The labour unrest and subsequent stalemate at HMSI were the result of abrupt dismissal of employees without proper notice or even due cause. They could have been prevented, had the stakeholders had a meeting with the union leaders beforehand and let them know about the downturn that the market is currently facing. Then they could have discussed how to proceed further.
The entire situation could have been handled better in the following ways:
a. Severance package: The contract labourers who were dismissed could have been provided with two months advance salary and some other incentives which would not have left them jobless and with zero prospects. This would have offered some financial help as well as helped them walk out with dignity.
b. Assistance in finding new job: The company could have worked with the union in making sure those who were terminated get some job outside and provide them with assistance for the same
c. Provide options to work for a different plant: Since the other plants were not getting shut down, they could have accommodated the extra resources for a couple of months, or until things looked up.
What would you suggest to HMSI to ensure smooth production?
A number of contract workers could be reinstated according to the plant needs and their contracts should be renewed. Since this issue has been taken to the police, the only way to keep peace is by reaching a compromise with the workers. There could be job rotation of the contractual employees or at least dispatched them to other locations. But the Union leaders should be reinstated on one condition – they have to maintain transparency both ways. This issue could have been resolved much earlier if the Union leaders had provided clear communication channels.
If you were asked to reinstate only those contract workers who are necessary to resume production, how would you go about the job? How would you attend to the challenging task of convincing the irate contract workers who are protesting at the gates? How would you persuade the union members? What would you do to improve the morale of workers at the plant?
First of all I would hire a skilled negotiator with an impartial view of the scenario and the convincing skills required to calm down a mob. This person will first get a clear idea of the expectations of the company and try to reach a deal with the workers and union leaders that will serve the interests of both parties.
Then there would be a re-interview of everyone which would give everyone a fair chance at getting the job. There will be a clear contract delineating terms and conditions of employment which will be enforceable both to the benefit of company and the workers.
Since it is a case of economic downturn and the company is bleeding money, incentives are not an option, but the company can promise good packages to be provided at the end of the contract term or termination due to certain inevitable conditions.
Samidha Padhi
The major problem that needs immediate attention is the morale of the workers. HMSI can provide an attractive scheme to each of its employees for buying a Honda vehicle. This will not only boost production to some extent, but also increase loyalty as the employees will feel valued.
(The author is a First-Year MBA student at TAPMI, Manipal)