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A Case on Contract Labour: M/s. ABC Chemicals Limited*

CASELET, HUMAN RESOURCE MANAGEMENT
ET Cases - GSMC, 3 Pages

Case Preview

A Case on Contract Labour: M/s. ABC Chemicals Limited

 

M/s ABC Chemicals Limited located at Thane – Belapur Road, Maharashtra is engaged in manufacturing of various chemicals since 1991. The total manpower of the Company is 450. The employee canteen at M/s ABC Chemical Ltd was contracted to Mr. Ram Shetty. The canteen contract was registered by the company under The Contract Labour (Regulation & Abolition) 1970. An agreement was also signed by Rama Shetty as a canteen contractor and a Mr. Kulkarni, factory manager on behalf of company.

The said contract was renewed every year and rates of the contract also were renewed every year with the consent of both the parties. In the canteen Mr. Shetty had  employed about 10 workers and they were provided with uniforms, attractive wages and accommodation.

Mr. Shetty had another canteen contract in a neighbouring company where he had employed about 15 canteen boys. In both the companies, the canteen worked smoothly. After every three months, Mr. Shetty would rotate these canteen boys on rotation between the two companies, so that there would be no continuity of job in  either of the companies for the canteen boys. This practice continued for a long time........................

Teaching Note Preview

A Case on Contract Labour: M/s. ABC Chemicals Limited

 

Synopsis

This Case is about M/s ABC Chemicals Limited, which is located at Thane – Belapur Road, Maharashtra. The Company is engaged in manufacturing of various  chemicals since 1991. The total manpower of the Company is 450. It had provided canteen for the employees and it was running on contract basis. Mr Rama Shetty was a canteen contractor. The canteen contract was registered by the company under The Contract Labour (Regulation & Abolition) 1970. An agreement  was also signed by Rama Shetty as a canteen contractor and on behalf of company a factory manager, Mr. Kulkarni.

The case focuses on the issues related to making contract labours ‘permanent’ in the Canteen of ABC Chemicals Limited. The Canteen employees who were on contract, with the pressure of internal union, demanded the Management to make them permanent employee of the Company. Retaliating, management issued a letter of termination of canteen contract which was delivered to the Canteen Contractor immediately. The issue was raised to the Labour Commissioner’s Office by the canteen employees. The Canteen Employees started giving slogans against the company. Further they used abusive language against the management. They were doing the same activity every day..............

Pedagogical Objectives

The case aims at preparing budding HR Managers to avoid such situations beforehand by clear understanding of the root cause of such crisis. Even then, if the crisis occurs, the case prepares them on how to face such real life situations by sensitizing them towards the sensitive handling of Labours and their problems keeping in mind the interest of management and jurisdiction.

Assignment Questions

  • I. Why management took the decision of terminating the canteen contract?
  • II. What role was played by union leader in this issue?
  • III. What is the IR issue involved in this case?
  • IV. ........................

$3.66
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Product code: HRM-2-0029, HRM-2-0029A

Abstract

This Case Study's objective is to shed light on issues related to making contract labours 'permanent' in organizations. The Government of India enacted the Contract Labour (Regulation & Abolition) Act 1970 in order to regulate establishments wherein contract labour has been employed by the contractors. The Act regulates that the contractors or principal employer has to provide and maintain the health, safety and welfare of contract labours. A Central and State Advisory Board has also been  formed in order to implement the provisions of the Act. Through the experience of the canteen of ABC Chemicals Limited, post the enactment of the Act, the Case tries to elucidate the roles and jurisdictions of the Union, the management and the Canteen Contractor and how unorganized Unionism can lead to fruitless wastage of time and productivity.



Pedagogical Objectives

  • To understand what pitfalls may happen in a Labour Contract and how to envisage issues before they go out of control
  • To be able to manage crisis in real life by sensitizing participants towards the sensitive handling of Labours and their problems keeping in mind the interest of management and jurisdiction
  • Case Positioning and Setting
    The Case Study can be used for MBA and executive MBA for the following course

    • MBA in HR with specialization in IR- This case provides the unique situation, in which the roles, responsibilities and actions of all the arms of the tripod, formed by Principal Employer-ABC Chemicals, Canteen Contractor and Contractual Labours working in canteen, are at cross-roads.

    • GSMC 2014, IIM Raipur

      This Case Pack Includes:
      - Abstract
      - Caselet
      - Teaching Note (**ONLY for Academicians)
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