04 July 2011 Business economy: trade unions

Lockdown And After

The strike at the Maruti Suzuki plant shows workers’ rights is still a simmering issue

Lockdown And After
Manoj Kumar
Lockdown And After

Spanner In The...

  • Labour disputes/strikes down from 250 in ’04-05 to under 100
  • Strike by 3,000 Maruti workers found support from 65 unions across companies
  • Trade unions assert workers’ right to form a union, or to decide which union to join
  • Ashok Leyland, Hyundai, Honda Motorcycles, GM among those that have faced labour problems


In many ways, the 13-day strike at Maruti Suzuki India Ltd, India’s largest automobile manufacturer, was a wake-up call for the Indian corporate sector. Not only did it illustrate the unity among the company’s workers, but with workers and unions across states voicing support, it threatened to flare up into a wider industrial dispute, giving strong signals of a resurgence of trade union activity in the country.

It wasn’t a wage hike or improvement in working conditions but the right to form a union—something of a rarity in the new industrial ecosystem in India—which saw 3,000 employees of Maruti’s Manesar plant in Haryana striking work on June 3. The plant workers wanted to register a new union—the Maruti Suzuki Employees Union (MSEU)—and had already applied for registration, something the management was opposed to. Maruti officials were not available for comments when contacted.

“Managements do not want to have unions. They want to make the unions subservient to their interests.”
Gurudas Dasgupta, CPI

Union activities of yore, like the long-drawn Bombay textile strike in the 1980s, had of late seemed a thing of the past. In the last decade or so, due to new management practices of hiring employees on contract and not putting them on the rolls, the number of industrial disputes and strikes in the manufacturing sector had scaled down from around 250 in 2004-05 to under 100 in 2010. In 2011, this has been the only major strike so far.

Labour leaders contend the lack of union activity in the industrial sector is because of large-scale suppression of labour rights and union voices. Says Gurudas Dasgupta, general secretary of the CPI-supported AITUC, “Managements do not want to have unions. They want to make the unions subservient to their interests and compel the workers to be part of a union controlled by them.”

Adds Dipankar Mukherjee, secretary, CITU, “Post-1991, all companies, be they mncs or Indian, have not wanted unions to be formed. It’s a pattern among new companies also, they either do not want unions or have ‘pocket unions’ who support the management.”

The fact that incidents of flash strikes or even violent attacks on members of the management have not yet dissipated is testimony to the fact that all is not well on the labour front. The corporate sector, however, disagrees with this view, contending that best management practices are being followed. As Y.K. Modi, chairman and CEO of the Great Eastern Energy Corporation and a former FICCI president, puts it, “The very fact that industries everywhere are generally having uninterrupted activity without labour trouble illustrates that there have been good practices mostly. Since the issue at Manesar was amicably settled through discussion, there’s no reason to react on this matter.... I do not see the emergence of an era of nationwide militant trade unionism.”

The fact that 65 unions in the nearby industrial belts of Noida, Dharuhera, Manesar and Gurgaon had voiced their support and about one lakh workers from 50-odd industrial units in these areas had decided to go on fast last Friday reflects a different workers’ perspective. Interestingly, many of these companies are associated with the automobile industry.

“Nations are competing against each other for market dominance. Any disturbance affecting productivity is bad.”
Y.K. Modi Ex-FICCI president

Although the strike at Maruti has been called off and the matter resolved for the time being, there are hushed discussions across companies on the way managements handle workers and trade union issues. Says BMS spokesperson Amar Nath Dogra, “A strike is not the first but the last option for workers. If it happened, it was because there were issues with the way the management dealt with workers’ demands. There is a mechanism where workers and management recognise unions and decisions are taken with mutual discussion. We are concerned about the way the company handled the situation.”

Experts stress that the trend of hiring workers on contract rather than taking them in as permanent employees gives company managements the right to hire and fire on issues of performance or in times of recession, something not easy in case of permanent employees under Indian laws. According to rough estimates, over 50 per cent of workers in most of the large companies are on contract and do not have rights to join unions or can only join one that is recognised, even suggested, by the management.

The general view among workers is that managements cannot dictate which unions workers should get affiliated to as it is their right to register or join a union. Says Mukherjee, “Employees have the right to form unions. Labour laws do not give managements the right to dictate which union the workers should join or what their political leanings should be.”

The demand for a new union at Maruti’s Manesar unit may be a signal of discontent amongst workers regarding management practices and their own rights and the lack of a redressal mechanism. Coen Kompier, labour standards specialist with the International Labour Organisation (ILO), says, “In general and compared to many other countries, the industrial relations system in India is very confrontational, which harms the interests of all parties.... A new era in the trade union movement will happen only if unions can operate in full freedom.”

“The employers haven’t acted intelligently here. Their actions harmed Maruti’s productivity,” says ILO’s Kompier.

The CPI’s Dasgupta remains optimistic that the Maruti strike will “open up the scope of the trade union movement and will work towards unity of workers and inspire them in future.” Given the fact that the 13-day strike led to production losses of over 12,000 cars and business losses of over Rs 400 crore, the corporate sector obviously has a different view. One which is strengthened by the fact that apart from Maruti, vendors and companies associated with it also suffered significant losses. “Industrial disputes anywhere are bad. These cause losses for both workers and investors. Consumers too face problems. All nations are competing against each other for market dominance. Any disturbance affecting productivity is bad,” points out Modi.

So what’s the way forward for companies and workers? Modi feels there must be more effective utilisation of industrial dispute resolutions as contained in the ILO governing council resolution on tripartite consultation convention 1976, a part of the ILO Plan of Action 2010-16.

Considering that neither the BJP-led NDA government nor the Congress-led UPA one has shown any political will to pursue labour reforms, including ensuring that workers (whether permanent or contractual) are given their legal dues, it may finally fall on the workers and union leaders to chart their own course. Unless, of course, the government wakes up to the need to strike an equitable balance.


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