Albert David pharmaceuticals (BD) Ltd

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Albert David pharmaceuticals (BD) Ltd

Albert David was established in 1848 by a British business man Albert Juda. The company was named after Albert Juda’s son Albert David. Albert David was a renowned pharmaceutical company of that time. In 1865 Albert Juda sold the company to a Pakistani business man Akbar Ali and he operated the company for many years from then. After the liberation war in 1971, the Government of Bangladesh took over the company and pledged it under the management of Bangladesh Chemical Industry Corporation (BCIC). Government disinvested the company to the private sector in 1985 and sold it to Mr. Shofi Ahmed Chowdhury. Since then the company Albert David is located in the Tejgoan industrial area and is successfully operated under the direction of Mr. Shofi Ahmed Chowdhury.

Introduction of the conflict situation

On 12th December 2009, at last the workers of Albert David created a “charted of demand” where they consistently insisted on raising the following issues from the year before: 10% raise of the basic pay, medical allowance raise of 5%, house rent allowance of 5% and on the other hand 100% of gross wages as bonus in both festivals of Eid. They also sent a formal letter to the apex body of the organization in 2008 and also in 2009. However, the management kept on delaying and avoiding the meeting from the beginning showing various reasons.

This discouraged the workforce from every aspect. However, on 15th December 2009, the workforce decided to go on a “go-slow” on production.

Later on 19th December, the management of Albert David agreed to hold a meeting regarding the issues with the elected representatives (Collective Bargaining Agent) of the workers.

In the meeting the management strongly refused to accept the demands referring that the profitability of the company has decreased to a great extent as the raw material rate went much higher in the international market and there are a lot of other reasons too. So if the demands of the workers are accepted then the company shall not be able to maintain the production level and will incur lose.

However, the meeting failed to achieve the demands of the workers which agitated the workforce to a great extent. On 21st December, the whole workforce decided to stop the production and go on a “sit-down strike” inside the factory premises.

After a straight three days of prolonged strikes, Albert David’s apex body and management was forced to go on a negotiation meeting again with the CBA, where an agreed settlement was reached in favors of both parties at the end.

Details of the collision that aroused in between:

The management was very reluctant from the beginning to accept the demands. As the management consistently came up with excuses that the market has become very competitive & that the demand is declining which is affecting the profitability to a great extent and hence, at this crucial situation it is impossible for the company to accept the demands at any case. But on the contrary, the CBA was still rigidly holding on to their demands and later urged the company to expand the factory by buying new machineries using retain profit or by taking loans. This will enhance the profitability level. Henceforth, fulfilling the “Chartered of demands” in every few years won’t be a hard issue for the company. In addition, the CBA referred that if other similar pharmaceutical companies can run smoothly by keeping their workforces happy than Albert David should do the same.

However, the management yet rejected to go on any further negotiations showing their terms to the CBA. This left no choice for the CBA to let the agitated workforce to go on a “sit-down strike” in the factory premises from 21st of December. All these collision forced the management to verify all the issues concerning the importance of these demands as well the current profitability of the company. Later on 24th of December 2009, the management along with the apex body of the company agreed to call a negotiation meeting with the CBA where they granted a mutual settlement through negotiation.

Collective bargaining is a mechanism of negotiation whereby employers and employees’ representatives negotiate agreements regarding wages, working hours, overtime, health and safety and other working conditions in related to the employment of the employees/workforce. However, all these negotiations with the employers are presented via elected representatives (CBA) among the employees who belong to a trade union or different trade unions in the organization. This mechanism allows the employers and employees to retain a good relationship and helps resolve and prevents arising any disputes in the organization.

There are five basic steps in collective bargaining:

Prepare: To prepare is to develop a negotiation team, consisting of members from both parties with abilities to do so. As such, representatives from both sides now work on understanding the need and specifics for the negotiation, laying in mind company parameters such as operations, working conditions, production orders, and others similar counts.

