Labour Unrest and the Introduction of a Direct Labour Management System

Abstract

The First World War and the Great Extension Scheme (GES) jointly provided the opportunity for the Tata Iron and Steel Company (TISCO) to improve labour productivity based on an unprecedented enlargement of its plant and equipment; but it would turn out that the additional production capacity alone was insufficient to attain the desired goals. According to the growth accounting analysis for the interwar period presented in Table 1.1, the rise in TISCO’s capital growth rate of 28% per annum during the period 1917/18–1922/23 was nearly cancelled out by negative total factor productivity (TFP) growth of −17% per annum during that same period, resulting in a low productivity growth rate of just 5% annually. Because TFP is linked with management efficiency , negative TFP growth suggests that TISCO suffered from severe managerial inefficiency after the implementation of GES. This means that TISCO could only have enjoyed the fruits of that internally financed Scheme if supplemented by significantly large improvements in managerial efficiency .

The First World War and the Great Extension Scheme (GES) jointly provided the opportunity for the Tata Iron and Steel Company (TISCO) to improve labour productivity based on an unprecedented enlargement of its plant and equipment; but it would turn out that the additional production capacity alone was insufficient to attain the desired goals. According to the growth accounting analysis for the interwar period presented in Table 1.1, the rise in TISCO’s capital growth rate of 28% per annum during the period 1917/18–1922/23 was nearly cancelled out by negative total factor productivity (TFP) growth of −17% per annum during that same period, resulting in a low productivity growth rate of just 5% annually. Because TFP is linked with management efficiency , negative TFP growth suggests that TISCO suffered from severe managerial inefficiency after the implementation of GES. This means that TISCO could only have enjoyed the fruits of that internally financed Scheme if supplemented by significantly large improvements in managerial efficiency .

TISCO’s managerial inefficiency during that period was most pronounced in the indirect labour management system that had been adopted at the start of operations, but then became incapable of managing the huge workforce demanded by GES ,¹ thus significantly harming the interests of all five tiers of the company—shareholders, management and millworkers alike. In addition to negative growth in productivity, the harm caused included TISCO’s first large scale strike on 24 February 1920.

Following the strike , TISCO ’s management decided to replace the existing organization with a “direct” system requiring the company to assume “direct” responsibility for labour management that had theretofore been subcontracted to fourth-tier “jobbers,” such as shop floor foremen, who carried out the required jobs based on their personal connections with labours. However, the transition did not progress smoothly, due to difficulties in bridging communication gaps which the former system had created between management and labour and among the millhands themselves.² Such slow progress not only impeded improvements in labour productivity , but would also lead to another large-scale strike in 1928, which will be discussed in Chap. 7.³

The post-GES dysfunction in labour management caused another noteworthy development in the creation of a trade union , the Jamshedpur Labour Association (JLA) , formed shortly after the strike began in 1920 as the workers’ formal means of negotiation with management. However, it would take years for the union members to establish an effective organization capable of a smooth and stable flow of communication with TISCO’s management .

The present chapter will first detail the processes and causes of the dysfunction that developed in TISCO ’s personal connection -based indirect labour management system during the first half of the 1920s based on a thorough analysis of the strikes that occurred at that time. We then turn to several attempts on the part of TISCO to replace the indirect system with a “direct” one after the work stoppage, which included the formation of a company Labour Employment Bureau and the opening of Tata Technical Institute . These two moves did afford TISCO room to grow during the 1920s by improving labour productivity , although both would be fraught with difficulties in subsequent years. Finally, we will describe how the settlement of these issues, particularly recognition of the JLA , required the involvement of influential political leaders, such as M. K. Gandhi , while even such celebrity by no means completely eliminated the dysfunction, requiring further remodeling during the second half of the 1920s as discussed in Chap. 7.

5.1 The Outbreak of Labour Unrest at TISCO in the Early 1920s

TISCO’s strike in the first half of the 1920s is reviewed in detail by Bahl (1995), Datta (1990), and Simeon (1995). Based on their works, as well as new archival evidence, we will clarify the processes of labour unrest. This clarification is necessary for the present monograph, as these processes are crucial to our analysis of the replacement of an indirect labour management system by a direct one, which are detailed in the following sections.

Still basking in the post-WWI boom, TISCO ’s indirect labour management system was suddenly rocked on 24 February 1920 by a worker walk-out,⁴ described by J. R. Dain , deputy commissioner of Singhbhum district where TISCO was located, as follows.

On the morning of the 24th February the foundry employees laid down their tools without warning; and their example was immediately followed by the workmen in other branches, and in less than an hour the entire body of Indian employees with the exception of the clerks, had ceased work (GoUK 1930, p. 117).

Dain also reported, “though there had been no disorder up to that time, the situation at Jamshedpur where 30,000 men were on strike …” Since TISCO ’s total domestic labour force came to a total of 25,221 in 1920/21, in addition to a few thousand unskilled labours employed through domestic contractors, it appears that nearly the entire TISCO workforce joined the strike.

On the second day of the strike , the workers presented to the company four initial demands, which were drafted by Damri Lal , a rolling mills engine driver from Partabgarh in the United Provinces .

“1. An increase in wage particularly for the lower paid employees to meet the increased cost of living. 2. A definite set of rules for the Company’s service corresponding to those in force for Railways and Government service. 3. A closer enquiry into cases of accidents…4. Prompter payment to relatives of men or women killed in the Works.” Lal also stated that in many cases, accidents, which were a result of trade risks or causes other than negligence on the part of the injured men, were recorded by foremen as “caused by his own negligence.”⁵

After two days of gridlock, management and labour met for the first time on 27 February, after General Manager T. W. Tutwiler returned from Bombay. The strikers were represented by five company employees, most of whom were maistries (4th-tier posts equivalent to foreman ), in addition to four “outsiders:” two barristers, Suren Halder and Nimal Chatterjee , one Agarwala from Allahabad, and the editor of an indigenous language newspaper in Calcutta by the name of Sukul .⁶ Representing management was Tutwiler and General Superintendent Alexander. Also in attendance was Singhbhum Deputy Commissioner Scott and Deputy Inspector General of Police Swain .⁷ The negotiations that followed produced a five-point agreement, stating,

• 1. The men should resume work voluntarily.

• 2. No action would be taken or ill-will borne by the Company against the strikers.

• 3. The Company would make no reduction from the men’s pay on account of the days during which the strike lasted.

• 4. The Manager undertook that the statistics [relating to working and living conditions of millhands] would be ready by 1st May, and he would consult the leaders of the men in each department before forwarding his report and recommendations to the directors.

• 5. The strike shall be treated as if it never existed, and that as a guarantee of restored good relations a mass meeting of the strikers should be called that evening, at which the General Manager for the Company, the Deputy Commissioner for the Government, and the four gentlemen for the strikers, should address the men and set the seal on the agreement.⁸

Despite postponing the settlement of such essential issues as wage increases and workers’ compensation for accidents, the agreement’s acceptance augured an improvement in the situation at Jamshedpur , at least in the estimation of Tutwiler, who on 2 March wrote in a confidential letter to R. D. Tata , “Do not worry, as I feel everything will come right.”⁹ That was before 8 March, when management made the following offer revised by the Board of Directors . According to a 1930 Royal Commission of Labour report.

The resumption of work was an essential preliminary to the grant of any concessions, but if the men returned by 6 pm on the 9th all the strikers including their leaders would be reinstated and paid their wages up to the date on which the strike broke out. Negotiations would then be opened regarding the other demands. The Company would reconsider the question of paying the men for the period of the strike, and undertook that there would be a definite increase in pay if the financial position of the Company permitted (GoUK 1930, p. 118).

