The Lessons of Manesar

A look at the larger context of the labour unrest and violence at Maruti Suzuki’s new car factory

Singh falls silent. He looks lost in thought as he prepares to comment on last week’s bloodletting and arson at Maruti Suzuki’s Manesar plant that left one manager dead and several injured. “That was unfortunate, a terrible tragedy, which shouldn’t have happened,” says Singh, a casual worker at the car-maker’s main factory in Gurgaon, a half-hour drive from Manesar in Haryana. “But after that incident,” he adds, “our supervisors have suddenly become more humane. Their language is no longer abusive and their manners unusually polite.”

Singh’s observations on the shifting nuances of boss-worker relations at the company need to be seen in the context of its operations: non-permanent workers constitute an overwhelming majority of its factory workforce. In a brazen violation of the spirit of Indian labour laws, these irregular workers—casual or contractual hands, trainees and apprentices—

are paid subsistence wages for jobs that are clearly regular. “If we take a day off without prior notice, we lose not just the day’s wage of Rs 320,” says Singh, “but have Rs 1,800 deducted from the sum we get at the end of the month for all the days worked.” Since firing properly enrolled workers is illegal in India, the use of such ‘casual’ workers is not uncommon. It lets the company downsize its workforce without legal trouble, and can keep costs low in other ways too. With more job seekers than jobs to go around, it also acts as a tool to keep workers in competition with one another (it’s a matter of survival for most) and prevent unionisation.

At Maruti Suzuki, all this has meant a restive workforce roiled by the company’s attitude towards them. “I can’t point fingers at anyone as the undisputed culprit of the crime,” says another casual worker at its Gurgaon plant, referring to the violence of 18 July, “Do find and punish them. But is that the only crime that has happened in Maruti? What about those being committed by the management every day?”

While India’s leading car company might be a byword for low-cost manufacturing, its labour policies have clearly left its workers at the raw end of the deal. What is no less clear is that they are aware of their condition, even if the threat of unemployment keeps them with their noses to the grind. “Workers in the automobile industry are not illiterate and ignorant,” says J John, editor of Labour File, a bimonthly journal on labour issues, “They are [Industrial Training Institute] pass-outs and know that labour rights are an integral part of Indian democracy. If you take away that, you are taking away a part of democracy.”

The violence Manesar, in which a senior human resources executive, Awanish Kumar Dev, was done brutally to death and 96 managers and supervisors were left battered and bruised, has shaken Maruti Suzuki up like never before. On 21 July, its Chairman RC Bhargava told mediapersons that the company was rethinking its hiring policy. “We will not have any contract worker in the core areas of manufacturing after March 2013,” he said, “We have decided to change the mode of employment, and all future recruitment would be done through the HR department to remove all distortions.” These ‘core areas’ include the press shop, welding shop, paint shop and the assembly line on which assorted car parts are put together.

At Maruti Suzuki, apart from a basic salary, a worker earns incentives that could add up to an equivalent amount, but vary depending on production levels and other performance measures. A Maruti spokesperson claims that permanent workers take home Rs 18,000-22,000 per month, including basic pay, production incentives and overtime, while casual workers get about Rs 11,000. Many casual workers at the Gurgaon factory, however, assert that they end up with only Rs 6,000-8,000 per month. Trainees and apprentices, another large part of the non-permanent staff, manage to take home a paltry Rs 4,000-5,000 a month.

The spokesperson also maintains that casual workers constitute about 50 per cent of the workforce at both units, a claim that is at odds with union leader Kuldeep Janghu’s assertion that of a total worker strength of over 6,000, only 2,250 are regular in the Gurgaon factory.

It was in 2000 that Maruti started employing contract labour in a big way, soon after the Government began privatising it. In October that year, the company saw its first major confrontation between workers and the management. Workers were being stopped at the factory gate, their entry made conditional on their signing a ‘good conduct bond’. This was illegal, said the workers, 100 of whom were summarily dismissed as the stalemate continued. Later, the management relented and withdrew the bond, but refused to take back 24 of the sacked workers. “Once the workers joined duty, the management victimised 150 workers, including office bearers of the union, by dismissing them,” says DL Sachdeva, secretary of the All India Trade Union Congress (AITUC), “Later, the company introduced a voluntary retirement scheme and forced workers to accept it. Around 240 regular employees were thrown out in the process.”

