Long Term Settlement - Views Expected From Experts

Dear All,

It is time to enter into a long-term wage settlement with the Trade Union. It is a practice of the Management to impose a term of the wage settlement stating that the Union should cooperate to improve productivity through any innovative methods or technology introduced by the Management, after which the Management may consider any wage revision as part of the settlement.

Now, it is expected that the Trade Union will demand that the Management not impose such a clause in the terms of settlement. They contend that they have exhausted all possible ways to improve productivity, claiming that all methods and technologies have already been adopted by both the workers and the Management.

My queries are as follows:
1. Are they legally justified in demanding that the Management not impose such a clause in the wage settlement?
2. In such an event, should the Management defer the wage revision or entering into a wage settlement?
3. Are there any other possible queries that need to be addressed in this context?

I seek expert advice on how to handle this situation diplomatically without causing harm to either party.

Hi Venkatraman,

It was an old practice that at the time of wage settlements, unions raised demands of different types which were discussed bilaterally and sometimes trilaterally and settled accordingly.

Later, it has been appreciated by managements that wage negotiation/long-term settlement is not solely the prerogative of the union; it is also the duty of the management to consider relevant demands for increased productivity/profitability, etc. Given this, please understand that management is not here to simply provide profits to the union/workers and sustain losses due to the additional costs as per the LTS. In such a scenario, workers also view management as a milch cow responsible for providing them with benefits without any reciprocal responsibility to the management.

Rest assured that there can never be a situation where you/your management conclude that either the workers, the management, or both are performing at their peak and no further room for improvement exists. Therefore, prepare your list of demands and present them to the union while negotiating their requests. This may result in negotiations spanning a longer period, possibly over several months.

Regards,

S.K. Johri