Patients in Turmoil: Unrest among the Regency Hospital Support Staff

The Gedex Hospital (GH) came into existence in the year 1983. The hospital was part of Gedex Ltd.--an
engineering conglomerate--and was built to provide medical care to the employees of the Gedex group of
companies. Gedex had its manufacturing facilities in different parts of the country with its head office in
Gurgaon. The workers of Gedex Ltd. registered a trade union named All Gedex Employees Union for
the safeguarding the interests of Gedex workers in all its establishments, including the workers employed in
the Gedex Hospital. This union was affiliated to Hind Mazdoor Sabha, the trade union wing of the earlier
Socialist party, which had merged into the Janata Party in 1977.
Gradually, GH grew into a full-fledged hospital. The hospital came up with critical departments and was
opened up for the general public other than the employees of the Gedex group. In the year 1983, GHs
management decided to employ contract workers in operation of its support services like those done by
House Keeping, General Duty Assistants, Laundry Boys and others. The intention was to keep
transactional activities separate from the core activities of the hospital. In the year 1985, 34 contractual
employees of GH became members of the All Gedex Employees Union. GHs Management of GH took
stock of the situation and was wondering what it was going to lead to. Apprehending any problem on this
count, it decided to take these 34 employees on the hospitals permanent rolls so as to form part of its core
team of workforce. The management wanted to avoid any unpleasant situation due to any possible legal
move by these 34 contractors employees.
Since the contract workers were not happy with their working conditions, 59 more contractual employees
formally became members of the All Gedex Employees Union later on. This time the management did
not concede their demand for permanency; thus they continued to remain a part of the contractual
workforce. These 59 employees had since been working under different contractors. The contractors did
not bother looking into the grievances of the contract workers, as they were getting their commission
regularly. Interestingly, contractors had been changing from time to time, but these workers remained the
same; for they were trained workforce of the hospital, and GH could not afford to have them removed and
witness unrest among them, keeping in view the need for providing continuous care to the patients.
GH did quite well and was catering to large number of patients, with a good track record of providing
health services. Eminent doctors were attached to the hospital. With the passage of time its business went
on flourishing. In 2003, 200 contractual employees formally became members of the Haryana HMS, i.e. the
federal body, by paying subscription for becoming its members. All contract employees were paid their
wages by the contractor concerned as per the minimum wage rates fixed by the Haryana Government under
the Minimum Wage Act 1948.
In the year 2005, Regency Hospital, a corporate Hospital chain, acquired Gedex Hospital. After the
acquisition, it had 640 permanent employees on the hospital rolls and 400 contractual employees in all.
These 400 included 59 union members, 200 HMS federation members, and about 140 completely nonunionized. Some of the permanent employees were doing the same work as was done by the contract
workers; this included the 34 workers, who had been made permanent by the management. The Regency
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Hospital (RH).did not consider it fit to make any significant change in the service conditions of these
contractual employees, as that might have disrupted the hospital functioning.
In August, 2011, the Regency Hospital made the following two wage settlements with the union:
1. Settlement 1: A three-year long-term wage settlement between Regency Hospital and All Gedex
Employees Union for the 34 employees that were earlier the contractors employees and had been
taken in the hospital as permanent core workforce.
.
2. Settlement 2: Three-year long-term wage settlement between the contractor and All Gedex
Employees Union for 59 contractual employees who had become members of the All Gedex
Employees Union. The Regency Hospital mediated in these wage settlements.
On 12th October 2013 all the contractual employees of Regency Hospital went on strike. Some 60 -70
workers blocked the main entrance and started shouting anti management slogans. Their demands
included increase in their wages and taking them on the permanent rolls of RH. The management got
quite concerned at this development. The HR manager of RG contacted the local police and gave a
written complaint against the striking employees. The police eventually pacified these contract workers,
who withdrew their agitation after the RH management gave them assurance to look into their demands.
In the meantime, the management enhanced some minor welfare benefits for them like tea and snacks.
But no substantive relief was made available to them.
It faced the following two major facts that were bothering the contract workers.
a. Wage disparity: The average monthly gross salary of the core unionized employees was in the
range of Rs. 36,000 to 40,000, whereas the contractual employee were getting only Rs. 9000 to
10000 per month including the overtime. Their nature of work was the same as those of the
Regency Hospitals own workers, both types of workers worked in the same premises.
b. The workers had been continuously working for RH, and earlier GH, under various contractors.
They had put in a substantial length of service ranging from 10 to 15 years.
The Regency Hospital was in a quandary. It was wondering how to handle the situation that had arisen in
this context so that it is able to resolve the issue with the least disruption in the hospital service and without
any enhanced long-term cost liability. It was apprehending that these contractual employees were quite
likely to make demand for permanency.
Discussion Questions:
1. What do you think are the legal and employee relations issues in this case?
2. What should the hospital do so as avoid any long-term financial burden?
3. What lessons in employee relations can managers learn from this case?
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