The revised offer reversed Tutwiler’s concession to immediate payment of wages during the strike, proposing instead to negotiate all demands, including wage increases if “the financial position of the company permitted.” The directors probably overturned Tutwiler’s offer out of fear that immediate payment could possibly encourage the outbreak of strikes at other industrial enterprises run and financed by TISCO directors, most of whom were financiers of other large business corporations in colonial India .¹⁰ Due to the fact that the revised offer lacked any substantive quid pro quo to counterbalance the rejection of instant strike wage payments, promising instead only negotiations, in the words of the above Report, “When these terms were placed before a meeting of the men, they were most unfavourably received” (GoUK 1930, p. 118). While the strikers intimated on 12 May their final refusal of the revised management terms, Byomkesh Chakravarti, the barrister and a political leader originally requested to represent the workers, and I. B. Sen , a worker representative, presented their final demands to management, summarized in the 1930 Report as follows.

They claimed an immediate increase of 15 per cent in all wages which before the strike did not exceed Rs. 8 per day. This increase was to be liable to enhancement or reduction in accordance with the result of the statistics which the General Manager was preparing. No men were to be discharged and sympathetic consideration of the subjects enumerated in the following memorandum was to be promised:- (1) Increment – 35 per cent and 50 per cent, (2) Provision against accidents, (3) Production bonus , general and labouring staff, (4) Annual leave, (5) Holidays, (6) Sick leave, (7) Casual leave, (8) Medical treatment, (9) Nurses and midwives, (10) Cattle dispensary and veterinary treatment, (11) Codification of service rules and gradations, (12) Number of working hours, (13) Treatment of Indian subordinates, (14) Town management, (15) Guest house, (16) Temple and Musjid, (17) Railway facilities, (18) The Department of Greater Extensions to be included, (19) Strike wages (GoUK 1930, pp. 118–9).

The company management summarily rejected this ultimatum after it was reported to R. D. Tata by Tutwiler with the comment, “If terms are refused [by the workers] it may be difficult to control strikers, but local Officials are prepared to deal with any emergencies,”¹¹ which proved, not surprisingly, prophetic, as management’s refusal to budge merely exacerbated the tension and resulted in a large-scale lockout during the ensuing days.

The tense situation peaked on 15 March, which to Tutwiler “appeared quieter…[although] the gates were still picketed and the strikers refused to pass employees and stopped grass for the Police Horses.”¹² Tensions then began to rise when at 7:30 a.m. Temple, the town’s chief engineer , and Sawday, a former Indian civil servant now in charge of the company’s town administration affairs, attempted “to take out a train carrying coolies , chiefly women who desired to go to their homes from the works to Tatanagar [Jamshedpur ’s railway station]” (GoUK 1930, p. 120). What happened next was reported by the Statesman on 18 March.

Mr. Temple tried to reach Tatanagar but found the railway line impassable as all switches had been tampered with, switch buffers withdrawn and switch points jammed. He and Mr. Sawday, therefore, returned to the works. At about 8:30 am, the DIG [Deputy Inspector-General], who was on duty at the works, received information that a large body of men were damaging the railway line. He immediately ordered two parties of mounted police, who had arrived the night before from Shahabad, to go up and arrest the offenders. As the police were strangers, he asked Mr. Sawday and Mr. Holmen, two of the company’s employees, to accompany the mounted party as guides. He also despatched in a carriage 10 Gurkha military police in charge of Mr. Ashby, DSP [District Superintendent of Police]. Mr. Swaine, DIP [Deputy Inspector-General of Police] gave instructions to the mounted police not to fire but, if violence was offered, to use the flats of their swords or butts of their carbines in self-defence. He gave similar instructions not to fire, except in self-defence, to Mr. Sawday and Mr. Ashby’s parties. The troops under Mr. Sawday’s guidance and the Gurkhas arrived at a point 300 yards beyond the running room of the traffic department and found that the strikers had piled on the rails telegraph poles and masses of pig iron, sleepers, and other obstructions and made derailment inevitable from whichever side a train approached. The second body of mounted men, who were asked to approach the men from the other side, did not arrive until the whole affair had ended. Many hundreds of strikers were approaching the spot from the north and west and, as they passed the L Town gate, they were shouting. “Kill the soldiers!” The mounted men proceeded to arrest prisoners from among the men actually engaged in wrecking the line and succeeded in capturing about forty. These were made over to the police. Under Mr. Ashby and Mr. Sawday’s direction, the work of removing the obstruction on the line commenced, but the situation was so dangerous that the train was ordered back to fetch reinforcements. Before they could arrive, the number of strikers had become so great that the prisoners could no longer be retained and the mob surrounded and got in among the police and rescued the prisoners. The whole body of strikers then attacked the police with stones, with the result that Mr. Ashby and some policemen sustained severe injuries. The authorities then thought it absolutely necessary to open fire in self-defence. After blank shots, the police fell back in the direction of the running room followed by 2,000 men who continued pelting stones despite the firing. Altogether 101 shots were fired, resulting in 5 killed and 21 wounded. The firing lasted for about 20 minutes, during whole of which time the police were falling back upon the works and firing only when their assailants pressed too closely upon them. At this stage Mr. Scott, DIP, arrived on horse-back and found the whole mob determined to press the attack home to the works. Out of the 101 shots, 30 were fired after Mr. Scott’s arrival. After giving orders to the police to cease fire, he galloped in front of the strikers and tried to persuade them to cease doing any further mischief. The mob was most excited and declined to listen…Mr. Scott also addressed the men asking them to keep quiet and submit to him anything they wanted to say, and he would give them his best consideration. This had the effect of quieting down the men to some extent.¹³

According to J. R. Dain , “This collision marked the end of the attempts at active intimidation in the vicinity of the works” (GoUK 1930, p. 120). In the midst of the bloodshed, the company had no choice but to abandon its truculent stance towards the workers’ demands; and on 18 March, the TISCO directors offered the following compromise for improving working conditions and daily lives of its millhands.

• 1. All employees drawing Rs. 50 or less per mensem, either as monthly salary or total monthly wages, will get a permanent increase of 25% on their salaries or wage (not including any bonus ) instead of the present bonus of 10%.

• 2. Uncovenanted men drawing over Rs. 50 per mensem as above will be given a permanent increase of 20% on their monthly salaries or total monthly wages (not including any bonus) instead of the present bonus of 10%, provided that no employee in this class will receive less than Rs. 62.8.0 per month as salary or wages.

• 3. These increases will be given to each employee from the date of his resuming work provided that he joins before 27th March with the consent of the General Manager .

• 4. The Directors will consider the statistics and report, which the General Manager is drawing up for a general production bonus system and regarding leave, accidents, etc., and will announce their decisions thereon on or before 31 May 1920.

• 5. The sale of grain and cloth will be continued as heretofore.¹⁴

In response to this offer, the workers requested a meeting with the directors on 19 March, which their legal advisors Halder and Chatterjee attended, accompanied by four workmen, including Teja Singh , foreman of the millwright department and one Bagchi , an apprentice in the millwright department, while management was represented by Board Chairman D. J. Tata, Board Directors Sasson David and Lalubhai Samaldas , A. J. Bilimoria of Tata Sons and General Manager Tutwiler. Two government officials, Heycock, commissioner of Singhbhum , and Scott , deputy commissioner, were also present. The meeting resulted in an agreement under which most of the strikers returned to work on 20 March. The workers’ demands were accepted, with the exception of the payment of strike wages.

