1

A STUDY ON “INDUSTRIAL RELATIONS”

With Reference To

BHARAT HEAVY PLATES AND VESSELS LTD.

Visakhapatnam.

A Project Report submitted to JNT University, in Partial fulfillment of the

requirements for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

KANAKALA.VISHNUPRIYA

Regd. No. 08991E0019

Under the esteemed guidance of

Mr. P. RAVI KUMAR

Head of the Department , M.B.A

ST.THERESSA INSTITUTE OF ENGINEERING AND TECHNOLOGY

(Affiliated to Jawaharlal Nehru Technological University)

GARIVIDI, VIZIANAGARAM

(2008-2010)

ACKNOWLEDGEMENT

I would like to forward my sincere thanks and gratitude to P.RAVI KUMAR for availing me the opportunity to do this project work.

My deep gratitude also goes to Mr. RAJASEKHAR faculty member, who as patiently guided me to the successful completion of project work.

I would like to express my sincere gratitude to SRI S.K.MISHRA Manager (TRAINING), HR department, BHPV for his valuable support and guidance during the entire course of the project work.

I would also like to extend my gratitude to my parents and friends without whose help and advice this project would not have been possible.

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DECLARATION

I here by declare that the project report titled “INDUSTRIAL

RELATIONS” with reference to BHARAT HEAVY PLATES AND

VESSELS LIMITED submitted by me to St.Theressa Inst. Of Engg. and

Technology is genuine and bonafied work done by me and is not

submitted to any other university or published anytime before. The

project work is for the partial fulfillment of the requirement for the

award of M.B.A, degree by the JNTU KAKINADA.

(S.K.MISHRA)

SIGNATURE

Station: Visakhapatnam

Date:

3

CERTIFICATE

This is to certify that Ms. KANAKALA VISHNUPRIYA

Student of final year MBA bearing Regd. No.08991e0019 had

submitted the project report entitled “A STUDY ON

INDUSTRIAL RELATIONS” with reference to BHARAT

HEAVY PLATES AND VESSELS LIMITED,

Visakhapatnam, in partial fulfillment of the award of

degree of MASTER OF BUSINESS MANAGEMENT in

St.Theressa inst of engg& technology, Garividi.

SIGNATURE

FACULTY MEMBER

Station: Visakhapatnam

Date:

4

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I N D E X

CHAPTER-I: INTRODUCTION

INTRODUCTION OBJECTIVES OF STUDY NEED FOR THE STUDY SCOPE OF THE STUDY METHODOLOGY LIMITATIONS

CHAPTER-II:

INDUSTRY PROFILE COMPANY PROFILE

CHAPTER-III:

THEORITICAL FRAMEWORK OF THE STUDY

CHAPTER-IV:

ANALYSIS & INTERPRETATION OF THE STUDYCHAPTER-V:

SUMMARY FINDINGS SUGGESTION

BIBILIOGRAPHY

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CHAPTER-1

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INTRODUCTION

Out of all the Human Resources Management

problems that have emerged on the cooperate forefront in recent

times; the problem of Industrial Relations has achieved more

prominence. The increased popularity of this aspect of Human

Resource Management is due to one single factor that it deals with

people who are the base of industry a class of people that makes

things to happen.

The term Industrial Relations refers to “Industry” and “relations”.

According to ID act 1947 Industry means systematic activity carried

on by cooperation between an employee and his workmen for the

production of goods or services with a view to satisfy human wants or

wishes(not for spiritual needs). Relations mean the relation that exists

between the employee and his workmen .The term Industrial

Relations mean that cooperative relationship which exists between

the employee and the employees. According to I Henry Richardson

Industrial Relations may be referred as an art of living together for

purposes of production. Industrial Relations are that part of

management which is concerned with the manpower of the

enterprise. Industrial relations have a very important concept of the

science of management because it deals with the man power of

enterprise.

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With Growing prosperity workers have organized their own

trade and thus gained a bargaining power enabling their rights in the

industrial society.

Industrial Relations is concerned with the

relationship between management representing the holders of capital

and trade unions representing the holders of harbor power regarding

the employment, unemployment, conditions of employment &

unemployment and conditions of work.

These industrial relations differ from one country to other

country .The type of Industrial Relations in a country depends upon

the technological advancement, employment opportunities, type of

trade unions ,Government legislation’s and economic conditions.

Coming to India, which is rapidly transforming from

the agrarian system to Industrial system. The country with its vast

population has very less percentage of working class and out of this

only one fourth is organized. But the relations that influence such a

small segment of workers have a far reaching implication not only on

the attitude of un-organized workers but on economy as a whole.

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SCOPE OF THE STUDY

Though the scope of field study is very vast, keeping in view the

availability of resources and time factor, present work is confined to a

single unit. The present study also specific in that, it aims at studying

how industrial unit is organizing the manpower and administrating

them towards achieving organizational goal. The present study aims

at making an elaborate analysis of different functions in the area of

personal administration and industrial relation.

The scope of this study is confined to BHPV-Vishakapatnam.The

data have been elucidated in the following areas:

Organization structure and functions of the personnel

department industrial relations department.

Positive aspects of industrial relations, which broadly collect

collective bargaining, and labour management co-operation.

Grievance handling and disciplinary actions.

Trade unions and its relationship with management.

OBJECTIVES OF THE STUDY

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The study has two co-equal objectives:-

1. To have knowledge about practices of

organization in field of personnel management

and industrial relations.

2. To get overall experience of an organization, it’s

day-to-day problem and the experience of a

personal executive in a company. In a broader

sense the present study enables the student to

understand.

Organization structure and internal organizations of

personal department.

Functions of industrial relation department.

Functions and duties of personal department.

Management culture and style.

The causes consequences and techniques of solving

disputes.

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Handling of day-to-day grievance of workers.

Trade unionism & collective bargaining.

Thus, both theoretical and practical knowledge will help

one to understand about the subject, the whole edifice of the

organization in which the study has been conducted.

NEED FOR THE STUDY

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The development of any organization depends on good

industrial relations, which involved both management and workers

until and unless there is commitment from both sides good industrial

relation cannot be achieved.

Every organization faces a problem in maintaining good

relations; this may due to man, money, machinery and material,

labour unions, working environment, etc. Poor industrial relations

adversely effects the industrial profile, labour, community in particular

and eventually the nation’s economy.

Coming to Bharat Heavy Plates & vessels a public sector unit,

study of industrial relations at BHPV is very helpful to me to get

experience on industrial relations.

METHODOLOGY OF THE STUDY

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For investigation and acquiring scientific knowledge about

any problem situation or subject, the researcher has to make

out the methodology of study, which refers to the body of

methods or techniques using conducting the study. To make

the present study more scientific the following methodology

has been adopted.

METHOD OF DATA COLLECTION:

For the present study the methods of research utilized are:

Historical method

Survey method

In historical method it includes personal bulletins, personal

policy book records and documents applied by them, but when in the

case of survey method it includes that the data collected from

schedules and questionnaires.

SOURCE OF DATA COLLECTION:

Source of data collections are generally two types.

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They are:

Primary sources of Data collection

Secondary sources of Data collection

In primary sources the data should be collected from

various resources like management representatives, union

representatives and workers and random sampling bases

and also questionnaires, asking questions.

In secondary it includes the records and

documents applied by them. The tools and techniques used

for data collection were with the help of structural scheduled

questionnaires.

LIMITATIONS OF THE STUDY

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While conducting the research work the researcher has to face

some or other difficulties. The present study does not escape from it.

The limitations are as follows.

The time allowed for data collection was about two

months it is difficult to get all the information with in

the short span of time.

BHPV-Vishakapatnam being a Heavy Plates &

Vessels Manufacturing unit, most of the data are

kept confidential as per ‘official secret act 1923’.

The hindrances before the researcher was most of

the executives as well as the workers were busy

with their normal work.

Sometimes the executives opine from their own

personal experiences while the workers, union

office bearers gave information from their angle but

not as per the demand of the study.

Finally the company is big concern and has a huge

records & data and the researcher has to carry out

his study omitting many of the cases and records.

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CHAPTER-2

INDUSTRY PROFILE

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BHARAT YANTRA NIGAM LIMITED :( Holding company)

Bharat Yantra Nigam Limited (BYNL) was incorporated in July, 1986 with

corporate office at Allahabad (UP), with the main objective to integrate, monitor

and coordinate the activities of the subsidiary companies with a view to secure

optimum utilization of resources and to provide package and turnkey services to

various core sectors. It has following 6 companies as its subsidiaries.

1. Bharat Heavy Plate & Vessels Limited, Visakhapatnam

2. Bharat Pumps & Compressors Limited, Naini, Allahabad.

3. Bridge & Roof Company (India) Limited, Calcutta.

4. Richardson & Cruddas (1972) Limited, Mumbai.

5. Tungabhadra Steel Products Limited, Hospet, Karnataka.

6. Triveni Structural Limited, Naini, Allahabad.

The total production of all subsidiary companies during 1999-2000 is anticipated

to be Rs.840 crore.

BHARAT HEAVY PLATES AND VESSELS LIMITED:

Bharat Heavy Plates & Vessels Limited, (BHPV) was set up in the year 1966 for

catering to the requirement of equipments for core sectors, such is, Fertilizers,

Oil Refineries, Petrochemicals, etc.

The company has 3 product divisions namely, Process Plant Division,

Cryogenics Division, and Boiler Division. The company is radually shifting its

emphasis, from mere manufacturing and supply of equipment to system sales.

The Company has entered into MOUs, on a case-to-case basis, with world

renowned companies for transfer of technology.

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The production of the Company for the year 1999-2000 is anticipated to be

Rs.255 crores.

BHARAT PUMPS & COMPRESSORS LIMITED:

Bharat Pumps & Compressors Limited, (BPCL) was incorporated in January,

1970 at Naini, Allahabad. The Company is catering to the needs of sectors like,

oil, fertilizer, chemicals etc. For various types of pumps & compressors. The

company became sick and was referred to BIFR. The company’s BIFR

sanctioned revival plan is under implementation involving fresh infusion of funds

by Government to the extent of Rs. 15.75 crores with financial restructuring of

Rs. 81 crores.

The Company is likely to end the year 1999-2000 with a production of Rs. 45

crores.

BRIDGE AND ROOF COMPANY (INDIA) LIMITED:

Bridge & Roof Company (India) Limited (B&R) was initially a subsidiary of Blamer

Lawry & Co. Ltd. Subsequently, Government of India directly invested additional

equity capital of Rs.174 lakhs in December, 1978 and became a Government

company. The administrative control of this company was transferred to this

Department from Ministry of Petroleum in June, 1986. The company’s operations

cover fabrication of medium and heavy structures, civil engineering works in

respect of buildings, concrete bridges, project civil works, cooling towers,

mechanical erection of complete plants for refineries, fertilizers, chemical, steel,

aluminum, etc.

The turnover of the company during the year 1999-2000 is anticipated to be

Rs.370 crores.

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RICHARDSON & CRUDDAS (1972) LIMITED:

Richardson & Cruddas (1972) Limited (R&C) was taken over from private sector

in 1972. It has four units — two in Mumbai & one each in Chennai and Nagpur.

The Company became a subsidiary of BYNL with effect from 2h1 April, 1987.

The product profile of the Company covers steel structures, transmission line

towers, industrial machinery, chemical machinery, refrigeration equipment, etc.

The company became sick and was referred to BIFR. A revival plan sanctioned

by BIER is under implementation involving financial restructuring of Rs. 110

crores. The company earned profit for the third successive year in 1998-99. Its

production during the year 1999-2000 is likely to be Rs. 105 crores.

TRIVENI STRUCTURALS LIMITED:

Triveni Structural’s Limited (TSL) was incorporated in July, 1965. The Company

is primarily engaged in the manufacture of heavy steel structural products such

as tall towers & mast for power transmission, communication and T.V.

broadcasting, hydro mechanical equipment, pressure vessels, etc. The Company

became a subsidiary of BYNL in April, 1987.

The company became sick and was refered to B. B sanctioned revival plan is

under implementation involving fresh infusion of funds by Government to the

extent of Rs.29.22 crores with financial restructuring of Rs.47 crores. The

progress of implementation of the sanctioned revival plan has been taken up for

review by BIFR. The production during the year 1999-2000 is anticipated to be

Rs.30 crores.

SECTORS SERVED:

Oil and gas

Petroleum

Petrochemical and refineries

Steel coal and mining

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Thermal hydel and nuclear power

Civil Engineering and construction services

Rail and road Bridges

Mass transportation including Railways

Highways and Roadways

Chemicals and sugar plants

Water and sewage treatment

Communication and media

Space Technology

Bharat yantra nigam ltd today is one of the most versatile engineering groups in

the country. The services rendered by it ranges from concept to commissioning.

It commands high-tech manufacturing facilities, backed by strong design and

research and development systems. It is equally strong in project execution

including construction and erection.over 30 collaborations with world market

leaders give it a distinct technology edge.

INDUSTRY OVERVIEW: ENGINEERING

The engineering sector is the largest segment of the overall Indian industrial

sector. India has a strong engineering and capital goods base.

The important groups within the engineering industry include machinery &

instruments, primary and semi finished iron & steel, steel bars & rods, non-

ferrous metals, electronic goods and project exports. The engineering sector

employs over 4 million skilled and semi skilled workers (direct and indirect)

The sector can be categorized into heavy engineering and light engineering

segments. Heavy engineering segments forms the majority of the engineering

sector in India. In the year 2003-04, out of the total engineering production of

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US$ 22 billion, the heavy engineering market contributed over 80 percent with

the light engineering segment accounting for the remaining.

India has a well-developed and diversified industrial machinery/capital base

capable of manufacturing the entire range of industrial machinery. The industry

has also managed to successfully developed advanced manufacturing. The

industry has also managed to successfully developed advanced manufacturing

technology over the years. Among the developing countries, India is a major

exporter of heavy and light engineering goods, producing a wide range of items.

The bulk of capital goods required for power project, fertilizer, and cement, steel

and petrochemical plants and mining equipment are made in India. The country

also makes construction machinery, equipment for irrigation project, diesel

engines, tractors, transport vehicles, cotton textile and sugar mill machinery.

The performance of the engineering sector is linked to the performance of the

end user industries for the sector. The user industries for engineering include

power utilities, industrial majors (refining, automotive and textiles), government

(public investment) and retail consumer (pumps and motors). The engineering

sector has been growing, driven by growth in end user industries and the new

projects being taken up in the power, railways, infrastructure development,

private sector investment being taken up in the power, railways, infrastructure

development, private sector investment field’s etc. Many factors contribute to

growth of engineering sector in India.

THE KEY GROWTH DRIVERS ARE:

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The growth of the key end user sectors In India. For example, the

domestic sales of automobiles have growth at the compounded annual

growth rate of around 14 percent over the past four years.

Government emphasis on power and construction sector has increased

for the past few years and thus increasing the demand for capital goods.

Further, India is being preferred by global manufacturing companies as an

outsourcing destination due to its lower labour cost and better designing

capabilities. Engineering companies thus have a huge potential for direct

exports and outsourcing.

