Assignment on Maruti Suzuki- Manesar Unrest

Submitted To: Vaneeta Aggarwal

Submitted By: Saurav Mehta Roll No.- 29 MBA-HR(3)

About the case:

Workers of Maruti Suzuki went on strike on July 18,2012 after almost one year after they went on strike in 2011. In 2011, there was stoppage of work 4 times. But at that time all were totally non-voilent. The negotiations at that time resulted in registering a new trade union- Maruti Suzuki Employees Union in place of Maruti Udyog Kamgar Union in October, 2011. But in the same month, the management reportedly got rid of the troublesome leadership of this union by offering them a VRS-type settlement. The workers then formed a new union, the Maruti Suzuki Workers Union (MSWU) with a new set of committee members. It was this union which had been negotiating with the management through 2012 for wage increases, for transportation facilities, slowing down the robotic pace of work, and regularisation of leave benefits. But with the MSWU apparently making little headway in the negotiations, discontent was simmering among the workers. And on July 18, when a floor supervisor allegedly misbehaved with a Dalit worker (Jiyalal), and instead of the supervisor getting pulled up, the worker got suspended, the new union was expected to deliver to get Jiyalal reinstated. And when it began to look like they wouldnt be able to, violence broke out. The management has said that the workers unleashed the violence. The workers say that the management instigated it by getting hundreds of bouncers to attack the workers, who responded to that attack. But nobody seems to know what exactly happened. The truth might be closer to what a labour activist describes as a combination of karna, karwana and hone dena. As the Maruti workers and management blamed each other for the unrest at the Manesar plant, almost 100 workers were arrested on Thursday. Over 1,000 policemen have now been deployed at the factory and work has been suspended indefinitely. One person died of burn injuries and sources say 85 others were injured in a scuffle at Maruti's Manesar plant on Wednesday. A case has also been registered against 50 workers for attempt to murder and damage to property. Work at the Manesar plant had to be stopped following the violence. The Gurgaon plant continued normally. While reports say the scuffle was because of differences over wages, the company said, "The sequence of events began in the morning with a worker beating up a supervisor on the shop floor. The workers' union prevented the management from taking disciplinary action against the worker. They blocked the exit gates and held the executives hostage. To resolve the issue amicably, members of the senior management met the union. During the talks, the workers attacked the senior management." On the other hand the Workers' Union hit back at the managament. In a statement, the Workers' union said, "The Maruti Suzuki Workers Union (MSWU) is anguished at the recent developments in Maruti Suzuki plant, IMT Manesar where the management has resorted to anti-worker and anti-Union activities in a pre-planned manner leading to the closure of the factory yesterday." The person who died in this violence was Awanish Dev, GM-HR of Maruti Suzuki.

The brutal violence that swept through the Maruti factory at Manesar, in which a senior executive was killed, could have been triggered by extreme left wing groups ,Maruti Suzuki chairman RC Bhargava has said. Participating in a panel discussion organized by a TV channel, Bhargava termed the violence by a section of workers as a "a class attack". "It was conceived by a small group of people. These could be extreme left wing elements who want society to change through virtual chaos creation," Bhargava said, adding that the violence was a "pre-planned conspiracy." "It were these left-wing extreme elements who incited the violence at Maruti. It was a conspiracy which was kept within a small group of people." The workers went on a rampage and smashed the arms and limbs of HR manager Awanish Kumar Dev and set the building on fire. Dev was charred to death as he could not escape while nearly 100 workers and senior Maruti officials were injured in the attack. The violence has rattled companies across the country and top industrialists have urged the government to take stringent action to stamp out extremism in factories. "A certain demand by one worker does not lead to arms and legs of a manager being broken," Bhargava said while recalling the horrific attack. "The attack was not directed at any one individual. It was like a class attack. It was like we are workers; we will attack anybody who is not a worker." The Maruti chairman also said that the company may have erred in its hiring process. Responding to question from Congress MP manish Tiwari about faults in the hiring processes, Bhargava said "we cannot rule out that the wrong kind of people got hired." He said the company may have failed to do adequate background checks before hiring contract labour." Bhargava also said that production at the plant will not resume until the safety of managers, supervisors, and even workers are ensured as some workers remain at risk. Since April 2012, the Manesar union had demanded a five-fold increase in basic salary, a monthly conveyance allowance of 10,000, a laundry allowance of 3,000, a gift with every new car launch, and a house for every worker who wants one or cheaper home loans for those

