Group: Nine

The Goose that laid a Golden Egg

Presented by
• Sanjeev Pandey
• Roshan Mulla
• Rushabh Shah
• Ruchit Sheth
• Rohit Patel
 Introduction of the
Company.
• Name: Pioneer Engineering Company
• Area: Manufacture of Switchgear components

Features
• Team of Professional Managers.
• Competent Engineers with Indigenous Skill to bring
about innovative development.
Workforce
• 1100 Workmen
• 250 Managerial & Supervisor in charge
 Persons –in-charge
• Mr. Verma – He is the Managing director of the company
and is very competent person in selecting engineers.

• Mr. Shukla – He was the Personnel Manager of the Company

• Mr. Ramani – He was the President of the recognized Trade

Union of the Co.

• Mr. Bakshi:
– President of Union in another Switchgear Co.
- Leader of a militant trade union.
- Leader of Engineering Workers Association.
 In 1979

 Pioneer Engineering Co. received its first

export order due to following reasons :
 Product met the client specifications
 Prices were lower than the competitors
 Mr. Verma had Guaranteed the quality
 Export order was important for the Company because:
 To earn Foreign Exchange
 Prestigious Name
 Higher profitability
 Break from extremely competitive Indian market
 Pioneer Engineering Mazdoor Sangh
Name of the labour union of the Co.
Recognized under MRTU & PULP Act 1976.
It got recognition under the act in August 1980.
Led by Mr. Ramani.
The union was the sole bargaining agent on
behalf of all workmen for all collective matters
relating to labour of the Co. for a period of two
years from the date of recognition.
The role of other unions was limited to defending
their members during enquiry & court
proceedings.
December 1979
Co. - declared a Bonus of 8.33% for the years 1978 &
1979.
In the year 1979, it received an export order worth 20
Cr.
Its annual turnover was 45 Cr.
Due to increased sales, the Co. declared a bonus of
20% & a wage rise of Rs.150 per worker.
The wage rate was not the leading among the other
engineering industries but the workmen were not
dissatisfied with it.
The declaration of 20% Bonus prevented the workers
from being disenchanted with the Co. policy.
January 1980 to December 1980
The Co. was able to double its export for the year
1980.
Total turnover = Rs.70 Cr.
a) Export order = Rs.40 Cr.
b) Local Sales = Rs.30 Cr.
The Co. planned to maintain & improve its
performance.
The co. did not raise the bonus or the wage rate.
This agitated a few workers.
1981- Beginning of Problems
January
 A few disgruntled workers approached Mr.Bakshi, a
militant trade union leader to organise the workers of
the Co.
 Mr.Bakshi had got for the workers in another
switchgear factory, a wage raise of Rs.350 to Rs.500
+ an additional bonus of 10% over 20% maximum
bonus payable under the Bonus Act.

15th Jan:
 At the behest of Mr. Bakshi, workers started :
Go-Slow process and
Got involved in cases of assaults outside the factory.
Contd..
Mid February
Management filed a complaint of Unfair Labour Practice
against the Mazdoor Sangh.
Mr.Ramani, the President of the Mazdoor sangh asked the
Management to withdraw the complain & undertake
negotiations.
The production came down to 40%
The leaders of the Mazdoor Sangh privately admitted that
they could do nothing as many workers were backing Mr.
Bakshi.They also were careful in not putting a demand to
the management for recognition.
Management thought it could not file a case against
Mr.Bakshi as a person for the production loss.
Worsening of problems
25th March
Gate meeting held by Mr. Bakshi
Criticized management for miserliness and heaping
misery on workers.
Said that workers were fooled by poor wage hike
and low bonus.
One of the leaders and signatories claimed that
Mr.Ramani was bribed by the management into
signing the agreement.
Till August
Continuity of the Go-Slow process
What did the Management think?
They wanted to keep the excess money for the
future growth and expansion of the Company.
Pained to see that workmen did not understand this.

What did the Recognised Union do?

Obtained injunction from holding negotiations with
the Engineering Workers’ Association led by
Mr.Bakshi.

Mr.Shukla, the Personnel Manager

Failed to give a satisfactory explanation of workers
behaviour.
Possible outcome of the agitation
Severe penalty for the failure to fulfill the export
order on time.
Not in the long term interest of both workers and the
union.

Mr.Bakshi’s Stand:
Demanded immediate negotiations and reopening of
the clauses in the agreement.
Refused to go to court for recognition.
Ready to make up for lost production only if
management agreed to their terms.
Mr.Ramani’s Opinion
Threatened management against legal action and
contempt of court.
Held management responsible for the current state
of affairs.
Wanted to punish all workers disobeying orders of
the “recognised union”.
Had the support of hardly 20% of the workers.
Where did the Union go wrong and What should have
been done by them??
The Union is the communication link between the
management & the workers.
Mr.Ramani, as a President of the Union for the Co.
should have taken charge of the matter.
Mr.Ramani couldn’t perform his job as a leader as the
members preferred to go to Mr.Bakshi (President of the
Union of a competitor’s Co.) instead of him to put
forward their demands.
Mr.Ramani failed to act on behalf of the workers as the
management was not aware about the reason for unrest
among the workers.
As the sole bargaining agent for the workers, the union
could have done a better job.
Where did the Management go wrong and What
should have been done by them??
The Management should have paid the workers both,
wages & bonus as per the industry norms, even if the
workers were satisfied with a lower amount.
The management should have had strict rules for
workers going against the Mazdoor Sangh & supporting
or joining militant trade unions.
Employees are at the base of the pyramid & by paying
them less, the base of the company structure is
weakened. Because of alleged miserliness of the
company the base structure is distorted, thereby
affecting the company reputation and profitability.
Workmen shouldn’t have been taken for granted.
Management Lessons Learnt
The Management should pay what it is required to pay,
no matter what! This helps to motivate the staff. They
must be made to feel that their work is recognised and
highly appreciated.
Any union formed in a company acts as an intermediary
between the workers & the management. Hence the
union should have a regular communication process
with the management & workers so as to enable things
to run smoothly.
The Union leader should have all qualities of a good
leader. He should have a vision, integrity, dedication,
humility, assertiveness and should be calm, confident
and committed to excellence.