Among developing countries, India offers the best combination of low costs,

availability and skills and capabilities of manpower for the engineering sector. In

terms of availability and skills, India produces over 500 phds, 200,000 engineers,

300,000 non-engineering postgraduates and 2,100,000 other graduates each

year, thereby ensuring a steady supply of qualified manpower for the sector. In

order to leverage India’s intrinsic technology strengths and the vast pool of highly

qualified software professionals, ABB has set up a global corporate R&D center

in Bangalore, Which focuses on industrial IT development and deployment. It

also helps maintain and support a rang of software intensive products and

partners with ABB R&D centers as well as business areas within the group. This

was the first such center to be established outside outside the US and Europe.

The combination of ABB’s global know-how and India’s qualified people enables

the Indian subsidiary outdoor circuit breakers and magnetic actuators. It also

exports several other products including transformers.

The Indians engineering industry is highly competitive with a number of players in

each segment. A large number of multinational companies such as Cummins,

ABB and Alfa Laval have also entered the industry. The intense competition has

led to Indian players developing improved capabilities that have made them more

competitive.

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Heavy Engineering

Granite machinery

Crushers induction furnaces

Tea processing machinery

Tobacco threshing

Air pollution

Milling equipment

Portable generator sets

Lifts

Injection molding

Diesel engines

Compressors

Gas turbines

Steam turbines

Fork lifts

Chemical tanks

Earth moving equipment

Material handling equipment

Hydro power equipment

Farm implants

Crushers

Industry and services

Heavy Industry

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Heavy Industry in India comprises of the heavy engineering industry, machine

tool industry, heavy electrical industry, industrial machinery and auto-industry.

These industries provide goods and services for almost all sectors of the

economy, including power, rail and road services for almost all sectors of the

economy, including power, rail and road transport. The machine building industry

caters the requirements of equipment for basic industries such as steel, non-

ferrous metals, fertilizers, refineries, petrochemicals, shipping, paper, cement,

sugar, etc.

Heavy Electrical Industry

Heavy electrical Industry encompasses important industry sectors including

power generation transformers, switchgears and relays. The performance of this

industry is closely linked to the programme of the country. The government of

India has an ambitious mission of’ power for all 2002’. As per working group on

power for 11th plan, a capacity addition of 72000 MW is required. To reach wheel

power, an expansion of the regional transmission network and inter regional

capacity to transmit power would be essential. This will stimulate demand for

heavy electrical equipments.

There is a strong manufacturing base for the manufacture of heavy electrical

equipment in the country. The technology available in India is almost at par with

that in the International market barring few areas of high voltage lines. However,

items like CRGO steel and amorphous cores for low loss transformers are

imported.

The present buoyancy in the India economy would create demand for electrical

products through industrial growth and general economic development. The

power sector reforms will create large business for power sector equipment

manufacturers and service providers. In the current favorable market scenario,

the electrical industry can certainly look forward to growth.

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Turbines and generator sets

The capacity established for manufacture of various kinds of turbines, such as

steam and hydro turbines including industrial turbines, is more than 7000 MW per

annum. Apart from BHEL which has largest installed capacity, there are other

units in the private sector who are manufacturing turbines for power generation

and industrial use. The manufacturing range of BHEL includes steam turbines,

Boilers, generators up to 500 MW for utility and commercial cycle application and

is capable of manufacturing steam turbines with super critical steam cycle

parameters and matching generators up to 660 MW size. Facilities are also

available for 1000 MW unit size. BHEL has the capacity to manufacture gas

turbines up to 260 MW.

The A.c.generator industry in India is adequately catering to the alternative

power requirement of large and small industries, commercial establishments and

domestic sector. Domestic manufacturers in India are capable of manufacturing

AC generator right from 0.5 KVA to 25000 KVA and above with specified voltage

rating. The export and import figures for the years 2006-2007 were around

Rs.2100 crores respectively.

Boilers

Boiler is a pressurized system in which water is vaporized to steam, the desired

end product, by heat transferred from a source of higher temperature, usually the

products of combustion from burning fuels. Steam thus generated May be used

directly as a heating medium, or as the working fluid in a prime mover to convert

thermal energy to mechanical work, which in turn may be converted to electrical

energy. Although other fluids are sometimes used for these purposes, water is by

the most common. BHEL is the largest manufacturing of boilers in the country

accounting for around two thirds of market share. It has the capacity to

manufacture different types of boilers including super thermal boilers, utility

boilers and other industrial boilers. The export and import figures for the year

2006-07 were Rs.395 crores and Rs. 98 crores respectively.

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Transformers

A transformer is a voltage changer. The health of transformer Industry depends

largely on the power generation and transmission sector. The major user of the

industry is the state electricity Boards and industries. The transformer Industry In

India has developed for over 50 years and has a well matured technology base.

It has the technology to manufacture wide range of power transformers,

distribution transformers and special transformers for welding, traction and

furnances etc. Energy efficient transformers with low noise level are also being

developed to meet international. The export and import figures for the year 2007

were Rs.2923 crores and Rs.2523 crores respectively.

Switchgear and control gear

Continuous power supply is crucial requirement not only for industry but also for

every other use of electricity. Switchgear and control gear are indispensable both

in transmission and distribution of power. The Indian switchgear industry is

manufacturing entire range of circuit breaker from bulk oil, minimum oil, are blast,

vacuum to sulphar hexafluoride as per standard specification. It is estimated that

the present size of the switchgear market is more than Rs.4000 crores. The

export and import figures for the year 2006-2007 were Rs.1464 crores and

Rs.2322 crores respectively.

Heavy Engineering Industry

The department endeavors to promote international cooperation in the field of

heavy machineries, Heavy Industries, capital goods and Auto sector and the

range of equipment manufactures includes crushing and screening plants,

coal/ore/ash handling plant and associated equipment such as stackers,

reclaimers, ship loaders/ unloaders, wagon tipplers, feeders etc.catering to the

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growing and rapidly changing needs of the core industries such as coal, cement,

power,port,mining,fertilizers and steel plants.

International cooperation

Keeps itself abreast with WTO matters, bilateral/multilateral agreement and other

issues concerning the department. To promote economic co-operation at

international level, meeting are arranged at senior officer/minister level. India has

free Trade Agreements (FTAs) with organizations/countries such as ASEAN,

BIMSTEC, and Singapore.

Thailand and EU etc. The department protects the interests of concerned

industries by suggesting the retention items in the negative list.

Recently, suggestions were made for retention of certain items relating to Auto

and machine tools in finalization of India’s negative FTA: and India Singapore

comprehensive economic cooperation agreement (CECA). The views on

machinery and Auto sector for the meeting of committee on rules of origin (ROO)

in WTO, Geneva have also been conveyed to the department of commerce.

A formal India-Czech joint working group (JWG) has been constituted in terms of

protocol of India-Czech joint committee meeting (JCM) of department of

commerce and joint secretary, Heavy Industries as co-chairman of JWG from

Indian side.

A beginning has been made and heavy Engineering Corporation Ltd., Ranchi

(HEC), has sought assistance from M/S viktovice heavy machinery, Prague for

submitting offer to Bokaro steel plant against their tender for manufacture and

supply of 8Nos ladle cars. HEC will also be participating in various tenders in

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India on the basis of technology and association of companies of Czech Republic

viz M/s Skoda Machine tools; M/s Unexon, on case to case basis and their

association will be sought before submitting the bids.

As per the agreed minutes of 10th session of India- libya joint commission held on

12th july,2007,based on BHEL offer, general Electric company of libya(GEFL)

have signed a contract with ECCO (An Indian Libyan joint venture) for the

mountain Extension and in turn, ECCO and BHEL also signed a contract for

execution of the project by BHEL.

COMPANY PROFILE

Incorporation of the company 1966

Primary objectiveTo manufacture custom built capital equipment for the process industries such as fertilizers, petrochemicals, petroleum refineries, chemicals etc.

Technical collaboration provided by M/s SKODA EXPORT,Czechoslovakis

Commencement of construction 1968

Completion of construction 1971

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Commencement of production 1971

Initial product costRs.17.5 corers

Initial product mix Heat exchangers, columns, pressure vessels,structure,piping etc

Installed capacity 23,210M.T

BHPV’S MISSION

The organizational mission of BHPV is to supply projects, systems, equipment

and services to the process industry and help the country in achieving self-

advance in this field.

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Corporate objectives

To own core sector plans downstream petrochemical plants to run the business.

To develop capability to build equipments like CNC Gas cutting and CNC laser

cutting.

To develop capability in project consultancy, computer software and other

peripheral service.

To achieve a leading position in research and development in different filed of

engineering and technology in the areas of work related to the business so as to

provide adequate Technology backup for the business.

To strive for total self-reliance through import substitution by research and

development and Indigenization of Equipment.

To achieve optimum utilization of capacities installed.

To develop export markets for products and services with a view to earn at least

to the foreign exchange component of imported materials.

To start joint ventures with reputed foreign parties with in India and abroad.

To develop export markets for products and services with a view to earn at least

to the foreign exchange component of imported materials.

To start joint ventures with reputed foreign parties with in India and abroad.

To develop a team of experts consisting of engineering quality control production

erection and commissioning to make available consultancy services so as to

guide and supervise performance of other companies.

To make up overseas operation of the plants by installing, maintaining and

requirements BHPV.

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To develop infrastructure facilities of the fabrication shop to shift to shift to high

tech areas by providing the latest CNC machines in all the areas and off-laid low-

tech equipments.

To earn fair and return of capital employed in order to generate adequate internal

Resource to finance growth of the company.

HEAD OFFICE: - Visakhapatnam, Andhra Pradesh

Branch office: - Mumbai, Calcutta, Chennai, Hyderabad, New Delhi and

vadosara

Bharat heavy plates and vessels Ltd, it is a public limited company. It is a job

order/ shop production industry. According to customer specifications and

requirements it produces various products.

Fore seeing the country’s need for fabricating of an exclusive factory with the

main object of reducing dependence on foreign suppliers and become self

sufficient over selves. Thus the birth of BHPV LTD in the year 1966 to meet the

demands of process equipment for core industry like fertilizers, petrochemicals,

petroleum and other chemical industries initially.

BHPV Ltd using different types of materials manufactured and supplied several

built equipments such as pressure vessels, heat exchangers, columns, internal

trays etc. After executing some important orders, BHPV Ltd gained full

confidence of customers which cleared the way to enter the line of cryogenic

filed, pulp cooking plant, evaporation plant and industrial boilers on a total

turnkey basis which of later years helped in augmenting turnover of the company

and increasing profitability.

In India these heavy engineering industries occupy a crucial role in its economic

development in view of the huge investment as well as the critical importance to

nation. These industries are mostly confines to the sector only.

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BHPV Ltd is the largest fabricator of process equipment in India for the

petroleum, chemical and allied industries. It is fully owned by the government of

India and is managed by an autonomous board of directors. Situated in the city of

destiny of Visakhapatnam on the western see coast of the Deccan plateau,

BHPV Ltd is accessible by road, rail, sea an is well connected to all metropolitan

cities by air.

M/s BHARAT HEAVY PLATES AND VESSELS LTD Visakhapatnam is a public

sector undertaking. M/s BHPV Ltd has been selected for the study. The topic

selected is “A study on the management of working capital” with reference to M/s

BHPV LTD.

Bharat Heavy plates & vessels Ltd., started off in 1966 as fully owned

government company for design, manufacture & supply of capital equipment

required for process industries in the core sector such as Fertilizers, oil refineries

& petrochemicals etc.

Sri D. sanjeevayya laid the foundation stone, the then minister of industry on 8 th

Jan 1967 in Visakhapatnam. It comes under the preview of the department of

Heavy Industry, ministry of Industry. With the technical collaboration of M/s

SKODA Export company of and for the design & manufacture of various process

equipments. BHPV became a fully owned subsidiary of Bharat Heavy Electricals

Ltd...

Licensed installed capacity is 23210MT. The initial capital outlay is Rs.17.5

crores. The product mix included heat exchangers, columns, and pressure

vessels, strong vessels, piping etc. During the year of it commercial production

i.e. 1971-1972 the turnover was just Rs 5 Lakhs. Now BHPV has crossed the

turnover of 200 crores.

HISTORY OF BHPV

Licensed to start construction of plant at Visakhapatnam in 1966, BHPV

confronted many obstacles such as water problems, frequent power cuts both at

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initial stage as well as the time when construction was going on .In spite of all

those obstacles the civil and structural work completed to a major extent by the

end of 31st March, 1967. The licensed and installed capacity is 23210MT. The

initial capital outlay being Rs.17.5 crores.

Later after completion of installation work had received orders for the 1st time

from M/s BOKARO steel plant and Fertilizer Corporation of India Ltd., for

fabrication and supply of equipment. The factory at initial stages had suffered a

loss in fabrication and delivery of factory was scheduled to go into production

initially in july, 1967, but due to backlog of some uncompleted construction work

the minister of state for steel and heavy engineering inaugurated the initial

production in 1970 where some production facilities has already been

established by installation of fabricating machinery like bending rolls, welding

equipment etc.

During the first year production, the company has incurred a loss of Rs 27.47

lakhs mainly due to incidence of fixed expenditure apportion-able to production

like establishment, depreciation etc. The same loss position was continued till

1978-1979. The continuous losses put BHPV far from profiteering companies.

The existence of excessive accumulated interest on loan taken from GOI

resulted in heavy loss to the company. In 1978-1979 the company had suffered a

loss of Rs 538 Lakhs due to incidence of delayed delivery of equipment,

excessive increase in cost of imported raw materials and other administration

costs. In later years the situation was improved through collective and

expeditious efforts of employees of the company.

REASONS FOR SICKNESS OR SUB-OPTIMAL PERFORMANC

Operational Issues

Order booking:

The Company was performing with marginal profits until 2000. Due to

globalization, the company started facing problems in normal business

34

operations from 2001. Due to low order bookings resulted in to huge losses.

However present order book position is improving.

Interest Burden on VRS loans:

The Company implemented VRS with the loans from Government of India and

2255 employees were relieved up to 2002. Then onwards the company

burdened with huge interest on these loans, which severely affected

profitability of company in the years 2004-05, 2005-06, and 2006-07.

Financial crisis:

The company has been facing financial crisis, during the last few years. The

bank accounts with consortium of bank have become NPAs. In spite of

improvement in the present order book, the company couldn’t, execute these

orders because of liquidity crisis.

The Bankers are not allowing any kind of operations, which include non-fund

based facilities like opening of letter of credits issues of bank guarantees this

further worsening the situation of the company.

The company is also not in a position to quote for new orders in certain cases

due to non-issuance on “Solvency certificate” Which is perquisite in pre-bidding

stage.

Management issues

The company is one of the six subsidiaries of BHARAT YANTRA NIGAM

LIMITES, the holding company, At corporate level the company’s affairs are

managed by eh Board consist of full time managing director and CMD,BTNL

as the chairman of the board. In addition, 3ex officio Directors, one director

35

from DHI (administrative ministry) & 2 nominated directors also constitute the

Board.

The following vacancies have arisen due to natural separation and needs to be filled:

position Present status

M.D GM as CGM(I/C) as an addl.Duty

CGM(FIN) GM(FIN)

CGM(PP Engg&Commercial) GM(FIN)

CGM(Cryo.Engg&commercial) GM(I/C) On extension

CGM(HR) GM (I/C) On extension

CGM(ES) GM(I/C)

Company secretary CS(I/C)on extension

The above vacancies are to be files immediately to strengthen the top

management of the company for achieving the projected operational results and

also the long-range viability of the company.

