International Journal of Humanities and Social Science Research

International Journal of Humanities and Social Science Research

ISSN: 2455-2070
Impact Factor: RJIF 5.22
www.socialsciencejournal.in
Volume 3; Issue 11; November 2017; Page No. 06-11

Interpreting Industrial Disputes in India: A study with special reference to the garment Industry
*1
Rathnamma R, 2 Dr. T Rajendra Prasad
1
Assistant Professor, GFGC Kanakapura, Karnataka, India
2
Professor and Chairman, Department of Economics, Bangalore University, Bangalore, Karnataka, India

Abstract
This paper examines determinants of industrial disputes in Indian garment industry. Industrial disputes are a problem at different
levels. They cause production loss, discourage investment and thereby eventually slowdown economic growth. There is a drastic
reduction in the number of industrial disputes and the workhours lost due to disputes in Indian garment industry currently. The
paper explores and shows that the female presence in the labour force is one of the factors instrumental in significantly reducing
the number of strikes and lockouts.

Keywords: industrial disputes, garment industries, women workers, labour, strikes

Introduction cost of living, growing industrial inefficiency, indiscipline and

The garment industry is one of the oldest and largest export sickness are the most responsible factors for the growing
industries. The industry exemplifies the challenges associated industrial disputes in the country.
with global manufacturing: low wages, "flexible" contracts Using the definitions given in the Industrial Disputes Act of
and sweatshop conditions. Informal garment and textile India 1947, Labour Bureau, Ministry of Labour, Government
workers often experience isolation, invisibility and lack of of India collects and publishes statistics on Industrial disputes,
power, especially those who produce from their homes. which consist of strikes and lockouts. An industrial dispute is
Industrial disputes are very much common, more so In a taken as a temporary stoppage of work in a production unit
mixed economy like India. Industrial disputes are the result of due to breakdown of understanding between workers and
conflicts between employers and workers. In the constant employers on some issue. Strike is defined as the temporary
tussle for the limited economic resources where employers are stoppage of work by a group or all employees of a production
always trying to resist increase in wages and also try to unit to express a grievance or to enforce a demand. Lockout is
increase the hours of work but the workers or employees are defined as the temporary withdrawal of work from all or a
organising themselves through trade union for raising their group of employees by the employer for matters relating to
wages along with betterment of other conditions of work; employment or non-employment or the terms and conditions
disputes become inevitable. of employment. The industrial dispute statistics exclude work-
In order to achieve their goal, workers tread the path of stoppages due to political strikes, sympathetic demonstrations
protests by resorting to gherao, go-slow, demonstrations, and the like as these are not connected with any specific
strikes etc. and the employers in order to enforce discipline grievances or demand which lies within the competence of the
and to safeguard their interest may go for retrenchment and employer concerned for redressal.
dismissal of employees and in the extreme case may declare a In 1951, total number of work stoppages was about 1,071
lock-out. which involved nearly 6.9 lakh workers and resulted in a total
Thus, both the strikes and lock-outs are the two extreme loss of 38.2 lakh man-days. During the planning period, the
measures followed by employees and employers respectively problem of industrial disputes magnified considerably. In
in extreme cases. Thus, these sorts of conflicts between the 1974, total number of work stoppages rose to 2,938 and
employer and employees are known as industrial disputes. The number of workers involved significantly increased to 28.55
industrial disputes result in huge loss of man-days as well as lakh resulting in a huge loss of 402.6 lakh man-days.
production. Due to the imposition of various suppressive measures during
The industrial relations are disturbed by industrial disputes emergency in 1975, there was a significant fall in the case of
and growing industrial disputes may pollute the entire industrial disputes. But after the restoration of normal
industrial climate of the country leading to a total chaos in the conditions, there was a sudden spurt in industrial disputes
economy. during 1977 and 1978. 1992 experienced a prolonged general
strike of textile workers in Bombay which resulted in a huge
Historical background: Industrial Disputes in India: Data loss of man-days to the extent of 748 lakh in that year.
and Trend In recent years also, the industrial disputes remain unabated.
In India industrial disputes are growing with the progress of Thus the number of man-days lost due to strikes and lockouts
industrialisation in the country. Increasing price level, rising over industrial disputes was 307.7 lakh in 1989-90 which

