Industry Relations(union)

issues at Asian Paints Ltd.

Group 8
PGP14071 - Dipasha Saxena
PGP14074 - Drishti Tyagi
PGP14073 - Divya Dawar
PGP14266 - Sheesh Chandra Mishra
PGP14096 - Kanishqa Rai
PGP14077 - Esha Naqvi
 Case Background
1. Founded in 1942, Asian Paints is India's largest and Asia's second largest paint company
2. It has a strong customer focus and innovative spirit
3. It has also won many accolades and awards, and also holds the special position of being
the only paint company to achieve such accomplishments
4. It has two plants in India— Ankleshwar, Gujarat and Cuddalore, Tamil Nadu
5. Over the years the company has faced multiple problems with the labour union in
cuddalore plant such as
a. Wage increase protests
b. Abusive and misconduct by employees
c. Unwillingness to work, till their goal has been achieved
d. There was a loss of INR 3 crores owing to labour stoppage between 1991 and 1992

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 Situational analysis
1. In May 1991, the management had signed a three-year wage agreement to provide the
workmen a hike of ₹550 per month. One of the clauses of the long-term wage settlement
was that the Union shall not cast any additional financial burden on the management during
the pendency of the settlement.
2. The management is now facing two issues:
3. The union is requesting for special increments for all or for none
4. Currently, the product line was halted due to the unwillingness of Ramesh, the Union
Leader, to start the production line.

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 Cause of the problem
Management side Labour union side
Complying to all the demands Unreasonable wage and interim
from the union demands
Negligence to disciplinary Involvement in unlawful strikes
issues Sabotaging of factory properties
No systematic reward and resulting in low quality products
appraisal system Threatening engineers and
supervisors

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 Collective Bargaining Process

Prepare for Conduct the

negotiations negotiation
The company should gather Understand the demands of
data relevant for the situation, the union and put forward the
both from the management managerial demand. If not
and the union side accepted, bargain for
negotiation

Develop strategies
Formalize
Ramesh being the union
leader is the reason the
agreement
After reaching a consensus,
management is hesitant. They formalize the negotiation and
should develop a strategy that the agreement into a document
lands up in a win-win situation
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Bargaining Zone and Negotiation Influences

The bargaining zone is essentially the overlap area

between walk-away positions in a negotiation. The
organization can:
Bargain in good faith
Provide information needed for meaningful
bargaining. This information should enable
workers’ representatives to obtain a true and fair
view of the performance of the firm
Since the bargaining negotiation is in jeopardy the
organisation must
deliver carefully honed questions in the
negotiation meetings
take into consideration the loss the company
would be facing
Address problems regarding- restructuring and
training, redundancy procedures,grievances and
disciplinary actions

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 Recommendations
The management should fire Ramesh. Negligence to his
actions would portray an unwanted example in the company.
In order to prevent such situations in the future:
The company must involve the union in decisions during
economic instability
The union must be made aware of the profits and sales
of the company
Systematic reward and appraisal system must be
created and the workmen should be made aware of the
same
Provide workmen opportunities to upskill themselves and
include job rotation as a part of the opprtunity
Clear regulations and actions for sabotage of factory
property and any misconduct must be implemented

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Thanks!
Do you have any questions?

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