Technology & Market Issues:

36

The present plant & machinery & infrastructure utilizing by the company is of 40

years old and have been fully depreciated. Therefore, it needs up- gradation

to cope up with present technological developments. At present the

internal lead time is high when compare to competitors and needs

computerization by going in LAN with Centralized control system to reduce

the internal lead time. Similarly in the areas of engineering the lead time required

for design and drawings is to be reduced which requires implementation of

sophisticated process design software.

Adverse Market Condition

The survival of any company primarily depends on its order book. However, due

to Liberalization and globalization, the company faced stiff competition from

multinational companies. Lump Sum turnkey (LSTK) concept adversely affected

the companies’ order book. For Quoting for LST projects, the company is not

eligible despite the capabilities to execute the project in conventional

manner.

Because of all above problems, the company incurred huge losses in 2002-03

and 2003-04 and the entire net worth of the company got eroded. As the net

worth of the company got eroded fully, the company was referred to BIFR as per

the act in 2004.

Manpower realization

Implementation of VRS:

37

In order to reduce the manpower cost, the company has been implementing

voluntary retirement scheme and 2255 employees have left the company on

VSRS. The manpower costs have been substantially reduced from Rs 61 crores

earlier to Rs 30 crores per annum now. However, it is still high for the present

level of production, which is very low. Moreover, BHPV is also incurring huge

interest burden on loans on account of VRS given earlier, which is severely

affecting the profitability of company.

Roll back of retirement’s age:

In the process of manpower restructuring, the company had reduced the

retirement age from 60 to 59 years during the 2001 in order to reduce the

manpower cost and to improve efficiency.

Product diversification

The company has undertaken several EPC contracts on EPC/LSTK basis at

various locations in India and abroad.

The company R&D department has developed technology for manufacture of

compact heat exchange and on Board oxygen Generating system (OBOGS) for

the light combat aircraft (LCA) which is being developed indigenously by

Aeronautical development of this technology for the above products indigenously

by BHPV has made the country self sufficient and also saving in foreign

exchange. Therefore, the company is also expecting export market for the above

products.

38

The in house R&D is capable of developing new techniques and methods in

welding of special materials.

Improvement in marketing

The steps taken by the management in improving marketing are not sufficient to

meet the present requirements. Therefore, the Regional offices are to be

strengthened to improve the marketing activities and for close monitoring with the

customers for their requirements.

Attempts at optimization of Resources, Etc.

AS the order book is low, the capacity utilization is less when compared to the

installed capacity; attempts are made to book more orders for effective utilization.

Attempts are made to reduce the manpower costs by giving VRA.

Attempts are made to reduce consumption of power, water, etc. In order to

reduce overhead costs.

Attempts are made to develop compact heat exchangers for LCA, by utilizing

existing R&D facilities.

PROPOSED REVIVAL PACKAGE:

Details of proposal / summary or recommendations:

39

Cash infusion:

A amount of Rs 380 crores is required form government of India-Rs 225 crores in

the form of grant for discharging of pressing liabilities, Rs 80 crores in the form of

loan for discharging of creditors and other customer related liabilities and balance

of Rs 75 Crores as equity for necessary capital investment. This will enable the

company to make its net worth positive and become viable.

Financial Restructuring:

Financial Restructuring of the company as on 31/3/2007 is to be undertaken, the

salient feature of which are as follows:-

Conversion of GOI loan outstanding as on 31/3/2007 amounting to Rs.224.80

crores, in to equity.

Waiver of interest, interest on interest and penal interest as on 31/3/2007

amounting to Rs.190.16 crores.

Interest holiday on restructured outstanding GOI loan as on 31/3/2007 for 3

years.

DIVERSIFICATION

Originally established for fabrication of process equipment.

40

As a step towards diversification signed collaboration agreement with M/s L’

Air Liquid of France in 1971 for manufacture of –

Air & Gas separation plants

Cryogenic storage systems

Further diversified into the area of industrial boilers in the range of 50 – 200

TPH in collaboration with M/s BHEL in 1981 based on the recommendation of

the working group constituted by DHI.

Entered into the area of oil & Gas Processing systems in 1990 in collaboration

with M/s B.S & B Engg. Co., USA.

COLLABORATION AND ABSORPTION OF TECHNOLOGIES

Some of the significant collaborations of BHPV entered include:

M/s BSL, France in respect of Field erected Cryogenic Storage Tanks.

M/s Delas, France in respect of Deaerators.

M/s ABB Lummus, Netherlands for Heat Transfer Systems

RESEARCH & DEVELOPMENT

Research & Development department was established in 1975 and is well

equipped with high tech equipment to cater to Applies Research and Product

Development. R&D has developed 136 Projects so far. Some of the products

commercialized include:

1. Titaning Anodes

2. Titanium Air Bottles

3. Cryo Vats

4. Individual Quick Freezing Unit

41

5. Super Insulated Piping.

6. Super Insulated Crow Storage tanks

7. D.M. Water Plants

A prestigious order for Development of Heat Exchangers for Light Combat

Aircraft (LCA) Phase-II has been received from Aeronautical Development

Agency, Ban galore.

Some of the Awards received for excellence in R&D include:

CIS Award for R&D achievement in 1992-93.

“The Chelikani Atchuta Rao Memorial Award” from FAPCCI for individual

Achievement in R&D effort in 1996 (Mr. BSV Prasad).

Subsequent Developments

Reference of BHEL

The Department of Heavy Industry asked the comments from BHEL for merger of

BHPV with BHEL. The BHEL indicated that BHEL had earlier examined the

prospects which were not found encouraging but now in the changed economic

scenario and with power plant orders on the upswing, the BHEL would like to re-

42

examine and assess the position afresh and requested for carrying out due

diligence of BHPV

After all the above developments, finally on 09.05.2008, the company was

formally taken over by BHEL, a navaratna PSU, as per the revival scheme

sanctioned by GOI.

The salient features of revival scheme are as below .

(As per the Govt. of India, Ministry of Heavy Industries & Public Enterprises and Department of Heavy Industry)

GOI will waive and write off loan and interest amounting to Rs.415.61

Crs.

43

GOI to provide guarantee amounting to Rs.250 Crs to enable BHPV to

raise bonds from the domestic market.

The entire paid up capital of BHPV to the tune of Rs. 33.79 Crs would be

transferred to BHEL at a notional value of Re. 1/-.

BHEL will takeover both the assets and liabilities (including contingent

liabilities) of BHPV as a going concern.

The takeover will entail the following concessions from the Government of

Andhra Pradesh: a) Transfer of title of land measuring 386.73 acres in

possession of BHPV as gift along with waiver of registration and stamp duty.

b)Waiver of Sales Tax arrears amounting to Rs.42.16 Crs c)Waiver of NALA

Tax of Rs.43 lakh and d)Waiver of dues towards Water Tax, Property Tax,

and Vacant Land Tax of Rs.3.96 Crs.

The consortium of Bankers has agreed for One-Time-Settlement BHEL may

take timely advantage of the offer.

BHEL will infuse at least Rs.34 Crs as additional Equity Capital and adequate

funds for up-gradation of manufacturing facilities, Capex and Working Capital.

BHEL will take over BHPV with all its employees.

DHI will assist BHEL in settling the disputed demands relating to excise,

customs, income-tax etc., on a case to case basis.

BHEL will takeover BHPV as its subsidiary and take all possible steps for its

revival. The matter regarding reconstitution of the Board of Directors is under

consideration of the competent authority.

DRAFT REHABILITION SCHEME

Submitted to BIFR.

Synergy of Business between BHEL and BHPV

44

In addition to improvement in present business of BHPV, the take over

by BHEL will have the following advantages:

Managerial and marketing support from BHEL.

Diversification into High Pressure Power Boilers.

Technological Support for new products. Financial Support for up –

gradation of manufacturing facilities, Capex and Working Capital

Requirements.

Ensured flow of new orders.

Synergy between the two organizations in view of similarity of

products/technologies.

Business advantage due to excellent Brand Image of BHEL.

Factors for revival of BHPV through takeover by BHEL

BHEL on its part has worked out the viability of the BHPV takeover, taking into

consideration the following:

BHEL to enhance the capabilities & capacities of BHPV to build upon its

strengths in the existing business of supplying process equipment to sectors like

Oil, Petrochemicals, Fertilizers etc. In addition, BHEL plans to enhance BHPV’s

capabilities & capacities in the area of industrial boilers, heat exchangers,

condensers etc. A capital investment is envisaged for the up-gradation of

required facilities. Expected growth in the market for BHPV’s products ,

especially in process equipment and cryogenics. As per Industry analysis,

orders worth Rs. 1700 Crs per annum are expected in the next five years from oil

Refineries and Petrochemical projects to flow to the engineering & fabrication

industry. With a market share of BHPV of 15% – 18% in the past in this segment,

BHPV can become more confident in addressing this market overcoming its

financial constraints by participating in some of the tenders with BHEL support.

45

As such, BHPV’s financial weakness would be mitigated once its restructuring is

completed and BHEL takes over its functioning. The Captive Power Projects

(CPP) and Industrial boilers market segment is expected to grow from around

Rs. 1800 Crs in 2007-08 to an estimated level of Rs. 2400 crs in next five years

based on projected 12 % industrial growth in the coming years. BHPV can target

a share of 25% – 30% of this market, provided market expectations on delivery

and price are fulfilled. Currently, the Trichy unit of BHEL is constrained in

targeting the industrial boilers market due to heavy load of boiler orders from

the utility segment. In this regard, BHPV can be developed as a dedicated

center for industrial boilers by BHEL. The sales turnover from this segment has

been projected to reach to level of Rs, 800 Crs by the fifth year after functional

take over by BHEL, based on factors like increased volume, better financial

capabilities leading to lower working capital borrowing costs etc.

PRODUCTION FUNCTION

BHPV  supplied  quality  process  plant  equipments, turnkey  Cryogenic, 

Combustion,  Oil & Gas Systems and  services  tailor   made  to  the  specific

46

requirements  of  the  Customers  and  to  their   satisfaction.  BHPV  has  come  

a  long  way  since  its  inception  in  1971  to   a  current   turnover  of   about 

US  $ 26 millions  with  an   eye  on  US $ 250 million  in the near future. 

 This   is   one   company   which   houses   excellent   engineering   skills, 

Asia's   biggest  fabrication   facility, uncompromising   quality   control, 

dedicated erection & commissioning  team under  one  roof,  a  combination  

resulting  in  India's  self  reliance. 

 BHPV acquired various National and International   quality accreditations  

such as ASME, LLOYDS etc.

BHPV  with  ISO 9001 accreditation  is  the  leading   EPC Company  in   South

East Asian  region  serving  following  sectors :

Refineries

Petrochemicals

Oil & Gas

Steel & Metallurgy

Power

Nuclear

Defense

Paper & Pulp

Pharmaceuticals

Cryogenics

Process Plant & Equipment

47

Boiler Plant & Equipment, Systems

Production facilities

Factory Area : 197 Acres

Total Covered Area : 90,000 sq. Meters

Covered area of Production Shops : 56,000 sq. Meters

Power Requirement : 3,000 KW from APSEB

No. of Ancillary Units : 11 Units

IMPORTANT MACHINERY:

The factory is provided with comprehensive and modern manufacturing and

testing facilities and suitable material handling equipment.

The maximum crane lifting capacity is 120 tones, but loads up to 250 tones

can be lifted with improvised

Maximum Rolling capacity is 60mm in cold condition and 170mm in hot

condition.

BHPV has the largest heat treatment furnace in India, the size being 5.5

meters width, 5.5meters height and 36.5 meters long. One more furnace of

200 Ton capacity and 15mtrs. Bogie length has been added.

48

Other critical equipment available with BHPV is Deep Drawing Hydraulic

Press of 1600T capacity.

Single Spindle CNC Deep hole Drilling Machine with Gun Drilling

attachment and 2Nos. CNC drilling machines which can employ

conventional drills. Another CNC Deep hole drilling machine has been

installed recently by HMT

A number of Welding Rotators of capacity up to 250 Tones.

Welding equipment such as manual Arc, Sub merged Arc, TIG, MIG,

Plasma including the latest high productive welding equipment such as

Twin Head submerged arc welding, and Bi-cathode TIG welding.

Tube Fining Machine.

A number of vertical and horizontal boring machines with a maximum

capacity of 5 meters dia and 200mm spindle dia respectively.

Different types of Non-destruction Testing Equipment.

Well equipped Physical and Chemical Laboratories.

ABUMPER OFFE-PROCESS EQIUIPMENT

49

BHPV has manufactured various types of pressure vessels, columns, heat

exchangers, storage vessels spheres etc. for a host of applications.

Pressure Vessels & Columns From multilayer construction with design pressure of 332 Kg/sq. cm to simple low

and medium pressure columns.BHPV has manufactured Columns of length up to

90 meters and weight up to 450 M.T with a Pressure range form vacuum to 55

Kg/cm2. With the backup of experienced engineers and a host of heavy capacity

cranes and other equipment, BHPV undertakes site fabrication and erection of

heavy equipment of any size and weight. The pressure vessel range includes

Agitator Vessels, Jacketed Vessels and Autoclaves with limpet coils.

Shell & Tube Heat Exchangers

From medium to high-pressure heat exchangers with test pressures as high as

450 Kg/cm2 and temperatures ranging from - 65˚C to 900˚C. Almost all types of

tubular exchangers for practically every requirement in chemical, fertilizer,

petrochemical, refinery and heavy water plants have been fabricated and

supplied.

Air Fin Coolers

Air fin coolers of forced draft type for refineries, petrochemicals, and fertilizers.

Complete units with fans, driving systems, structural scheme, louvers and

panelling are supplied by BHPV as a package.

Fired Heaters

BHPV has full-fledged collaboration with M/s ABB Lumus Heat Transfer for

design manufacture, erection and commissioning of Fired Heaters. With the vast

experience and expertise gained in design, manufacture, and erection and

commissioning of Fired Heaters, BHPV is now in apposition to take up total

50

systems involving Heaters on Turnkey basis, encompassing Civil, Structural,

Electrical, Instrumentation and Piping.

The capabilities of BHPV include following type of Heaters.

Crude and Vacuum Heaters

Coker Heaters

Visbreaker Heaters

Catalytic Reformer Heaters

Fired Reboilers for Refining Process

Steam super heaters

Hot oil Heaters

Charge Heaters

Recycle Heaters

Start up Heaters

 

 

Storage Spheres

 BHPV manufactures Storage spheres of any size and thickness including low

temperature service. BHPV also undertakes erection and site stress relieving of

these spheres.

 

Transportation Tanks

 BHPV manufactures rail or truck mounted transportation tanks of stainless steel

and carbon steel including low temperature applications.

 

Deaerators and Feed Water Heaters

BHPV manufactures complete feed water heater systems including deaerators,

HP heaters and LP heaters and steam condensers.

51

 

Paper & Pulp

 BHPV manufactures Batch and continuous pulp digesters and multiple effect

evaporation plants.

 

Column Internals

 BHPV manufactures column internals like valve trays, bubble cap trays, sieve

trays, etc.

 

Liquefied Gas Containers

 BHPV manufactures Storage and transportation containers for LPG, Chlorine,

Ammonia, etc.