Despite its acquiescence to economic demands, evidence shows that TISCO ’s management had difficulty fully understanding worker grievances, for at the 19 March meeting D. J. Tata is reported to have been filled “with grief to see that in spite of all that was being done and projected for welfare work for the Company’s employees, all the efforts of the Company, of the Directors and the Agents seemed to be thrown away as demonstrated by this strike .”¹⁵ Such sentiment indicates how out of touch the top tiers of the company were with the actual working conditions on the shop floor , reinforcing what we have observed in Chap. 3 about top management concentrating its efforts on the financial and commercial sides of the business, while leaving production and the labour relations aspects to the third tier of general managers and their staff. There should be no doubt that it was such a lack of understanding at the top which resulted in an inability to take quick and decisive action to ease conflicts with workers and avoid violence, a failure which was to be followed by continued conflicts among and within the company’s five tiers throughout the 1920s.¹⁶ Despite such ignorance on the part of top management, most labourers resumed work on March 20th, indicating their acceptance of the company’s terms, which did not last very long, for two months later in May trouble occurred that would last until June, although the intensity of the unrest did not reach the level of the February–March action. The Dain Report described the initial phase as follows.

On 25th morning I received the confidential reports from the DSP Jamshedpur , recorded by Inspector Mitra of the CID [Criminal Investigation Department] and sub-Inspector Rewa Singh. These seemed to me to indicate a situation already very tense and containing the possibilities of early and serious trouble…I should sum up the situation as follows: The concessions made by the Directors, in fulfilment of their promise of 20th March 1920, have not satisfied the employees.¹⁷

Although it did not lead to another general strike , this action, which continued until mid-June, was triggered by two specific grievances among those already aired in March. At a meeting on 26 May with Acting General Manager Marshall and General Superintendent Alexander, Teja Singh accompanied by a number of other workers first cited general inflation and consequent declining real wages as the causes of rising dissatisfaction among the workforce and then noted the arbitrariness of foremen as another factor stating, “under the rule providing for dismissal, a foreman may not report a workman as being insubordinate merely for the purpose of getting rid of him,” to which Marshall and Alexander responded that “every case would be looked into individually and that the General Manager was the sole judge… if an employee thought he had been dealt with unfairly, Works Committees had been organized which would take care of that kind of thing and to whom he should make his representations.” Another labour representative Abdul Latif then noted the insufficient functioning of those Works Committees, stating, “even an enquiry may go wrong as the committee might be packed so that the man’s case could not be fairly considered.”¹⁸ These two causes, declining real wages and arbitrariness on the part of shop foremen, which had been emphasized by workers in explaining their walk-out during February–March, were again listed as the major causes of the action during May–June.

Management ’s response was to propose the following additional compromise on wages, which was accepted.

Following increase will be granted from 1^st June 1920. To employees receiving not less than 8 annas daily, Rs. 15 monthly and not more than Rs. 1-5-14 daily or Rs. 40 monthly—20%; To employees receiving over Rs. 1-5-14 daily or Rs. 40 monthly and not more than Rs. 2-8-0 daily or Rs. 75 monthly—15%; To employees receiving over Rs. 2-8-0 daily or Rs. 75 monthly and not more than Rs. 5 daily or Rs. 150 monthly—10%. These increases will be calculated on the basis of wages before strike .¹⁹

The labour unrest from May to June 1920 also produced a new grievance in management ’s refusal to recognize the JLA as the company labour union, which stated to ranked first among all the workers’ recent demands.²⁰ The first attempt at organizing workers at TISCO was the Jamshedpur Town Social Welfare Union , which was formed in 1919 under the leadership of A. V. Thakkar of the Servants of Indian Society . The company was apparently under the impression that Thakkar, a well-known Indian social worker, would somehow mediate the interests of management and labour, which had been growing further and further apart due to changes in working conditions taking place under the wartime boom, then under GES . The company was dead wrong about Thakkar, who “failed” to resolve the situation, instead favoring the plight of the workers, in exactly the same manner he had been conducting his social work all along, apparently unbeknownst to TISCO. Thakkar was soon told by a “disappointed” Tutwiler that his “services” would no longer be required in Jamshedpur .²¹

The JLA was formed just prior to the tragic events of 15 March,²² “with Mr. S. N. Halder as president, Jogesh Ghosh as secretary, and Viswanath Janardan Sathy as treasurer.”²³ According to the rules and regulations of the JLA , the objective of the Association “shall be to raise a fund for the assistance of members out of work, in case of sickness or in distress; in case of accident etc.; to regulate the relation between employers and the employed.”²⁴ The union officers were designated as the president, vice-president, treasurer, secretary and auditor, among whom the rules and regulations stated, “The secretary and the treasurer must be employees of the company of at least three years’ standing,” meaning that the president, vice-president and auditor positions could be held by persons outside the company.²⁵ The likelihood of an outsider ’s nomination for president or vice-president would become a serious problem for TISCO’s management, particularly after 1921 when its confrontation with the JLA intensified and M. K. Gandhi had to be called into mediate a settlement in 1925.²⁶

During the initial labour unrest in 1920, the management expressed doubt about the representative capacity of the JLA, citing an insufficient number of JLA rank and file members and its short period of activity. For example, at the beginning of a meeting on 19 March 1920 between management and labour regarding settlement terms for the initial strike of February-March, Board Chairman D. J. Tata raised the question of the JLA ’s representative capacity in the following manner.

He [Tata] was authentically advised that a large majority of the workpeople did not desire to go on strike . It was only a few better paid Maistries and workmen who had decided to go on strike, and it was by their persuasion and intimidation that the majority of the workpeople left off work. Under the circumstances, how could a few people represent the large majority?²⁷

Despite such doubt, the management recognised the JLA in January 1921 in response to the demands of th May–June 1920 strikers²⁸; however, that recognition was withdrawn as early as the middle of 1922, a move which the management explained as stemming from worry over the possibility of an outsider ’s nomination as union president or vice president.²⁹ The change of heart got rolling when Tutwiler wrote to Peterson on 19 September 1921,

The Labour Association is in very bad hands, and as long as the class of people which are at present leaders remain so, I am sure it works a harmful influence both to the Company and the men… I am of the opinion that it is a mistake to let them keep on the way they are going, and think that we should refuse to recognize them any longer unless they will elect a representative body from among the workmen.³⁰

The withdrawal of union recognition was followed more direct action in September 1922, during which the strikers demanded an increase in remuneration (GoUK 1930, p. 125). The strike , which began on the 19th, “was complete and included not only the ordinary Indian workmen, but also many Anglo-Indians and the Bengali clerical staff” (ibid.). The wage increases demanded by the workers were not seriously considered by management , in contrast to the strikes of 1920, because the company was facing a serious financial crisis ,³¹ which will be taken up in detail in Chap. 6. As to the strikers’ demand for union recognition, the JLA requested Dewan Chamanlal , secretary of the All-India Trade Union Congress (AITUC) , to act as their representative.³²

Chamanlal arrived in Jamshedpur on 20 October, on the evening of which he

addressed the workers and told them that a settlement had been reached on the following terms… (i) Everybody was to return to work at 6 am the following morning. Those who had gone to homes were to resume work at once on their return. (ii) A committee of 10 from each side would be appointed to arrange settlement of their demands. (iii) Everyone would go back on the wages drawn before the strike . (iv) The reorganization of the union shall be undertaken by the Trades Union Congress [AITUC ]” (ibid., p. 128).

