Bajaj Auto Strike: Statement of Vishwa Kalyan Kamgar Sanghatana

Hresonance believes in the principle of Hear The Other Party. In keeping with that policy, Hresonance invited statement of the Union at Bajaj Auto employees, Vishwa Kalyan Kamgar Sanghatana on the issue of Stoppage of Work and the demand regarding shares of the Company. Here is their response published unedited. The views expressed here are exclusively of the VKKS, and not of this blogger.

Statement of Vishwa Kalyan Kamgar Sanghatana Stoppage at Chakan, Pune Plant of Bajaj Auto Ltd, From 25th June, 2013
We are the only MRTU recognized Union at Akurdi and Chakan plant. We believe that cooperation is must but conflict is also an expression of some un-addressed lacunae in the rationale of our system and culture. We take the opportunity to convey to you our anguish that despite our sincere efforts to develop good harmonious relations, but the Bajaj management does not changed its anti labor and anti union approaches and actions. To protect the workers interest, Union had been compelled to refer the various matters in court of law. At present various matters are pending before the court of law. There is a need to understand the root causes of the problem and hence we are giving you the brief background and facts in chronological order:

[Photograph of Mr Dilip Pawar, President of Vishwa Kalyan Kamgar Sanghatana]

Scenario at Chakan Plant before formation of the Union: As you know that Chakan plant has been set up in the year 1999. In early days management shown lot of dreams to the employees and created hopes for better future. But over a period of time employees understood and experienced that management ditched them by giving false hopes and assurances. Employees started experiencing exactly opposite what was committed to them by the management. The workers were experiencing various kind of harassments as follows:

a) The management made overtime compulsory and refused to pay overtime. b) The management arbitrarily deciding the shift timings and compelling workers to adjust themselves accordingly.

c) Workers were getting overloaded with excessive workload and if any worker raised the grievance he was getting ill treatment by abusive language and punishment. d) The wages of the workers were low and getting very low yearly increments. e) There was no job satisfaction among the workers. The tag of World Class Company was just for namesake. There was totally negative approach towards workers. f) The workers were getting punished by inhumane way.

Formation of the Union at Chakan Plant:

Because of above mentioned adamant and suppressive attitude of the management, the workers at chakan plant decided to form union, in the month of January, 2010. There was tremendous fear among the workers in terms of formation of union but at the same time harassment of the management was at its peak level and hence they decided to join Vishwa Kalyan Kamagar Sanghatana (VKKS) which was the recognized union under MRTU for Akurdi Plant. In due course of time VKKS got official recognition under MRTU for Chakan Plant.

Scenario after formation of the Union:

a) The First General Body Meeting (G.B.M) of Union held on 26th January, 2010 and afterwards officially VKKS has been recognized by the Management. The issues got discussed in peaceful manner and the first Collective Bargaining settlement was signed on 21 May, 2010. b) In September, 2010, VKKS got official recognition under MRTU and good relationship got established. All the issues were getting discussed and resolved across the table and day by day relationship was getting improved.

st

Pant Nagar Episode:

a) The Pant Nagar plant got established in the year 2007. In Pant Nagar also chakan episode got
repeated. The situation at Pantnagar Plant was similar to that of the Chakan Plant and because of this attitude of the management the workers at Pantnagar started agitations in the month of May, 2012. These agitations at Pant Nagar were the outburst of the anger against management harassment and declaration of very low wage increment. Some of the workers approached VKKS to support their agitation. VKKS suggested the Bajaj Management at Akurdi to establish dialogue with Pant Nagar workers but management refused to discuss. As a result of this the workers had no option but to form union. The workers of Pant Nagar knew that it is next to impossible to get union registration in Uttara-khand and therefore they

requested Vishva Kalyan Kamgar Sanghatana for the membership. Considering their situation and request VKKS given them membership and majority of the workers from Pant Nagar joined VKKS.

b) The first positive step has been taken by VKKS and directed all workers to withdraw the
agitation and start production. In this way all workers resumed their duties and brought normalcy.

c) The above mentioned episode has been informed to the Bajaj Management through an official
letter by VKKS but management refused to accept any letter. The management also refused the Charter of Demands submitted by VKKS for Pant Nagar Workers.

