Setback for workers
Governance issues in Maruti's severance package
Maruti Suzuki has paid a hefty severance amount to a few of its agitating workers at its factory at Manesar in Haryana. Newspaper reports have estimated the payment at Rs 16 lakh per employee. The number of such beneficiaries is estimated at 30 and this includes Sonu Gujjar, who led the agitation last month significantly disrupting production at India’s largest manufacturer of passenger cars. For Rs 4.8 crore, the company has been able to safeguard itself against another production breakdown, at least for the time being. With their leaders gone, workers will take time to regroup and press their demands for better working conditions. Until then, the company can afford to breathe easy.
The compensation paid to these 30 workers is higher than the normal severance package on offer. According to the rule book, each of them was entitled to 15 days of salary for each completed year of service. Most of them had put in five years and drew Rs 20,000 per month from the company. This entitled them to Rs 50,000. True, they were also entitled to provident fund and gratuity, but that couldn’t have added up to Rs 16 lakh. There is nothing illegal about the higher-than-normal compensation, and indeed the Haryana government was party to the settlement. But will the company pay the same money to those who were not among the 30 suspended workers? This, in fact, puts a premium on bad behaviour. Those who agitate and disrupt work can hope to get a golden handshake! It is bound to send out a wrong signal to workers across the country.
Even in the takeover of a company, an acquirer is bound by rules to offer the ordinary shareholders the same price for shares that he pays to the promoters. This has been done to ensure that minority shareholders are not shortchanged. The spirit cannot be any different in the case of workers. You can’t have one set of compensation rules for those who agitate and another for those who don’t. Also, Mr Gujjar and the other 29 workers were eased out of the company very quietly. The labour unrest at Maruti Suzuki’s Manesar factory was a matter of great concern for the investors. The three strikes there since June have caused the company’s stock to underperform not just the Sensex but also the automobile index by a fair margin. In fact, Mr Gujjar spoke to analysts through video link to put across his viewpoint. And when these workers left, no information was sent to the stock exchanges. It all blew up when people realised that Mr Gujjar had left the scene for good! Almost ten days after he left, Mr Gujjar has resurfaced and said that he made this “sacrifice” to “save jobs” and “maintain harmony” at the factory! Maruti Suzuki shareholders deserve better than this.
Spare a thought also for the workers of the Manesar factory. They have every reason to feel betrayed by Mr Gujjar and his band. This happens at a time when there is growing disillusionment with national trade unions, especially the ones affiliated to the Left parties. Workers have begun to realise that protracted agitation benefits nobody. This was the reason why Mr Gujjar had become so popular. From this viewpoint also, the workers at Maruti Suzuki’s factory at Manesar will be extremely suspicious of non-political leaders in future. This does not augur well for the cause of industrial relations in the country.