Although almost no increase in remuneration was achieved, the settlement provided fourth and fifth tier workers with a channel for negotiation with upper tier management , paving the way for the recognition of the JLA .³³

After the strike of 1922, workers apparently changed their main demand from wage increases to recognition of the JLA and attempted to involve powerful political leaders in the negotiations. At meetings on 14 and 15 March 1923, the JLA decided to propose the formation of a conciliation committee , which would consist of “an equal number of representatives from the employers and employees together with an independent umpire to settle disputes as between employers and employees.”³⁴ Several months later in April 1924, management accepted the proposal with modifications,³⁵ resulting in a Conciliation Committee composed of several top managers, in addition to powerful politicians who supported workers’ demands (C. R. Das (Committee president); Dewan Chamanlal ; N. M. Joshi; C. F. Andrews ; Manu Subedar ) and a few worker representatives (D. C. Gupta ; T. C. Goawami ; Ahuja; Ruhr Singh ; and Dhavle ).³⁶ According to the Times of India , the committee functioned as follows.

The function of this Committee will be to consider mutual representations made by employers and employees of the Jamshedpur Steel Works. On every question raised before it, the Committee will hear both sides. The findings of the Committee will be in the shape of recommendations which will be given effect to both sides as far as possible …Further, the Committee will proceed forthwith to suggest lines for the organization of labour at Jamshedpur, the object of which union will be not only negotiations with the employers, but every activity legitimate to Trade Unions. It is understood that the employers will give assistance in establishing such a Trade Union or Trade Unions working on modern Trade Union principles, including the formation of a regularly elected executive or executives by the provision of a ballot system, which will also govern all declarations of cessation of work.³⁷

What made the formation of the Conciliation Committee most uncomfortable for TISCO ’s management was the Steel Industry (Protection) Bill (detailed in the next chapter), proposed under the recommendation of the Indian Tariff Board to relieve the company from financial stringency in the aftermath of the wartime boom and presently being deliberated by the Legislative Assembly , to which the TISCO workers had sent their grievances and requested support. The Assembly members appealed to were D. Chamanlal (to be elected in 1923), Motilal Nehru , one of the founders of the Swarajist party , and C. R. Das , another powerful Swarajist, two of whom would become Conciliation Committee members. It was Committee President C. R. Das, in particular, who sympathized with the workers and insisted on the prompt recognition of the JLA as expressed in a memo he wrote to the TISCO Board of Directors , which was discussed at its 1 July 1924 meeting as follows.

Mr. Das stated that a beginning should be made by recognizing the existing Labour Associations as the nucleus of the larger organization that is to be. In answer to an enquiry [of directors], Mr. Das stated that he saw the Register of the existing Association and gathered therefrom that the number of members at present was 1,200. If the existing Association be recognized, as suggested, there was every possibility of its increasing in membership and, as soon as 15,000 were reached proper electoral rules and regulations could be framed and enforced.³⁸

Other members agreed with Das. For example, at a meeting of the Committee on 20 August 1924, C. F. Andrews expressed strong opposition to Tata’s refusal to recognize a JLA with outsider union officials.

Suppose a man has been in the Works for 15 years; he has had sufficient experience to run an Association; you turn him out or dismiss him. The men think that you dismissed him wrongly. They put him in as their secretary. You at once say, no, we shall not have him and from that moment you are the master of that Union. Excuse me, in this way, you can turn out any secretary…Thus the Union becomes a slave of the Company…In every place where there is a decent Union and the only reason why in Ahmedabad the Trade Union has succeeded - and that is one stringing thing in India – is because they have outside men who are doing secretarial duties in different Departments.³⁹

Motilal Nehru went so far in his criticism of Tata’s fear of outsider union officials as to declare that he (Nehru) would not support tariff protection for the steel industry without a labour settlement.

I may mention one thing to remind you of the conversation which Mr. Jinnah and myself had with you that our unstinted support to the Tariff Bill was depended upon the settlement of the Labour question; of course, we did not mention any particular way to settle it; so I would advise you to see that this does not break through. Our understanding was that everything was being done subject to the settlement of the Labour question.⁴⁰

Nehru’s warning seemed to do the trick, for after a few more conversations with Committee members, Tata gave in, stating “On your advice I give up the question of outsiders and will try to persuade my Directors to accept them…. [although] [w]e shall not accept a dismissed servant.”⁴¹ Tata’s condition regarding dismissed employees were not particularly disconcerting for either the Committee members or the JLA . For example, when the JLA retained a dismissed employee by the name of Sethi as union secretary, R. D. Tata brought the fact to Motilal Nehru ’s attention on 20 April 1925, stating,

Mr. Andrews has made two requests…As regards… [the second] request, namely, that the Labour Association should be left free to elect its own office-bearers without any restrictions, you know that this is against our understanding. After consulting our Board of Directors , I had telegraphed to Mr. Goswami on 12th January that our Board of Directors had no objection to the office-bearers, namely, President, Treasurer, and Secretary of the Association being outsiders, but not ex-employees of this Company. As you will remember I had agreed, while I was in Delhi last [at the Conciliation Committee meeting], to abide by your decision on these matters. I would like you to advise me of your views so that I can place them before the Board of Directors for final decision. In this connection, I am sending you, for reference, a copy of the Minutes of the Conciliation Committee meeting held at Jamshedpur in August last as received from the Hon. Secretary, Mr. Goswami.⁴²

Andrews, who had been elected president of the JLA in March 1925,⁴³ rebutted in a letter to R. D. Tata on 8 June 1925 that management could not exclude ex-employees from office, because of labour legislation allowing any non-employee to be elected officers of a trade union in India.

It is quite impossible for you to refuse to recognize the Labour Union with such a man as secretary after Sir Charles Innes on behalf of the Government of India has laid down the principle that the Government are prepared to accept the position that outsiders are a necessity in Trades Unions in India today and the new Trades Union Bill had recognized this fact also…One thing the company cannot do. They cannot refuse to recognize the Union simply because Sethi is Secretary after the Government of India announcement. That would be quite impossible in a Company drawing a bounty of over 65 lakhs from the Government of India.⁴⁴

The response of Motilal Nehru also took issue with Tata’s objection in a 31 May 1925 letter to Andrews, writing,

During my illness at Allahabad I received two thick envelops [sic] from R.D. Tata containing papers relating to the situation at Jamshedpur . They lie among my papers unopened, and I have no present intention of attending to them as I am still very weak…I have invited Mahatmaji to come up here for a few days but I do not expect him to accept the invitation.⁴⁵

Taking up Nehru’s notion, Andrews decided to invite Gandhi to Jamshedpur to take the lead in settling the JLA recognition issue. Gandhi accepted the invitation and arrived in Jamshedpur in August 1925. On 8 August, he addressed the workers as follows.

