Industrial Relations In Tata Steel: A Detailed Overview – Shubham From XLRI

Tata Steel, one of the largest employers of blue collar workers in the country, has successfully maintained cordial and productive relationships with its workforce through effective Industrial Relations management for more than a century. This is largely attributed to the Management’s concern for its employees and the pre-emptive yet symbiotic attitude of the labour unions. In Jamshedji Tata’s own words, “We do not claim to be more unselfish, more philanthropic than other people. But we believe in sound and generous business principles and regard the health and the welfare of our employees as a sure foundation of our prosperity”. Throughout the history of the organisation, the industrial relations setup in Tata Steel has set many labour standards and precedents. The structure, dynamics and orientation of IR in Tata Steel has witnessed drastic changes over the years and the same will be covered in the following sections. Also, in spite of measures such as wages regulation, participatory decision making, etc., the relationship between company and labour has not been without discord and drama.

Formation of TWU and TEU:

Trade unions were formed in Tata Steel in the early 1900’s for the same reason unions were being formed elsewhere in America and Europe – growing dissatisfaction amongst the workers and the need to have a collective say and representation for the labourers. As a result of this, the trade unions were formed as early as in 1920’s under the aegis of freedom fighters such as Netaji Subash Chandra Bose and Rajendra Prasad, to name a few. The formation of trade unions was given further impetus in the freedom struggle against British colonialism. One of the earliest trade unions, Tata Workers Union (also alternatively known as Jamshedpur’s Workers’ Union) ( was formed in 1920. TWU is politically affiliated to the Indian National Trade Union Congress (INTUC) and is the most powerful trade union at Tata Steel and Jamshedpur today. TWU further came to the forefront during the 1942 Quit India Movement. Apart from TWU, another union which holds considerable sway in the organisation is the Tata Employees Union (TEU) formed in 1935. There are two ranks of workforce at Tata Steel, i.e., officers and non-officers (workers who work in mines and plants and staff members). TWU has representation of both the classes whereas TEU consists of officers only. Though only TWU is recognized by the management for the purpose of collective bargaining, the domains of negotiation are clearly demarcated for each union.

Tata Steel and TWU:

Apart from the strike of 1956 (when Communist Party tried to usurp the Congress affiliated TWU) and the disruptions during Quit India Movement in 1942 when work was suspended, the overall scenario has been harmonious. The 1920’s unrest finally led to resolution of critical matter such as increase in wages, introduction of fringe benefits such as Provident Fund and recognition of TWU. This was marked with intervention of leaders like Gandhi and resulted in better working conditions, safety measures, etc.

Consolidation of the Movement:

Marked with appearance of leaders such as Prof. Abdul Bari, the period from 1930s to 1940s saw the union taking deep roots into the culture of organisation. It was a period marked with strikes and negotiation and resulted in revised wage structure, revised bonus schemes, systematic relationship with management, etc. It was also the period of formation of joint committees (which exist to date) between trade union and management for better communication and negotiation.

Era of Constructive Trade Union Movement:

After Prof. Abdul Badri, Shri Michael John took over as the leader of the TWU. His tenure and subsequent years saw windfall gains for the trade unions and many collaborative agreements with the management. One such as agreement was the Agreement of 1956 between Tata Steel and TWU. This agreement saw the formation of a three-tier program of association between the union and management for better dispute redressal and negotiation for terms and conditions for working conditions, benefits such as education, medical facilities,  etc. At the bottom level was the Joint Departmental Council responsible for representation purposes. At the next level was the Joint Workers Committee and at the top level was the Joint Consultative Council of Management.

Between 1920 and 2008, a total of 19 agreements have been signed between Tata Steel and TWU. TWU presently has membership of over 93% of Tata Steel employees. It is the only recognized union by Tata Steel. All benefits (financial, fringe and social) have been gained through peaceful means and there has been no industrial strike in TISCO since 1928. From a crude mechanism setup as a reactive dispute redressal mechanism almost a century back, the trade unions and the management of Tata Steel have come a long way to create an environment of harmony and progressive relationship building.

