Page 198 - DMGT548_GLOBAL_HRM

Unit 10: International Industrial Relations

Notes
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Case Study Norman (I) Limited

The Company
The first wall tile manufacturing plant in India was established by Kay Pee in 1963 at
Thane in Mumbai under the name Norman tiles. The company was using the brand name
‘Norman’, a leading international tile manufacturer, Norman International Limited and
was paying royalty for the same. The Norman International Limited owned 49% equity in
this venture since its inception. With growth in sight the company set up another
manufacturing unit at Rampur in the state of Uttar Pradesh with an investment of ` 85
million in the year 1981. Initially, at Rampur unit the company was carrying out only
partial operations with semi-finished products being supplied by Thane unit. It was only
in 1984, that the company started carrying out full operations at the Rampur unit. Since,
the market for ceramic tiles started expanding, the company expanded its operations,
accordingly. The process of manufacturing wall tile was such that it needed unskilled
manpower barring few fitters and electricians. Accordingly, the company hired 400 workers
mostly uneducated and unskilled from nearby villages. Few of them were taken for the
fitter and mechanic positions. Apart from these, there were sixty staff members looking
after the other support functions. The workers were paid low wages and were employed
on temporary basis at the beginning and till 1986 most of them were not made permanent.
The human resource department was headed by R.C. Jain, who was an experienced
professional and was with the firm since its inception.
The Genesis
In 1986, the company ventured into floor tile manufacturing and set up another facility at
Rampur unit. This plant was semi-automatic as compared to the wall tile plant which
needed manual operations. The machinery of floor tiles unit was bought from Italy and
due to the nature of process some experienced workers were shifted from wall tile facility.
Slowly, two distinct groups of workers emerged based on the nature of their job and
subsequent skills required. First group was that of unskilled workers mostly associated
with manual operations and the second group was that of skilled workers looking after
technical operations. The second group was paid higher wages than the first group. This
disparity led to discontentment among workers but in the absence of union, it never came
out as an organised reaction. The first such organised attempt was made by workers in
1988, but a prompt and harsh action from management aborted the workers’ bid to form
union. However, this event drew management’s attention towards workers’ grievances
and management helped workers to form a union in 1989. The union was named “Bhartiya
Crystallisation Mazdur Sangh”. However, since most of the workers barring few technical
ones were uneducated, they were unaware of roles and responsibilities of union.
The Management started negotiations with the newly formed union and the first wage
settlement agreement was signed on January 19, 1990. In this agreement, though the
management agreed to increase wages to the extent of ` 250 per month, it linked wages to
production targets. After three months of this agreement, the union leader left the
organisation to join government service. The union was left leaderless. After some time
the workers started voicing their concern about the target-linked wages, but in the absence
of a leader their concerns could not get a voice. It was at this point that some external
labour leaders started inciting the workers. A gate meeting was organised to exploit the
situation on September 21, 1990. After this incident, the industrial relations situation

Contd...

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