I have great pleasure in being able to visit these great steel works. I have been thinking of coming to this place ever since 1917, the year in which I was trying to serve the Champaran agriculturists…As you know, I am a labourer myself… But none of my activities is one-sided, and as my religion begins and ends with truth and non-violence, my identification with labour does not conflict with my friendship with capital…Capitalists have in the end regarded me as their true friend…The wish therefore that the relations between you should be of the friendliest character is a desire from the bottom of my heart. And it is my deep prayer that you may help in delivering Indian from evil and bondage and help her to give the message of peace to the outside world…May God grant that in serving the Tatas you will also serve India and will always realise that you are here for a much higher mission than merely working for an industrial enterprise.⁴⁶

The following day, a meeting was held attended by Gandhi, R. D. Tata , C. F. Andrews and Jawaharlal Nehru on behalf of his ill-stricken father, at which Tata “agreed that the Labour Association with officers duly elected would be recognized by the Company.”⁴⁷ The agreement was approved by the Board of Directors on 27 August 1925, thus recognizing the JLA and confirming the re-employment of Sethi at TISCO at the same rate of pay he received prior to dismissal.⁴⁸

An overview of the way in which labour unrest unfolded at TISCO during the first half of the 1920s reveals a dysfunctional indirect labour management system as the root of the problem; namely, almost total authority being held by fourth-tier foremen, in the guise of “jobbers,” over the payment of wages, safety standards and other rules and regulations in the workplace. Moreover, workers’ attempts to replace “jobber ” representation with a direct channel to management through trade union negotiations was initially refused by the upper management tiers, requiring the intervention of influential political outsiders with names such as Gandhi and Nehru to finally reach a settlement in 1925.

However, our analysis must not stop at a summary of the events, but delve more deeply into the nature of the dysfunction in the indirect labour management system , which led to alleged decreases in real wages and degraded safety in the workplace. Were the workers’ grievances founded? How exactly did working conditions worsen? And how did the indirect labour management system fail to adjust to the interests of both management and the workforce? These questions will be examined in the following sections.

5.2 The Impact of Wartime Inflation on Real Wages

As described in Chap. 4, the outbreak of the First World War caused a sharp increase in general prices in India. Figure 5.1 shows that the price indices of basic necessities such as rice , wheat, and gram (with the exception of salt ) increased sharply by 75%, on average, from 121 to 202 (rice ), 114 to 205 (wheat ), and 123 to 236 (gram ) over the two year period 1917–1919 in Singhbhum District, where TISCO was located. This two-year period was a time during which the NDP deflator rose by 50% from 131 in 1917/18 to 195 in 1919/20 (based on 1910/11 prices). Similarly, the NDP deflator for primary produce also rose by a similar degree during the period.⁴⁹ These figures indicate that the prices of necessities in Singhbhum District followed the general price trends throughout India.⁵⁰

Fig. 5.1

Sources Price data from Government of India , Index numbers of Indian price . Calcutta: Central Publication Branch. Primary product deflator from Sivasuburamonian (2000)

Price indexes in Singhbhum district: 1910–1929 (in 1910 prices).

For TISCO workers, their nominal wages unfortunately did not keep up with the rising prices of daily necessities during the entire second half of the 1910s, when, as we have seen in Sect. 2.4 of Chapter 2, real wages for colonial India ’s skilled and semi-skilled labour could have started to rise in general. Figure 5.2 shows the average nominal wage index of TISCO, and indices of the primary product deflator and the rice price in Singhbhum . According to the Figure, the average wages of TISCO employees working in its production departments barely kept pace with increasing trends of price indices during the 1910s, except for the few years at the end of the decade when India was suffering from the above described severe wartime inflation . The average real wage trends of workers in Fig. 5.2, however, does not represent the actual trend for most of the labour force. This is because TISCO’s workforce consisted of highly paid covenanted foreign employees in addition to low wage indigenous labour, as described in Chap. 3.

Fig. 5.2

Sources Nominal wage data from Government of India (1924a, pp. 109–11). Prices index and NDP deflator data from sources in Fig. 5.1. ¹Calculated based on data for employees working in the main productive departments, such as the coke ovens, blast furnaces, the open hearth, blooming mill, 28’ mill, and bar mills. Average wages includes total wage payments plus bonuses. ²Wage and bonus figures for 1918/19 based on nine months of available data, adjusted to 12 months. ³The almost 15% reduction in nominal wages between 1918/19 and 1919/20 was probably due to the suspension of wage payments during the strike lasting more than one month in 1919/20

Indexes of average nominal wages at TISCO and deflators: 1912–1923 (in 1912/13 prices).

Figure 5.3 shows that immediately after the outbreak of the War, the nominal wage of covenanted labour such as experienced management staff and skilled technicians recruited from foreign countries grew faster than the wages of the shop floor indigenous workers. The real wage index of covenanted labour shown in Fig. 5.4 remained above its prewar level by almost 50%, immediate increases caused by a shortage of qualified management staff during the War. The supply of such skilled labour from abroad was severely disrupted upon the outbreak of the War, at exactly the same time TISCO ’s General Expansion Scheme required an increase. In contrast to the rise in covenanted real wages, uncovenanted real wages dropped in the midst of rampant inflation to less than 70% of the prewar standard (from 106 in 1913/14 to 68 in 1919/20). Such a discrepancy in wage trends between foreigners and most Indian workers, in addition to decreasing real wages themselves, would be another grievance aired by the latter group during the strikes of the early 1920s.

Fig. 5.3

Sources Same with Fig. 5.2

Average nominal wage indexes of TISCO production departments: 1912–1923 (in 1912/13 prices).

Fig. 5.4

Sources Same with Fig. 5.2. ¹The nominal wages adjusted by the NDP deflator (primary sector )

Average real wage indexes¹ of TISCO production departments: 1912–1923 (in 1912/13 prices).

Our wartime wage analysis also indicates that despite diminishing real wages for most of India’s labour force, the nominal wages of TISCO’s Indian skilled or semi-skilled workers may have still been slightly higher than those of workers doing equivalent work at other mills.⁵¹ According to wage lists of all TISCO employees in October 1919 and April 1920, the “average” wage paid to fitters was almost Rs. 42.5 per month (Rs. 1.5 per day) in 1919 and Rs. 50 per month (Rs. 2 per day) in 1920; carpenters were paid Rs. 25 per month (Rs. 1 per day) and Rs. 42.5 per month (Rs. 1.5 per day), respectively,⁵² amounts higher than what similar work at the railway workshops was fetching in most cases, according to Table 5.1. It was the higher wages paid to TISCO’s skilled workers that had attracted them far and wide from the country’s railway workshops and other industrial centres, as described in Appendix in Chap. 3.

Table 5.1 Nominal monthly wages for low level management staff and skilled railway and mill workers in India

Although Indian workers at TISCO had a history of receiving slightly higher wages, that advantage began to diminish during the War. Tables 5.1 and 5.2 indicate that the average wage of TISCO’s uncovenanted labour remained stable at Rs. 23 or 25 during the second half of the 1910s, whereas the average wage of skilled labourers at other mills rose, suggesting that TISCO did not adjust wage standards to price levels amidst severe wartime inflation , like other manufacturers did. As to the reason why, we only need point to the fact that authority over the payment of wages to the majority of the workforce was in the hands of the company’s fourth-tier lower management staff , such as shop floor foreman , under a personal connection -based indirect “jobber ” labour management arrangement. Therefore, a failure to adjust wages in accordance with living costs stands as another indictment against TISCO’s dysfunctional brand of labour management .

Table 5.2 Nominal average monthly wages plus bonuses at TISCO according to production department: 1912–1923

5.3 Post-GES Industrial Accidents on the Rise

While the wage standards of some of India’s highest paid skilled and semi-skilled workers were plummeting during wartime, the work plant industrial accident rate was soaring. In correspondence sent to the TISCO Board during June 1921, General Manager Tutwiler cited the example of the safety records of railway companies, which experienced a total 15,918 accidents in 1918/19 and 17,401 in 1919/20, among which 368 and 550 had been fatal . Given the total number of workers employed by those companies, 684,976 in 1918/19 and 711,690 in 1919/20, their accident rate came to 2.3% (0.05% fatal ) in 1918/19 and was 2.4% (0.07% fatal) in 1919/20. In contrast, Tutwiler continued, TISCO had experienced 687 accidents in 1918, 879 in 1919, and 834 in 1920, of which 20, 14 and 30 had been fatal. Given a total TISCO workforce of 15,950, 23,560, and 30,985 during those same years, the company’s accident rate came to 4.3% (0.12% fatal), 3.7% (0.05% fatal) and 2.7% (0.09% fatal), respectively.⁵³ As already described in Appendix in Chap. 3, many of TISCO’s workers had been employed at railway companies before coming to Jamshedpur , and just about as many must have been surprised and frustrated by the higher number of accidents at TISCO than on the railways.