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International Journal of Humanities and Social Science Research

declined significantly to 236.0 lakh in 1990-91. But in 1991- infrastructure sector like power and ports and docks.
92, there was a sharp increase in the man-days lost to the tune The reduction in strikes and lockouts was more prominent in
of 341.5 lakh. There has however, been a steep decline in the public sector and the central sphere compared to the private
mandays lost in 1992-93 which stood at 22.97 million sector and the state sphere. The proactive role of the
mandays. Government, seeking solutions through involvement of social
This is mainly due to the fact that there were quite a few partners in various tripartite for arriving at policies impending
bandhs and strikes both at the state and national level and on labour interests, was responsible for bringing down the
widespread social unrest. All these have resulted in a outbreak of strikes and lockouts.
substantial loss in mandays worked and also in production. The man-days lost on account of strikes and lockouts have
However, industrial unrest in general remained confined to however, increased from 16.3 million in 1995 to 3.29 million
cotton and jute textile and engineering industries located in the in 2013. Man-days lost due to strikes increased to 2.05 million
states like Andhra Pradesh, Maharashtra, West Bengal and whereas mandays lost due to lockouts decreased to 0.84
Tamil Nadu. million in 2010.
A recent study made by the CMIE on the current position of Wage and wage related issues were the important reasons
industrial disputes in India shows that in 1992, total number of behind the strikes along with personal issues and
industrial disputes was 1,737 out of which 1034 were strikes retrenchment. There were also incidents of protests against
and 703 were lockouts. Total number of workers involved in privatisation and multi-nationals.
these disputes was 1.34 million. Total number of mandays lost Considering the radical changes that have taken place in the
was 2 lakh. The study shows that even during 1991 and 1992, domestic industrial scenario and the labour market, Second
lockouts accounted for nearly 53 per cent of man- days lost. National Commission on Labour was set up to suggest among
Thus this higher share of lock-outs in the total man-days lost others, rationalisation of the existing laws in the organised
is to be re-assessed and the factors responsible for such lock- sector so as to make them more relevant and appropriate in the
outs should be tackled properly so that repeated use of lock- changing context of globalisation and opening up of the Indian
outs against the working class be controlled. Thus the policy Economy.
of industrial relations should be updated considering the
changes in the character and composition of industrial Materials and methods
disputes. Rationale for the study
Industrial disputes are a matter of great research interest. As
The current state already explored, many studies have made significant
Industrial relations have shown a steady improvement in the contributions to the study of industrial disputes in varius
years following the economic reforms introduced in India. sectors. This study is focused on the garment industriaes in
Man-days lost due to strikes and lockouts declined particular. This is because the garment manufacturing sector is
significantly from 34.57 million in 1991-92 to 20.44 million in characterized by one very important difference from the other
1993-94 and then to 17.99 million in 1995-96. This was sectors. i.e., Geographic Dispersal. In the garment sector,
mainly due to improvement in the industrial relations production can be dispersed to many locations across and
situations in Cotton, Engineering, Coal and non-Coal mining, within countries. In developed countries, this is associated
Beverages, Tobacco and Tobacco products, Jute and Rubber with outsourcing production to developing countries. In
industries. developing countries, production moves within and between
During 1991-94, industrial unrest mainly witnessed in the countries in search of cheaper/faster labour. This has resulted
states of Andhra Pradesh, Gujarat Tamil Nadu and in very complex value chains and power imbalances. Modern
Maharashtra. Government’s proactive role through timely and production and distribution of garments has created a “global
effective conciliation of industrial disputes and involvement of assembly line” (Carr, Chen and Tate 2000) [11]. Power has
the social partners in the formulation and implementation of shifted from producers to traders and retailers. Buyers set the
labour and industrial relation policies and programme has terms for what is to be produced, by whom, where, when, and
successfully harmonised the interests of employers and at what price (McCormick and Schmitz 2001).
workers through a change from confrontation to collaboration, Moreover, there are various types of Garment Workers who
and their appreciation that employment security is promised categories this industry. There are important differences
upon productivity and viability of the enterprise. between workers depending on whether they are hired by
There has been an improvement in the industrial relations large factories as core or contract workers, hired by small
scenario of the country in the 1990s as compared to the 1980s units, or work under subcontracts from their homes. There are
as reflected in the statement of mandays lost on account of also self-employed garment makers who produce for local
strikes and lockouts. The above table reveals that the number customers or markets. The workers employed in the garment
of strikes which was 732 in 1995 has increased to 793 in 1997 industry usually comprise of unskilled or semiskilled workers.
and then it declined to 173 in 2012. A point that is interesting and needs specific mention is the
The number of lockouts also increased initially from 334 in fact that the majority of workers in the garment factories This
1995 to 512 in 1997 and then it declined to 121 in 2012. Total uniqueness offers a great ground for researching the industrial
number of strikes and lockouts which was 1,066 in 1995, dispute dynamics.
gradually increased to 1,305 in 1997 and then it declined to
181 in 2013. There have been a few instances of protests by Scope, focus and limitations
workers in response to restructuring measures in the Time along with numerous and conflicting sources have been

