condition for the present and how best the co. could sustain the resultant recurring expenditure in the future. I think if your Co. has no resources to implement a reasonable revision, you should try to explain the difficulties to agree to a substantial revision and try to convince them. You may also avail the help of experts or a conciliation officer. Coming to worse you should agree for a Proforma revision, a token revision which may not cripple the operation. Believe, you can run the Co. without a revision, it is possible and strikes could be overcome with tactical move/decisions. And strongly advocate, spare them their jobs. I also hope employees would realise the situation and extend cooperation not only to run but also to improve your bottom line.
2. I don’t think you should try ever to employee any one new by removing older ones. Legally it’s almost impossible keeping the very same entity going, unless and until you close the existing ones and fully settle them. Closure is possible only under satisfying certain legal conditions.
3. If your existing employees would have faith in your frankness and your figs tell the truth who knows they as well extend cooperation to get over your problems.
4. When you said ‘if strike is withdrawn’ … do you really believe there is such a possibility, then why do you mulling with closure option. There are so many entities running without even granting normal/annual increments leave alone a periodical wage revision. It’s possible to run an entity without agreeing to wage revision to existing employees.
5. Interference of appropriate conciliation process and court role cannot be ruled out under any condition/at any time.
From India, Bangalore
2. I don’t think you should try ever to employee any one new by removing older ones. Legally it’s almost impossible keeping the very same entity going, unless and until you close the existing ones and fully settle them. Closure is possible only under satisfying certain legal conditions.
3. If your existing employees would have faith in your frankness and your figs tell the truth who knows they as well extend cooperation to get over your problems.
4. When you said ‘if strike is withdrawn’ … do you really believe there is such a possibility, then why do you mulling with closure option. There are so many entities running without even granting normal/annual increments leave alone a periodical wage revision. It’s possible to run an entity without agreeing to wage revision to existing employees.
5. Interference of appropriate conciliation process and court role cannot be ruled out under any condition/at any time.
From India, Bangalore
Answers to your queries are :
1. Union has given strike notice and is legally on strike
2. We have started negotiation before union declared strike and continuing weekly meetings infront of lsbour commissioner with both parties sticking to their stand
3. Workers are uneducated and are from farmer families in surrounding villages. They are guided by union leaders and local politicians.
4. They could continue strike since they have side incomes from family farms and side business which makes their families survive without wages from employment. Many of them have taken other low paying temporary jobs. Many of them want to return to work but mob & local pressure and threats from union not allowing them to do so.
5. If we don't recruit new employees, only option is to stop production.
6. Although Union leaders understand our position, workers themselves are adamant and undertaken to violence and not allowing non-striking older and new employees to attend duty.
7. Police is cautious with our complaints due to local political pressure.
8. Workers don't care police cases due to their local clout.
9. Workers are as good as blackmailing with a belief that we cannot runaway since we have already invested in plant.
10. They genuinely believe that annual rise is their legal right even though we can not afford with current market conditions and we don't have option but to agree as we had always agreed during last 32 years of our existence. But many employees are just 6 year old in our company and donot have family responsibilities yet.
11. For your information average CTC of new and old employees is Rs.22500/MTH
12. Strike shall be withdrawn if we negotiate and agree to their demands. But in that case we shall have as good as 2 sets of employees... Newly recruited during strike period (become permanent by virtue of service period) and old employees.
I was surfing through internet and came across following links
https://corporate.findlaw.com/law-li...realities.html
https://www.bipc.com/permanent-repla...at-will-status
These links are about US legal options wherein company can hire replacement workers, if available at lower wages, to continue production in case of strike by existing workers. On withdrawal of strike, striking workers have to wait for employment till further vacancies are created.
I find no such provision in Indian law. In this case, employer can literally blackmailed by unions.
We are confused about our legal options. Shall appreciate your advise Sir.
From India, Nashik
1. Union has given strike notice and is legally on strike
2. We have started negotiation before union declared strike and continuing weekly meetings infront of lsbour commissioner with both parties sticking to their stand
3. Workers are uneducated and are from farmer families in surrounding villages. They are guided by union leaders and local politicians.
4. They could continue strike since they have side incomes from family farms and side business which makes their families survive without wages from employment. Many of them have taken other low paying temporary jobs. Many of them want to return to work but mob & local pressure and threats from union not allowing them to do so.
5. If we don't recruit new employees, only option is to stop production.
6. Although Union leaders understand our position, workers themselves are adamant and undertaken to violence and not allowing non-striking older and new employees to attend duty.
