Question

Do you agree that the 1977 wage agreement was principally

responsible for the strained industrial relations and low productivity
acknowledged by the case study? Justify your answer.
Answer
The 1977 wage agreement was not solely responsible for the low
productivity and strained industrial relations at Pioneer industries
limited rather it was another hole in an already sinking ship.
PILs problems started from 1948 when competitor companies
revised wage structures while PIL remained unaffected by this
turbulence in the market.
PIL had one registered trade union that remained quiet during the
industry turbulence however the Trade unions were riddled with
internal conflict due to two factions arising for power the communist
and the other right wing led by the BJP faction. However the Trade
union united under the leadership of Ashok Kumar who studied the
workers problems and put forth a report stating 7 general and 116
individual problems the workers at PIL faced.
Thus the first nail in PILs coffin that led to its low productivity and
strained industrial relations was when the management influenced
the government to back out of holding a special committee to
address Trade union and worker problems leading to the longest
strike ever witnessed of 58 days.
The second nail was the act of suspending Ashok Kumar, the leader
of the workers, under false accusation of irregular attendance. This
questionable act of victimization and interference caused the
workers and staff to walk out as he was the one who had come up
with the disturbing conclusions that PILs low wages had caused
workers to be heavily indebted to their friends and money lenders
leading to absenteeism wide spread resentment to wards the
organization and lower productivity contributing to PILs low
productivity and strained industrial relations.
The third nail that lead to PILs low productivity and strained
industrial relations was when the government went back on their
finalized draft agreement, promising several benefits to workers in
November 1975 with the joint secretary of the concerned ministry,
in the tripartite negotiations of January 1976. This led to the
appointment of a new CMD who introduced a second shift system to
augment productivity and a multi trade system to make better use
of skilled manpower also new negotiations started for a new wage
settlement system based on incentives rather than DA.
The final nail that led to PILs lost fortunes was the new 1977 wage
agreement Though this new incentive system was very attractive to
workers, as it offered them wages based on arrears and they felt
they would get substantial arrears, they were cheated out of their
salaries by the management as their pay slips that were submitted

for salary evaluation showed most workers got no arrears and many
cases recovery of money was needed.
Thus PILs low prodctivity and strained industrial relations cannot to
principally attributed to just the 1977 wage agreement but was
rather a culmination of many factors namely- questionable and
unfair labour practices by Management, victimization, interference
and breach of conditions of recognition.