 System-oriented equipment for process plants on turnkey basis Off/on-shore skid mounted package units like Separators, Glycol Dehydration

Packages, Gas Collection Modules, etc., including site fabrication and

commissioning.

 

Today, BHPV with its vast manufacturing capability can manufacture process

equipment of almost any size. In addition, it has the requisite handling facilities –

and being located at Visakhapatnam, has excellent port facilities for transporting

large size vessels. In case of extra large equipment, which cannot be

transported, BHPV undertakes site fabrication and erection.

 

Hydrocracker Reactors

 

BHPV has entered into technical back up agreement with NUOVOPIGNONE,

ITALY for design, engineering, manufacture and supply of Hydrocracker

Reactors.

 

52

NUOVOPIGNONE is one of the most qualified suppliers of heavy wall reactors

for Hydro- cracking, Hydro treating and similar refinery applications.

 

With the above back up from NP, BHPV supplied 3 No’s Hydrocracker Reactors

to Indian Oil Corporation for their 6 Million tons new grass root refinery at

Panipat.

 

The Hydrocracker reactors are highly critical equipments in the Refinery. The

reactors require heavy forgings with internal strip cladding. These are ASME U2

code stamped equipments.

 Boilers  BHPV entered into full-fledged collaboration with BHEL / CE for design,

manufacture, erection and commissioning of Industrial Boilers for process and

captive power. The technology obtained from CE, USA has been improvised to

suit Indian fuels with the support of BHEL’s vast experience and continuous R&D

effort. BHPV has fully absorbed the technology from BHEL. A large number of

highly efficient Boilers from BHEL / CE are operating successfully all over the

world. With this back up, BHPV has more than thirty such installations to its

credit.

BHPV offers steam generators of capabilities up to 200 TPH in low, medium and

high-pressure ranges with Superheat up to 540°C. These are offered in the

following patented types:

 

VP package units, oil/gas fired. VU-60 bottom supported, oil/gas fired. VU-40 top supported, oil/gas/coal (PF) fired. VU40S stoker fired.

53

The main features of these boilers are natural circulation, welded water-wall

(membrane type), front/tangential firing, and forced/balanced draft, bi-drum, to

meet varying process load demands. These are equipped with all modern

features like:

 

FSSS (Furnace Safeguard & Supervisory System) or BMS (Burner Management System)

High Energy ARC Ignition (HEA) UV/IR flame scanners Microprocessor based auto control systems with DCS Pollution monitoring instruments

 OTHER SYSTEMS The following equipments/systems are offered by BHPV along with boilers as a

part of total service package.

 

Deaerators and feed water system with HP/LP heaters, feed water pumps with motors/turbine drives, control valves.

Main steam, feed water piping and other external piping Water treatment plants Coal and ash handling systems Electrostatic precipitator/mechanical dust collector/bag filters Oil storage, pumping and heating units. Complete electrical requirement of the system. Fire fighting system. Integration of Boiler with steam turbo generators (STG) Erection and commissioning of STGs. Dynamic simulation of power plant.

WASTE HEAT RECOVERY STEAM GENERATORS (WHRSG): BHPV has also the capability to design, manufacture, erect and commission

WHRSG. BHPV executed 2 Nos 140 TPH WHRSG of dual pressure, forced

circulation with auxiliary firing using LSHS/Gas for 2 Nos. Frame-VI GE USA Gas

Turbine (30MS-ISO-rating each) located at IPCL, Vadodara. These Boilers are

designed in collaboration with HCG Netherlands, a sub-licensee of GE, USA.

54

BHPV is also geared to handle Waste Heat Boilers from the exhaust gases of: 

DG Sets Kiln off gases in Sponge Iron Plants Kiln off gases in Cement Plants, etc.

Cryogenic Plants and Equipment BHPV branched off into the manufacture of Cryogenic equipment in 1971. The

move was prompted by BHPV’s growing awareness that India’s process

industries were hopelessly dependent on imports for all Cryogenic Equipment. In

collaboration with L’ Air Liquide of France, BHPV ventured into this technology-

intensive field. In just a few years, BHPV has left its mark. In 1982, in the face of

fierce international competition, it bagged a prestigious contract from Vizag Steel

Plant to meet the entire cryogenic need of the plant.

QUALITY

BHPV is reputed for quality and workmanship of its products. BHPV has received a number of international accreditations such as –

LLOYDS REGISTER OF INDUSTRIAL CLASS I CERTIFICATE FOR FUSION

WELDED PRESSURE VESSELS

ASME U & U2 STAMPS ON PRESSURE VESSELS

ASME ‘S’ STAMP FOR INDUSTRIAL BOILERS

NATIONAL BOARD OF BOILER & PRESSURE VESSELS INSPECTORS,

U.S.A

‘R’ STAMP FOR REPAIS OF CODED VESSELS

STAMI CARBON UREA REACTORS

HALDOR TOPSOE AMMONIA REACTORS AND HIGH PRESSURE HEAT EXCHANGERS

55

ARBIAN AMERICAN OIL COMPANY PROCESS PLANTS

As a part of total quality management program, BHPV has acquired ISO

9001 certification during the year 1993-94 particularly to boost up its

exports and to be competitive in the international market.

Re-certification of ISO 9001 has been obtained in September, 1996.

In recognition of high standards of our quality, confederation of Indian

industry (CII), Southern Region, AP presented the Quality Award.

Case – to – case tie ups, BHPV entered into include:

Evaporators from M/s Ecodyne Corporation, USA

Paper & plus digesters from M/s Kamyr AB, Sweden

Gas collection modules from M/s KTO Corporation, USA

Large space simulation chamber from M/s HVEC, USA.

Primary reformer from M/s Halder Topse, demark

Waste heat boiler from Borsig, Germany

Feed water heater from delas, France.

Argon recovery unit from M/s L’Air Liquide, France etc.

Hydro cracker reactors from M/s Neo-Pignani, Italy.

Vacuum Ejector systems from M/s Korting Hannover, Germany.

56

LPG handling & storage system from M/s Noell-LGA, Germany

Ammonia storage system from M/s KTI, Germany etc.

By absorbing know-how from various world renowned collaborators, BHPV

upgraded its status from a mere fabricator of process equipment to that of an

engineering company of international repute.

PROJECT OF NATIONAL IMPORT AN EECUTED/UN

EXECUTION

S.NO. CUSTOMER PROJECT/EQUIPMENT

1. IOCL, Panipat Hydro cracker reactors-3No.s

2. IOCL, Panipat Reactor, Regenerator & Office Chamber

3. IOCL, Panipat Reformer & WHR Package

4. IOCL, Mumbai 150 MT Capacity LPC bullets

5. IOCL, Chennai Sphere

6. BOKARD STEEL PLANT,

Bokaro

Argon Recovery unit

7. NRL, Numaligarh Air Fin collers/SS Clad Vessels, Spheres etc.

8. HPCL, Visakhapatnam CDU Heater with APH System/VDU Heater

57

9. HPCL, VREP – II

Visakhapatnam

Clad/CS Columns/CS heat Exchangers etc

10. HPCL, Visakhapatnam Co-boiler

11. HPCL, Visakhapatnam Revamping of 50TPH oil & gas fired boiler

12. HPCL, Mumbai 50 TPH Boiler

13. BPCL, Mumbai Nitrogen Plant

14. Hyundai Heavy Industries, New

Delhi

Cryo Nitrogen plant

15. Space application centre,

Ahmadabad

505m Dia thermal vacuums system

16. TECHNIMONT ICB LTD.

Mumbai

Nitrogen plant

STRUCTURE OF HRM DEPARTMENT

Functions of sr.manager (P&A)

He looks after all the moments which are related to salary and wage

administration of employees.

Separate estate administration department working under him.

He looks after the time office particulars

Legal proceedings which are related to collective bargaining, disciplinary

discussions and enquiry proceedings are conducted in present of him.

Contract lobour problems, tenders, daily wages negotiation with presence

of him.

Hindi language cell is to teach Hindi to all employees.

Functions of Sr.manager HR: under him five departments are there. He

has ultimate control over the departments.

58

P&IR department’s deputy manager looks after the industrial relations and

workers problems, grievances.

Separate hospital in township, which is headed by the medical

superintendent.

Canteen Administration.

Security and five departments.

Welfare department administration.

RECRUITMENT

Objective: The rules are intended to regulate recruitment of executives,

supervisors, workers and their employees of staff category on the basis of

merit/reservation for various posts. The rules are only for consumed as restricting

the general powers of management to waive a suspend or amend these rules.

Appointment authority

The president of India, the board of directors, the chairman, the managing

director and or any other officer of the company to whom the power in this grand

have been special delegated.

Trainee

A learner recruited under any of the training schemes of the company and who is

engaged in learning and is governed by the terms and conditions laid down in the

agreement executed by him with the company excluding apprentice under this

act.

Employee:

59

Means directly employed, only person, in the company other than personnel on

deputation.

Classification of officers

Senior executives : E4 and above

Middle mangt.Executives : E2 and E4

Executives : E1

Classification of supervisors:

Senior Supervisors : S3

Junior Supervisors : S1 and S2

Classification of workmen : HSW-I, HSW-II, HSW-III

Skilled : WG-III TO WG-VI

Semi skilled : WG-II

UN skilled : WG-I

Eligibility:

Candidate for appointment must by

A citizen of India or

A Tibetan refugee who came over to India before 1st January 1962, with

the intention of prominently setting in India or a repatriate from Burma,

srilanka or East Asia, on

A person of India who is migrated form Pakistan eight the interim of

permanent settling in India.

60

MANPOWER (As on 31st March, 2010)

Workmen / Staff : 767

Staff : 249

Supervisors : 59

Executives : 263

Total : 1250

EMPLOYEE WELFARE AMENITIES

Township Area - 151 Acres

No. of Quarters - 1192

20 bed Hospital

Protected Water Supply

Underground drainage system

English medium school with CBSE Syllabus

Telugu medium school with AP State Syllabus

Special school for mentally handicapped children.

Vocational training centre for mentally handicapped

Community center for cultural activities & sports – open air theatre

facilities

VOLUNTARY RETAIRMENT SCHEME

61

The government of India had adopted a new economic policy where by is is

relaxed and in certain cases removed restriction in import and export. This

resulted in significant charges in industrial and business sector. One of the

important aspects of the liberalized economic policy is the existing voluntary

retirement scheme policy. Since the procedure under industrial dispute act 1947,

for retrenching involves a lot hurdles and compels so the voluntary scheme is

totally opposed both by hand trade unions.

FINACE FUNCTION:

FINANCE FUNCTION (DEPARTMENT) IN BHPV:

Finance is a core function of any manufacturing concern. Hardly can we find any

such industrial organization functioning after isolation of finance department.

Though this finance discipline is of recent origin, it has unique spot in the

functioning of firm’s operations. As every developing activity starts with financing

function, it has been given immense importance both by executives as well as

project authorities.

OBJECTIVES OF FINANCE DEPARTMENT:

The micro objective set to function efficiently in Finance department includes:

To avoid operations of cash credit and also to maintain adequate cash

balance.

To see that the current ratio, which reflects the firm’s liquidity positions, is

followed according to BPE norms of 1:1

The additional funds thus generated through efficient operations are

proposed to divert for payment of part of outstanding interest due on loan

taken from government of India.

The finance department of BHPV ltd., headed by the general manager. As shown

in the finace division chart.

62

State bank of India

Canara bank

Andhra bank

State bank of Hyderabad

State bank of Patiala

Oriental bank of commerce

PROFITEERING YEARS FOR BHPV

After a series of continuous loss years, BHPV for the first fine in its history, in

1979-80 has witnessed several significant events both on financial as well as

production fronts. BHPV for the first time in its years of commercial production

attained a break-even level with a marginal profit of Rs 33.09 lakhs as against a

net loss of Rs 129 lakhs projected at the beginning of the year. During 1980-81

the company for the second consecutive year, earned a net profit (after tax) rs

48.21 lakhs from its operations.

This year BHPV Ltd operations included manufacturing of very critical and

sophisticated equipment to core industries. Again in 1981-82 the company

operations resulted in a net profit of Rs 60.19 lakhs as against a budgeted loss of

Rs 20/ lakhs. Major pending interest on loan from GOI was cleared in year.

During 1982-83 BHPV reached 100% target production and resulted in a net

profit of Rs 103.71 Lakhs as against the budgeted loss of Rs 95 lakhs. With

prestigious work orders from Visakhapatnam steel plant for supply of air and gas

separation plants BHPV crossed a target production and its operations resulted

in a net profit of Rs 575 lakhs.

63

The year 1986-87 is treated to be the dark year for BHPV. Since its entrance into

threshold of profit arena, it could not achieve its set motto of beyond billion

barriers. Sinking of a ship carrying bulk of raw material and components

slackening demand for loss of Rs 170 Lakhs again. In 1987-88 BHPV’s projects

were successfully fabricated and its profit took an upward trend and its

operations resulted in PAT of Rs 290 Lakhs.

It was expected to emerge an increasing trend in the profit of BHPV for the year

1988-89. After 1987-88 profits are in decreasing trend. It got a loss of Rs 590

lakhs during 1955-96. Amidst tight liquidity conditions the company the company

has made a net profit of Rs 1.31 crores (before tax) and Rs 1 crores after tax

during 1997-98,Rs 1.23 crores PBT. Details of turnover, profitability for the period

from 1997-98 to 2005-06 are as follows.

Details of turnover, profitability for the period from 1996-97 to 2008-2009 are as follows.

YEAR TURNOVER PROFITABILITY(BEFORE

INT) (RS IN LAKHS)

1966-1997 29998 2411

1997-1998 29160 2825

1998-1999 21465 1968

1999-2000 12558 476

2000-2001 25670 2301

2001-2002 23409 2378

2002-2003 14750 14512

2003-2004 5956 10694

2004-2005 10943 3281

2005-2006 12202 -2321

2006-2007 18036 -2932

2007-2008 18030 -4492

64

2008-2009 8439 -12212

Financial restructuring

Financial restructuring of the company as on 31/3/2007 is to be undertaken, the

salient feature of which are as follows:

Conversion of GOI loan outstanding as on 31/3/2007 amounting to

Rs.224.80 crores, in to equity.

Waiver of interest, interest on interest and penal interest as on 31/3/2007

amounting to rs 16 crores.

Interest holiday on restructures outstanding GOI loan as on 31/3/2007 for 3 years

MARKETING FUNCTION

As BHPV is heavy engineering industry, there is no full-fledged department. The

marketing activities are taken by the commercial department. The chief general

manager (Engineering & Commercial) is the head boiler (Commercial) divisions.

Process plant (Commercial) look after the marketing activities of the process

plant only each of the department divisions is further divided into two groups will

look after the marketing activities.

The main functions of the marketing department in BHPV Ltd.,

Submission of pre-qualification documents and company capabilities,

enlistment with customer and consultants as an approved contactor.

Meeting customer’s time-to-time, going through newspapers and other

informative journals to asses upcoming projects and business potential of

BHPV.

65

Arrangement of Technical collaboration or process license for critical

equipments and projects with various foreign/domestic consultants.

Once the project is coming up marketing department will see the BHPV

shall qualify for the particular project by way of submitting prequalification

documents as desired by the customer and to receive the enquiry.