Although such a discrepancy may be attributed to the higher risk technical demands of an iron and steel plant in comparison to a railway workshop , there may have been other factors, possibly originating from the implementation of TISCO’s General Extension Scheme, which required a drastic increase in the workforce from 9,507 in 1913/14 to 30,135 in 1923/24⁵⁴ and expanded the fourth-tier management staff of shopfloor supervisors (foremen) from 125 to 554 during the ten years following 1913/14.⁵⁵

To begin with, as mentioned previously, the implementation of GES made it necessary to employ a huge amount of additional skilled staff and labour at the exact time when the outbreak of the War greatly reduced the supply of available technicians from abroad, particularly Germans, whose presence as covenanted workers at TISCO production departments decreased from 125 in 1913/14 to 64 in 1917/18. All told, almost 40% of the company’s prewar covenanted workers left the country, leaving TISCO with a serious shortage of steelmaking know-how and experience. Faced with such a labour resource supply and demand imbalance, the company had no other alternative than to find people to fill these skilled positions from the domestic labour market, particularly from among the existing workforce. The consequent rash of job promotions that followed is seen TISCO’s documents recording the number of workers employed as millhands at TISCO in the middle of the 1910s promoted to low management or skilled labour posts such as shift foreman , shop foreman, and assistant foreman, and roller and guide-setter up to 1921. A total of 17 Indians received promotions within three years after being hired as millhands, while 23 were promoted within seven years.⁵⁶

This tumultuous, not to mention premature, promotion of Indian millhands to positions of leadership in the workplace is a very likely one cause of serious accidents, regardless of technical requirements. Moreover, inexperience and the inability to lead can cause mounting discontent and grievances on the shopfloor. J. L. Keenan , who joined TISCO as a blast furnace shift foreman in the 1910s and served as general manager from 1930 to 1937, reflected on that same period, stating, “The old friendly spirit of affection which our labour had left for his foreman had been replaced by an acute distrust not far from hate” (Keenan 1943, p. 84).

On the other hand, an increasing rate of accidents can be caused by the employment of insufficiently equipped and skilled millhands during the GES surge. Under the indirect “jobber ” system that the company had become locked into as the only way to procure and manage skilled and semi-skilled shopfloor workers, all new additions had to be recruited by the foremen, who were under contract with top management and had been given total authority over a workforce which they had assembled based on personal connections. Such a personalized form of recruitment is by no means effective in assessing the reliability and appropriateness of a large number of candidates over the short period of time demanded by GES, thus causing foremen to employ workers without the appropriate information concerning their fitness for the job. A sudden influx of unqualified millhands in a steel plant will probably not only lower productivity, but also increase accidents on the job.

In sum, both declining real wages and deteriorating safety conditions, which led to labour unrest and low productivity during the first half of the 1920s, provided a momentous impetus for the transformation of TISCO’s dysfunctional “jobber ”-led labour management system .

5.4 First Attempts at Direct Labour Management

It goes without saying that the ultimate responsibility for worsening working conditions and labour unrest lay with TISCO’s top management ; however, the actual problems on the shopfloor were directly attributable to the foremen who under the company’s indirect “jobber ” system, had been entrusted with almost full authority in the management of skilled and semi-skilled millhands. In contrast to this kind of “indirect” management, a more “direct” method would involve transferring “employment” relations , including labour recruitment, supervision, training and compensation from the prerogative of foremen to a corporate organizational unit, while entrusting only “work” relations, including the supervision and control of production on the shop floor , to the foremen.⁵⁷

Figure 5.5 shows the transformation of TISCO ’s labour management system during the early 1920s and the creation of new organizations, including the Labour Employment Bureau , whose superintendent was placed in charge of recruitment , employment, promotions, wage levels and worker dismissals, and the Tata Technical Institute , whose director was put in charge of supervising employee training, indicating that TISCO was attempting to internalize these functions into its corporate structure .

Fig. 5.5

Sources Organization chart attached to a letter of Keenan to directors of TISCO , 20 March 1930, Industrial Relations Papers, Files 70, p. 130, Tata Steel Archives and other sources. ¹Positions newly created with the introduction of a direct labour management system in the early 1920s

TISCO ’s organization in the early 1920s.

5.4.1 The Labour Employment Bureau

The idea of forming such a department and its expected role was being discussed as early as February 1920. In a letter to R. D. Tata on the 28th, the fourth day in the first strike , Acting General Manager S. M. Marshall firstly wrote, ‘As the cost of food and other living necessities are constantly changing and on the whole continuously rising, I believe it will be wise for the Steel Company alone or for the associated Tata interests to establish a permanent department or bureau, whose duties would be to collect information on labour rates and the cost of necessities in the principal part of India and in foreign countries as well’. He continued, ‘This bureau should study welfare conditions at the Tata plants and compare them with the work which is being done by Railways or other industries in this country. Perhaps thus it might lead to some cooperation between our Companies and other large companies having similar labour problems so that the Employers of all the large Companies would receive uniform and just treatment’.⁵⁸ Marshall’s remarks imply, first, a sense that organizational steps were required to obtain satisfactory information to determine appropriate living wages for the workers, which the foremen/”jobbers” had failed to do. Secondly, the letter indicates that the initial first step in direct labour management was considered to be collecting accurate information on working and living conditions of workers to determine a living wage under severe inflation , rather than strengthening corporate control over the workforce.

It was in 1921 that the Labour Employment Bureau was actually set up, with the inclusion within its purvey of the “employment ” functions previously entrusted to the foremen. General Manager Tutwiler described in his letter to the Board of Directors how everything was progressing.

We are organizing an Employment Bureau with an Employment Superintendent -in-charge, whose duty it will be not only to handle all employments and discharges, but to keep in personal touch as far as possible with the Superintendents and Departmental Heads regarding the position of their labour.⁵⁹

These duties also included the gathering of useful information regarding ‘recruitment ’, as stated in TISCO’s Answers to the Questionnaire of the Labour Enquiry Committee, Bihar.

Certain categories of skilled labour like Fitters, Masons, and Motor Drivers are generally available in the Employment Yard of the Company’s Labour Bureau and selection is made from amongst those who have previously served the Company and are in possession of certificates showing their trades and duration of previous service. In cases where skilled men with previous service are not available in the Yard, the Card Index Registration of dependents of employees of the company is restored to and selection made according to the qualifications of the candidate and the length of service of the employee. If the number required cannot be obtained from this category, selection is made from outsiders who attend the Yard and have the necessary qualifications or from applications from outsiders which are registered in the Labour Bureau Office according to profession or trade (TISCO 1938, p. 5).⁶⁰

What makes such moves historically significance for TISCO , in particular, and the modern corporation in colonial India , in general, is the fact that they represent full-fledged attempts to introduce a direct labour management system in conjunction with the expansion of business scale. The introduction of an “effective” system at TISCO, however, progressed slowly and had to endure another outbreak of labour unrest as is detailed in Chap. 7 before being gradually implemented at the end of the 1920s.

