Jaya Shree declares lockout in Bengal mill on union crisis, may relocate

The trouble started when the company's management dismissed nine workers in December 2017, alleging illegal strike and unruly behaviour

For the first time since commencing operations in 1949, the Aditya Birla Group-held Jaya Shree Textiles has declared an indefinite lockout of its mill in Rishra, West Bengal, due to rising trade unionism and may decide to move this plant out of the state in case matters remain unresolved.

For the past 20 days, despite some of the company's 5,700 workers reporting for duty, a section of trade union leaders has been preventing commencement of production resulting in this factory incurring a top line loss of Rs 50 million a day. Besides, several export orders, which make up for 25 per cent of its Rs 20 billion revenue, have also been cancelled. Its logistics cost, to meet its previous delivery commitments to clients, has also risen substantially.

“A large section of workers want to report for work but they are being prevented by some trade union leaders” Moloy Ghatak, the state’s labour minister said. 

The trouble started last year when the company’s management, in December 2017, dismissed nine workers alleging illegal strike and unruly behaviour. They are facing legal proceedings. Workers in this factory have been protesting since May 2017 against the management’s offer to implement a single annual increment in place of three increments in a year.


 

A senior company official said that the management had given several notices to the workers to report for work latest by June 23 after which a lockout would be declared. 

For the past one year, after the Aditya Birla group had invested Rs 2.5 billion in installing new machinery, it had proposed to put in place a Five-Year Productivity-linked Long Term Wage Settlement aimed at increasing productivity in this mill.

Under the management’s proposal, among other terms, a five-year wage settlement will be concluded between the management and the workers where wages would increase every year on a pre-negotiated basis and efficiency of workers per 1,000 spindles had to be improved. The management claimed that in course of increasing efficacy at the spindles, there would be no job losses and only the overtime component had to be adjusted. 

Currently, against a global average of 27 workers per 1,000 spindle, the Rishra mill has 52 workers which the company wants to bring down to 38 workers to maintain cost competiveness.

“In case we are not able to improve productivity of the workers, we will cease to remain competitive and will have to relocate the plant outside West Bengal. But it is too early to arrive at any conclusions; we are open to negotiations to restart operations but if it doesn’t materialise, we have to think of something”, a senior official from the management said.

The person added that in states like Gujarat or Maharashtra, 30 workers per 1,000 spindle are employed.

This official claimed that the company would be able to implement the minimum wages as stipulated by the state government in one year in place of an earlier suggestion of five years. 

However, union leaders from eight different unions have turned down the management’s proposal to modify the wage revision module and want the management to re-employ the nine personnel who are undergoing legal proceedings for allegedly resorting to illegal strike and violence.

The management has stated that while negotiations with the trade unions have previously been underway, post the lockout, a fresh series of negotiations will now be held if the trade unions are interested to talk and negotiate.

Previously, while remaining firm in its stand of not taking back the abovestated nine workers, the management, in consultation with the labour minister, had agreed to revoke suspension on 12 other employees after a pay-cut.

“However, now we may not even consider taking them back or giving any revision of wages at all. Negotiations will have to be held fresh”, the top official stated.

Ghatak said the state’s labour department has initiated rounds of meetings with the company’s management to resolve the crisis and he himself will be meeting the unions so that operations may resume in the Rishra mill.

Jaya Shree Textiles, held by Grasim Industries, holds India’s sole integrated linen factory to its credit. It has expanded its linen yarn capacity from 2,300 tonnes per annum (TPA) to 3,400 TPA and linen fabric processing capacity from 7.3 million meters per annum to 10.1 million meters per annum. It also has a merino wool unit. In the recent past, it has started retailing linen fabric under the Linen Club brand-name.

Jaya Shree Rishra factory at a glance 

• Set up in 1949, it is India’s only integrated linen factory
• Linen yarn production capacity stands at 3,400 tonnes per annum
• Linen fabric processing capacity stands at 10.1 million metres per annum
• Worsted Yarn capacity at 26,356 spindles
• Last year got an investment of Rs. 2.5 billion to improve machinery and output
• Employs 5,700 workers 
• Trouble started from May 2017 over changes in wage revision module