MAJOR CUSTOMERS

Fertilizer industry

Petroleum refineries

Steel plants

Chemical industries

Power sector

Nuclear, Defence & Space Sectors

SOME DOMESTIC CUSTOMERS

Fertilizer Corporation of India.

National Fertilizer Limited

Hindustan Fertilizers and chemicals Ltd.

Rashtriya chemical and fertilizers Ltd.

Indo Gulf chemical and Fertilizer Ltd.

Indian farmer Fertilizers co-operative ltd.

Bindal agro chemical ltd.

66

TATA chemicals and fertilizers Co-operative Ltd.

Indian oil Corporation

HPCL

BPCL

Madras Refineries Ltd.

Cochin refineries Ltd.

Indian petrochemicals ltd.

Maharashtra gas cracker complex

Indian Drugs and pharmaceuticals Ltd.

Hindustan Antibiotics

ONGC

Steel Authority of India Ltd.

Rashtriya Ispat Nigam Ltd.

MAJOR COMPETITORS

Larsen & Turbo }

GR Engg } for process plants

Lloyd steel }

I.O.L }

INOX }

L & T }

Linda, Germany }

B.O.C, UK }

Air products, USA & UK } for cryogenics & systems

KOBE, Japan }

Nippon Sanso, Japan }

HOPM, China }

67

PRAXAIR, USA }

BHEL }

L & T } for industrial boilers

BABCOCK THERMAX }

ACC Babcock Ltd. }

EXPORTS IN BHPV

Export performance:

In late seventies BHPV started its exports is sending of two standard oxygen

plants to Iran in 1977. The value of the order is 4, 10,000 dollars.

After gap of 10 years (1988) BHPV re-entered into the export market by receiving

and order from Colombo gas water company Limited, sri lanka for the supply of

Chlorine containers and another order from Buffalo and storage research center,

Vietnam for supply of cryo Bilolocal containers. BHPV also executed an order for

the transfer of technical know-how with ENGC, Algeria during 1981-86.

Exports strategies of BHPV Limited

The following strategies are followed by BHPV in order to increase their exports.

Multilabteral Aided project

68

The World Bank and other multilateral lending organization like IDA, IBRD, IADS

etc., create a vast market every year to the tune of about 37 Billions US dollars

by funding various projects.

Apart form carrying attractive business prospects, these projects enjoy high

priority in India and also get adequate support from both the executing agency as

well as the funding agency. BHPV interacts with the beneficiaries of these

programs right from the conceptual stage. It also makes use of the date available

from the EXIM bank, ECGC, and other agencies on these projects.

Consortium Approach

With the objective to step up exports in the fertilizer and chemical sector, the

government has nominated BHPV as lead agency to co-ordinate the export effort

in these sectors. The Indian consortium leader, BHPV identifies the various

business opportunities and penetrates into the market by pooling up the common

resources of these companies, which helps it in entering into the systems supply

by offering the projects in turnkey basis.

The Indian consortium for oil and natural Gas (Icon) was formed for exporting the

products and services in the hydrocarbon sector with HIL as the consortium

leader. BHPV is also a member of ICON, other being EIC, ONGC, BHEL, B&R,

Mazagon dock limited, instrumentation limited and petroleum India Limited; the

opportunities available through this consortium are fully exploited for generating

export order for BHPV.

Middle East Market

The Gulf in oil market and the subsequent fail in the revenue and other problems

have made these countries to bank on developing countries like India for their

69

technological requirements. BHPV has been concentrating on this sector and

trying to penetrate into the Market.

FUTURE PLANS

PRESENT STRENGTHS

Excellent design & Engineering capabilities.

State-of- the-Art Manufacturing facilities.

Accomplished image as a supplier of quality products in the domestic and

international markets.

High degree of Customers confidence.

Technological tie-up arrangements

Well trained and qualified work force and Engineers.

Sound work culture & harmonious Industrial relations

Extensive Computerization]

Capability to supply project& systems on turnkey basis.

Project Management skills.

FUTURE PLANS

70

To grow as an engineering, procurement and construction company.

To enlarge Export Business

To resort to extensive computerization and automation for reduction of

cycle time, improvement of quality and reducing costs.

To Forgo strategic business alliances with International companies to

derive technological and marketing advantages

To strive for continuous updating of technologies to be on par with

International companies.

To focus on human resources Development.

To change the work culture to be compatible with market demands.

After merging with BHEL the target is to make it Rs. 1000 crore company

in the forth coming five years, with a capital expenditure of Rs.236 crore

spread over three years.

Action plan for Exports

Efforts should be made to identity the business potential and penetrate into

these markets.

In view of Government policies to promote export, it should be BHPV’s

Endeavour

To increase the export business. The devaluation of he rupee convertibility

will help BHPV to be more competitive.

Agents are main instruments in generating enquiries as well business for

BHPV in the international market. BHPV should identity suitable and

influential for the target markets.

BHPV will generate more in Iran for the upcoming projects such as Arak

petrochemicals and tabring petrochemicals. Efforts should be made to finalize

agency agreement for the gulf countries such as Oman and Kuwait.

71

BHPV should make use of their collaboration with firms such as BS&B,

ALSTOM, ABB-LUMMUS etc, for generating export business wherever

possible joint bidding shall be made.

Constraints

Dependence on imports even for common materials like Boiler Quality

plates.

Port congestion adding to the delays in importing of materials.

Big burden of high interest rates on working capital while competing

with International suppliers who have the facility of very low interest

rates.

Abnormal increase in bank charges such as commission on Bank

guarantees, retirement of documents etc.

Restrictions in shipping imported materials (FOB contracts VS C&F

contracts) resulting in delays.

72

CHAPTER-3

THEORITICAL FRAME WORK OF THE STUDY

73

ON INDUSTRIAL RELATIONS

Industrial Relations is concerned with the relationship between

Management resenting the holders of capital and trade unions

representing the holders of labour power regarding the employment,

unemployment, terms of employment and unemployment, conditions

of employment and unemployment and conditions of work, Industrial

relations is a developing and dynamic concept and does not limit

itself merely to the complex of relations between the unions and

management, but also refers to the general web of relationships

normally obtaining between employees themselves. Both parties to

industrial relations have a common interest in industry, but many a

time, they are found to be pulling in different directions which lead to

industrial unrest. Therefore, it has become necessary to secure the

cooperation of both workers and management to achieve good

industrial relations.

Besides management and workers, state is another party

associated with industrial ions. The interference of government in

industrial relations through legal and administrative measures is quite

common. Thus, the area of industrial relations has been extended

relations among the state, employer and employees.

74

Definition:

According to Encyclopedia Britannica -

"The subject of industrial relations includes individual relations

and joint consultation between employers and workers at the place of

work, collective relations between employers and their organizations

and trade unions and part played by the state in regulating these

relations".

According to Dale Yoder -

"The term industrial relations refers to the relationship between

management and employees or among employees and their

organization that arise out of employment".

Major Players to Industrial Relations:

Thus, There are Three major players in industrial relations.

1. Workers and their Organizations:

The personal characteristics of workers, their "culture, educational

attainments, qualifications, skills, attitude towards work, etc play an

important role in industrial relations. Workers' organizations, known

as trade unions are political institutions. Trade unions are formed for

safeguarding the economic and social interests of the workers. They

put pressure on the management for the achievement of these

objectives.

75

2. Employers and their Organizations:

The Employers are a very important variable in industrial relations.

They provide employment to workers and try to regulate their

behavior for getting high productivity from them. Industrial unrest

generally arised when the employers' demand from the workers and

other benefits. In order to increase their bargaining power employers

in several industries have organised Employers' Associations. These

associations put pressure on the trade unions and the government.

They also participate in tripartite bodies constituted by the

government to regulate industrial relations.

3. Government:

The Government exerts an important influence on industrial relations

through such measures as providing employment, intervening in

working relationships and regulating wages, bonus and working

conditions through various laws relating to labour. The government

keeps an eye on both the trade unions and employers' organizations

to regulate their activities in the interest of the nation.

76

Indian Industrial Relations Spectrum

The spectrums of "Industrial Relations" scenario in India today

present four distinct pictures.

Scenario-1:

A sweet heart relationship scenario representing Industrial peace

and harmony characterized by

(a) Mutual trust

(b) Mere perfect collaboration and

(a) Even "collusion with unions"

Scenario-2:

A "cat and Dog" scenario, resulting in frequent conflict, work-

stoppages and strikes, lock-outs, characterized by

(a) Complete distrust

(b) Mutual blackmailing on issues and

(c) Product losses

Scenario-3:

A "Blow-hot, Blow-cold" scenario somehow pulling along

relationship characterized by

(a) Some time peace

(b) Some time conflict

(c) Most of the organizations fit into this category.

77

Scenario-4:

A "peace in the Grave" or "Marriage of convenience" situation

Characterized by

(a) Apparent peace

(b) Patching of an issue

(c) Self-out of managerial authority

(d) Constant sickness of the industry

Most of the sick Government Industries are the examples. While

certain aspects of Industrial Relations scenario have been cited above

a close examination of the" government, judiciary, a worker involved in

the Industrial relations scenario also requires proper appreciation.

The Government has also stepped in and played an important

role in establishing harmonious Industrial Relations, partly because it

has itself become an employer of millions of workers but mainly

because it has enacted a vast body of legislation to safeguard the

rights of industrial workers and management by enlisting cooperation

of both. The objectives of Industrial Relations are to facilitate good

relationship between employers and employees.

The quality of this relationship differs Company to Company,

industries and economies. These relationships are based on class

contradictions and antagonism historically born out of the social

structure, which is determined by the mode of production.

78

CHARACTERISTICS OF IR:

IR is outcome of employment relationship in an

industrial enterprise.  

IR develops the skills & methods o adjusting to &

cooperating with each other. 

IR system creates complex rules & regulations to

maintain     harmonious relations. 

The government involves shaping the IR through

laws, rules, agreements, awards etc. 

The important factors of IR are: employees &

theirorganizations,employers&theirassociations &

government                                            

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FACTORS OF IR

INSTITUTIONAL FACTORS:

It include Government policy, labour legislations, voluntary

courts, collective agreement, employe courts, employers federations,

social institutions like community, caste, joint family, creed, system of

beliefs, attitudes of works, system of power status etc..

ECNOMIC FACTORS:

These factors includes economic organization, like capitalist,

mixed etc, the structure of labour force, demand for & supply of

labour force etc 

TECHNOLOGICAL FACTORS:

It includes mechanization, automation, rationalization, computerization   etc. 

SOCIAL & CULTURAL FACTOR:

  It includes population, religion, customs & traditions of people race

ethnic group, cultures of various groups of people etc.

80

 

POLITICAL   FACTORS:

It include political system in the country, political parties & their

ideologies their growth, mode of achievement of their policy,

involvement in trade unions etc. 

GOVERNMENT FACTORS:

 It includes government polices like industrial policy, economic

policy, labour policy, export policy etc. 

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PRINCIPLES OF IR

1. Recognition of the dignity of the individual & of his right to personal Freedom & equality of opportunity.  

2. The part of the both employee, management & workers & their representatives in the exercise of the rights & duties in the operation of the Industry.  

To promote & develop congenial management

relations.

To enhance the economic status of the worker by

improving wages benefit & by helping the worker in

evolving sound budget.

To regulate the production by minimizing industrial

conflicts through state control.

To socialize industries by making the government

as an employer.

To provide an opportunity to the workers to have a

say in the management & decision making.

To encourage & develop trade unions in order to

improve the workers strength.

To extend & maintain industrial democracy.

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CHANGES IN IR

Occupation in ancient India:

In ancient times the principal occupation was agriculture, and trading.

In   this period the caste system had influence on the development

and progress of the various  industries  and  occupations. The 

concept  of caste system was originally based on the transfer of skill

and specialization which ultimately led to the standardization of

professionals.  

 Labour in medieval India:

 British are entered in India. In this period the principal occupation

was craft, painting. A large no. of occupation was also carried on by

small manufacturers and traders in their cottages mostly on

hereditary basis. A majority of artisans lived at starvation level. They

led a miserable life. 

Guilds and unions:

Shreni union is the first union that is formed by craft people at the

time of Mugal Empire. The utility of union has been stated in shukla

yajurveda samhita: “ if men are united nothing can deter them”.

Cultivators, merchants, cattle breeders, bankers and artisans worked

under the recognized rules of their unions. These unions gradually

gained strength so that the employee’s could improve unions were

helpful not only in the evolution of arts like sculpture but were

powerful centers of   arts themselves.

83

IR system:

The industrial relations machinery during the Vedic times consisted

of a madhymasi, a man of potion and influence in the society. People

in the rural community were able to solve and settle all disputes by

themselves. The village officials attended to and solved the local

problems. They were invested with judicial as well as executive

authority. His system prevailed under the Hindu government. The

unions were not only the assemblies of the employees but they were

also the institutions for maintaining cordial relations between

employers and employees. 

Early British rule: 

o The first industrial unrest in the year 1877 in the weavers

of express mills in Nagpur.

o In 1895 workers have called of for the first strike in budge

jute mill.

o The first factories act is enacted in 1881.

o The first labor association known as Bombay mill hands

association was established.

84

IR from Ist world war to pre Independence

period:

The First World War (1914-1918) gone back to their villages. After 1919 international labor organization is established.

o Trade Disputes Act 1917.o Workmen Compensation Act 1923. o Trade Union Act 1926.

 II world war: 

  In this period they give 1% share to the employees:

In 1947 INTUC formed. In 1946 INDUSTRIAL EMPLOYMENT STANDING ORDER

ACT

In 1947 ID ACT, which paid the machinery mainly to solve industrial disputes.

85

IR after Independence:

  Factories act in 1948

o To bring the industrial peace with a industrial truce

revolution in 1947(only employees).

o In 1948 – Factories Act, Minimum Wages Act, employee

State Insurance Act.

o In this only the first five years plan was formed in1951 for

bring industrial peace.

o Second five year plan several mechanism and practices

like need base and minimum base, schemes for workers

participation and management etc were incorporated.

o Third five year plan in 1962 there is a war between India

and china. In 1962 the industrial truce revolution again

brings peace in between the employees and employers.

In 1965 bonus act was enacted. In 1969 first national

commission labour under the chairmanship of

gagendragadhar.

86

  New economic policy and IR:

         In 1991 June 14th the new economic policy was started. Here increased the foreign direct investments and also increased the MRTP. 

Introduction care growth plans for workmen.

By providing regular training to employees to

minimize their obsolence.

Rationalization the workforce through internal

transfers.

Nurturing stress between union and management.

In culcating proper work, culture etc.

   IR committee

In BHPV, for maintaining industrial relations a separate

committee is there i.e., Industrial relations committee. It is

representing the members of both management and employees. The

main function of this committee is to promote a capital relation

between the employee and employer which helps in smooth running

of an organization without any disputes

87

TRADE UNIONISM

A Trade Union signifies an organization of workers engaged in

securing certain economic benefits for its members. However, this is

not the true view of a trade union. In I the modern context, trade

union's activities are not. confined to mere "securing the I economic

benefits". The purview of its activities now includes even the political

and welfare activities undertaken by it for the benefit of its members.

Trade union is a historical necessity and by product of the

Industrial revolution. For good Industrial Relations, be remember that

trade Unions play a vital role. With a view to self-protection and self-

help, labour has organized itself under employee associations and

unions. Conflict between capital and labour in Europe and American

resulted in the origin of the trade union movements.

