After two formal requests sent by the TU to the management, demanding a discussion related to employment issues with the senior management and since there was no response from the management the TIC had to resort a strike action even after extending the 14 days provided. The Management in return sent letters to the strikers that they would be considered as vacated of post if the workers don’t report to work within days from the date lettered.
The strikers being absent to report to work on the said date, the management sent the second letter confirming that strikers are considered as vacated of post, which then lead the issue to the commissioner of labor and the Minister thereafter to an arbitrator appointed by him, resulted the workers to stop the strike but the management did not allow the workers to be at work again as a result the Labor commissioner instituted action against the directors of the Company in the magistrate courts.
The case report is a comprehensive analysis to the following issues related to the “Lank Leather Products Company’ 1 . Whether it is necessary to notify the employer before forming a trade union? 2. Should the employer have given an opportunity to the union to discuss these matters with management? Is it a legal requirement? 3. Was the employer under a legal obligation to deduct the union membership fees from the salaries of member employees? 4. What are the demands which the employer was mound to grant under the law?
What are the situations where the employer had acted contrary to law as alleged by the union? 5. Are there any demands in the list submitted by the union which you consider as unreasonable? 6. Is it lawful for the employer to have sent “Vacation of Post” (POP) letters to the striking employees? 7. Was the final letter sent to the union by the HER manager legal? 8. What do you think are the two offences the employer would have committed under the industrial dispute act for the commissioner to have instituted legal action against the directors of the company? 9.
As the many was an independent institution registered under the companies act is it lawful to have instituted action against the directors without instituting action against the company? 10. Was there possibility of avoiding this unfortunate situation if the employer had been more flexible with the union? If so what do you think the company should have done? Case study Analysis. Question 1 Whether it is necessary to notify the employer before forming a trade union? The issues discussed here are two fold, first Legal Aspect and the Employee relation Aspect.
It is important to know that there is NO legal requirement to inform the management when workers are forming a Trade union. According to Freedom of association and protection of right to Organize convention (1948 No 87 he employees and employers shall have the right to establish union with only to the rules of the organization concerned and right to join to join to workers and employers’ organizations of their own choosing without previous authorization. Also, The Industrial Disputes (Amendment) Act, No. 6 of 1 999 stipulates under the title Unfair Labor Practices that no employer shall require a worker to join or refrain from joining, any trade union, or to outdraw from or to refrain from withdrawing from his/her membership of a trade union of which he/she is a member, as a condition of his/her employment. Also for a union to be legally accepted it should have a minimum of 40% of the employer’s membership. The Sir Lankan constitution grants as a fundamental right for every person to join a trade union by considering all the factors it is not necessary to inform the employer when forming a trade union.
But concerning the smooth relationship (RE) between the employee and the employer and moral/ethical values in the work place it s important to keep the management informed on such activities. It’s believed and proven that a Employer with High morals/ Values have less Employee related issues and such employer who operates under legal framework would not discourage a TU activities yet more would be more concern of the Employee relation and transparency, therefore it’s necessary to inform the employer on the grounds moral/values. Question 2 Should the employer have given an opportunity to the union to discuss these matters with management?
Is it a legal requirement? Yes, the employer is legally bound to discuss matters with a TU that has 40% of employees as its embers. According to the Industrial Disputes (Amendment) Act, No. 56 of 1999 stipulates under the title Unfair Labor Practices that no employer shall: refuse to bargain with a trade union which has in its membership not less than forty percent of the workers on whose behalf the trade union seeks to bargain. Question 3 Was the employer under a legal obligation to deduct the union membership fees from the salaries of member employees?
No, the employer is not legally obliged to deduct the Union membership from the salaries of the member employee, but the member has to pay a membership fee to the Trade Union which can be deducted from the salary on monthly basis by giving the consent to the employer to deduct from the salary. According to Section 2 of the Minimum Wage Ordinance deductions from the wages of a worker may be made for any contribution or subscription which the worker makes through the employer to any welfare scheme, trade union or temple fund, etc Question 4 What are the demands which the employer was bound to grant under the law?
What are the situations where the employer had acted contrary to law as alleged by the union? Legal Obligation by the Employer for the demands, NON payment of PEP and E TFH to casual and temporary workers. According to the Employees provident fund At NO 1 5 of 1958 The Employer has the responsibility of paying the contributions for each and every Employee a minimum rate of 8% and 12% from the employee and employer respectively, unless The Employer is not absolved from this responsibility on the grounds of the Employee’s unwillingness to contribute.
While the nature of employment or status is immaterial, employers have to make contributions to the provident fund in respect of employees who are permanent, nonperformance, temporary, apprentice, and casual, working few hours with intermittent breaks and working less than a day. Contributions to the Provident Fund should also be made for those who are employed on piece rate basis, contract basis, commission basis or unit (output) basis although the payments made by cash or a by any other form. The payable contribution to the Fund has to be calculated up to the extent of the value of the payment to the member.
