Renault-Nissan Labour Dispute Goes Arbitration Way

In a first ever incident in the history of labour disputes in multinationals in India, the labour strife at Renault-Nissan car unit in Chennai is getting arbitrated. This is a departure from the convention of negotiated settlement of such disputes. (1)

The Background

Renault-Nissan, a joint venture between the French and Japanese car makers, had set up its plant in Chennai in March 2010. The unit produces 4,00,000 cars exclusively for exports and employs 3,500 workers.  The main cause for dispute is wage revision which is pending since March 2018. As the talks failed, the matter reached the High Court where it is undecided for the past one year. The Government of Tamil Nadu notified this dispute for arbitration in an attempt to speed up the matter. The arbitrator, a retired judge of the Madras High Court will decide on a total of 53 points raised by the parties. (2)

Advantage Arbitration

Arbitration involves mediation by a person who is trusted by both the sides. The decision is expected to be impartial and fair and is binding for all.  Unlike other form of settlement, scope for appeal is highly limited in arbitration. Hence arbitrator’s word is final. (3)

Union’s Worry

Trade Unions described arbitration for labour dispute at Renault-Nissan plant a wrong precedence, primarily because they fear that this type of arbitration may devalue the stamp of trade unions in dispute settlement. They argue that the collective bargaining across the table by the management and the union representatives can extract more benefits to the workers. (2)

Closing Remarks

According to experts, Renault-Nissan incident will be a trend setter for the strategy of arbitrating the labour dispute.  They feel that arbitration route will be fast and ultimate. In other modes, appeal by the aggrieved party can further prolong the matter and the litigation is expensive.

Post Script

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Key Words:

#HRM#Labour Dispute#Arbitration#Trade Unions#Renault-Nissan  

Source Article: 

The Economic Times Prime Newsletter June 16, 2021                                        

Business Standard June 13, 2021                                                                                                             

R. Clayton Allen-2021                                                              

Discussion Question

Recall one incident when you had a difference of opinion with your superior. How was it resolved? Were you fully satisfied with the outcome? Why?