d) The argument of the management was, the registration of VKKS is only for Maharashtra and
they dont have any right to take up any membership from outside Maharashtra. The VKKS submitted all the documents including the letter from Additional Commissioner, Pune. But management was adamant on their stand and surprisingly, the Labour Department of Uttarakhand also using the same language that of a Management. Therefore, VKKS has been compelled to refer this matter at Nainital High Court. On the other hand management refused to bargain collectively for Pant Nagar workers, we have been compelled to refer this matter under conciliation. Finally, Hon. High Court given a judgment in favour of VKKS and directed the Labour Department of Uttarakhand to start the conciliation process with VKKS.

e) We hereby bring to your notice that all our members have been harassed by the management
and compelled them to accept the settlement (which is totally one sided, unfair and illegal) signed by the puppet Union. This strategy is very much short sighted; this cannot be the permanent solution. This achievement of the management is just due to sheer power and there is no ethical ground at all. History again and again proved that such strategies dont work in the long term.

f) In short, we never approached Pant Nagar Workers for joining the Union but due to
harassment by the local management and low increment declared by the management they joined VKKS. In other words management compelled them, due to their wrong behaviour, to join VKKS. Its management failure and to save themselves they are blaming VKKS.

Changed Relationship at Chakan Plant after formation of the Union at Pant Nagar.

It seems that to take the revenge of Pant Nagar Episode, Management started harassment at Chakan Plant. Therefore, they decided to vitiate the atmosphere at Chakan. Before, Pant Nagar Episode the relationship at Chakan was normal, how all of a sudden whole atmosphere got vitiated? To vitiate the atmosphere at Chakan management started harassing the workers in following way: a) Created an issue of line balancing and created unnecessary dispute to take action against union members. b) First giving additional manpower, achieving higher targets and then removing additional manpower and asking for the same level of impossible targets. Based on false targets and false reports management started giving warning letters, show cause notice, suspension, pending enquiry suspension and dismissals. c) From June 2012 (after the Pant Nagar Episode) management started various actions. For your kind information we are giving it in the following table: Sr. No. 1 2 3 4 5 Particulars Suspensions Pending Enquiry suspension Show cause Notice Numbers 22 8

and 2 3 1

Enquiry Domestic Enquiry Terminations / Dismissals

d) Management just not stopped from taking false and illegal actions but also refused to review the increment as per settlement dated 21st May, 2010. Therefore union had no option but to terminate Long Term Settlement. Against said termination letter management went to Court. e) Management were using flexible manpower like earn & learn, trainee and contract workers to frame false charges against union members and again we have been compelled to file the cases against Company on the issue of earn & learn, trainee, contract, etc.

f) Management started giving impossible production targets with an objective of taking action against union members and hence we demanded scientific time study based on ILO norms. This matter is also referred to court of law.

Requested for Dialogue: In short the relationship at Chakan got totally disturbed due toWRONG, UNFAIR and ILLEGAL behaviour of the management. The management always compelled us to refer most of the issues to court of law instead of resolving the same through discussions.

The Workers were in vulnerable situation and such situation is not good for any organization in terms of growth and sustainability. There is entire list of issues which prevents the development of harmonious industrial relations in the Company. In the absence of a dialogue and in the face of utter lack of desire being demonstrated by the management, it was very difficult to either build good harmonious relations, or to adopt reasonable attitude. We were finding it impossible to maintain relations or to resolve issues amicably.

Requested for Intervention to bring normalcy: We requested to M.D. Mr. Rajeev Bajaj to save the relationship. We also requested him to give us an opportunity to present our case with documentary proofs and to prove our position. It is unfortunate that M.D. never took it seriously. On the contrary the situation further worsened.

Violation of the Settlement dated 21st May 2010 and other issues in Chakan Plant: The issue of contract labour, earn & learn, trainees, violation of the settlement dated 21st May, 2010 are pending before the court of law. Union have been compelled to file cases on the above matters only because management refused to discuss these issues across the table. The Vishwa Kalyan Kamgar Sanghatana and the Bajaj Auto Ltd signed the settlement on 21st May 2010 deciding the wages and service conditions of workmen working at Chakan Plant. As per the settlement the increase of 12%, 8% and 8% was agreed for the first, second and third year respectively. In the settlement dated 21st May 2010, it was agreed that if the annual increment awarded to the similar category of employees across the Bajaj Auto Ltd. is higher than the above mentioned increments in that case higher % of increment will be made applicable to workmen