Employer will be liable for the payment of surcharge ranging from 5% to 50% for late payments and non payments may result in involvement in legal battles. Failure to provide separate conveniences for female employees and suitable place for the employees to take meals. In accordance with the requirements f the factories ordinance, minimum of 1 toilette should be provided for 25 females in a factory and provisions of employees’ facilities such as canteens, meal rooms, change rooms, drinking water should be provided.
Failure Of the management to fulfill the request made by the union for suitable office space. In accordance With the requirements of the factories ordinance the facility shall provide a minimum of 400 cubic feet per person, with suitable lighting and ventilation. Failure to provide First -Aid facilities within the factory premises or an ambulance or ensure that a vehicle be always available for the transportation f sick and the injured employees to a hospital.
As per Factories ordinance the Factories must have a First aide box to provide immediate medication and one responsible and trained person in first aide per 1 50 workers. NON deduction of weekly holidays and statutory holidays when computing the maternity leave entitlement of female. As prescribed by the shop and office act Female employees are to be entitled to maternity leave with full remuneration and the leave is counted excluding weekly holidays & public holidays. Failure to recon the Pay holiday as a holiday with remuneration for both office and Factory employees.
According to Shop and office act Pay Holiday is considered as Holiday and over time is due if an employee is engaged in employment on a pay day. (Shop & Office TO rate Monthly rate /30 X 1. 5 and Factories ordinance – Monthly rate/26 X 1. 5) Management Failing to recognize the union and discuss matters relating to their members. Management or the employer is bound to discuss matters and bound for collective bargaining process with TU that has 40% worker strength as prescribed by the industrial dispute act.
Also refuse to bargain with a trade union which has in its membership not less than forty percent of he workers on whose behalf the trade union seeks to bargain considered unfair labor practice by the industrial dispute act. Question 5 Are there any demands in the list submitted by the union which you consider as unreasonable? A salary increment of 50% – considered as unreasonable demand by the TU as the company may not be in a financial situation to increase Salaries as demanded. 48 hours is the maximum hours permitted for a worker as prescribed by the Factories Ordinance, anything beyond 48 hour band would only be considered as TO.
Over time is allocated only and when need by the employer in order to narrate more revenue but not as a source of income to the employee. Therefore TO payment for all the employees is unreasonable. There is no legal request to provide No pay Leave for employees. To grant a Half days leave with pay daily for the union secretary to attend to union activities. Considered to be unreasonable due to the fact that the employee’s time belongs to the employer while at work and granting leave daily with pay is not justifiable.
And the employer is not legally bound to pay for such activities other than collective bargain situations on mutual understanding. Question 6 Is it lawful for the employer to have sent “Vacation of Post” (POP) letters to the striking employees? It is not lawful for the employer to send employees who are on strike as acted post because The Sir Lankan law does not explicitly recognize a right to strike, as in the case of the fundamental right to freedom of association, which also includes the right to join a trade union of choice.
These fundamental rights do not at any point state that it includes the right to strike. However, the Trade Unions Ordinance defines as to what strike action involves and therefore, in the context of the Sir Lankan labor law, strike action an be regarded as a legitimate trade union activity, except in situations where it is restricted by law. Similarly, an employer can’t discriminate against a worker in any aspect of employment due to the worker’s participation in trade union activities as prescribed by the Trade union ordinance.
If an employer is terminating the services of a employee depending on NON disciplinary grounds the employer should seek the permission from the commissioner of labor as prescribed by the Industrial dispute act. Question 7 Was the final letter sent to the union by the HER manager legal? When and during an Industrial dispute is transmitted to the labor commissioner and examined by the labor courts, employer cannot terminate the service of an employee as required by the industrial dispute ace In such situations the correct process should be from conciliation to arbitration, industrial courts and Labor tribunal. Refer annexed 1) therefore the letter sent by the HER manager was not legal due to the fact the termination occurred while the case is being examined by the Industrial courts. Question 8 What do you think are the two offences the employer would have committed ender the industrial dispute act for the commissioner to have instituted legal action against the directors of the company? The management failing to discuss with the Trade unions and refrain from collective bargaining and also Terminating Employees on management’s discretion without getting the written permission from the Commissioner of Labor.
Question 9 As the company was an independent institution registered under the companies act is it lawful to have instituted action against the directors without instituting action against the company? There are instances where the liability will extend even up to the personal assets of the directors although the company is being treated a different legal entity. Question 10 Was there possibility of avoiding this unfortunate situation if the employer had been more flexible with the union?
If so what do you think the company should have done? There are enough and more situations to avoid the present state of the company by the management, by maintaining healthy Employee relationship as it is the cornerstone of a sound HER practices in a company. The company could have practiced and follow legal requirements such as providing contracts letters with details of the employment and how tooth parties are equally responsible for the relationship to all the employees to maintain bona fide.
The company could be transparent and flexible with the trade union on their grievances give more time on listening to their concerns provide solutions without delays. Transparency on all aspects makes the employee aware of the company situation and mutual understanding goes a long way and getting in to collective agreements would have been the best option. 11 Questions Sudden decision of the union officials to call off the strike which was carried on for a long time was considered by certain members as a betrayal of the ion struggle. What is your opinion?