who want to build their own houses. In addition to this compensation and normal weekend/holidays, the union demanded the current 4 paid weeks of vacation be increased to 7 weeks, plus each worker have 40 days allowance of sick and casual leave - for a total of 75 days. 2011 was not the first time when there was a strike by marutis workers. In 2001 also there was a strike by the maruti workers. The workers movement in Maruti Udyog Limited began on the issue of incentive wages. The union demanded reinstatement of the original incentive scheme which had been in place prior to 1995, according to which 65% of all savings in labour-cost above the norm set (at 41.5 cars per worker per year) was to be distributed to workers as an incentive bonus. Instead the management introduced a scheme where incentives paid would be dependent upon the sales of the company, both of cars and spare parts and the attendance record of the worker. The union refused, arguing that productivity incentive could not be connected with car sales since that was not something the workers could determine. It should be remembered that according to the project report of the company in 1982, estimated production was one lakh vehicles on a manpower base of 4000. This target was reached by 1988. In 1995 the production level had gone up to 2 lakh cars and in 1999-2000 it had crossed 4 lakh units. While one reason of this productivity increase is due to technology change, the significant reason is also the labour contribution. But in the late 90s, Maruti had begun to feel the effects of competition. This can be attributed as one of the reason for attack on the workers. Anyway when Management-Union talks broke down in September 2000, the workers agitation began: black badges to start with, and later, hunger strikes, tool down strikes etc. The management suspended 10 workers on the charge of shouting slogans, later dismissed 4 workers, and subsequently dismissals and suspensions were almost a regular affair. In this period the President and the General Secretary of the union who were on hunger strike were picked up by the police and charged under S. 309.151, 107 IPC. They were released on 12 October, only when the Gurgaon Bar Council threatened to go on strike. Management subsequently introduced a Good Conduct Undertaking, where in order to enter into the factory workers need to sign a good conduct agreement. On 12 October, when the workers arrived at the factory gate, they were greeted by hundreds of policemen and then onwards, it was a virtual lockout. Under this pressure 600 workers signed the good conduct undertaking out of a total unionized strength of 4800. The workers did not give up their demands, and on 13 December about 4000 workers began a dharna of 25 days at Udyog Bhawan. From 18 December three union leaders went on a fast undo death. Eventually an all party meeting in Parliament suggested a compromise, asking workers to accept the incentive scheme proposed by the MUL management, while the MUL management agreed to reinstate all workers dismissed and suspended in the course of an agitation. The workers finally accepted the deal on condition that all suspended and dismissed workers should be reinstated. Management agreed with the settlement only in speech, in deeds they violated the fundamental theme of the settlement. A total of 82 workers had been dismissed and 12 suspended during the course of the agitation, starting

