Viewpoint: Dealing with Employee Grievances in India – HR Managers Should Know the Law!

Author: Vikram Shroff & Sushil Tayal

Workplace grievances are inevitable. In fact, it is said that to have a grievance is to have a purpose in life! Unattended grievances are like loose cannonballs in a ship – unless managed well, they can wreck the ship.

A clear, transparent, quick, robust and confidential grievance redressal system can effectively help manage workplace conflicts and potentially go a long way in bringing harmony at the workplace. Some of the better places to work have an effective employee grievance redressal mechanism. For the others, it may just be the need for the hour.

In a recent session conducted on Employee Relations for a leading manufacturing company in India, some of the important causes for employee grievance issues include unclear organisational strategy, adhoc / inconsistent decision making, trust deficit, inability to resolve issues effectively, unempathetic approach, lack of transparency, insufficient communication, low level of engagement with employees/union members, and inability to manage expectations, amongst others. In the same session, HR managers indicated building trust, having honest & open conversation with the union, managing aspirations of employees, changing the mindset of employees & union, managing multiple unions, building effective relations with unions, managing discipline, improving productivity, ever-changing approach of the organisation, changing demographics, changing legal landscape, and understanding the legality & provisions of different laws, as their main challenges for employee relations.

In India, certain central and state specific labour laws require the employer to adopt certain grievance redressal mechanisms at the workplace. Here is a quick list of various mechanisms under various laws which the HR managers should be familiar with and can incorporate as part of their HR policies & practices:

  • Internal Complaints Committee: As per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 of India (POSH Act), every workplace having at least 10 employees is required to constitute an Internal Complaints Committee (IC). The IC is required to investigate into complaints of sexual harassment of women at the workplace and give recommendations to the employer. The IC has the same powers as are vested in a civil court (under the Code of Civil Procedure, 1908) and can hold office for 3 years. The law provides 90 days to the IC to complete its investigation and another 10 days to issue the report. 
    In the case of Vidya Akhave vs. Union of India and Ors.[i] (Bombay High Court), the Hon. Judge was of the view that the IC should also act in a free and transparent manner in order to ensure that the complaints of sexual harassment are inquired into seriously and that too without any bias. 
  • Grievance Redressal Committee: As per section 9C of the Industrial Disputes Act, 1947 of India (IDA), every employer employing at least 20 workmen[ii], is required to set up a Grievance Redressal Committee (GRC) for resolution of the disputes arising out of grievances of the workmen. The GRC should not consist of more than six members and must have an equal number of representations of both, the management and the workmen class. The draft Industrial Relations Code, 2019 which has been introduced in Lok Sabha, proposes that the industrial establishment should have one or more GRC to resolve disputes arising out of grievances of individual worker relating to non-employment, terms of employment or conditions of service. Additionally, it proposes to increase the total number of members of GRC to ten. Although having a GRC has been mandated by IDA, any employer who already has an established process for grievance redressal may not be required to set up a separate GRC. 
  • Works Committee: The labour authorities may under section 3 of the IDA, order an establishment having at least 100 workmen, to set up a Works Committee (WC). The WC is required to promote measures for securing and preserving amity and good relations between the employer and its workmen, and to that extent, comment upon matters of common interest or concern. It should also endeavour to compose any material difference of opinion in the organisation. A WC may be more common in cases where employees are unionised and there is collective bargaining. The constitution of the WC should be such that the number of representatives of workmen on the WC is not less than the number of representatives of the employer. 
  • Committee for Employee’s Health and Safety: Certain Indian states like Maharashtra (covering employers in Mumbai and Pune), require employers employing at least 100 workers, to set up a Health, Safety and Welfare Committee (HSW Committee). The duty of the HSW Committee includes surveying and identifying any accident-prone or hazardous objects or spots in the premises, rectifying such spots, conducting healthcare camps once a year, creating awareness about contagious diseases, epidemics or natural calamities, conducting recreational and cultural activities, and conducting social and educational awareness programmes. The HSW Committee is to be constituted with equal number of employer and worker’s representatives. The draft Occupational Safety, Health and Working Conditions Code, 2019, which seeks to consolidate 13 federal-level labour laws in India, proposes to allow every employee a right to obtain the information from the employer relating to employee’s health and safety at work. The employee may also be able to represent to the employer directly or through a member of the Safety Committee. if any, regarding inadequate provision for the protection of his safety or health in connection with the workplace. 
  • Whistleblowing in India: As per the Companies Act, 2013, certain categories of companies are required to have a vigil mechanism (similar to whistleblowing channels). Every listed company and those companies which accept deposits from the public or have borrowed money from banks and public financial institutions in excess of INR 50 crores (approx. USD 7 million), are required to have a vigil mechanism in place.[iii] Additionally, the Securities and Exchange Board of India (SEBI) mandates every listed company to have a whistleblower policy or vigil mechanism for its directors and employees to report genuine concerns and publish the details on its website.[iv] While the Whistle Blowers Protection (Amendment) Bill, 2015 was introduced by Lok Sabha, it is yet to be enacted as a law. Accordingly, private employers in India (unlisted entities) are yet to be mandated with a whistleblowing policy. 

In addition to internal channels, employees can also look to utilising the external mechanisms. Indian labour laws also provide for a list of acts which are construed as unfair labour practices on the part of the employer. Among others, discharging or dismissing workmen by way of victimisation, not in good faith or colourable exercise of employer’s rights, are considered as an unfair labour practices by the employer, for which the employee can raise an industrial dispute. In such situations, workmen can approach the labour courts and industrial tribunals for resolving their industrial disputes. The IDA also provides for the appointment of conciliation officers to try to conciliate the workmen’s grievances, prior to the case being referred to the labour court or industrial tribunal.

In a bid to discourage employees from going external and to allow employees to complaint on an anonymous basis, some of the progressive organisations have effectively and voluntarily adopted policies and implemented mechanisms to proactively address employee grievances across the organisation. For example, it is common to see US and European headquartered companies having large operations in India to extend their online Ethics Hotline, so as to allow their employees in India to report any conduct that may be unethical, unprofessional, illegal, or otherwise inconsistent with the organisation’s policies or Code of Conduct. Some organisations prefer a more informal set up such as an Open Door Policy to encourage the employees to resolve disputes through informal discussions as a quicker and simpler approach.

While there is no magic bullet, effective employee grievance mechanisms can legally protect employers in several situations, especially in today’s world of work where employees are well-informed of their rights and entitlements. Some employees may not have legal protection as not being workman or by way of nature of employment, however increasing trends of “employee activism” is becoming an acceptable norm to resolve their grievances.

Quick and fair redressal of the grievance is key to success. Displaying positive & empathetic approach, irrespective of the outcome of the redressal, is usually more productive and appreciated. Having said this, knowing & being compliant with various legal provisions are mandatory and the law needs to be followed in letter and spirit. As it is commonly said, a stitch in time saves nine!

[i] MANU/MH/2037/2016

[ii] Workman has been defined as (s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person–

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950). or the Navy Act, 1957 (62 of 1957); or

(ii) who is employed in the police service or as an officer or other employee of a prison; or

(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

[iii] Rule 7, Companies (Meetings of Board and its Powers) Rules, 2014

[iv] Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Sushil Tayal – Enabling World

Article was first published on https://www.shrm.org/shrm-india/pages/dealing-with-employee-grievances-in-india-hr-managers-should-know-the-law.aspx

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