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Shyamal Majumdar: Souring industrial relations

Battle lines are being drawn in labour actions across India

Shyamal Majumdar  |  Mumbai 

The past few days have been a nightmare not only for Maruti, but also for a host of other companies: Coal India, Dhanlaxmi Bank, Dunlop — the list is getting longer by the day. Employees of even much smaller entities like Meru, a car leasing company, got influenced by the general employer-bashing mood.

The reasons for the labour pains of each of these companies are vastly different, but the industrial-relations scenario in India has not been so bad for many years now.

After Monday’s token one-day strike over bonus issues, Coal India unions have now threatened to go on a six-day strike if their demand is not met. As if that wasn’t enough, its officers are now threatening an indefinite strike. Among their key demands is the implementation of performance-related pay, due since 2007-08.

If the Coal India strike signalled union unity, it was exactly the opposite at the Dunlop factory in West Bengal’s Sahagunj unit. Hours after the owners announced suspension of work, unions affiliated to different political parties vowed to fight together against the “evil intentions” of the management. The unity, however, proved to be fragile with each union now blaming the other. Meanwhile, work continues to remain suspended.

The Dhanlaxmi Bank case on Tuesday was much more serious since an industry union alleged irregularities in its accounts, asset-liability mismatch and so on and expressed doubts about the bank’s survival. The management hit back, saying the allegations are stupid and basically a fight for survival by a minority union.

These are serious industrial-relations issues, but insignificant compared to what’s happening in Maruti Suzuki, India’s biggest car maker. The fact that Maruti’s production is heading towards a complete halt is bad enough; what’s worse is the complete collapse of trust between the workers and management. While unions have accused the management of “vengeance” and “high-handed provocative activities”, the management has termed the striking workers a mob of people who are going on the rampage.

And Maruti is just one among a series of automobile companies to see strikes and lockouts this year. In March, workers at a General Motors factory went on strike for nearly three months. The Gurgaon-Manesar belt, where Maruti operates, had earlier seen tremendous worker unrest at Honda’s two-wheeler plant, as well as in the facilities of some auto component manufacturers.

In Maruti’s case, however, part of the blame must go to the management that botched up badly. For example, the insistence on workers signing “good conduct bonds”, even though the Union labour secretary himself has said it is illegal for any company to force its workers to sign a bond.

The standing orders for the Maruti workers list 103 acts constituting major misconducts. These include such gems as “lack of proper personal appearance, sanitation and cleanliness, remaining in toilets for a longer period of time” and so on. Apart from the legality aspect, these kinds of bonds certainly wouldn’t help in improving the trust factor between managements and employees.

But going beyond individual company issues, one thing is clear. The surge in industrial disputes shows that battle lines are being drawn in labour actions across India. Managers, amid the global economic downturn, want to pare labour costs and remove defiant workers. Unions are attempting to stop them with slowdowns and strikes that have led at times to bloodshed.

But the main reason for the growing number of industrial disputes (over 1.6 million man-days were lost because of labour strikes and lockouts last year) is the country’s archaic labour laws. For example, the Industrial Disputes Act of 1947 still requires companies to gain government permission before dismissing workers. The Contract Labor Law of 1970, meanwhile, prohibits employers from using temporary workers for long-term jobs. Both aim to encourage companies to protect workers by making them permanent. It’s no surprise, therefore, that absorption of contract workers is one of the main issues in Maruti.

The contract labour issue has been a problem for the auto industry for long. The root cause seems to be the high percentage (almost half in some cases) of temporary or contractual workers that the auto industry employs. They don’t get paid the same wages as permanent employees, leading to anger.

Observers also cite the recent data released by the National Sample Survey Organisation (NSSO) as a reason for the growing industrial discontent. The data showed that the UPA government generated only two million jobs between 2004 and 2009, even as the economy grew at the rate of 8.43 per cent annually. The employment numbers present a stark contrast to the Planning Commission’s target of 58 million jobs in the five years between 2007 and 2012.

NSSO’s survey drew flak from even the Chief Statistician of India and the deputy chairman of the Planning Commission, but is seen as one of the main reasons for the feeling among an increasing number of workers that the spoils of industrial growth have not trickled down to them.

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First Published: Fri, October 14 2011. 00:44 IST