Bata India's HR Problems

            

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Themes: HR Problems
Period : 1990-2001
Organization :Bata India Ltd.
Pub Date : 2001
Countries : India
Industry : Shoes and Apparel

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Case Code : HROB001
Case Length : 06 Pages
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Bata India's HR Problems | Case Study


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Other gains included an average increase of Rs. 45.50 in the weekly pay of the 5,600 employees in Batanagar, an improved rate of DA and increase in tiffin allowance. However, canteen rates had been doubled from Rs. 0.75 for a meal to Rs. 1.50. For the 500 families staying at Batanagar, the electricity rates had been doubled to Rs. 0.48 per unit. BMU was successful in preventing the management from dismantling the public health unit in which 80 people were employed. In September 1999, the West Bengal State labour tribunal in an order justified and upheld Bata's action of suspending and subsequent dismissing of three executive members of the BMU. The tribunal had provided no relief to the dismissed members who had been found guilty of assaulting the chief welfare officer at the Batanagar unit on November 26, 1996.

Assault Case

More than half of Bata's production came from the Batanagar factory in West Bengal, a state notorious for its militant trade unions, who derived their strength from the dominant political parties, especially the left parties.

Notwithstanding the company's grip on the shoe market in India, Bata's equally large reputation for corruption within, created the perception that Weston would have a difficult time. When the new management team weeded out irregularities and turned the company around within a couple of years, tackling the politicized trade unions proved to be the hardest of all tasks.

On July 21, 1998, Weston was severely assaulted by four workers at the company's factory at Batanagar, while he was attending a business meeting. The incident occurred after a member of BMU, Arup Dutta, met Weston to discuss the issue of the suspended employees. Dutta reportedly got into a verbal duel with Weston, upon which the other workers began to shout slogans. When Weston tried to leave the room the workers turned violent and assaulted him. This was the second attack on an officer after Weston took charge of the company, the first one being the assault on the chief welfare officer in 1996. Soon after the incident, the management dismissed the three employees who were involved in the violence. The employees involved accepted their dismissal letters but subsequently provoked other workers to go in for a strike to protest the management's move. Workers at Batanagar went on a strike for two days following the incident. Commenting on the strike, Majumdar said: "The issue at Bata was much wider than that of the dismissal of three employees on grounds of indiscipline. Stoppage of recruitment and continuous farming out of jobs had been causing widespread resentment among employees for a long time."

Following the incident, BSO decided to reconsider its investment plans at Batanagar. Senior vice-president and member of the executive committee, MJZ Mowla, said2: "We had chalked out a significant investment programme at Batanagar this year which was more than what was invested last year. However, that will all be postponed."

The incident had opened a can of worms, said the company insiders. The three men who were charge-sheeted, were members of the 41-member committee of BMU, which had strong political connections with the ruling Communist Party of India (Marxist). The trio it was alleged, had in the past a good rapport with the senior managers, who were no longer with the organization. These managers had reportedly farmed out a large chunk of the contract operations to this trio.

Company insiders said the recent violence was more a political issue rather than an industrial relations problem, since the workers had very little to do with it. Seeing the seriousness of the issue and the party's involvement, the state government tried to solve the problem by setting up a tripartite meeting among company officials, the labor directorate and the union representatives. The workers feared a closedown as the inquiry proceeded.

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2] In an interview to Business Standard on July 30, 1998.