(a)Trade Unions Definition:

The trade unions Act, 1926 defines a trade union as meaning—

"any combination whether temporary or permanent, formed primarily

for the purpose of regulating the relations between workmen and

employers or between workman and workmen, or between employers

and employers or for imposing restrictive conditions on the conduct of

any trade or business, and includes any federation of two or more

trade unions".

88

(b)Registration of Trade Unions:

Any seven or more members of a trade union can, by

subscribing their names to the rules of the trade union and otherwise

complying with the provisions of this Act, apply for registration under

the Act. The application has to be made to the Registration of Trade

Unions appointed by the appropriate Government for the State

(sec3&4). This application must be accompanied by a copy of the

Rules of the Trade Union and a statement containing prescribed

particulars.

The name under which the trade union seeks registration must not be

similar to that of any existing union (S.7). On registration, the

Registrar issues o certificate of registration in the prescribed form.

This is conclusive evidence that the said Trade Union has been duly

registered.

Trade union is a necessity and by product of the Industrial

Revolution. For good Industrial Relations, it must be remembered that

trade unions play a vital role in providing a proper work atmosphere

and congenial Industrial Relations scenario. With a view to self-

protection and self-help, labour has organized itself under Employee

Associations and Unions. The conflict between capital and labour in

Europe and America resulted in the origin of the Trade Union

Movement.

89

The following are various tools employed by the Trade Unions.

They may use one of the too, or combination of some of them in

pursuit of achievement of their objectives.

1. Financial Support:

It means the provision of a fund to insure against eventualities and be

of some encouragement to the needy workman. It also acts as a

deterrent to a worker from accepting jobs on terms which are less

advantageous to the work force.

2. Collective Bargaining:

This is useful for the workers, as their capacity to get the best in

Industry diminishes in case there are small groups, whereas the

bargaining power goes high when it is a collective and collaborative

approach. Lasting settlements can be reached through collective

bargaining and implementation also is quick and smooth.

3. Legal Approach:

Trade Unions also take the law as resort to realize their objectives.

Also they employ the usual methods of propaganda, canvassing etc.

to convince the community and the Government that the measures

suggested for addition will prove advantageous to the working class.

When such aspirations are reflected by enactment, it satisfies the

Trade Unions.

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4. Direct Action:

Implies, strikes, gheraos, procession, work-stoppages,

demonstrations etc. This should be discouraged because

it is harmful in the long run for both the employees and

employers. This leads to loss in production, strained

relations.

THE OBJECTIVES OF TRADE UNIONS:

The following are some of the aims and objectives of trade

unions to secure for the worker fairer wages in the light of the cost of

living and the prevailing standard of living.

1. To improve the worker's working conditions by securing shorter

working hours, better leave facilities, adequate social security

benefits, appropriate educational facilities and other welfare

benefits:

2. To assure the workers a share in the increased profitability of

an industrial unit by providing him payment of adequate bonus;

3. To protect the workers interest and more specifically to avoid

heir exploitation;

4. To ensure the workers security of employment by resisting

retrenchment and victimization.

5. To protect the large interest of society by aiding in the

91

improvement of trade and industry.

A Trade Union signifies an organization of workers engaged in

securing certain economic benefits for its members. However, this is

not the true view of a trade union. In the modern context, trade

union's activities are not confined to mere "securing the economic

benefits". The purview of its activities now includes even the political

and welfare activities undertaken by it for the benefit of its members.

A trade union may be defined as an organization of employees

formed on a continuous basis for the purpose of gaining diversified

benefits.

Trade union is a necessity and by product of the Industrial

Revolution. For good Industrial Relations, it must be remembered that

trade unions play a vital role in providing a proper work atmosphere

and congenial Industrial Relations scenario. With a view to self-

protection and self-help, labour has organized itself under Employee

Associations and Unions. The conflict between capital and labour in

Europe and America resulted in the origin of the Trade Union

Movement.

92

TRADE UNION MOVEMENT IN INDIA

Trade Unions, as understood today, however, originated in the

first quarter of the 20th century, although the groundwork was laid

during the last quarter of the 19th century. In Mumbai, as early as in

1875, reformers undShapurji started a movement. They protested

against the appalling conditions of the factory workers and appealed

for introduction of adequate legislation to prevent them. The credit for

laying the foundation of the organized Labor Movement in India is

attributed to Mr.N.M.Lokhande, a factory worker himself in 1884 in

Mumbai. Actually a real organized labour movement in India was

started at the end of the First World War. Rising prices, without a

corresponding increase in wages despite the employers making huge

profits, led to a new awakening. Many Trade Unions were formed

throughout India. To this was added the influence of the Russian

Revolution, the establishment of ILO (International Labour

Organization) and the All India Trade Union Congress. This speeded

up the pace of the Trade Union Movement. Following the Second

World War, there was a spiraling of prices. The workers once again

became restive. This further indirectly strengthened the movement in

India.

93

TRADE UNIONS IN BHPV:

Under the trade unions act 1926, the term trade union means

any combination whether temporary or permanent, formed primarily

for the purpose of regulating the relations between workmen and

employers or between workmen and workmen or between employees

and employers.

NUMBER OF TRADE UNIONS

In BHPV there are 13 trade unions are there they are:

1.BHPV mazdoor sangh

(Regd No.1686/98)

2. BHPV National Employees Union-recognised union

(Regd. No. 237/74)

3.BHPV Employees union

(Regd. No.1517/96)

4.BHPV Karmika sangh

(Regd. No1324/93)

Affiliated to BMS

5.BHPV Democratic employees union

(Regd. No.1583/96)

Affiliated to IFTU

6.BHPV Janatha Employees Union

(Regd. No 1613/97)

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Affiliated to HMS

7. BHPV Uniyted Employees Union

(Regd. No. 1645/97)

Affiliated toTNTUC

8. BHPV Employees Trade Union Congress

(Regd. No. 1526/96)

9.BHPV staff and workers Union

(Regd. No. 1568/96)

10. BHPV National Employees Trade Union Congress.

(Regd. N0. 1580/96)

11.BHPV Janatha Dal Employees Trade Union

(Regd. No. 1613/97)

12. BHPV Karmika Samkshema Trade Union

( Regd. No. 1764/99)

13. BHPV Progressive Employees Union

(Regd. No.D/2054/2007)

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Out of these unions, the active function unions are INTUC-

Congress party, CITU-CPM, BHPV Majdoor sangh, BMS party.

Independent unions are also there in BHPV, affiliated to state,

these unions are organized by those people are familiar faced

and have the ability to organize others.

For every once in two years elections will be conducted, whose

party has got the majority that will be the lead party.

RECOGNISED TRADE UNIONS

In BHPV, only one recognized union is there i.e BHPV National

employees Union, affiliated to INTUC i.e Congress party. It is an

active union, this union has the right to meet or talk to the

management directly regarding the problems of employees.

PROCEEDURES FOR RECOGNITION

Any seven or more workers of an establishment can form into a

trade union and apply to the registrar for its recognition by

subscribing their names to its rules. In BHPV, INTUC is the

recognized union in that 77 members are as office bearers.

The application for registration should be accompanied by a

copy of the rules of the nation and the settlement containing

particulars namely the names, occupations, and address of the

members making the application.

96

The names of the trade union and the address of its head

office.

The titles, names, ages, addresses, and occupation of the

office barriers of the trade union.

The registrar after verifying all these, the registrar of the trade

union under trade union acts 1926 and issue a registration

certification.

For every once in two years the verification is done i.e that the

funds are properly used or not, manner for appointing the

members etc. by the Deputy Commissioner of Labor,

Visakhapatnam.

Every year the membership has to be renewed then only the

union has the right to enter or participate in the elections.

What ever the information was submitted to the recognition was

not accurate, and then he has the right to dissolve the trade

unions.

In BHPV there are 6 unions, which union got the highest

percentage of votes that union will be recognized by the

management.

In BHPV as we know that INTUC is a recognized union, in that

President Is V.Babu Rao

Secretary is Ch. Muni Babu

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Honorable President is Dr. Kesawarao.

These members are selected depending upon the efficiency, caste,

experience; cash etc, basing on that the members will be elected.

ROLE OF TRADE UNIONS IN CHANGING BUSINESS SCENARIO

Many events in India and abroad are making significant effects

on the trade union movement in India. Firstly, the collapse of the

socialist economies in Russia and Eastern Europe has revealed

glaring economic disparities between the East and the West and also

resulted in a uni-polar world.

Secondly, while these changes are making significant socio-

economic and political impact on the world economy, regionalisation

and protectionism are also on the increase. The unification of Europe

and the formation of NAFTA are examples.

Thirdly, the development of satellite communication and the

explosion in information technology has resulted in customer needs

across the world getting more and more homogenized and this has

perhaps lead to the creation of "The Global Shopping Centre".

Fourthly, the emergence of the so called Asian Tigers in the 1980's

as major players in global trade challenges the classical international

trade theory-the convention jpwhich believes that the basis of

international trade is the endowment of the resources of nations.

The Asian Tigers are not endowed with any of the traditional

98

productive or I natural resources. What made them major players,

in the world market was their conscious effort to create a competitive

advantage for themselves.

These nations used $ technology and linked up their economy to the

world market economy to gain benefits.

Lastly, the liberalization policies of opening up of the Indian

economy to the global competition have also affected trade unions.

EMERGING TRENDS:

1 As a consequence of all these happenings, a few issues are

coming into sharp focus in the Indian economic scene.

Gradually, as India gets integrated into the world market, there

is cut-throat competition in the industrial sector.

2 Competition is inducing innovation and companies r,re evolving

newer strategies to survive the onslaught on their market share

by new and more efficient enterprises, improving the quality of

their goods and services and yet trying to remain cost efficient.

3 Faced with keen competition, one sector of economy is also, at

times evolving short term strategies with utter disregard to the

interest of other sector(s).

4 The customers are becoming supreme, seeking greater and

greater value in the goods and services they buy.

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ROLE OF TRADE UNIONS:

Indian Trade Unions and, for that matter, trade unions in any

developing economy in the above scenario, is finding it difficult to

continue with their traditional role of promoting the interests of their

membership with a sectarian emphasis. Market forces are no longer

allowing any sub-optimal utilisation of resources to be passed on to

consumers in the form of substandard goods/services or increase in

prices. In such a situation, any demand for "more" has to be linked up

with higher productivity and improved quality. In this changed context,

trade unions in India may have to find a new role for themselves as

important agents of social and economic transformation for the

common good of everybody, especially the under privileged. Trade

Unions with their resources and expertise may also provide a

platform to other social institutions to integrate the conflicting interests

of different segments of society, e.g., the employed and

unemployed/under-employed etc.

However, no voluntary organisation can survive by neglecting

the sectorian interests of their membership altogether. Keeping this in

view, I would suggest that the unions operating in industrial and

services sectors may shift their emphasis from demanding more and

more financial benefits for their members to more important issues

on-their agenda such as:

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Rehabilitation of displaced employees

Facilitating self-employment

Ensuring social security

Safety and health of the workers

Working as a watch-dog for protection of environment .

Worker education

Involvement in the running of business through greater degree

of participation

Productivity bargaining etc.

However, in order to play any meaningful role, trade unions

must have a strong membership base. For too long has the trade

union movement in India remained weak and obsessed with intra-

union and inter-union conflicts. For ages, their leadership has

deliberated over some important and urgent issues like:

1 Secret ballot vis-a-vis verification of membership through

check-off;

2 Recognition of a single union vis-a-vis formation of

bargaining council or a combination of these;

3 One union in one industry vis-a-vis formation of a

confederation of trade unions, etc.

But very little has been achieved so far towards consolidation of

workers. There has been, in fact, a tendency of further splitting the

movement with every split in political parties.

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This has hot only created utter frustration amongst the sincere

and devoted sections of trade union members, but the movement is

also losing public sanction very fast.

In my analysis, two major issues are to be resolved by the

leadership to achieve consolidation of the movement. They are:

a) Over-emphasis on political ideology of some trade union

houses;

b) Leadership issues in the consolidation process;

Once these issues are resolved and he trade union movement

gets consolidated, the leadership will find itself more comfortable in its

redefinedrole.

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DISCIPLINARY PROCEDURE

Discipline is a Code of Conduct in an Enterprise in which the

members of the enterprise conduct themselves within the standards of

acceptable behaviour which means that the stipulations of the code of

conduct laid down by the enterprise are properly understood and

observed by one and all.

The state of Industrial Relations in a country/factory is also

reflected in the discipline and the morale of the labour force. Discipline is

very essential for a healthy industrial atmosphere and the achievement

of organisational goals.

In any Organisation maintenance of discipline among personnel at

all levels is required' to create the conducive work environment so as to

facilitate increased productivity and organisational effectiveness! So

management of an organisation can adopt two approaches for discipline

maintenance:

1 Adopting preventive measures 'prevention is better than cure'

principle is based on the assumption that employees perform

better through rewards than

punishments. So the problems of indiscipline do not emerge.

2 Curative measures that it taking "disciplinary actions" against the

persons involved in indiscipline.

The Disciplinary Action should be taken after going through

specific process because the punishment may be held invalid if there is

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any deviation from the procedure laid down. The procedure for taking

disciplinary action is defined by the Standing Orders formulated by the

Organisation.

While taking an action, all the relevant facts leading to indiscipline

must be ascertained so that the need for disciplinary action is

determined. The facts must be collected as soon as possible to take the

action promptly.

The disciplinary procedure either Punitive or Curative has to be

invoked for preserving industrial peace as well as maintaining the

efficiency of the organization.

DISCIPLINARY MANAGEMENT

DISCIPLINE

Discipline refers to a condition or attitude prevailing among the

employees, with respect to rules and regulations of an organization

Maintenance of effective discipline in an organization ensures the most

economical and optimum utilization of various resources including

human resource.

Need for discipline

Rules and regulations of an organization are essential to maintain

peace.

Disciplinary measures ensue just and equal treatment to all the

employees, efficient 2 way communications, encourage c0-

operative and build team pride.

Disciplinary measures regulate the behaviors i.e commitment

towards work.

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Objectives of Discipline

To obtain a willing acceptance of the rules, regulations and

procedures of an organization, so that organizational goals may be

obtained.

To develop among the employees a spirit of tolerance and desire

to make adjustments.

To give and seek directions and responsibility.

BHPV employees follow the disciplinary rules and regulation framed by

the management, to run the organization successfully because even the

company gave less wages to all the employees were showing interest to

develop their organization profitably like previous one, this can be

acquired through this disciplinary measures.

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Disciplinary procedures

Disciplinary procedures in BHPV comprise the following stages.

1. Issuing a letter of charge to the employee calling upon him for

explanation:-

When the management of BHPV comes to a conclusion that

an act of misconduct committed by an employee warrants

disciplinary action the concerned employee should be issued

a charge sheet. The charge sheet should indicate the

charges of in discipline or misconduct clearly. Explanations

should also be called from delinquent employee of that

sufficient time should be given.

2. considerations of the explanation:-

What ever the explanations given by the employee is

satisfied by the employer, there is no need for conducting an

enquiry. When the management is not satisfied with

employee’s explanation, there is need for serving a show-

cause notice.