5.4.2 The Tata Technical Institute

Initial attempts to establish technical training schools in India were made before the First World War ,⁶¹ the most notable of which for the purpose of this study was The Mechanics’ School . The Mechanics’ School, which was established based on a report prepared by Walford , an inspector of technical schools for the Government of Bihar and Orissa, and submitted to TISCO in June 1915 after a number of covenanted foreign employees returned home due to the outbreak of the War.⁶² On 4 July 1916, when the TISCO Board of Directors decided to implement the Great Extension Scheme , it also decided to set up a technical institute to train maistry -level workers based on Walford ’s report. The objective of the school was to teach workers how “(a) to construct and understand working drawings, (b) to make simple calculations, and to learn (c) elementary practical mechanics.” Admission to the school was open “only to youths employed in the works to be selected by the management ,” which meant based on the recommendation of a foreman to management . Classes were held two days per week, eight hours each day beginning at 9:00 am, including four hours of English study. Students were paid their daily wages in addition to a certificate allowance of Rs. 2 per month for a period of one year after completion of the course. The school’s first class consisted of 12 students.⁶³

Although the establishment of the Mechanics’ School was an important step for TISCO in obtaining a stable domestic supply of foremen and skilled labourers, the institution proved insufficient, due to the small number of students, an abridged curriculum offering classes only two days per week, and a poorly unorganized training programme. The Tata Technical Institute was established in November 1921 to overcome such shortcomings and “enable educated Indians to qualify themselves for superior positions in the works” (GOI 1933, p. 158). The minimum requirement for admission to the Institute was an “I. Sc. [Indian School Certificate] with Physics, Chemistry, or Mathematics” (ibid.).

The Tata Technical Institute (TTI) turned out to be an improvement over the Mechanics’ School by first doubling enrollment to approximately 24 students per year, resulting in a total of 250 graduates by 1932, three times the number of covenanted labourers (85) TISCO hired that same year. Secondly, TTI was granted an annual revenue of almost Rs. 132,000, nearly 16 times the amount (about Rs. 8,100 in the mid-1910s) allocated to the Mechanics School, due to generous contributions from private enterprises, such as the Bird and Company managing agency (GOI 1927, p. 203), in exchange for their employees being trained at the Institute. Finally, TTI’s training curriculum was far superior, offering intensive courses in iron and steel metallurgy and an allied subjects programme, which required three years to complete. For the first two years, students were to attend courses at the Institute for one week and then receive on the job practical training during the next in the production departments, and during the final year were assigned to one specific department for on the job training. During their training period, students received apprentice wages of Rs. 60 per month. While approximately half of the students performed well in the course, most concentrated on the “practical work in the plant to justify their acceptance for employment by the steel company on Rs. 7–13 a day, or Rs. 200 per month,” which was about 60–70% of the minimum salary paid to Indian foremen during the early 1930s.

The Institute modified its admissions policy and educational structure in 1932 to better adjust to the requirements of the steel plant, by limiting admission only to students with degrees in science or engineering from recognized universities and colleges in India or abroad, with some exceptions made based on hiring requirements at the plant. Of the 1932 enrollment of 31 students, 27 were placed in a new curriculum that divided them into two classes, A and B. A-class students were required to have earned an Honours degree and in some cases have experience working in foreign steel works. B-class students were typically trained to assume foremen positions in the production departments. Stipends were not paid to first-year students, but from the second year on, Rs. 75 per month was paid to A-class students and Rs. 60 to B-class students. Both courses lasted for two years, during which 18 months were to be “spent in general training in the various departments” and “the remaining six months in specialized training in one particular department” (GOI 1933, p. 158), while they attended evening lectures on metallurgical processes, plant maintenance, cost accounting and industrial economy three times a week.

Between 1921 and 1938 the Institute graduated 233 students, 219 of which were then hired by the company (see Table 5.3). Many graduates succeeded in replacing covenanted labourers, thus helping to further “Indianize” TISCO’s workforce. Figures 5.6 and 5.7 show how Indianization progressed in two leading production departments, the blast furnace and open hearth furnace . According to Fig. 5.6, all foremen posts in the blast furnace department were filled by Institute graduates (names underlined), while such positions as superintendent and general foreman were filled by covenanted workers (names in bold). In contrast, Fig. 5.7 indicates that the Indianization of such lower management posts as foremen progressed more slowly in the open hearth department, but were eventually filled by Institute graduates. Figure 5.7 also indicates that the open hearth department employed low management indigenous staff who were not graduates of TTI, but had acquired the necessary knowledge and experience at other educational institutes in India and abroad. Overall, the two figures show that the Indianization of low management positions progressed gradually over the 10-year period following the establishment of the Institute in 1921, marking its significant role in providing a stable supply of personnel to man its developing “direct” labour management system .

Table 5.3 Tata Technical Institute student body

Fig. 5.6

Sources Keenan to Tata Sons on 15 August 1933, Indianization Programme Papers, Tata Steel Archives

Middle and low level management staff from the blast furnace in 1933 (bold indicates covenanted employee; underline indicates TTI graduate).

Fig. 5.7

Source Keenan to Tata Sons on 15 August 1933, Indianization Programme Papers, Tata Steel Archives . ¹Mentioned in the source as “Indian staff on a salary of more than Rs. 250/- per month… not ex-technical institute graduates” nor covenanted labour , for that matter. Incidentally, Superintendent Mathur also was not categorized as covenanted labour

Middle and low level management staff of the open hearth furnace in 1933 (bold indicates covenanted employee; underline indicates TTI graduate).

That being said, the adoption of stricter admission standards may have impeded greater progress, otherwise. Limiting admissions to holders of bachelor’s degrees in physics, chemistry or mathematics at the time of the establishment of the original Institute, instead of accepting students with recommendations from management , like at the Mechanics’ School , resulted in the enrollment of students from the Indian middle class, thus excluding the plant’s millhands from the application process. This change did not escape public attention, for at oral testimony before the Indian Tariff Board during the 1920s, V. G. Kale, a Board member and professor of economics at Fergusson College, Poona, posed the following question to the TISCO representatives.

The men whom you get for your Technical Institute generally belong to the middle class of Indian society – and these men are not expected to put in that kind of hard work that is wanted there. Even in America and in England it is not the young men who come out from public schools and Universities who are taken for this kind of work… Men who go in for higher education come from a class who are not used to this kind of manual work. You do not want men of this class in your open hearth department, for example. So I thought it might be an advantage in the long run if you could select men from another class who are used to hard manual work (GOI 1924b, p. 332).

After stating that “Our actual workmen on the plant are from the class you referred to but the foreman type you have to get from people with some knowledge of chemistry and metallurgy,” General Manager T. W. Tutwiler , replied, “It would not be possible to put him [the man used to manual labour] in the Technical Institute and give him an idea of chemistry and metallurgy” (GOI 1924b, pp. 331–2).

Regarding Kale’s opinion that it was unusual for steel plants to employ low management staff with degrees in physics, even in the United States and Britain, a list of such degree holders working at TISCO when TTI was founded in 1921, for example, shows that among 72 covenanted foremen and superintendents working in such production departments as the blast furnace , open hearth furnace , blooming mills, rail mills and bar mills, only three labourers had earned degrees.⁶⁴ This characteristic was shared by low management positions and skilled millhands in Japan , where the first full-fledged modern iron and steel plant, Yawata Steel Works , opened for business in 1901. There almost half of the middle/lower management staff had a junior high/high school education, while the remainder lacked even that level (Sugayama 1993, pp. 7–11).

