You are here: Home » Companies » Features
Business Standard

Maruti's striking labour problem

The persistent deadlock is overshadowing the real problem

Akshat Kaushal  |  New Delhi 

Workers want a union, while Maruti wants a ‘’ Both refuse to give in to each other. The real issue, however, is something else.

Across the road from gate-2 of Limited’s Manesar factory, around 100 workers sit underneath a tent in protest. They have now been here for over two weeks. “The media is nowhere to be seen. The ones who come, only speak to the company people and leave,” says Sonu Nehra, who works on the assembly-line of the Maruti factory. This is Maruti’s second strike in the last three months.

This is how the whole thing began: In June, Maruti workers at Manesar had been demanding a union for themselves but the company management asked them to join the union affiliated to the “That is a pocket union of the company which the workers don’t want to be part of,” says All India Trade Union Congress’ Plus, these workers were agitating for some suspended colleagues to be taken back. They weren’t, and the workers went on a 13-day strike. The strike ended after the company took back the workers. However, no decision was taken on the formation of a union. The company says that soon afterwards, there were large scale incidents of sabotage—such as doors falling off completed cars. So, in order to ensure product quality, the company insisted on workers signing a ‘Good Conduct Bond,’ which they refused.(Click here for table)

The curious aspect of this strike is that while both sides have dug their heels in and refuse to budge from their positions, the impasse is costing a boatload of money for the car company—at least Rs 500 crores so far by one account. Yet, Maruti would rather bleed cash than give in. Today, reports suggest that workers at the company’s are also thinking of striking in solidaritywith their Manesar brethren.

Maruti, however, says there is a clear reason behind its stance to disallow another union. “After having a union, the earlier agreement that existed between a company and its workers gets extended to a third-party that is usually associated with a political party. Then, politics starts interfering in the daily work of the company,” says an executive of Maruti, who wishes to remain anonymous. Recently, even RC Bhargava, chairman of Maruti Suzuki India, described the present stand-off as ‘political’.

Maruti is not the only one saying this. A senior official representing another auto-major out of Chennai says that “negotiations practically are never conducted with workers, if the union is backed by a political party.” Moreover, have been bestowed rights under Indian law, which stipulate that they can essentially decide on whom they decide to talk to or negotiate with.

Others in the auto sector have also wrestled with their own union problems. In April 2009, at Hyundai Motor India in Tamil Nadu, workers went on an eighteen-day strike to demand recognition of the employees’ union. Similarly, tire maker MRF's Arakkonam unit was closed for 185 days in 2009. Its workers subsequently went on strike in October 2010 as well as June 2011.

Why is the formation of a union so crucial to these workers? Arguably, if everyone is receiving a decent wage with benefits, there is little reason to go on an agitation. E Balaji, MD & CEO of Ma Foi Management Consultants has an alternative answer for the face-off—the prevalence of a widespread practice in the auto industry which uses cheaper, contract labour, often comprising of up to fifty per cent of the workforce, which inturn decreases costs for the auto maker by as much as fifty per cent. Balaji says that in doing so, the auto maker also benefits by having greater autonomy in choosing when to lay-off workers in times of a slump. A senior official from an auto major agrees that the contract system suits the management of a company better. “We don't have to deal with the workers since our point of contact is only the HR firm.”

Workers at the Maruti plant say the working conditions between the permanent and contractual workers differ vastly. Maruti employs close to 2,500 workers, of which 1,100 are permanent and the rest consist of workers on contract, apprenticeship and training.

According to Shiv Kumar, president, Maruti Suzuki Employee Union who is a permanent worker, an unskilled contract worker is paid Rs 5,500 a month and a skilled contract worker (with an ITI diploma) gets Rs 7,000; a permanent worker’s pay is around Rs 18,000. In Haryana, the minimum wage of an unskilled worker is fixed at Rs 4,348. Other than salary, a contract worker is not entitled to medical benefits that a permanent worker gets, or the bus service, again which only the permanent worker can use. Even difference exists, workers say, between the uniform of a permanent and contract worker. To become a permanent worker, a skilled worker has to work for a year as an apprentice and another three years as a trainee before he is made permanent. Yet, there is apparently little difference in the specific nature of the job for both categories.


Workers say working conditions at the Maruti plant are, in general, ‘difficult’. According to workers, the eight-hour shift that they are required to work usually gets extended by an hour. The company provides a 30-minute lunch break, ten minutes of which goes in travelling to the canteen. A seven-minute break is given for tea and using the bathroom. Going on leave becomes almost impossible as Rs 1,500 is deducted for every day on casual leave from their salary. “Last year, we exceeded the targets by working more in the morning and evening. For every hour that we worked extra, we were paid Rs 20. What part did we get of the profit that the company earned by exceeding the targets?” wonders factory worker Nehra. Naturally, say the workers, striking for a union was the only option left to them. Maruti Suzuki refutes these allegations and says that its workers are treated fairly.

Tapan Mitra, head of Human resources at Apollo Tyres says that most manufacturing exploit contract labour. “The management of any company needs to understand that workers are not commodities,” says Mitra. “Many times the HR department of the company doesn’t address the grievances of the workers. However, they want workers to work more when the company desires so. In such a situation, the workers reach out to either unions to press their demands,” adds Mitra. According to him, increased communication between workers and management, and also trust and confidence between the ‘white and blue collars’ would ensure minimum friction in any company.

Sanjay Upadhyaya, fellow at the VV Giri National Labour Institute, says that there are laws to ensure that the rights of the contract labourers are protected but they are seldom implemented. “The labour law mandates that any company that has to employ contract labour needs to obtain a license from the labour department. The labour department can cancel the license if the rights of the contract labourers are abused. But, these laws are very rarely implemented,” says Upadhyaya.

Curiously, the numbers collected by the labour department show a large decrease in strikes and lockouts in the past five years or so (see chart) but some say that these numbers are misleading. Tapan Sen, General Secretary, Centre of Indian Trade Union, says that though the number of strikes have decreased over the years, it doesn’t mean that the workers are a happy lot. “Most of these are figures reported and should be treated with caution. The number of strikes is decreasing, but not lockouts and closures. Most of the times the lockouts and closures are not reported, as they are not a law and order issue unlike strikes,” he says. Praveen Jha, professor at the Jawaharlal Nehru University, says the data doesn’t paint a true picture of workers’ conditions. “As compared to the 1990’s, the lockouts and strikes have come down but they misrepresent the true condition of workers. Their conditions have worsened but they don’t strike as they used to a decade ago,” says Jha.

And what to make of the automakers’ claims of politicised unions? “What is the problem in having a union? India is a democracy and every worker has a right to form a union. And it is bound to be political since a democracy is run by political parties,” says Prabhat Chaturvedi, who recently retired as the labour secretary . Chaturvedi also questioned the validity of the ‘good conduct bond’ that Maruti wants its workers to sign. “I am totally against the view of the management to get a bond signed by the workers. They have no right to do so. The industry is earning profits by hiring labour on contract, but doesn’t want to share these profits with them.”

First Published: Thu, September 15 2011. 00:18 IST