from the 10 suspensions on 19 September. By the settlement of 8 January, 46 workers had been reinstated. After the settlement 36 workers, including many of the office bearers remained dismissed and 17 remained suspended. The intention of the management becomes clear - to break the unity of the working class and to derecognize the struggling union. The workers who joined the factory faced severe harassment from the management. Although management was forced to withdraw the Good Conduct agreement, harassment inside the factory premise continued, including intense workload and humiliations like not allowing workers to go to the toilet except for the rest time. The purpose of all this harassment was to force workers to take VRS in order to reduce the operational cost. VRS was notified on September, 2001 and it came into effect immediately. In the same year, a three year scheme called Challenge 50 was launched, which aimed at increasing profits by 50%. Cost cutting measures like VRS was part of the proposal. By introducing VRS 1251 jobs were reduced. In the subsequent years contract workers were hired to work at a much lower cost. The entire offense on the part of the management was clearly to crush the working class unity to reduce the man power cost. The movement was just an excuse for them. The management systematically crushed our Maruti Udyog Employees Union (MUEU) by dismissing the union members following the workers agitation and lockout in MUL in 2000-01 and later de-recognizing it. The MUEU was not allowed to conduct a single general body meeting after the lockout. The current union is management controlled. It is called Maruti Kamgar Union and it was set up in December 2000 with 28 members and has 700 members now. It does not even have a secret ballot and settles issues by show off hands! The situation is much the same elsewhere too. Recall that the Honda workers agitation began because the management refused to recognise the union, and suspended some leading members. The escalating movement eventually reached the day when workers were brutalised by the police. At the end suspended workers were reinstated, but some conditions were imposed on workers. The attacks on the trade union movement and on trade unions increase along with the neo-liberal policies. Now Maruti is expanding its production by opening a plant near Haridwar. Some workers may be relocated there. Unionising them also is a challenge.

Workers stand:
Workers say that the violence started when a supervisor made a castiest comment against a worker Jiya Lal following which the management in place of punishing the supervisor suspended the worker. The workers union protested and asked the top management to revoke the suspension. Seeing the protest the management called the union representatives for a meeting and deployed hundreds of bouncers inside the factory. Workers say this is common practice when negotiations break down. Gautam Mody, a career unionist and currently secretary of the NTUI (New Trade Union Initiative) says, hiring bouncers is standard practice in Haryana.Workers say that the bouncers attacked the workers who responded to the attack. This is how the violence began inside the factory. And it is because of this violence started by the managements action that the GM-HR was killed. Some of the arrested workers also alleged that they were arrested without any reason even when they were not involved in the mob at all. They said they were picked up after their shift was over because the police arrested whoever they can find from Maruti.

Managements stand:
Management says that this violence was a pre-planned conspiracy. They say that the worker Jiya Lal was misbehaving with the supervisor from the start of the shift. After sometime he slapped the supervisor following which the management suspended the worker. Workers union tried to revoke the suspension by protesting. Following which the management had a meeting with the workers union and assured them that the suspension would be temporary, pending an inquiry. The workers union didnt think this was enough. By 6.30 pm, people with armed rods were at the gates. They ordered the rest of the workers from shop floors to join in. The mob entered the conference room, where negotiations between workers and senior management had completely broken down. Workers started smashing the conference tables and then their managers legs. They then aimed for the heads and when the managers covered their heads with their hands, the hands took the hit. After which they set the place on fire. Its not clear where HR manager Awanish Kumar Dev was when the fire broke out. Some say that his legs were broken and he had ducked behind a desk. That he was asthmatic and that when the fire broke out he was unable to move, trapped because his legs were smashed. The postmortem report says he died of suffocation and hundred percent burns. Maruti Suzuki chairman RC Bhargava said that the brutal violence could have been triggered by extreme left wing groups. He termed the violence by a section of workers as a class act. He said it was a conspiracy which was kept within a small group of people. Bhargava while recalling the horrific attack said "A certain demand by one worker does not lead to arms and legs

of a manager being broken. The attack was not directed at any one individual. It was like a class attack. It was like we are workers; we will attack anybody who is not a worker. He further said that the company may have erred in its hiring process. He said the company may have failed to do adequate background checks before hiring contract labour.