covered under said settlement. Management refused to do so and violated the clause no. 17 C of the settlement. And hence Union have been compelled to file case in Industrial Court, Pune. Further, in the said settlement, though the settlement is of 9 years, it was agreed that wages will be discussed and reviewed periodically every 3 years. It was further agreed that for any reason whatsoever the wages/salary review is not done after every 3 years, both the parties shall have a right to terminate the settlement for the remaining period. (Clause No. 2-B). Bajaj Management refused to REVIEW and hence Union had no option but to terminate the settlement as per the said clause and submitted fresh Charter of Demands. Bajaj Management refused to discuss demands submitted by the Union and hence Union have been compelled to admit this matter under conciliation at Labour Commissioner Office, Pune. Management filed a case against union in terms of cancellation of the registration of the Union. The matter is pending before the Hon. High Court. From all above one can understand that the basic objective of the Bajaj Management is to demolish the Union. They did not like the fact that Chakan workers and Pant Nagar workers joined the Union. They succeeded at Pant Nagar by paying heavy price and now trying to adopt same strategy at Chakan.

Why stoppage?
From the above mentioned facts and considering the Bajaj History it is now very clear to the union that Bajaj Management will never share their profitability with workers. Bajaj Management always shared profit with the management staff by Paying BONUSES & INCREMENTS but always refused to share the profitability with the workers. Earlier we thought that at least this sharing can be done by getting reasonably good wages and better service conditions. But management always refused to do so and never consider profitability while deciding wage rise and hence to get permanent solution in terms of profit sharing we demanded 500 shares in the month of January 2013. Bajaj Management did not respond to this demand. Therefore union have been compelled to go on stoppage from 25th June, 2013. Only after stoppage, Bajaj Management is trying to highlight this issue. While

addressing the press, Mr. Rajeev Bajaj rejected this demand by saying ridiculous. How this demand is ridiculous? On the contrary this demand is very much PRO-COMPANY. This demand is made in order to motivate workers for better performance and increase prosperity. The prosperity due to better performance should be shared with workers, not fully but to some extent, so that they are bound to feel themselves as a part of the Company. Also accepting this demand will be a tribute to Late Shri Jamanalalji Bajaj who believing in Gandhian philosophy of Trusteeship. This demand is based on Trusteeship and will improve harmony & peace in the Company. Thus this demand is to the advantage of both the parties. Also this demand will generate direct stake of workmen in the overall performance of the Company and also induces motivation not only to perform better but also become vigilant & cooperative in inter-functional integration of the work organization. In last few years the Performance of the Company is outstanding but workers could not get their due share.

PARTICULARS

YEARS

2001

2002

2003

2005

2006

2007

2009

TOTAL CAPITAL EMPLOYED INCOME

3150 3964

3682 4402

4253 5070

5501 6322

6325 8106

7233 10076

3443 8932

EXPENDITURE OTHER THAN LABOUR COST, DEPRECIATION & INTEREST VALUE ADDITION EMPLOYEES SHARE IN VALUE ADDITION CAPITAL SHARE IN VALUE ADDITION EMPLOYEES SHARE IN VALUE ADDITION (%) CAPITAL SHARE IN VALUE ADDITION (%) RETURN TO CAPITAL (%) Gross Profit Net Profit Ratio of Employees Share & Income

3169

3395

3826

4752

6037

7803

7265

795 244 551 31 69 17 369 249 6.16

1007 237 770 24 76 21 587 518 5.38

1244 283 961 23 77 23 788 534 5.58

1570 249 1321 16 84 24 1086 764 3.94

2069 274 1795 13 87 28 1580 1123 3.38

2273 301 1972 13 87 27 1728 1237 2.99

1667 354 1313 21 79 38 958 654 3.96

The above table reveals that though the Performance of the Company got improved drastically, Employees share in Value Addition reduced drastically from 31% to 12%. Even among Employees the share of workers is negligible as against management staff. All workers i.e. around 1450 workers are getting around Rs.300/- per Pulsar. It means per worker per Pulsar amounts to 22 PAISA !!! Share Holder & Management Staff get around Rs. 16700/- per Pulsar Governments get around Rs. 10000/- per Pulsar Dealers get around Rs. 10,000/- per Pulsar What about workers who creates this wealth? They are getting only around Rs. 300/- per Pulsar & Per worker it is 22 PAISA.