In this case the trade union representative CBA and company management of Albert David met to lay this preparation. The management carried out details on how the market has become competitive and the cost of raw materials increased- to attain bargaining power over CBA. On similar count, CBA also brought in preparations on chartered of ongoing demands to counteract the management’s observations.

Discuss: Rules to regulate the negotiation process is laid in discussion between both parties. It is also maintained that this discussion takes place at an unbiased place. Exhibition of mutual respect and trust is also contained at this stage so that a collective bargained agreement is reached.

In this case both parties attended this discussion at Hotel Sarina conference hall, as this place was a neutral and unbiased location to the ongoing dispute.

Propose: At this point both parties try to venture out the issue and ways to resolve the same. Opening statements are put and exchanges of messages take place to cultivate opinions of both parties.

In this case, CBA proposed the following ideas to resolution:

  • 10% raise of basic payment
  • 5% raise of medical allowance a year
  • 100% gross wages as bonuses on both Eids
  • 5% raise of house rent allowance

CBA’s proposal was on the basis of how the yearly economic inflation increases the cost of living standards. Considering all the cost increase- their proposal was on increasing the gross Eid bonuses to 100% each time of the both festivals, while at present they had bonus of 50% gross wage on each festival. The increase in basic payment, along with medical allowance and house rent allowance increase-also reflected the inflation in economy each year.

On the other hand, the management of the company stated how the production cost for the company has gone up with the increase rate of raw material in the international market. Also the local market has become very competitive and demands for their products are on the fall. CBA’s proposal if considered as of now, the company will have to incur loss on all grounds.

Bargain: At this point the agreement is drafted, with ideas of ‘what ifs’ and with a proper problem solving attitude being kept, these ideas are addressed.

In this case, CBA initiated to obtain a 10% increase of wages, while management of the company bargained to place a 2% increase. This being too less than the proposed rate, CBA stated a rate of 6% increase- countering which management placed a 4% increase. This rate was agreed upon by both parties.

The idea presented by CBA was based on how their demands were economic in nature, and cannot stand in isolation without due attention from the authority and without due effective solution. Considering this bargain is how the management agreed to the rate increases.

Also increased were the house rent and medical according to what the management decided, 2% each, which was only accepted by CBA on ground that the festivals bonuses on each Eid will have to do at a 100% wage each. This was in accord.

Settlement: After the bargaining process, both parties agree to the common decisions made regarding the issues. Mutual implementations of the agreed terms are now to be tied in a written agreement. The negotiated changes, planning of the same and the shared visions are all to be incorporated in the agreement.

In this case, the final negotiation was reached through this process and agreed minutes were submitted, which closed the negotiation. Both parties kept their interests and workers were secured to their full confidence on the company. Workers’ issues were met after 2 years of demand; a new found level of trust was established and workers’ efficient involvement gained.

Recommendations:

This individual dispute was resolved with little complicacy but this situation of conflict wouldn’t arise if the management of Albert David didn’t avoid the situation from the beginning and gave due attention. So, I would like to strongly suggest the management of Albert David to keep the workers happy and motivated by giving incentives each year according to their performance and increase their allowances & wages in every few years. Simultaneously if the management of Albert David has such frame of mind it would allow them to maintain the reputation of the company and to keep up with the trend of the market. These techniques of the management will give the workforce a good motivation to work efficiently and achieve rewards, thus restraining themselves from involving in any mutiny or conflict situations.

Secondly, I would also like to suggest the management of Albert David to go for “partner based relationship” with the CBA, where both the parties will come together to work towards their mutual goals. This relationship will help the management to always communicate & keep the CBA up to date about the current good/bad situation of the profitability level of the company and also will allow the CBA to discuss their needs and wishes with the management

Conclusion:

From the above analysis it is understood that every organizations should give due attention to the issues on the right time before any further conflict arises. Also should maintain a smooth and transparent relation with the workforce to totally avoid such conflicts.

References:

Pippa relly pg: 130 to133

http://www.naukrihub.com/industrialrelations/process.html

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