The primary purpose of a labour union in a capitalist system is presumably to collectively bargain for a greater redistribution of a firm?s profits to its workers in the form of better wages and other perquisites. But any sensible, responsible and forward looking labour union ought to realise that there can be no redistribution of profit if a firm is in the red. That?s the hard lesson that workers in the former Communist countries of Eastern Europe and the Soviet Union found out?a set of bankrupt firms, even when state-owned, can?t do much for worker welfare.
Unfortunately, this is not a lesson that has been at all well learnt by workers in one particular industry: airlines. The airline industry isn?t the most obvious candidate for industrial action: it isn?t filled with blue-collar workers who are being paid subsistence wages to do hard labour, populated instead by relatively very well-paid professionals. Similarly well-paid professionals in other modern enterprises would rarely go on strike, probably not even unionise.
But airline employees?pilots, cabin crew, engineers, ground staff?almost everywhere in the world are very strongly unionised and do not for a moment hesitate to exploit their power to disrupt normal life for thousands of travellers by simply refusing to show up at work.
Consider the cases of Air India and British Airways, both of which are facing industrial action by employees. Particularly telling, in both cases, is the timing of industrial action by employees that makes the action even more abominable than it would in any case have been.
Air India?s problems are many, varied and complex. A lot of them admittedly stem from the fact that it is state-owned and that its owner, the government of India, doesn?t always allow it to be run professionally like a regular commercial enterprise. However, unlike all the suffering imposed on the traveller (because of poor services) and the taxpayer (because of constant losses), Air India does a very good job of looking after its employees, all of whom are paid at par with or better than their peers in competitor airlines. Pilots and engineers, in fact, draw monthly salaries in comfortable six figures and annual salaries that usually go into seven figures. That would rank them alongside senior corporate honchos.
So, one would imagine that the pampered employees would have a stake in not running the airline down. However, they have chosen to do just that, just when the airline is passing through a very difficult stage. Air India posted massive losses of Rs 5,400 crore in the financial year 2009-10. And then suffered one of its worst disasters ever in Mangalore last weekend. Instead of rallying behind the beleaguered airline, the pilots? union shot off a letter questioning the hiring of expat pilots, simply because the captain of the ill-fated IX 812 was an expat. There is yet no confirmation of what exactly went wrong, and whether the pilot?s nationality had anything to do with the accident. The pilots? union acted in naked self-interest finding an opportune moment to hit out at expats who are not part of their union and usually get higher salaries. It took only two more days for the engineers? union and the union that represents ground staff to go on strike ostensibly in strong protest against the management?s decision to issue a circular, asking union leaders not to talk to the press.
Surely, that isn?t reason enough to harass thousands of passengers and plunge the airline into further losses, not immediately after such a massive tragedy that cost 158 lives. And if the real reason for action is demand of greater pay and perks, the unions need only look at Air India?s balance sheet. Indeed, the relatively well paid staff?we aren?t talking manual labour wages here?could easily live with cuts and freezes if that?s what it took to revive the airline. Employees in other sectors of the economy, including India?s leading industry, IT, have readily accepted similar cuts during the downturn.
In another corner of the world, another airline union is acting in a most irresponsible manner. British Airways? cabin crew is on a five-day strike over demands for pay and perks. This is not their first industrial action this year, but comes at a most inopportune time. Like Air India, British Airways, too, recorded a disastrous financial performance in the financial year that ended on March 31, recording losses of around ?500 million. The airline then accumulated additional losses when airports in the UK and much of Europe closed down for over a week because of volcanic ash in the airspace.
British Airways, of course, has a serious problem?the slowdown in the West has dented its most profitable premium trans-Atlantic business and that business is unlikely to recover soon. In such circumstances it is unreasonable for staff to not accept some cuts and freezes. CEO Willie Walsh laid out the bottom line succinctly when he said, ?BA won?t exist in 10 years if we don?t transform.?It?s a pity that the unions have not figured out this simple truth.
This sort of irresponsible and deplorable white-collar trade unionism ought to be dealt with very sternly by the managements and governments concerned. Public opinion would, in fact, be very supportive of strong action. If necessary, those on strike should be fired. Unions that have no regard for the financial health and performance of the firms their members work for are unhealthy for capitalism.
dhiraj.nayyar@expressindia.com