3. show cause notice:-

In the show case notice, the employer provided another

chance to the employee, to explain this conduct. This notice

was issued by the manager to the employee. It is nothing but

an enquiry commission.

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4. Holding of a full fledged enquiry:-

In this, the enquiry should be in conformity with the principles

of natural justice i.e. the delinquent employee must be

given a reasonable opportunity of being hear the enquiry

offices should record his findings in the process of enquiry.

He also suggests the nature of disciplinary action.

5. Considering the enquiry proceeding and findings and making final

order of punishment.

6. Follow up:-

After taking disciplinary action, there should be proper follow

up. The disciplinary action should not make the employees

repeat the mistake.

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Punishments

When a delinquent employee is going to be punished, the type of

punishment should be based on severity of the omission or misconduct.

The following are punishments imposed by the management of BHPV to

the delinquent employee i.e.,

Oral warnings:-In case of minor, oral warnings will be given by

superior concerned.

Written warnings:-Whenever oral warning fails to achieve the

desired behavior a part of an employee, written warning may be

given means certain rights of an employee would be withdrawn.

If the omissions are minor, one year increment will not be given to

the delinquent employee, if it is a major life long Increment will be

deducted.

Promotions will not be given in some case.

Demotions:-Under this kind of punishment, an employee is

reduced to a lower grade from the grade enjoyed by him earlier.

Termination:-The employee services can be terminated in the

following forms i.e. discharge simplicity, discharge, and dismissal.

Showing disciplinary action for various offences.

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INDUSTRIAL DISPUTES

Dispute, in general sense, is the expression of differences over

some issues of interest between two or more parties. Industrial disputes

like problems of indiscipline and their effective management are on the

major issues in maintaining good Industrial Relations in the Country /

Organization.

Definition:

According to Industrial Disputes Act, 1947

"Industrial Disputes means any dispute or difference between

employers and employers or between employers and workers or

between workmen and workmen, which is connected with the

employment or non-employment or the terms of employment or with the

conditions of labour of any person".

An individual dispute between an employer and one of his

workmen is by itself not an industrial dispute, which can be referred to

under section 10 of the Act. But such a dispute may become an

Industrial dispute provided a majority of workmen, or union of workmen

takes up the cause of particular workman, in the particular industrial

establishment.

The causes of industrial disputes are many and varied and

sometimes even trivial. In India, various causes of Industrial disputes

may be grouped into four categories: economic factors, management

practices, trade union practices and legal and political factors.

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Machinery for Handling Industrial Disputes

In managing industrial disputes, management can take certain

actions. These actions may be grouped into two categories

Prevention of industrial disputes:

The preventive machinery has been set up with a view to creating

harmonious relations between labour and management so that disputes

do not arise. It comprises of the following measures.

(a)Worker's Participation in Management

(b)Collective Bargaining -

(c)Grievance Procedure

(d)Tripartite bodies Code of Discipline

(e) Standing Orders

Settlement of Industrial Disputes:

If preventive machinery fails, then the industrial dispute settlement

machinery should be activated by the Government under Industrial

Dispute Act, 1947, because no-settlement of disputes will prove to be

very costly to the workers, management and the society as a whole. This

machinery consists of

(a) Conciliation

(b)Court of Enquiry

(c) Voluntary Arbitration

(d)Adjudication (Compulsory Arbitration)

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COLLECTIVE BARGAINING SYSTEMS

Collective Bargaining is a technique adopted by the organization of

workers and employers collectively to resolve their differences with or

without the assistance of a third party. Its ultimate aim is to reach some

settlement acceptable to both the parties involved in labour-management

relations. This concept was coined by Sydney and Beatrice Webb.

Great Britain is said to be the 'Home of Collective Bargaining'.

The phrase collective bargaining is made up of two words-

Collective which implies group action through its representatives; and

Bargaining which suggests/haggling and/or negotiating. This concept,

implies "Collective negotiation of a contract between the

managements' representatives on one side and those of the

workers as the other. It may be defined as a process of negotiation

between the employers and the organized workers represented by their

union in order to determine the terms and conditions of employment.

International Labour Conference also defined as 'Collective

Bargaining' extends to all negotiations which take place between an

employer, a group of employers or one or more employers'-

organizations on the one hand and one or more workers' organizations

on the other for determining working conditions and terms of

employment and/or regulating relations between employers and workers

and/or regularizing relations between employers of their organizations

and a workers organization.

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As per Habirson, collective bargaining is a process of

accommodation between two institutions, which have common and

conflicting interests. It is the resolution of industrial problems between

the representatives of employers and the freely designated

representatives of employees acting collectively with a minimum of

Government dictation.

It is a process in which the representatives of a labour organization

and representatives of the business organization meet and attempt to

negotiate a contract or agreement which specifies the nature of

employer-employee union relationship.

The technique of CB has been adopted by unions and management for

resolving their conflicting interests. It plays a significant role in

improving the labour management relations and in ensuring

industrial harmony. It helps a lot in better understanding of each

other's point of view as well as problems. Through discussion and

interaction, both the parties learn more about others and often

misunderstandings may be removed. It helps in easing out many minor

differences and there are many instances in which even major disputes

are said to be settled without any work stoppage or outside intervention.

Accordingly, its role in conflict resolution is very significant.

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Collective bargaining brings the employees and managers closer;

develops better understanding helps industrial peace; resolves conflicts

and differences; brings social change. It helps effective functioning of the

enterprise and promotes industrial harmony. It helps effective functioning

of the enterprise and promotes industrial harmony. It is a two-way

process and mutual give and take aspect rather than take it or leave it

method of arriving at the settlement of disputes. The essence of

collective bargaining is the agreement for dispute settlement and smooth

functioning of the enterprise. The agreements bring both labour and

management together to determine the conditions of employment and

create new environment for problem-solving. It provides a flexible means

of adjusting wages and conditions of employment to economic and

technological changes.

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Scope of collective Bargaining:

The Encyclopedia Britannica defines collective bargaining as

follows:

"In its widest sense collective bargaining is a negotiation between

the employer or group of employers and a group of work-people to reach

an agreement on working conditions. If negotiations are between an

employer and a group of his own work people the dependence of the

work people on the employer for their jobs weakens their bargaining

powers, and therefore, collective bargaining is more usually understood

to be negotiations between one or more trade unions and an employer

or group of associations or employers".

It is a process of self-settlement by which management and

organized labour may discuss each other's problems and exchange

each other's view points negotiate and reach a common understanding

to develop a setting for a better employment and working conditions to

the mutual benefit of workers and management in a spirit of cooperation

and goodwill for keeping peaceful industrial relations.

114

Collective bargaining performs a legislative function.

The agreement under collective bargaining as concluded

between the parties performs a judicial function when it helps the

parties in the interpretation sought in case of a particular clause

and also furnishes meanings, explanation and application which a

particular clause conveys. Within the ambit of executive function

of collective bargaining comes the enforcement of the agreement,

the various methods and procedures, for discipline and grievances

handling.

Some of the salient features of collective bargaining are:

It is a 'group' process; wherein one group representing the

employers and the other representing employee sit together to

negotiate terms of employment.

It is a process in the sense that it consists of a number of

steps. The starting point is the presentation of the charter of

demands and the last stage is the reaching of an agreement, or

a contract which would serve as the basic law governing labour-

management relations over a period of time in an enterprise.

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Negotiations form an important aspect of the process of

collective bargaining, i.e., there is considerable scope for

discussion, compromise or mutual give and take in the

collective bargaining deliberations rather than confrontation.

It is a bipartite process. The employers and the employees

are the only parties involved in the bargaining process. There

is no third party intervention. The conditions of employment

are regulated by those directly concerned.

The purpose of collective bargaining is that it brings parties close

and develops better understanding for industrial peace, democracy

resolves conflicts and differences; guarantees the rights and

responsibilities of the workers; develops self-respect and fosters

responsibility on both workers and employers; brings social change

through acceptable solutions; and formulates the terms and conditions

under which labour and management will have to work together. The

primary objective is to ensure effective functioning of the individual

enterprise and more importantly the entire economy.

116

Main functions of Collective Bargaining:

The main functions of Collective Bargaining are:

Concentration on wage determination-fixing the prices of labour

services;

Establishment of a system of workers rights in industry - this

may be termed as democratization of industrial relations system

or industrial jurisprudence;

Establishment of machinery for the representation of employees

in decisions affecting their industrial and group interest.

117

WORKERS PARTICIPATION IN MANAGEMENT

Workers Participation, also known as Labour participation or

Employee participation, in management is a concept shrouded with so

much vagueness that for different people, it has different meanings. The

basic reason for this perceptual difference is due to different pattern of

practices and programmes adopted by various Countries for

implementing workers participation-in management. Many Industrial

Relations experts regard it as an essential step involving redistribution of

power between management and workers in the direction of industrial

democracy though there are differences of views over the content and

level of participation. The principal forms through which workers

participate are Information sharing, Joint consultation and Suggestion

schemes.

118

The various forms of workers participation in management have

assumed great importance these days because it serves the following

purposes:

Reduced industrial unrest

Maintaining good Industrial Relations

Higher productivity

Workers participation in management falls into several categories.

These are informative, consultative, associative, administrative and

decisive participation.

Informative: In informative participation, there is sharing of information -

for instance, the information regarding production figures, the balance-

sheet of the company and economic conditions etc.

Consultative: In consultative participation workers' representatives are

consulted on matters relating to welfare facilities by the management. Here,

the workers' representative action an advisory capacity and the final

decision rests with management.

119

Associative: In associate participation the management accepts the

suggestions of the council for solving a problem on hand. The

management is obliged to accept and implement if the committees take

unanimous decisions regarding a problem.

Administrative: In administrative participation, the decision is already

taken and the councils (joint bodies) have the right to choose the method

of implementing it. This may include administration of welfare measures,

operation of vocational training and apprentice schemes and preparation

of work schedules. This involves higher degree of delegation of authority

and responsibility to the lower rank and file of the organization.

Decisive participation: Finally there is decisive participation, the

highest form of participation where all matters, economic financial and

administrative are brought under the scrutiny of the councils and the

decisions are taken jointly.

120

OBJECTS OF WORKERS PARTICIPATION IN

MANAGEMENT:

The objective pursued by the various systems of workers’ participation in

management varies from country to country, from region to region and

even from organization. The workers or the trade unions may regard

participation as a means to increase their wages, while the others may

regard it as a means to increase production, which may not necessarily

result in greater security for workers. All these objectives include in

particular (ILO, 1969):

i. Moral, ethical or ideological considerations which are linked

with the growing awareness of (a) the basis equality of men which

beyond the political sphere, should extend also to that of economic

pursuit and production effort, and (b) the importance of the

undertaking for the socio-cultural life of the workers in general, and,

more particularly, their need to be recognized and associated as a

community in decisions which may affect their conditions of work

and living within and without the undertaking.

121

ii. Socio-political objectives, aimed mainly at applying the

principles of democratic self-government within the economy; this

generally claims for what has often been defined as "industrial

democracy" being particularly stressed either where the need is

felt thus to develop or to strengthen democratic institutions in the

political sphere by making them rest on the undertaking self-

government, or, in the undertakings belonging to the public sector

of the economy or under the. National development programmes,

also, to supplement or to replace private entrepreneurial motivation

through the association of workers in management and in the

results of the undertakings. However, the social aim in

management and in the results of the undertakings. However,

the social aim of some of the participation schemes is merely to

achieve a closer integration of the workers within the undertakings

while not interfering with the latter's basic structures;

iii. The general economic objectives based on the assumption that

whenever people are allowed to participate in the preparation of

measures and policies which they are called upon to implement,

such participation may prove apt particularly where linked with

economic advantage, to reduce conflict and to enhance the

cooperative spirit of all concerned.

122

SPECIAL FEATURES LEADING TO THE SUCCESS OF

PARTICIPATION

One reason for the successful functioning of the joint consultation is the

clear demarcation of issues to be" discussed by various forums, which is

strictly, adhered to. Another important reason for the continued success

is that both management and union treat it as a dynamic system. From

time to time? New subjects are added to the list and financial powers of

JDCs are increased. The list of subjects which the highest council -the

JCM - discusses is impressive. It includes not only performance in

relation to production, cost and manpower, but also sales, finance and

industrial relations. It is indeed a rare sight in India to see a meeting

attended by an equal number of top management and union officials

which is chaired- 7 the union president. Again, despite the pressures on

his time the Managing Director makes it a point to attend DC meetings.

Other reasons of success are peaceful industrial relation climate, good

upward communication system, and progressive personnel policy of the

organization.

123

SOME SUGGESTIONS FOR PROMOTING WORKERS

PARTICIPATION IN MANAGEMENT

Some important points which may be considered by the Government,

management and trade unions for making participative management a

success and relity.

1) INDUSTRIAL RELATIONS: The quest for industrial peace has

been the central preoccupation of employers, workers and

government for a long time. The Five Year Plans, Labour

legislations, the Industrial policy, have all endeavoured to

emphasise industrial peace as the necessary pre-requisite for

industrial growth and development, but it has remained elusive.

Here an attempt has been made to indicate briefly some important

measures which are considered necessary for bringing about a

conducive industrial relations climate which is one of the basic pre-

requisites for the success of participative management. The

essential features are:-

124

(A) It is a fact that in the absence of an arrangement for

statutory recognition of unions, or voluntary recognition by

employers on moral grounds, collective agreements have not

made much headway.

(B) Consequently, there is a greater scope for more reliance on

collective bargaining thereby replacing avoidable

adjudication or more of governmental interference.

(C) To create appropriate climate for collective bargaining, it

becomes necessary to resort to statutory recognition of a

sole bargaining agent, where voluntary efforts fail.

(D) Recognition of trade union should be made compulsory

under a central law:

(i) for all undertakings employing more than 1000

workers;

(E) Provided the trade union seeking recognition has at least

45% membership among workers at present, but attempts

should be made to have a higher percentage of around 55 to

60.

125

(F) There should be a properly recognized authority under a

central legislation to decide disputes through verification of

records, where the difference in the verified membership is

10% or less than a secret ballot open to all the employees

should be taken.

(G) The recognized union should be statutorily given:

exclusive right of sole representation;

exclusive right to enter into collective bargaining;

exclusive right to collect membership subscription within the

factory premises;

Right to nominate representatives on different joint committees.

(H) The minority union should only be allowed the right to

represent individual cases of dismissal and discharge before

a labour court.

126

(I) TRAINING FOR PARTICIPATION:

All employees (both management and workers) should be

briefed on the reason for the introduction of participation and its

likely impact, they should receive clear documentation and have

the facility of questions being answered. Training for those

management and workers' representatives who are going to be

directly involved in participative forums should cover three main

points:

Basic knowledge of the philosophy, operation and intent

of participation

Within the company. This approach should be intended to

promote joint working based on problem resolution rather

than negotiating 'conflict'. Team development techniques in a

workshop situation may be used for this purpose.

Special skills training to enable them to discuss and contribute

to the decisions in which they are to be involved:

Contextual training - participation puts strains on and

questions the company's traditional approach to management.

Opportunities therefore have to be provided for management

teams to consider the impact that participation will have on them.

127

PARTICIPATIVE MANAGEMENT

Joint management councils:

It constitutes a committee known as joint management committee, to

look after the duties and responsibilities of joint management councils.