Therefore, what is wrong in demanding shares?

VISHWA KALYAN KAMAGAR SANGHATAN

President

General Secretary

Mumbai: Its a month since workers at Bajaj Auto Ltds Chakan plant struck work but neither the management nor the union appear to be giving in over the issue of wage hikes and the allotment of discounted company shares to employees. The Chakan plant employs 1,486 workers, of which 900 are permanent, 364 are trainees, and the rest are part of the learn and earn employment-promotion programme run by the state employment exchange. The strike began on 25 June. The Vishwa Kalyan Kamgar Sanghatana (VKKS) labour union wants Bajaj Autoto allot 500 shares each to all workers at a price of Rs.1 per share, besides a wage hike and better working conditions. The production loss amounts to 25,000 units, said Kailash Zanzari, vice-president of manufacturing. However, he said that there has been no shortfall in despatches to dealers so far. While the company doesnt expect demand to pick up before the festive season kicks in later this year, as a result of lower production, dealer inventory is likely to come down from four weeks to a week, he said. The company is very open to take up the wage negotiation issue, but it wont change its stance on the allotment of shares as it doesnt see any merit in such a move, he said. There is no question of allotment of shares. However, we are committed to a salary review but only after normalcy in production is restored. We wont do it at gunpoint, he said. The labour trouble has broken out at a time when companies are paring production and undertaking scheduled closures of their plants. Though none of Indias two-wheeler firms have reported production cuts, dealers are grappling with unsold stocks. Companies typically go slow on dispute resolution when demand falls since it helps them get rid of excess inventory and put them in a stronger negotiating position, experts said. During a slowdown, companies can afford to adopt a wait-and-watch policy, said Pranabesh Roy, dean, academics, at Jamshedpur-based Xavier Labour Research Institute. An analyst at a domestic brokerage, who declined to be identified, said workers may have to settle for less and compromise on their demands when sales are down, one of the reasons it could take longer for the issue to be resolved.

Following the slowing economy, high interest and fuel costs, auto sales in India hit a decade low in fiscal year 2013. Even demand for two-wheelers, relatively insulated compared with cars, contracted to a four-year low. In 2008, when auto sales contracted in India following the global economic slowdown, at least three firmsApollo Tyres Ltd, MRF Ltd and Bosch Ltdhad a standoff with workers. Unable to reach an agreement, the companies had resorted to lockouts. Zanzari ruled out a lockout, adding that irrespective of market condition, Bajaj Auto is keen to resolve the issue. The market condition is not that important, he said. What is critical is restorat ion of the culture. Meanwhile, Bajaj Auto has been shifting production of the models produced at Chakan plant to its facility at Waluj in Aurangabad. In the month since the strike has begun, Bajaj Auto has shifted 40% of its production to the Aurangabad unit, which produces the Pulsar, Avenger and KTM models. In a statement on 24 June, the company said 798 workers had reported to work that day and that it would produce 1,900 vehicles at Chakan and 1,100 Pulsars at Waluj. These are false claims as all the workers engaged in core production jobs are with us, said Dilip Pawar, president of the labour union, adding that he plans to intensify the stir. Bajaj Auto has appealed to the industrial court to declare the strike illegal. It said the workers went on strike three days before the actual date on which they were to resort to line stoppage. The hearing is due on 29 July.

AUG 13: The workers union at Bajaj Autos Chakan plant has withdrawn its strike. Union members will resume work from August 14, bringing the curtains down on the 50-day saga, which began on June 25. The unions announcement came hours after Rajiv Bajaj, the motorcycle majors Managing Director, agreed to extend the deadline to resolve issues from August 12 to August 16. Last week, he had told the striking workers that if no progress was made on the matter, the company would consider permanently moving half of its production from Chakan to other plants. The withdrawal of the strike comes on the heels of several rounds of discussions between the Vishwa Kalyan Kamgar Sanghatana (VKKS) Union and the Bajaj Auto management, including some presided over by senior labour officials from Maharashtra. In a statement, Rajiv Bajaj said: A strike is invariably a lose-lose proposition for all involved, not only in financial terms, but also in terms of internal morale and external reputation. I am very pleased that the VKKS has unconditionally called off its strike at Chakan. More importantly, I hope that the decision is a reflection of their understanding, however late, of their erroneous choice of direction. The strike, termed work stoppage by the workers, hinged on the VKKS demand that each of its 900 members be given stock options to the tune of 500 shares, for a price of Re 1/share. The company had categorically rejected this demand. The union had also terminated a nine-year wage agreement prematurely, and demanded the reinstatement of 22 workers suspended for various reasons. I am certain that the vast majority of the workmen at Chakan never supported the unions stand, and that in the end this has been the most important reason the VKKS union has had to call off their strike, said Bajaj. On behalf of the management I assure all the 22 workmen who are suspended pending enquiry that their cases will be considered objectively and sympathetically in the collective interest of all stakeholders. Dilip Pawar, President, VKKS, said the strike had been withdrawn to protect the interests of the workers. He expressed confidence that their demands, such as wage revision and better working conditions, would be resolved in time.

