workers participation in Management 1In India, the concept of workers’ participation in management is comparatively of recent origin even though there were a few instances of informal joint consultation as early as in 1920’s in the Government Printing Press, Tata Iron and Steel Company, Jamshedpur, Indian Aluminium Works, Belur and in the Railways. The Delhi Cloth and General Mills Ltd. also introduced workers participation in management in 1938 by having an elected representative of workers on the Board of Directors of the Mills. The element of participation was also evident in the Permanent Arbitration Board at Ahmedabad, where representatives of the Mill owners’ Association and the Textile Labour Association settled many disputes through voluntary arbitration.  The Royal Commission on Labour (1929-31) recommended the formation of works committees, “which can play a useful part in the Indian industrial system”. It also suggested the establishment of a joint machinery to deal with the more general questions, and to act as an advisory appellate body in respect of disputes which are confined to one establishment. The recommendations of the Commission bore fruit with the provision of formal statutory machinery under the Bombay Industrial Relations Act, 1946, and the Industrial Disputes Act, 1947. The B.I.R. Act, which applies to the textile industry in Maharashtra and Gujarat, provides for the setting up of joint committees only in units which have a representative union. The U.P. Industrial Disputes Act, 1947 provides for the formation of works councils in State government undertakings, employing 100 or more workmen. The Government of Gujarat by the B.I.R. (Gujarat Amendment) Act, 1972 have made it compulsory for industrial establishments employing 500 or more workmen to set up joint management councils.

Participation/Consultation at the Company and Shopfloor Levels in India

Since Independence, various schemes have been formulated to provide for employee participation/consultation at the company and shopfloor levels. Some of these are discussed below.

1947: Works Committees: The Industrial Disputes Act, 1947 provides for limited participation of elected representatives of workers in bipartite works committees with a view to promoting measures for securing and preserving amity and good relations between employers and workers. Some committees like the canteen and safety committees are statutory. The functioning of the committees are, however, not satisfactory due to the lack of clarity about their scope and functions and conflict between the elected representatives of the works committees and the trade unions operating in the enterprises.

1958: Joint Management Councils: The Industrial Policy Resolution, 1956 reiterated that, ‘in a socialist democracy labour is a partner in the common task of development and should participate in it with enthusiasm. There should be joint consultation and workers and technicians should, wherever possible, be associated progressively in management.’ Accordingly, in1958, Joint Management Councils (JMCs) were introduced. They were supposed to be responsible for welfare, safety, vocational training, preparation of holiday schedules, etc. They were also to be consulted on matters relating to changes in work practices, amendment or formulation of standing orders, rationalisation, productivity, etc. They did not receive much support from unions or management and the apparent similarity in the scope and functions of JMCs and works committees resulted in a multiplicity of bipartite consultative bodies. 

1970: Employee Director in Nationalised Bank: Following the nationalisation of banks in 1969, the government required all nationalised banks to appoint employee directors to their boards, one representing the workmen and the other representing the officers. The scheme entailed the verification of trade union membership, an identification of the representative union. The tenure of an employee director was to be three years, though union membership verification need not occur even once in a decade.

In parallel, the government also began appointing labour representatives to the boards of several public enterprises; but these representatives had no direct link with the enterprise in organising the union at the local level and were drawn from among the national leadership or on the basis of some other elusive criterion. There was no clarity about the role and function of worker directors.

1975: Amendment to the Constitution and the Workers’ Participation: In 1975 the Constitution was amended and Section 43A inserted in the Directive Principles of the Constitution. The section provided that, ‘The State shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.” Accordingly, the Scheme of Workers’ Participation in Management at the shop floor and plant levels in manufacturing mining industries employing 500 or more workers was notified in 1975. Shopfloor and plant level councils were assigned specific functions relating to production and productivity, management of waste, reduction of absenteeism, safety, maximising machine and manpower utilisation, etc.

1977: Scheme of Workers’ Participation in Management: Another scheme, broadly similar to the 1975 scheme, was introduced in 1977 and extended to commercial and service organisations with 100 or more employees. Both schemes evoked some enthusiasm initially during the Emergency, but with held soon after the lifting of the Emergency and the change in government in 1977. In 1978, the new government constituted a special tripartite committee on workers’ participation in management which recommended a three-tier participation at the levels of the board, plant and shopfloor. But the government did not last long enough to implement the recommendations. 

The 1983 Scheme: In 1983, another new scheme was introduced and made applicable to all central public sector enterprises, except where specifically exempted, and a standing tripartite committee was set up by the Ministry of Labour to facilitate review and corrective measures. Implementation of the scheme was left to the administrative ministries concerned. Barely half of the central public sector enterprises introduced the scheme over the next decade, and several of these atrophied subsequently.

Workers’ Share in Equity, 1985: The 1985-86 Union Budget made provisions for offering stock options to employees up to a total of at least 5 per cent of the total shares. This was intended to enhance workers’ participation in management.

The 1990 Bill: The government’s discontentment with the implementation of voluntary efforts resulted in the convening of a national seminar and the subsequent introduction of a bill in the Rajya Sabha in 1990 to introduce workers’ participation at all three levels board, plant and shopfloor – through legislation.

The Second National Commission on labour 2002 has recommended, “The time has come to legislatively provide for a scheme of workers participation in management. It may be initially applicable to all establishments employing 300 or more persons. For the smaller establishments, a non-statutory scheme may be provided.” This was followed by the government intention to pass a law that makes it mandatory for companies to go for workers participation and reserve some seats for worker’s representatives.


In some of the organisations, the scheme of Workers’ Participation in Management (WPM) has proved to be a ‘hit’. Let us briefly examine the experience of TISCO. In 1982 TISCO celebrated the first silver jubilee of workers participation scheme. Right from inception TISCO firmly believed in achieving success through employee involvement and participation in organisational work. To regulate employer-employee relations, two forums are consistently put to use; i.e., wage related issues through collective bargaining forum and safety, welfare, working conditions, cost saving efforts, etc., through participative forum. Since 1957, WPM at TISCO has been functioning at three levels: Joint Departmental Council (JDC), Joint Worker Councils (JWC), and Joint Consultative Council. There are over 40 joint-departmental councils operating at the base level – one to discuss production and productivity related issues and another to discuss safety and welfare matters. The Joint Worker Councils review the working of JDCs and JWCs, at periodic intervals. These councils consist of representatives of labour and management in equal number. WPM has succeeded in TISCO because the management stood behind the scheme firmly right from the beginning. The presence of single, strong union has also created a congenial atmosphere for improving relations between labour and management greatly. Management has created special task forces to oversee that the councils’ functions do not overlap. Special training is being offered to prepare workers for participative ‘give and take’ sessions. Spurred by these encouraging initiatives, workers have also come out with highly useful, cost-saving suggestions arrived at improving overall productivity from time to time. Generally over 70 per cent of these suggestions are actually implemented with great success!

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