These bodies represent both labor and management. The nature of

functioning of these bodies are only consultative in nature means, the

management given an opportunity to participative in management

decisions, so that the employees shows more interest towards the work.

Safety committee:

Means it is the committee which looks after the safety facilities in an

industry. In BHPV, one safety committee is there, the inspector of factory

is the safety committee head. His main function is to provide good

working atmosphere at the work place, whether the machinery in the

company was properly functioning or not, is there any pipe leakages, etc

all these facilities will be properly maintained or not are checked by the

safety committee.

128

Works committee:

According to industrial disputes act 1947, every establishment employing

100 or more workmen may be required by the government to constitute

a work committee representing equal representatives of both

management and workmen for promoting dialogue between the

employer and the workmen.BHPV constitutes this work committee. The

main function of this committee is to Endeavour to compose any

difference of opinion in matter of common interest, and thereby promote

amity cordial relations between the employer and employee.

129

GRIEVANCE MANAGEMENT

Grievance is a state of dissatisfaction over some issues related to

employment. Generally, expression of this dissatisfaction in oral form is

known as complaint while in written form it is known as grievance. In the

organizational settings, employees may have some grievances against

employers, in the same way, employers may have grievances against

employees.

Grievance Management is very essential to maintain good

Industrial Relations, which increases productivity and effectiveness of an

organization. Grievance should be redressed by adopting proactive

approach rather than waiting for the grievance to be brought to the

notice of management. In many cases, even the proactive approach of

management for removing the causes of grievances may leave some

scope for the emergence of grievances. For handling such grievances, a

Grievance Handling Machinery, known, as Grievance Procedure is

required.

130

The Grievance Procedure is problem solving, dispute-settling machinery

which has been set up following an agreement to that effect between

labour and management. It is the means by which a trade union or an

employee makes and processes hi r- claim that there has been a

violation of the labour agreement by the company. Grievance Procedure

is a device through which grievances are settled, generally to the

satisfaction of employees/trade union and management.

GRIEVANCE READRESSAL MECHANISM:

“A Grievance is a sign of employees’ discontent with job and its nature”.

The employee has got certain aspirations and expectations which he

thinks must be fulfilled by the organization, where he is working. When

the organization fails to satisfy the employees’ needs, he develops a feel

of discontent or dissatisfaction.

For instance, the employer expects proper implementation of the central

and state government laws, collective agreements, company policies

and management responsibilities. A violation of any one degree among

these cause dissatisfaction on any part. Thus, grievance is caused due

to the difference between the employee expectation and management

practices.

131

GRIEVANCE PROCEEDURE:-

If any grievance is there, then the grievant employee, communicate with

there immediate supervisor, then the supervisor has to solve within 48

hours, if he is unable, then he communicate with the Head of

Departments, then the representatives of the department has the

decision within 3 days regarding this grievance, if he is unable, then

communicate with grievance committee, if the decision was not satisfied

the employees, then it will goes to the manager, next to the committee of

union and management of representatives, not satisfied, communicate to

voluntary arbitration, within 7 days. The grievance will be settled. This

was the normal procedure which was followed by every organization.

But in BHPV, at present there is no grievance committee, it there is any

grievance, they can directly approach to the union, and the union talks

with the management and try to solve the grievance, if it is not possible

then the third party, i.e. voluntary arbitration will be done.

Previously, one welfare officer will be there, if any grievances are there

he will collect the grievances from all departments and communicated to

the concern authorities and decision will be communicated in the next

day.

132

INDUSTRIAL RELATIONS AND ITS IMPACT ON

PRODUCTION AND PRODUCTIVITY

Industrial relations do not emerge in Vacuum they are born out of

"employment relationship" in an industrial setting. It is the Industry which

provides the environment for industrial relations. The Production and

Productivity of an Organization depends upon the type of Industrial

Relations or the events that take place in an organization which are

harmful to industrial relations.

When it comes to Productivity, the impact of Industrial Relations

events on Productivity was not so severe. The Productivity details of the

company show that the productivity was increasing continuously in the

last ten years. If the events did not take place may be the productivity

would have further increased.BHPV plant being one of the integrated

plates and vessels in the Country. The loss of production in one

department will affect the other department and the cost of loss of

production is also depends upon the type of manufacturing department.

If it is a major production unit the loss is very severe if it is a service unit

the loss is less.

The Production and Productivity of an Organization is good when

there is a good Industrial Relations. The Industrial Relations would be

good when the management provides safety measures, incentives, good

internal communication and good welfare activities to the employees. At

the same time the Trade Unions should also function effectively to

improve the Industrial Relations.

133

Quality circles

It is a small group of employees in the same work area or doing similar

type of work who voluntarily meets regularly for about an hour every

week to identify analyze and resolve work related problems not only to

improve quality, productivity and the total performance of the

organization but also to enrich the quality of work life of the employees.

Objectives:-

To develop enhance and utilize human resources effectively.

To improve quality of products and reduce cost of

production.

To improve various supervisory skills.

Benefits:-

Improvement in job performance of workers.

Development of solution to the identified area.

Promotions of participative management culture and team

work.

134

Quality Management

BHPV is reputed for quality and workmanship of its product.

BHPV has received a number of international accreditation

regarding quality.

As a part of total quality management programmes, BHPV

has acquired ISO 9001 certificate during the year 1993-94

particularly to boost up its exports and to be competitive in

the international market.

Re-certification of ISO! Has been obtained in September

1996.

In recognition of high standards of our quality, confederation

of industry (COI) southern region, AP represented the quality

awards.

QUALITY POLIOCY IN BHPV:-

To maintain a commanding position as a supplier of quality

product systems and services by continuous updating of technology to

meet international standards and to build a high level of customer

confidence and satisfaction by providing cost effective quality products.

135

QUALITY ASSURANCE ACTIVITIES AT BHPV

The quality assurance activities that have been taken up at

BHPV are

Advance planning of quality assurance activities for industrial

equipment.

Preparation and updating of quality manual standards

systems and procedures.

Defect analysis and casual removal.’

Quality auditing.

Systematic training of quality control.

Quality reporting and follow up corrective actions.

The quality of equipment manufactured by BHPV has

received international recognition.

136

CHAPTER-4

137

DATA ANALYSIS AND INTERPRETION

1) How is your company maintaining industrial relations?

INTERPRETATION : From the above table we can say that 68.75% of

your company maintaining industrial relations

138

S.No  Response   No. Of

Respondent  Percentage

   1 Very good                1 2.083

   2 Good               12 25

   3 Satisfactory               33 68.75

   4 Un satisfactory               2 4.166

     Total              48 100

2) Do you feel that industrial relations help in improving production in your company?

INTERPRETATION: From the above table we can say that 93.33%of

respondents feel that industrial relations help in improving production in

your company

139

S.No  Response   No. Of

Respondent  Percentage

   1 Yes                42 93.33

   2 No 0 0

   3 Don’t know 3 6.66

     Total 45         100

3) How far is the company following trade union act and

Industrial disputes act rules & regulations on a scale of 100,

how much percentage will you Rate.

INTERPRETATION : From the above table we can say that 53.33%of

respondents are satisfactory in BHPV

140

S.No  Response   No. Of

Respondent  Percentage

   1 Very good                0 0

   2 Good               18 40

   3 Satisfactory               24 53.33

   4 Un satisfactory               3 6.66

     Total              45 100

4) What are the different problems faced by trade unions.

INTERPRETATION : From the above table we can say that, 43.75%

respondents related to compensation

141

S.No  Response   No. Of

Respondent  Percentage

   1 Related to compensation 35 43.75

   2 Related to work environment 0 0

   3 Related to management 30 37.5

   4 All of the above 15 18.75

     Total 80 100

5) Is workers participation in management is satisfactory in your organization

142

S.No  Response   No. Of

Respondent  Percentage

   1 Yes 40 50

   2 No 34 42.5

   3 Needs a relook by the org 6 7.5

     Total 80 100

INTERPRETATION : From the above table we can say that, 50% of

respondent’s workers participation in management is satisfactory in your

organization

6) Collective bargaining strengthened industrial relations.

S.No  Response   No. Of Respondent   Percentage

   1 Strongly Agree                40            50

   2 Agree               34          42.5

   3 Disagree               6          7.5

   4 Strongly Disagree                0            0

     Total              80         100

INTERPRETATION: From the above table we can say that 50% of

respondent’s Collective bargaining strengthened industrial relations.

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7) What kind of systems do you approach for solving the

Grievance Redresses

144

S.No  Response   No. Of

Respondent  Percentage

   1 Open door policy 18 40

   2 Step ladder policy 24 53.33

   3 Both 3 6.66

     Total 45 100

INTERPRETATION : From the above table we can say that 53.33% of

respondents are approaching step ladder policy

8) Grievance redressal forum are satisfactory

INTERPRETATION: From the above table we can say that 53.33% of

respondents Grievance redressal forum are satisfactory

145

S.No  Response   No. Of

Respondent  Percentage

   1 Satisfied                24 53.33

   2 Not satisfied 18 40

   3 Don’t know 3 6.66

     Total 45         100

9) How is the system of labour management relations functioning in your organization?

146

S.No  Response   No. Of

Respondent  Percentage

   1 Very good                10 13

   2 Not Effective 20 25

   3 Can do better 50 62

     Total 45         100

INTERPRETATION: From the above table we can say that 62% of

respondents the system of labour management relations Functioning in

your organization

10) Is job rotation system in BHPV is functioning?

147

S.No  Response   No. Of

Respondent  Percentage

   1 Yes                15 18.75

   2 No 55 69

   3 Don’t know 10 12.5

     Total 80         100

INTERPRETATION: From the above table we can say that 62% of

respondents are job rotation system in BHPV is functioning

11) Management is concerned for welfare of work man ?

S.No  Response   No. Of Respondent   Percentage

   1 Strongly Agree 0 0

   2 Agree 55 69

   3 Disagree 15 18.75

   4 Strongly Disagree 10 12.75

     Total 80 100

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INTERPRETATION: From the above table we can say that 69% of

respondents Management are concerned for welfare of work man

12) Quality of work life is better in BHPV

S.No  Response   No. Of Respondent   Percentage

   1 Strongly Agree 12 23.07

   2 Agree 30 57.69

   3 Disagree 10 19.23

   4 Strongly Disagree 0 0

     Total 52 100

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INTERPRETATION : From the above table we can say that 69% of

respondents Quality of work life is better in BHPV

13) Better industrial relations is the reason for increased

Production &productivity

S.No  Response   No. Of Respondent   Percentage

   1 Strongly Agree 40 66.67

   2 Agree 20 33.33

   3 Disagree 0 0

   4 Strongly Disagree 0 0

     Total 60 100

150

INTERPRETATION: From the above table we can say that 66.67% of

respondent’s Better industrial relations are the reason for increased

Production &productivity.

14) Does the employer have right to lockout?

151

S.No  Response   No. Of

Respondent  Percentage

   1 Yes                40 50

   2 No 34 42.5

   3 Don’t know 6 7.5

     Total 80         100

INTERPRETATION: From the above table we can say that 50% of

respondent’s employer has right to lockout

15) How is management _employees-work relations in your

Organization

152

S.No  Response   No. Of

Respondent  Percentage

   1 Very good                42 93.33

   2 Satisfactory 0 0

   3 Not satisfactory

3 6.66

     Total 45         100

INTERPRETATION: From the above Interpretation we can say that

93.33% of respondents are very good

CHAPTER-5

153

SUMMARY

The overall Industrial relations scenario in BHPV is peaceful, conidial and healthy. With the

dedication and commitment of BHPV collective, the organization has surmounted all odds

and achieved best even records by crossing its rated capacities continuous effort to improve

the employees morale have resulted in improving the Technological and operational

discipline Which ultimately helped in heightening the motivation of the Employees.

It is noticed that since inception BHPV has signed successive usage settlements with the

recognized union. The notable features of the implementation are productivity and

production. Apart from this a number of settlements on various issues like promotions,

incentives and welfare have helped enhancing the moral and motivate and motivation of the

employees. Participative committees have helped the organization goals through the active

employees’ participation/ involvement.

One of the most important factors is the productive work culture which is being considered

as of crucial important is BHPV. As such several initiatives have been taken to adopt a multi-

skill and multi-employment thus ensures the optimum utilization of its human resources.

154

FINDINGS

A critical evolution of organization reveled that the personnel department is not totally independent one.

The structure neglects the functions like manpower planning, scientific recruitment

Since last several years they had been no strikes and lockouts in the organization.

The number of disciplinary cases not must to cause alarm or to reflects a highly unsatisfactory of industrial relations.

The functioning of various participative forms has particularly not successful in the company.

Workers participation meeting committees are not held regularly.

155

SUGGETIONS

It should be suggested that the manpower planning and forecasting should be done strictly and properly.

Employees are not satisfied with welfare measures, so the management should take due steps for the effective use of welfare measures.

Here the unions are leaders centered, so the rank & file members should be allowed to participated in the unions.

There are no industrial disputes and the climate has been very cool and quite.

I suggest that management should adopt the “Hot stove rule” for prompt redressal of the cases and awarding to the punishment.

The management should try to implement all collective bargaining decisions.

156

A few quality circles are functioning regularly so management should try to encourage workers to participate and improve the mutual trust between the parties.

Grievance procedure should be maintained as far as possible.

Questionnaire for Employees

Name of the Employee :

Department :

1) How is your company maintaining industrial relations

a)very good b)good c)satisfactory d)unsatisfactory

2)Do you feel that industrial relations helps in improving production in your company

a)yes b)no c)don’t know

3) How far is the company following trade union act and

157

industrial disputes act rules & regulations on a scale of 100,

how much percentage will you rate.

a)very good b)good c)satisfactory d)unsatisfactory

4)what are the different problems faced by trade unions.

a)related to compensation

b)related to work environment

c)related to management

d)all of the above

5) Is workers participation in management is satisfactory in

Your organization.

a)yes b)no c)needs a relook by the organization

6) Collective bargaining strengthened industrial relations.

a) Strongly agree b) agree c) disagree d) strongly disagree

7) What kind of systems do you approach for solving the

Grievance Redresses.

a)open door policy b)stepladder policy c)both

158

8) grievance redressal forum are satisfactory

a)satisfied b)not satisfied c)dontknow

9) How is the system of labour management relations

Functioning in your organization.

a)very good b)not effective c)can do better

10) Is job rotation system in bhpv is functioning

a)yes b)no c)don’t know

11)Management is concerned for welfare of work man

a)strongly agree b)agree c)disagree d)strongly disagree

12) Are there any industrial disputes in your organization

a) yes b)no c)not aware of

13) Quality of work life is better in bhpv

a)strongly agree b)agree c)disagree d)strongly disagree

159

14) Better industrial relations is the reason for increased

Production &productivity

a)strongly agree b)agree c)disagree d)strongly disagree

15) Does the employer have right to lockout

a) yes b)no c) cant say

16) How is management _employees-work relations in your

organization.

a)very good b)satisfactory c)not satisfactory

160

BIBLIOGRAPHY

BIBLIOGRAPHY

1. Journals

ANNUAL REPORTS AND MANUALS OF B.H.P.V. Ltd.

2. Text books

HUMAN RESOURCE INDUSTRIAL RELATIONS

- V. SUBBA RAO

PERSONNEL MANAGEMENT

- EDWIN B FLIPPO

3. Websites

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www.bhpvl.com

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