In 2001, the management derecognised the old union. “The same year, another union was registered under the management’s patronage. That union has continued since,” says Sachdeva.

Today, regular workers account for a third of the Gurgaon plant’s workforce. “Only regular workers can become members of the union,” says Janghu. While he can enumerate various welfare measures the union has won for regulars, it’s obvious that non-regulars have been left in the lurch.

The scenario at the Manesar factory, which has been operational for the past four years, has been slightly different. Last year, it witnessed three phases of worker unrest over the management’s refusal to recognise a union that was independent of the one at the Gurgaon factory. It was only after a two-month standoff that the management eventually did. “The violent incident at Manesar shows that the management has not learnt [lessons] from the last three strikes in 2011,” says Tapan Sen, general secretary of the Centre of Indian Trade Unions (CITU). “The management never tried to help workers overcome the trust deficit that had survived their earlier unrest,” he adds, “Labour laws continued to be violated. Most workers, particularly casuals, were forced to live like sub-human beings. The Haryana government also played a reprehensible role by turning a blind eye to the persistent violation of labour laws in employing contract workers for regular jobs and by siding with the management in its repression of workers.”

Unions usually limit themselves to acting as a voice of permanent employees, but the formation of any such body gains legitimacy by posing at first as a representative of all workers, especially if the ratio of irregulars is high. From the point of view of a union, such unity is imperative if it is to achieve its desired bargaining position vis-à-vis the management. At Manesar, this unity was still in place. Sources suggest that some of the tension was caused by managerial efforts to divide the two groups of workers.

Casual workers, their insecurity heightened by those attempts, have been vocal in claiming that it is both discriminatory and illegal to deny them the status of regular workers. “The principle of equal pay for equal work has no place in most of the automobile industry. That such a situation should prevail even in Maruti factories is shocking,” says Sachdeva. “Suzuki Motor Corp, the parent company, would have been wiped out in the recession of 2008-09 had Maruti not been there,” he claims.

It is true that Suzuki is dependent on Maruti for its all-round performance to a large extent. The Japanese company’s annual report makes clear that its Indian subsidiary accounts for almost half its global revenues. While Suzuki’s car production and sales in Japan registered absolute declines in 2008 and 2009, Maruti’s figures in India showed a steady uptrend.

Suzuki clearly cannot afford to let its Indian operations slip. But it is also evident that labour unrest is not something that only Maruti faces. The entire automobile belt of Gurgaon-Manesar has seen poor labour relations in recent times, with a sharp deterioration over the past couple of years.

In 2005, agitating workers of Honda Motorcycle and Scooter India suffered a brutal police attack, an event that showed how closely the state administration was working with managements. This incident was followed by labour unrest at several other manufacturing units, including Sunbeam, Rico Auto, Micro-Tech, FCC Rico, Rico Daruhera, HMSI, Hema Engineering, Hi Lux, Sona Steering, Hero Honda, Bajaj, Denso Haryana and AG Industries.

Trade unions allege that in all these cases, the Haryana government chose to overlook labour laws and back company managements. Even the principle of tripartite negotiation was given the go by.

Also, even though workers were allowed to form unions, it was made clear to these collectives that any affiliation with a central trade union would not be tolerated. According to John, this has proved counterproductive for these companies. “Central trade unions have vast experience of negotiation with managements,” he says. To his mind, such unions have what is needed to deal calmly with tough situations, while spontaneous outbursts by angry young workers are “not good either for workers or the management”.

“These young workers are actually experimenting with various forms of collective bargaining without learning from our huge reservoir of experience,” says Sen, “What is worse, this is happening in a very acrimonious environment.”

“What the workers of Manesar did is self defeating,” says Sachdeva, who is perhaps the most visible representative of central trade unions in the Gurgaon-

Manesar belt, “It took away all the gains they had achieved over the last couple of months. No central trade union would have advised them to do this had they been affiliated to it.”

Worker-management relations are marred by myopia on either side in various other industries too. Within India Inc, the Manesar case has predictably begun to evoke a cry for ‘reforms’ of the country’s ‘outdated’ labour laws; this is code for the demand that firms be allowed to hire and fire workers at will. While some argue that this will result in regular recruitment in larger numbers, the job insecurity it creates could prove disastrous in a poor country without an adequate social safety net. Workers do have rights—and it is only humane that these are accorded primacy.

About The Author

Dhirendra K Jha