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the important limitations. Another important limitation A study conducted by the Worker Rights Consortium between
pertains to most of the resources being very general in nature 2001-2011 across 15 countries found garment workers' wages
of pertaining to the topic. declined overall. The IEMS findings on earnings confirmed
low incomes. For instance, In Ahmedabad, the average
Sources of data monthly turnover (gross earnings, before deducting any input
The data for the current paper is mainly gleaned from costs) for the study’s garment workers was 2,337 rupees
secondary sources such as books and articles. (about US$42). They reported working over 23 hours in the
week preceding the survey.
Causes of Industrial Disputes in India
Theoretical literature on strikes and lockouts are based on (ii) Demand for Bonus
three sets of ideas. Another important cause of industrial disputes in India is the
(1) Existence of asymmetric information when firm and demand for bonus by the workers. This has resulted from
union bargain over wages (Hayes, 1984; Cramton and workers’ increasing demand to share profits of the industrial
Tracy, 1994) [18, 13]. units and employers’ non-acceptance of this provision. During
(2) Joint-cost hypothesis of Reder and Neumann (1980) [28], emergency the government reversed its decision and reduced
and the rate of bonus from 8.33 per cent to 4 per cent. Later on the
(3) Reputation building models of Calabuig and Olcina rate of minimum bonus was raised to 8.33 per cent again.
(2000) [10]; Kreps and Wilson (1982) [21]; Milgrom and The economic demand for workers, i.e., for wages and bonus
Roberts (1982) [24]. has resulted in about 46 to 50 per cent of industrial disputes in
India during 1961-71 and during 1976-84 wages and bonus
The basic idea of asymmetric information models of strike is has been responsible for 32 to 40 per cent of industrial
that firm has private information about its willingness to pay disputes in the country.
and union has bargaining power and strike is an instrument
employed by the unions to elicit the private information of the (iii) Personnel and Retrenchment
firm. A highly profitable firm, which is really willing to pay Another important cause of industrial dispute in India is the
more, prefers to avert a strike by accepting higher wage retrenchment and personnel which accounted nearly 29 per
settlements. On the other hand, a less profitable firm, which is cent of the total disputes during 1961-76. During 1981-84,
unable to pay high, chooses to endure a strike in order to settle these causes resulted in about 21 to 22 per cent of the total
at a lower wage. Models of lockouts, on the other hand, industrial disputes occurred in the country.
assume that firm has bargaining power and union members
have private information regarding their alternative wage and (iv) Demand for Improved Working Conditions
lockout is the mechanism firms use to force union members to Industrial disputes in India has also resulted from demand for
truthfully reveal their alternative wage (Fisher, 2001) [15]. improved working conditions such as leave, lesser hours of
work, better working conditions like better safe measures,
(i) Demand for Wages and Allowances canteen facilities etc. About 2 to 3 per cent of the total
The most conspicuous cause of industrial disputes in India is disputes is resulted from such demand.
the demand for higher wages and allowances by the workers.
While the price level has been increasing constantly at a (v) Other Causes
higher rate but the increase in the rate of wages could not keep There are varieties of other causes which are also very much
pace with it. This led to a situation where workers resort to responsible for higher incidence of industrial disputes in the
strike for raising their rate of wages. country. These causes include introduction of rationalisation
In India most of the industrial disputes have resulted from measures in the factory, employers’ apathy to recognise trade
demand for the higher wages. If steps could have been taken unions, conflict between rival unions, insult of union leaders
for ensuring a system of automatic adjustment process in the by the employer, fear of retrenchment arising through
wages and prices then the number of disputes would have computerisation, strikes of political nature etc.
been reduced to minimum. All these other causes are responsible for about 30 per cent of
Most homeworkers in the garment and textile industry are the disputes during 1961 and 1976 and around 40 per cent
paid by the piece (according to how many items they during 1981-86.
produce), earn very little, and do not receive overtime pay.
Most receive no sick leave or paid vacations. (vi) Lock-Outs
By hiring homeworkers to do the labour-intensive work of Lock-out declared by the employers to counter the militant
assembling garments and paying them by the piece, these workers is also another important cause of industrial disputes
subcontractors keep their wage costs and overhead low, and in the country. Lock out is the result of prolonged strikes and
minimize the risk of loss associated with uncertain orders irresponsible trade unionism.
(Carr, Chen and Tate 2000) [11].
Subcontracted homeworkers have little power over the terms The major causes of increasing number of lock outs are:
and conditions of their work. In Bangkok, 60 per cent of (a) lower labour productivity,
subcontracted workers in the IEMS study reported that wages (b) rising wage rate,
were set by the contractor; 51 per cent said they could not (c) increasing competition arising through the introduction of
bargain. liberalisation policy,

