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Remedy needed for India Inc's labour unrest

January 28, 2013 10:34 IST

StrikeIt is a trend that threatens to assume alarming proportions in corporate India. Incidents of labour unrest have been on the rise in recent years across companies, pointing to growing discontent among workers over wages and other issues.

The list of companies include big names such as Colgate-Palmolive, Hero, Maruti Suzuki, Hyundai, Videocon, Onida, Arvind Mills, Nokia and Mahindra & Mahindra.

These companies are believed to have good governance and human resource policies.

Colgate, for instance, just announced the end of an 18-day strike by labourers at its Goa plant following intervention by the labour commissioner there.

Earlier this month, Videocon had managed to quell unrest at its Bharuch plant in Gujarat which was sparked by the company’s move to lay off some workers at the factory.

The same goes for Maruti Suzuki, Hyundai, Onida, Arvind Mills and Nokia, managing to find a middle path with striking workers at their respective plants.

Bringing labour strife to a halt remains top priority for most managements, because of the bad press it gets as well as the production loss.

Union leaders allege companies don’t do enough for their workers.

Tapan Sen, Rajya Sabha MP and general secretary of the Centre of Indian Trade Union, a prominent workers’ union that operates in a number of companies, argues there is gross violation of labour law in factories of big corporates.

“Often, companies use terrorising tactics such as retrenchment or suspension when workers raise their voice over issues pertaining to wages or increments or even better working conditions.

“This only aggravates matters,” he says.

HR experts have a different view to offer. According to Sunil Goel, director of Delhi-based HR consultancy GlobalHunt, which advises blue-chip companies, management’s failure to effectively communicate to workers about policies could lead to a stand-off.

“This could take an ugly turn when managements are perceived by workmen to be insensitive.

“So, in reality, while companies may actually be following good HR policies on the factory floor, lack of effective communication could lead to widespread dissatisfaction among workers,” he adds.

Permanent workers in India’s second-largest car maker, Hyundai, earn between Rs 45,000 and Rs 47,000 a month, depending on the number of years they have put in.

In the largest car-maker, Maruti Suzuki, monthly wages of an experienced hand stand at over Rs 50,000 at its Gurgaon plant and Rs 39,800 at its Manesar plant.

In both companies, disquiet among workers started brewing over the appropriate representation of workers by the formation of union.

At Hyundai and Maruti Suzuki, the company management initially refused to recognise politically affiliated unions.

“When the unrest happened about three years ago, workers agitated not over wages but over the formation of a union.

“We told them they could form a union but that we would not recognise a politically-affiliated union. We will talk with any independent representative body.

Most workers saw sense in that and the strike was called off. The key is to communicate and not lose touch with your employees,” says a senior executive at Hyundai India.

At Maruti Suzuki, too, after initial reluctance, the company’s management helped the employees in registering a second independent union at Manesar.

What happened later and resulted in the death of a senior human resources executive on the factory premises erupted from latent “internal issues”, according to the special investigation team set up by the Haryana government.

Deepesh Rathore, managing director of HIS Automotive India, explains labour problems of the magnitude witnessed at Maruti Suzuki occurs due to complex issues ranging from disparity in socio-economic conditions within the same workforce to lack of identification with the company’s work philosophy.

“When a large number of contract or temporary workers within a company get paid a fraction of the salary earned by permanent workers, differences surface within the workforce.

“The living conditions of this section of workers are miserable, particularly when contrasted with the socio-economic parameters in the Guragon-Manesar region, which has developed into one of the flagship industrial sectors in the country.

Besides, the worker may not be able to identify with the strict work culture of a Japanese company or there could be a complete lack of communication between the management and those on the shop-floor.

“All these issues need to be looked at,” says Rathore.

In fact, if monthly wages of contract labourers are considered, the picture is indeed grim.

The average salary for contract workers is Rs 15,000 a month in Hyundai, while at Maruti Suzuki it is about Rs 12,000.

In Maharashtra and Goa, for instance, contract labourers at big companies draw anywhere between Rs 3,500 and Rs 10,000 a month.

The starting salary for permanent workers, on the other hand, could be Rs 15,000 to Rs 30,000, depending on experience.

Additional inputs by Sharmistha Mukherjee and Viveat Pinto

M Saraswathy in Mumbai/New Delhi