7. Police is cautious with our complaints due to local political pressure.
8. Workers don't care police cases due to their local clout.
9. Workers are as good as blackmailing with a belief that we cannot runaway since we have already invested in plant.
10. They genuinely believe that annual rise is their legal right even though we can not afford with current market conditions and we don't have option but to agree as we had always agreed during last 32 years of our existence. But many employees are just 6 year old in our company and donot have family responsibilities yet.
11. For your information average CTC of new and old employees is Rs.22500/MTH
12. Strike shall be withdrawn if we negotiate and agree to their demands. But in that case we shall have as good as 2 sets of employees... Newly recruited during strike period (become permanent by virtue of service period) and old employees.
I was surfing through internet and came across following links
https://corporate.findlaw.com/law-li...realities.html
https://www.bipc.com/permanent-repla...at-will-status
These links are about US legal options wherein company can hire replacement workers, if available at lower wages, to continue production in case of strike by existing workers. On withdrawal of strike, striking workers have to wait for employment till further vacancies are created.
I find no such provision in Indian law. In this case, employer can literally blackmailed by unions.
We are confused about our legal options. Shall appreciate your advise Sir.
From India, Nashik
Sorry, I just now could realise the situation you are in. This type of nitty-gritty situation not new to Indian conditions. I understood the problems as we ourselves faced in a project which was located in a remote village employing majority locals. We had to undergo legal issues for more than 10 yrs before we finally closed this project under Sec.25(O) ID Act with the support of BIFR/SICA both of which have been replaced/subsumed into a new set of Act/Tribunal now.
Coming to your scenario, Is't your firm a 'sick' unit/potential 'sick' Co. as of now? Or you suffer only for want of Cash/Current assets to meet additional burden due to impending/impugned wage revision?
Are you beset with supply commitments to your clients? Could you sustain the idling for over many years? US laws are not applicable in India and therefore you have no option.
It's all but impossible to avoid either agree to retain sizable bunch of oldies coupled with accepting new/freshers if you wish to restart the operation. I presume your plant has stopped production & is idle. It's better to settle all the old employees and go for fresh recruitment, if possible. This will in a way avoid saddling with past liability. Have you studied legal options ?, ofcourse there is no tailor-made solution to the vexed problem.
From India, Bangalore
Coming to your scenario, Is't your firm a 'sick' unit/potential 'sick' Co. as of now? Or you suffer only for want of Cash/Current assets to meet additional burden due to impending/impugned wage revision?
Are you beset with supply commitments to your clients? Could you sustain the idling for over many years? US laws are not applicable in India and therefore you have no option.
It's all but impossible to avoid either agree to retain sizable bunch of oldies coupled with accepting new/freshers if you wish to restart the operation. I presume your plant has stopped production & is idle. It's better to settle all the old employees and go for fresh recruitment, if possible. This will in a way avoid saddling with past liability. Have you studied legal options ?, ofcourse there is no tailor-made solution to the vexed problem.
From India, Bangalore
Dear Colleague,
In the present context and prevailing strike situation, examine possibility of declaring lockout by expert labour lawyer and lob it in the lap of govt labour machinery under the ID Act.
Parallally , keep channels of formal and informal communication open for possible settlement .
Regards,
Vinayak Nagarkar
HR - Consultant
From India, Mumbai
In the present context and prevailing strike situation, examine possibility of declaring lockout by expert labour lawyer and lob it in the lap of govt labour machinery under the ID Act.
Parallally , keep channels of formal and informal communication open for possible settlement .
Regards,
Vinayak Nagarkar
HR - Consultant
From India, Mumbai
We are surely not a sick unit but with high wage bill as compared to our competitors, we want to control it as a preventive measure for future since market is becoming too competitive.
We have commitments to our foreign clients and lock-out is last option we want to try.
Since we don't have legal option as US companies have, we shall be saddled with 2 sets of employees. In that case, our lawyer advise us, we shall have to retrench new employees for lack of work and pay their legal dues as 1 month notice and retrenchment allowance.
Actually all new employees are educated.... engineers or at least diploma holders as against uneducated oldies. They are more productive and resourceful. We shall prefer to retain them.
In that case our lawyer advised to declare VRS scheme to old employees but strikers are not ready to accept.
We have asked labour commissioner to issue 'failure report's and allow our case to go to labour court.
Our lawyer says labour court donot have jurisdiction to decide on wage revision since we are already paying above minimum wages and other legal dues. Further wage revision is subject to market forces..... balancing our need of the experienced labour and need of labour to continue in job.
Hence, further wage revision is left to market forces... even though we are not a sick unit and are managing to make some profits (even after large wage bill as compared to competitors... Just because of some better technologies)... so that future competitiveness is planned.