Conclusion:
The violence that broke out on July 18,2012, may not have been result of a scuffle between a worker and a supervisor. This is because a demand by a single worker cannot lead to the brutal violence that broke out on July 18 as has been said by RC Bhargava, Maruti Suzuki chairman. Workers reaction on July 18 can be related to the confrontations between the management and the workers in June, September and October,2011. All were totally non-violent. The workers had been agitating for an independent union in place of the ineffective company union the Maruti Udyog Kamgar Union (MUKU). After a lot of struggle, they registered the Maruti Suzuki Employees Union (MSEU) in October last year. But in the same month, the management reportedly got rid of the troublesome leadership of this union by offering them a VRS-type settlement. The workers then formed a new union, the Maruti Suzuki Workers Union (MSWU) with a new set of committee members. It was this union which had been negotiating with the management through 2012 for wage increases, for transportation facilities, slowing down the robotic pace of work, and regularisation of leave benefits. But with the MSWU apparently making little headway in the negotiations, discontent was simmering among the workers. And on July 18 when there was a scuffle between the worker and the supervisor and when the worker got suspended, the union was expected to deliver- to get Jiya Lal reinstated. And when it began to look like they wouldnt be able to, the violence broke out. Following are the factors that may have triggered the violence: 1. Large Number of Contract workers: About 65% of the workers were contract workers. There is a difference between the wages of the contract and the permanent workers. The wages of the permanent workers were almost more than double that of the contracted workers. So the contracted workers were unhappy with the management for the huge difference in the wages. 2. Small increase in wages: Marutis profit increased by 2200%(2001-02 to 2010-11), CEOs pay increased by 419%(2007-08 to 2010-11), increase in productivity was 400% with just a 65% increase in workforce(1992-2000). And the workers real wages increased by just 5.5% whereas CPI rose by 50%(2007-11). 3. Hard Policies: Some of the policies of the organization were really hard to follow. A worker can lose nearly half his salary for taking a couple of days leave in a month. The worker gets only 7.5 min. tea/toilet break during an 8 hour shift and has to run 150 metres

to pick up his tea and another 450 metres to the toilet. And if they take more than 7.5 min. for tea/toilet then they could end up losing half days pay. 4. Breakdown of Communication: There was no proper communication between the management and the workers which is clear when the violence broke out during the meeting between the management and the workers. Each party could not communicate well its stand to the other party which led to the violence. 5. Young workers: Almost all the workers in Marutis Manesar plant are young. The average age of workers is in 20s. They are new to work with Maruti as compared to Marutis workers at Gurgaon Plant who are working with Maruti since a long time and have understood their culture well. So the workers at the Manesar Plant are more volatile which may also be a triggering factor. Although there are many factors which may have triggered the violence at Marutis Manesar Plant on July 18 but all this cannot justify the brutal murder of Awanish Dev GM-HR. It is disturbing to read reports that the manager burned to death because his legs were fractured by some workers and he could not escape the fire set off by them. The violence of the mob was so ghastly that 33 managers are still in hospital nursing injuries inflicted on them. Those found guilty should be dealt with sternly and held to account especially considering that worker violence has become all too frequent in recent times in the Gurgaon-Manesar belt that houses many automobile and ancillary companies. While condemning the violence unleashed by the workers, it is important to find out why they reacted in such an extreme way. Marutis Manesar plant workers and management have been in an uneasy relationship for over a year now. The plant witnessed labour protests for more than four months last year, culminating in a 33-day lockout following a dispute over employment of contract labour, wages, the creation of a new union and speed-ups. The truce since then was an uneasy one as borne out by the unfortunate events of last week. This case should be put on fast track and issue should be resolved as soon as possible because it not only affects the management and workers of the Manesar plant but it also affects the ancillary industries and also the local economy around the Manesar plant. Ancillary industries providing parts to Maruti have reduced their production which in turn has reduced the working hours of the workers and their wages. It has also affected the local economy which was going well because of the workers working at the Manesar plant.

References:
www.dnaindia.com www.thehindu.com www.tehelka.com www.timesofindia.com www.indiancarbikes.in www.ibnlive.in.com