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(d) Higher degree of bargaining power of employer etc. operation within the industrial unit;
Thus the bargaining power of the trade unions has weakened (c) Adopting industrial truce resolutions in 1962 by the
considerably due to the policy of liberalisation and central organisation of employers and employees
restructuring introduced in the country in recent years. pledging neither to interrupt nor to slow down
production; and
Settlements of Industrial Disputes: Policy of the Government (d) Setting up of National Arbitration Promotion Board in
Growing industrial disputes is not a healthy sign of industrial July, 1967 by the Government for settling industrial
development in the country. Thus from the very beginning the disputes.
Government has been taking various steps and policies for the
settlements of industrial disputes in the country. Findings
The main objectives of industrial relation policy of India are: An overview of the statistics pertaining to Employment in
(a) Prevention and peaceful settlement of industrial disputes garment industry (2013) shows that 8 million people are
and employed in the garment industry (2014: 45 million in
(b) Promotion of better industrial relations. Textiles and Clothing ‘T&C’) of these, Approximately 60%
The Industrial Disputes Act 1947 and its Amendments in are women, but this varies from region to region. This figure
1956: is the official figure, but it is worth noting that there are many
In order to prevent and settle the industrial disputes, the garment workers in the informal sector, which this number
Government of India passed the Industrial Disputes Act in most likely does not count.
1947 which was later on amended in 1956. Textiles and Clothing contribute to 4 % of GDP (2013) and
Following are some of the provisions of the Act to settle form 12% of export (T&C) (2013/14). The Industry
industrial disputes in the country: contributes 25.8%of GDP and the Value garment export
(2013/14) is at $15.7billion/€12.4 billion (apparel only) 9,
(a) Work Committees $40billion/€31.6 billion (textiles and apparel). The Percentage
Work committees are to be formed taking the employers and of the world market for apparels (2013) is 3.7%, which is
employees together for all undertakings employing 100 or apparently, the 6th Position for Apparels.
more workers for maintaining good relations between them. The Minimum wage is approximately 4000Rs which average
At the end of December 1987, work committees were of key regions. Living wage calculation by Asia Floor Wage
functioning in 546 establishments. (2013) indicates it to be around 125Rs.
The trade union membership statistics give a good insight into
(b) Conciliation the state of workers organization. In the garment industry,
This Act permits the Government to appoint conciliation there are generally low levels of TU membership; however,
officers and also to constitute board of conciliation, the above figures show that across all industries (and
representing employers and workers for the settlement of such presumably in the garment industry) union membership is
disputes. growing. Still, much of the garment industry is still in the
informal sector, with little regulation. Even where Trade
(c) Court of Enquiry Unions exist, their power is limited. Those who participate
When conciliation failed to yield any result then the matter may face discrimination. Furthermore, collective bargaining
must be referred to court of enquiry for making investigation agreements are ‘virtually non-existent’ in the garment
on the dispute and report it to the Government. industry. Some unions in the garment industry are: - Garment
and Textile Workers Union (GATWU) - Garment and Fashion
(d) Labour Courts Workers Union (GAFWU) - Mazdoor Ekta Manch (MEM)
Labour Courts were set up by the State Governments to
consider the disputed matters like dismissal, suspension of Women’s Work
employees, legality of strikes and lock-outs etc. Garment workers around the world, especially those who do
the basic stitching of children’s and women’s garments, are
(e) Industrial Tribunals predominantly women. Also, the vast majority of
Two types of industrial tribunals were set up by the homeworkers are women. According to statistics in Chen,
Government which includes: (I) state tribunals and (ii) Sebstad, and O'Connell 1999, women accounted for 87 per
national tribunals. These tribunals are adjudicating disputes cent of homeworkers in Argentina, Germany and Hong Kong,
relating to wages, bonus, profit sharing etc. The adjudications and over 90 per cent in Japan and Mexico.
of these tribunals has a binding on the concerned parties. But often, some of the higher-skilled tasks such as cutting are
Moreover, in recent years some other practices are introduced often done by men. And where products require higher
for settling industrial disputes in the country. technical skills to produce, women have been squeezed out of
These include: garment manufacture by men, who have more opportunity to
(a) Formation of joint management Councils with the learn the new skills (Carr, Chen and Tate 2000) [11]. Export
participation of workers in the management for bringing factories tend to hire young women before they are married or
better relationship between management and labour; become pregnant, and let them go once they are.
(b) Introducing code of discipline evolved in Indian Labour The share of female workers has significant negative impact
Conference 1958 by which the employers and workers on the number of disputes, strikes and lockouts. Large
voluntarily agree to maintain mutual trust and co- presence of female workers in the total direct workers can

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International Journal of Humanities and Social Science Research

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