Does advise of lawyer makes sense?
In any case, Indian law needs revision so that blackmailing by workers and unions can be countered. Otherwise workers can go on strike and withdraw at their will leaving employer to their mercy and saddled with responsibilities to negotiate and settle with them any how.... The links given in my previous post are self-explanatory saying that similar situation in US has forced the Govt to amend the law few decades before allowing employer to hire replacement workers....
Your view please...
Thanks
From India, Nashik
We have commitments to our foreign clients and lock-out is last option we want to try.
Since we don't have legal option as US companies have, we shall be saddled with 2 sets of employees. In that case, our lawyer advise us, we shall have to retrench new employees for lack of work and pay their legal dues as 1 month notice and retrenchment allowance.
Actually all new employees are educated.... engineers or at least diploma holders as against uneducated oldies. They are more productive and resourceful. We shall prefer to retain them.
In that case our lawyer advised to declare VRS scheme to old employees but strikers are not ready to accept.
We have asked labour commissioner to issue 'failure report's and allow our case to go to labour court.
Our lawyer says labour court donot have jurisdiction to decide on wage revision since we are already paying above minimum wages and other legal dues. Further wage revision is subject to market forces..... balancing our need of the experienced labour and need of labour to continue in job.
Hence, further wage revision is left to market forces... even though we are not a sick unit and are managing to make some profits (even after large wage bill as compared to competitors... Just because of some better technologies)... so that future competitiveness is planned.
Does advise of lawyer makes sense?
In any case, Indian law needs revision so that blackmailing by workers and unions can be countered. Otherwise workers can go on strike and withdraw at their will leaving employer to their mercy and saddled with responsibilities to negotiate and settle with them any how.... The links given in my previous post are self-explanatory saying that similar situation in US has forced the Govt to amend the law few decades before allowing employer to hire replacement workers....
Your view please...
Thanks
From India, Nashik
Dear friend,
In the given situation, I feel, introduce VRS immediately and see the outcome. Unless you offer an attractive package you may not get considerable optees. Legal process certainly involve a long drawn process & years and above all there's no guarantee that verdict would go in your favour.
From India, Bangalore
In the given situation, I feel, introduce VRS immediately and see the outcome. Unless you offer an attractive package you may not get considerable optees. Legal process certainly involve a long drawn process & years and above all there's no guarantee that verdict would go in your favour.
From India, Bangalore
Dear Colleague,
Your workers are on strike and with the help of replacement workers you are running your production. The plus point is the striking workmen are not threatening or preventing the replacement workers.
You have to fight this mainly on two fronts. Legally you approach labour court to get this strike declared as illegal( although prior notice is given, you contest the legality) and unjustified.
As regards the charter of demands on which negotiations have failed and conciliation also failed , let it be referred to adjudication by the Govt. Once it is referred to the Industrial Tribunal under ID Act, the strikers cannot continue with the strike and they will have to resume duties.
As per Indian laws , you cannot dispense with the services of striking workers without following due process of disciplinary action unlike US. At the most , they will lose wages if the strike is declared illegal or unjustified.
As regards replacement workers, if the strike is withdrawn/ workers resume work, they will have to be terminated if you had taken precaution to recruit them on temporary basis Otherwise also on the grounds of strikers have returned to work, you can convince them for termination.
You can continue with taking production through replacement workers as long as you can , pending court proceedings.
While apparently there is no merit in the demand of higher wages, as currently you are paying far better wages , you need keep doors of communication open for some possible solution.
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
Your workers are on strike and with the help of replacement workers you are running your production. The plus point is the striking workmen are not threatening or preventing the replacement workers.
You have to fight this mainly on two fronts. Legally you approach labour court to get this strike declared as illegal( although prior notice is given, you contest the legality) and unjustified.
As regards the charter of demands on which negotiations have failed and conciliation also failed , let it be referred to adjudication by the Govt. Once it is referred to the Industrial Tribunal under ID Act, the strikers cannot continue with the strike and they will have to resume duties.
As per Indian laws , you cannot dispense with the services of striking workers without following due process of disciplinary action unlike US. At the most , they will lose wages if the strike is declared illegal or unjustified.
As regards replacement workers, if the strike is withdrawn/ workers resume work, they will have to be terminated if you had taken precaution to recruit them on temporary basis Otherwise also on the grounds of strikers have returned to work, you can convince them for termination.
You can continue with taking production through replacement workers as long as you can , pending court proceedings.
While apparently there is no merit in the demand of higher wages, as currently you are paying far better wages , you need keep doors of communication open for some possible solution.
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
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