Friday, 11 September 2009


Jet Airlines pilots put up the worst possible case for a union. They acted arbitrarily, were blackmailing the company, and were out maneuvered by the company and the media. They now make unions of white collar workers look like greedy and dysfunctional goons. But there is still hope.

Many companies in India have a clause in fine-print that prevents employees from participating in a union. This is true of all major IT companies as well. Contrary to popular belief the job of a union is not to go on a strike. The job of a union is to ensure that employee related issues such as (and not limited to) pay and occupational health and safety get adequate attention.

In my personal opinion Unions are important, particularly in large companies because their role can be expanded to go beyond the employee benefits and welfare. If engaged with in a symbiotic manner it can drive up productivity and profits. I admit, these are text book interpretations of what a union can do.

But let me go a step-up further. Unions, if used well can also ensure that a company behaves in manner that is in the interests of the general public.

Hypothetically let us assume that you are a brilliant software engineer. You use your skills as a part of a team with expertise across various domains to develop a missile guidance system for short range missiles. IF this work is being done for Isreal or the US Govt - you are supporting their occupation and war efforts in Asia. You are in effect helping them continue their campaign of destroying economies and rebuilding them with US ownership. A union would be in a position to lobby with the management to refuse work that can be described as "abetting war crimes".

Imagine if Halliburton or Bechtel had a Union for officers/management in the company. You would never have had a war in Iraq. Halliburton/Bechtel would not have had the balls to profiteer from the war at the cost of it's own employees and innocent civilians in Iraq. It would not have mattered if Cheeney was promoted to President replacing Bush - the war would still have not happened. The war could have been prevented if the insiders had a union through which to voice their conscience.

A union will be able to balance the overwhelming mandate of greed and profiteering that an executive management has to deal with. They will be able to use their position to ensure that the management does not profiteer at the cost of other stakeholders.

In hindsight, the Satyam saga could have been averted if there was a Union in place and a union member was on the board of the company. Maybe the independent directors would have had an alternative and formal source of information related to ground realities.

Capitalism develops complex games and complex rules to move wealth from one hand to the other. The financial instruments that sparked the current global crisis is a good example of these complex games and rules. Unions present an excellent check-point and counterbalance to this gluttonous greed that has got hold of the juggernaut that is right-wing capitalism. Profiteer at any cost as long as the people who die and suffer are not of interest to the media.

It must be compulsory for companies that have an excess of 1000 employees to have a union. How would this help?
  • The unions could prove to be of invaluable help in creating internal mechanisms for whistle blowing. (This benefits everybody concerned).
  • The unions could ensure that the company does engage in business that is not in the interest of stakeholders who do not have a share of the company's profits
  • It will prevent the management from misusing company funds and resources for personal gain (a la Satyam).
  • It will provide a safety net. An entity other than a vulture fund, might be willing to take over and rebuild the company in case the company is on the brink of failure.
What are the risks?
  • Unions can fall into a conventional trap of becoming a one trick pony. No Raise = Strike! As the jet pilots have shown, you do not need a union to perform this trick, you just need to be a pony.
  • Unions must understand that in order for growth to be inclusive all stakeholders have to compromise. If they don't - they will revert to being a one trick pony
  • Unions have to develop a mindset that goes beyond the welfare of its members and looks at the welfare of all stakeholders. They have to learn to to walk on a fine line balancing interests of all stakeholder.
  • There is no such thing as a fair democracy. Unions have to strive to be democratic but can not let themselves be manipulated by political parties. We need to formally de-link the structure of the union with the structure of politics. Congress, BJP and CPI can not use unions as vote banks for elections.
  • An active union member should not necessarily translate into a politician.

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