The strike at Bajaj Autos Chakan plant came at a time when cuts in production in the automobile sector
in the Pimpri-Chinchwad-Chakan belt led to many job losses, especially for contract workers. This, together with the fact that Bajaj doesnt hire contract labour, helped the management impel the union to withdraw their 50-day strike at the two-wheeler plant unconditionally. The union had clearly chosen the wrong time to strike work, in the midst of a downturn that adversely impacted this industrial belt -- one of the leading automobile hubs in the country. The automobile industry has invested about Rs 50,000-crore (Rs 500-billion) in the Chakan belt. Experts say about 40,000 contract workers, accounting for 80 per cent of the automobile workforce in this belt, have lost their jobs. There are about 200,000 workers in the automobile sector across the Chakan belt, primarily in smallscale units. We realised contract labour does not have the same commitment. So, we decided to hire only permanent workers in the core areas of operations, says Rajiv Bajaj, managing director of Bajaj Auto. However, the company has an earn while you learn trainee scheme, under which trainees get the same wages as permanent workers. About half of these trainees are absorbed in the company, depending on their performance and the plants requirements. At Bajajs Chakan plant, there are about 900 permanent workers and about 500 trainees. During the strike, the trainees, who werent part of the union, kept the factory from being shut, churning out about 1,200 bikes, about a third of the normal production. The unions demand that the wage agreement be cancelled and a new one be put in place didnt have much teeth. Bajaj has always ensured despite being a two-wheeler manufacturer, wages at the company are benchmarked with those at large car companies in the belt, including Tata Motors, Volkswagen and Mahindra & Mahindra. Bajaj says its average salaries of about Rs 25,000 a month are comparable to the best in the region. For contract workers, the average wages in the belt are Rs 7,000-12,000 a month. Though the workers union at Bajajs Chakan plant received some support from local politicians, such as a few Shiv Sena leaders, and activists such as Medha Patkar, its key demand of shares for workers, something not seen in any Indian automobile company, didnt strike a chord with national and state level politicians.

During a recession, a demand for shares and scrapping a wage agreement that offers a 12 per cent salary increase every year cannot win the hearts of workers, says a senior central union leader. Bajaj Auto, unlike Maruti (Gurgaon-Manesar) or Volkswagen (Chakan), which have production capacity based in a single area, has the flexibility to move production out of Chakan to other plants located in Pantnagar and Aurangabad in a short time. The companys management says the process could have taken a month. And, this doesnt entail major costs, as many of the vendors are common across locations. That is why Bajaj had given an ultimatum that it would permanently shift half its production from Chakan to other locations if workers did not return to work. It was able to quickly shift production of about 1,000 bikes, to be produced at Chakan, to Aurangabad. Both major automobile companies, as well as the 8,000 small and medium units (mostly vendors) in the region have cut production. For instance, Mahindra & Mahindra has done away with 1,000 temporary workers at its Chakan and Nashik plants.

The Pune labour commissioner has issued a show-cause notice to Bajaj Auto for allegedly employing workers who are not licence holders and trainees at the production line in its Chakan plant, where existing employees have been on a strike since June 25. According to sources, the company has been given three days to respond to the notice, which followed a complaint from the workers' union. The union alleged that the company started using workers, who did not have licences, at the production line following the strike by its existing employees. It further said using of 'learn-and-earn' trainees by the company for full-time production was in violation of the state's labour laws. Under the 'learn-and-earn' scheme of Maharashtra, a trainee is given a diploma after completion of a four-year course, which comprises both theory and practical training.