Moreover, case studies from the US, Britain and Japan tell us that lower management staff , such TISCO ’s fourth-tier, required a minimum level of technical training and accumulated practical knowledge which could only be acquired from on the job experience. The importance of the latter was noted by Ghandy, TISCO’s first Indian general manager , while reflecting in the 1960s on his shopfloor days in the 20s.

[A foreman] knew the technical part of the job well, and he had his own way of solving his difficulties. He distributed the work and ordered his men about. Paperwork was almost unknown. He had a limited sphere of work. Yet he moved around with an air of authority and importance.⁶⁵

This importance of applying practical knowledge and experience on the job and the difficulty in developing such skills while studying for a short time at a technical institute together imply, at least to this writer, that experienced skilled workers might have been better qualified candidates for Tata Technical Institute . Despite such a possible advantage, TISCO’s management apparently did not see the possible advantages in adopting such an admissions policy , but did just the opposite in 1932 by tightening the minimum admissions requirements to completely eliminate the possibility. It seems that the exclusion of personnel with on the job experience from the possibility of promotion to lower management staff was endemic to corporate colonial India , as Morris notes,

In the UK, as elsewhere in the West before 1914, technicians and administrators typically started at the workbench and moved up through the ranks. Widespread literacy made this possible. In India, literacy even in the vernacular tended to be the monopoly of small groups and it was from these that managers and technicians had to be drawn. Industrial development in the West is usually seen as an instrument for increasing social mobility, but in India there were almost no cases where ordinary workers were able to rise into these ranks (Morris 1983, p. 583).

TISCO and its Technical Institute seem to have been no exception here.

5.5 Labour Union Membership and Its Limitations

Top management was not the only tier in TISCO’s corporate structure to notice the deteriorating working conditions caused by a dysfunctional labour management system . It was for the purpose of improving those working conditions that the millhands turned to union organizing and the formation of the Jamshedpur Labour Association in 1920 and fought hard for company recognition of it during the years that followed. Under the leadership of the JLA, its members achieved wage increases during the first half of the decade and opened a direct negotiating channel with top management by mid-decade.

However, these early accomplishments would not promise a bright future for TISCO ’s trade union , as will be taken up in detail in Chap. 7. As we have already seen in the previous sections, the JLA was already showing signs of difficulty in the early 1920s regarding a limited capacity to represent the majority of TISCO ’s workforce, as opined by Acting General Manager S. M. Marshall when he stated, “It is estimated that the organization [JLA ] probably represents about 60% of the Company’s better class employees.”⁶⁶ What Marshall meant exactly by the “better class of employees” is indicated in a letter he wrote to company directors reporting the names, job descriptions and workplaces of the JLA representatives: namely, Damri Lal , engineer driver , rolling mills ; P. C. Sinha , high line foreman , blast furnace department; V. K. Paranjapey , power house and armature shop foreman ; Sheo Shanker , foreman , coke oven department; Abdul Latif , foreman , machine shop no. 2, great extensions department; Teha Singh Bhar , millwright department , operation shops; and N. K. Roy , second melter , open hearth department.⁶⁷ Noteworthy here is the fact that four of the seven JLA representatives were foremen, a “class of labour” occupying only a very small portion of the total workforce. Moreover, given the fact that it was the abuses of foremen/”jobbers” that were cited as a significant grievance by most workers, doubts arise as to the ability of a foremen-dominated JLA leadership to reflect the majority voice of the workers it claimed to represent. Such doubt was expressed by General Manager Tutwiler in a September 1921 letter to the Board of Directors , which read, “it is… wrong for Foremen to be leaders in a Labour Association, for they use their position in the Company in influencing the men under them.”⁶⁸

Despite what seems to have been a conflict of interest, foremen continued to dominate the JLA leadership throughout the first half of the 1920s, probably due to the fact that the first strike of February-March 1920 after the JLA was formed was led by foremen, according to a memo from a conference held on 3 March 1920, a week after the start of the strike on 24 February, where Scott , the deputy commissioner of Singhbhum , and Swain, the deputy inspector of Police, Bihar and Orissa revealed the names and details of the “ringleaders,” which are summarized in Table 5.4. The Table shows that the strike leaders were either actual foremen or of a similar “class of labourer” mostly receiving relatively high-end salaries of over Rs. 50 per month, or double the average monthly wage for uncovenanted labour (Table 5.2).

Table 5.4 List of the 1920 Strike “ringleaders”

Probably because of lack of alternative for majority of labour, the foremen “class” leadership of the JLA seemed to be accepted throughout most of the decade until 1927–29, when serious labour unrest broke out once again at TISCO . The labour unrest in 1927–29 was unlike that of the 1920s in that the members of the strike committee , supported mainly by skilled and semi-skilled millhands, turned to an outsider , but native of Jamshedpur knowledgeable of iron and steel production , Maneck Homi , instead of the foremen-dominated JLA, to lead the strike , after the 1 May 1928 lockout of 4,000 workers. The strikers formed the Jamshedpur Labour Federation, under the leadership of Homi, until he was accused and convicted of embezzling union funds and threatening a TISCO supervisor in 1930. More to come on this interesting trade unionist in Chap. 7.

5.6 Conclusion

This chapter has attempted to explain how the Great Extension Scheme and the First World War factored into the worsening of working conditions, including declining real wages, at TISCO, which in turn resulted in the outbreak of continuing labour unrest during the first half of the 1920s. We have also tried to demonstrate that one of the critical causes of the worsening working conditions was the dysfunctionality of the indirect labour management system in operation at TISCO since its inception, arguing that it accounted for a large part of the negative TFP growth for years following the mid-1910s, shown in Table 1.1. Finally understanding the crucial role played by its dysfunctional labour management system in the outbreak of labour unrest , TISCO’s management attempted to introduce a direct method, whereby some labour management functions, such as recruitment , promotion and dismissal were conducted by corporate organizational units, the Labour Employment Bureau and Tata Technical Institute , rather than subcontracting personal connection -based foremen/”jobbers” system. Finally, we discussed the origins of trade unionism at TISCO at the beginning of the 1920s, and initial attempts to represent the united voice of its disgruntled workforce.

We have seen that the development of a direct labour management system and labour unionism faced serious limitations on into the latter half of the 1920s, after the company’s postwar depression financial woes were solved by the introduction of tariff protection for steel in 1924, an epoch-making departure from the Government of India ’s laissez-faire economic policy framework up to that point throughout the colonial era. Recognizing the necessity to sustain a domestic iron and steel industry for military, fiscal and political purposes, the Government granted tariff protection to TISCO on the condition that it further rationalize its labour management system , to which outside pressure TISCO would respond with a drastic plan that severely impacted both its developing direct labour management corporate organization and nascent trade unionism. The plan, which called for the shop floor rationalization without corresponding nominal remuneration , further exacerbated already worsening working conditions, causing a level of frustration and uproar within the workforce that neither the direct labour management organizations already put in place nor the newly recognized Jamshedpur Labour Association could assuage. It was against this backdrop that TISCO would face its worst labour unrest to date, and in its long history for that matter, during 1927–1929, which will be taken up in Chap. 7.

Before clarifying the details of the dysfunctional direct labour management system and trade union under the rationalization plan in the second half of the 1920s, we will turn to TISCO in the period of postwar depression in the mid-1920s. Tariff protection set in the period formed an important foundation for the labour problems during the second half of the 1920s (Chap. 7) and for production efficiency problems in the 1930s (Chap. 8). Thus, a detailed analysis of TISCO at the time of the introduction of tariff protection is required to understand the company during the interwar period.