Evolution of IR in Tata Steel

Every organization has got its own organizational culture. This is definable by the modes in which the Industrial Relations Management policies are practiced. TISCO’s first and foremost value is the development of human resources and adequately compensated them. TISCO believes that when the employees are well treated, then production and productivity increase will take care of themselves. This philosophy is true as far as TISCO organization is concerned.

In Tata Steel, Personnel Management and Industrial Relations was never considered the monopoly of the personnel manager. On the contrary, it was thought that every supervisor and officer is fully responsible for looking to the welfare of the men who work with them. However, to look after the labour matters, a special officer was appointed in Tata Steel as early as in 1923.

The seed of Industrial Relations Management in TISCO was sown by the appointment in 1946 of a Deputy Agent (Personnel) and followed up a few months later by the setting up of Personnel Division under a Director 0f Personnel in January 1941. The department, however, ran into difficulties from an inadequate appreciation of its powers and functions; which, in the early stages, remained undefined.

The relations between Management and Labour in Jamshedpur may be regarded as passing through three stages. The first, roughly up to the end of the ‘First World War’ was dominated by the Tata attitude of imaginative sympathy and kindly concern for employees, but this attitude had not yet been fully translated in action . The second, which was more or less co-extensive with the troubled years after the War up to the middle thirties, was one of inadequate adjustment and some conflict. The third stage saw the transformation of an attitude into a philosophy, its detailed application to concrete situations, and the consequent improvement of relations all along the line.

From 1920s, the first stirrings of organized trade union movement were noticed in Jamshedpur. As in the case of other trade union struggles in India, the one at Jamshedpur had a political origin. The major landmarks in the trade union movement that started about this time were strikes of 1922 and 1928 in which Indian national leaders of eminence tried to intervene on behalf of workers and lead them to wards a healthy trade union movement.

Since 1938, the trade union movement in Jamshedpur has been under one union leadership. But the principal factor was the steel company which welcomed and assisted the growth of healthy trade unionism by all means. It recognized the trade union, afforded those facilities for organizing and raising funds and made all Industrial Relations decisions in close cooperation with them, as evident from the collective bargaining agreements concluded between the union and management on 4th June, 1938.

The last stage is closer association of employees with management in the nature of Joint Consultations which has existed very successfully right from its date of inception in 1956 to date.

Currently, more than 25 trade unions exist in Tata Steel. Some of them are autonomous trade unions while some are affiliated to Central trade union organizations, for example, CITU, AITUC, etc. Be that as it may, these trade unions have barely any following among the laborers and supervisors of Tata Steel. This is the essential purpose behind the non-political nature of the union. At present only one strong trade union is existing since long called Tata Workers’ Union (TWU).

One of the earliest trade unions in India, the Tata Worker’s Union (TWU), came into being in 1920 initially as Jamshedpur Labour Association (JLA) during a prolonged strike at TISCO. Since then, it has had a chequered career, characterized by occasional setbacks, full support from eminent national leaders during pre-Independence days, political pressures, and a prolonged struggle for worker’s rights. From its very inception, it has had the advantage of being headed by renowned trade union personalities like Prof. Abdul Bari and Mr. Michael John.

The TWU has 85% membership, 14792 in numbers and is the sole bargaining agent and the only recognized union in TISCO. Despite the existence of several other trade unions affiliated to central federations, TWU, which is affiliated to the Indian National Trade Union Congress (INTUC) .

Interestingly, TWU is Asia’s richest trade union valued at INR 35 crore as of 2015. The membership fee is INR 80 per month which is collected by the check-off method. The political linkage of the union is pluralistic in nature. The office bearers have different political orientations, with some being a part of Youth INTUC, while others are linked to BJP. But, the union still works in complete harmony and there are no issues as such because of these linkages.

Important attributes of TWU:

  • It has a written constitution
  • It is legally Registered
  • Affiliated to INTUC, and through INTUC it is affiliated to International Confederations of Free Trade Unions, and a member of International Metal Worker’s federation.

Shubham Chakraborty