LABOUR DISPUTES: The Summer Of Discontent

By M H Ahssan

Worker angst is rising. Unless the root causes are dealt with soon, there will be grave implications for future labour relations.

On 5 January this year, 10 temporary workers of the German multinational Epcos India entered the Deputy Labour Commissioner’s office in Nashik and, in full public view, swallowed bottles of pesticide. The mass suicide attempt was to protest against their dismissal after repeated ‘temporary’ appointments for several 180-day cycles. While speedy hospitalisation saved their lives, the government machinery was suitably shaken, and it quickly swung into action to control the damage. In the negotiations that followed, most of the dismissed workers were taken back, and some of them have been made ‘permanent’ too.

At the other end of the spectrum, the well-organised bank employees are gearing up for an all-India strike on 12 June. This follows a breakdown of talks with the Indian Bank Association (IBA), the apex body of bankers. The United Forum of Bank Unions (UFBU), representing nine unions and one million employees, has rejected an offer of a 15 per cent rise in wages that would cost the industry Rs 4,125 crore. This is not the first round; and UFBU has promised it won’t be the last. The bank unions struck work on 24 and 25 September last year. And they have promised to repeat a two-day work stoppage later, too, if the 12 June strike does not deliver the goods.

Labour Disputes On The Rise
Over the past four-six months, there has been a steady increase in the number of labour disputes and flash strikes. With no previous history of strikes, Nestle’s 4,300 workers in four units stopped work for a day on 19 January. More recently, its Pantnagar unit has been through a few shutdowns. Auto companies Mahindra & Mahindra (M&M) in Nashik and Hyundai in Chennai have gone through a couple of weeks of strikes and lockouts last month. MRF’s Arakkonam unit was paralysed for most of May. In the public sector, besides bank employees, thousands of workers and officers of oil companies, MTNL staff and Airport Authority (AAI) have been on the warpath. For those used to the relative calm in industrial relations during the pre-Lehman Brothers boom years, the new employee restiveness has caused some alarm.

Government labour departments do not track industrial relations exhaustively. However, the number of workers affected by strikes had almost doubled from 570,000 in 2007 to 930,000 in 2008, according to the Central government’s Labour Bureau, possibly because of strikes by larger central unions such as bank employees.
In Maharashtra, the most industrialised of the states, the number of strikes and lockouts has been steadily on the increase. More significantly, the number of mandays lost in 2008-09 has nearly doubled to 920,000 from 1,072,000 for the previous year 2007-08.

Government officials admit that labour disputes are on the rise. Says the additional secretary in the Union ministry for labour and employment, S. Krishnan: “Disputes have gone up since 2008, but the data is still being compiled for that period. Figures do not reflect the trend as often disputes are not being reported. Closures are taking place, layoffs are happening, but either workers are accepting it quietly or the units they were working for were very small.”

One reason why disputes do not always show up in figures is that workers have taken to new forms of protest. Strikes, union leaders say, are often used to close down units. Vivek Monteiro, secretary of the Centre of Indian Trade Unions (Citu), Maharashtra Chapter, says, “There are some wildcat strikes, but the general environment is However, strikes have been part of the arsenal of recent showdowns, particularly in the auto industry. M&M’s plant in Nashik has just emerged from a two-week strike by its 2,750-strong workforce, though the issues that sparked it are far from settled. According to a company spokesperson, the tool-down strike began on 4 May after the company suspended the union president, Madhav Dhatrak, after he skirmished with the chief security officer. Dhatrak, on the other hand, told BW: “The management targeted me as I opposed the heavy production burden imposed by the MoU signed by the previous union committee.”

The strike was declared illegal on 13 May by the Industrial Court, and the workers returned to work on 18 May with an assurance that the union president would be allowed to resume after normalcy was restored. However, Dhatrak’s suspension has not been revoked, laying the basis for a possible Round 2.

Hyundai Motors in Chennai too saw an 18-day strike during which the company threatened to shift the production of its prestigious i20 brand to Europe. A company spokesman said trouble started on 20 April after a section of workers led by the Citu pressed a 45-point charter of demands that included travel facilities in AC buses despite the fact the average wage scale was around Rs 39,000 per month. pro-strike yet. The mood is to put pressure on employers to stem the tide.”

The union, however, insists the face-off took place because the company refused to negotiate and instead “victimised” its leaders and members. Says A. Soundararajan, Citu leader and honorary president of the Hyundai Motor India Employees Union: “At the very inception, the management declared that no union will be allowed. This very declaration made the workers want a union. The management reacted by transferring the president and general secretary (of the trade union) to Mumbai and Delhi, and dismissed 76 workers and suspended 23.”

The strike was called off on 8 May after the Commissioner of Labour began conciliation proceedings, and after Hyundai agreed not to take action against the striking workers or sign settlements with the rival, pro-management workers’ committee.

One of the country’s largest tyre-makers, MRF, too has just been through both a strike and lockout at its Arakkonam unit. The majority union, the MRF United Workers Union, launched a sit-down strike on 9 May after the company signed a settlement with an older MRF Arakkonam Workers Welfare Union. MRF retaliated by trying to force out the workers from the plant by declaring a lockout from 18 May. The workers were evicted on 20 May and the company lifted the lockout on 27 May claiming that 1,000 workers reported for work on the first shift.

While an MRF statement said the agreement it signed with the older union gave a handsome rise of as much as Rs 5,000 per month to the workers, the rival union leading the strike claimed its only demand was recognition as the majority union. Says P.V. Paramasivam, president of the MRF United Workers Union: “We have more than 1,200 workers supporting us here and in the Pondicherry factory. But the management has entered into an agreement with the MRF Workers Welfare Association, which has barely 50 members.”

Companies that had been spoilt by not having to deal with aggressive unions in the spell of high growth are finding it difficult to cope with re-emerging demands for collective bargaining. The case of Nestle is interesting, particularly since the Geneva-based International Union of Foodworkers (IUF) is determined to embarrass the Swiss multinational by filing several complaints for breach of the Organisation for Economic Co-operation and Development (OECD) guidelines before its home government.

The OECD guidelines spells out standards for employment, international relations and human rights for multinational enterprises headquartered in Switzerland.

A strike at Nestle’s Uttarakhand plant in Pantnagar was triggered by the removal of two probationers on 27 April. On 1 May, in a meeting called by the labour commissioner of the management and the striking employees, the company took the stand that it had the right to remove probationers over performance targets, but later agreed to a settlement. However, the next day, the management suspended four more workers, sparking a 23-day strike that was settled when the workers were reinstated. Protest action included 300 workers, representing Nestle’s seven plants, demonstrating at the company’s headquarters in Gurgaon on 25 May. Franklin D’Souza, head of IUF’s India Chapter, says Nestle climbed down and has pasted notices at its various units stating it is ready to negotiate with workers’ representatives.

Brewing Over The Years
Though these wildcat strikes and militant protests have suddenly made a splash in the media, the problem has been festering for some time. Over the past two decades, both the shop-level bargaining power of unions and political clout of the labour movement has slowly eroded. During the 1970s and 1980s, the movement was a political force to reckon with. George Fernandes’s 1-million strong Railway Union paralysed the national rail network in 1982 for nearly a month, while Datta Samant led 250,000 textile workers in Mumbai on a crippling one-year strike that shook the Congress-led Maharashtra government in 1981. It was an era when transport and taxi unions were used to shut down cities and bring governments to their knees.

These powerful, ideologically oriented labour movements began to wilt in the late 1980s with governments cracking down on the militant unions. Simultaneously, industry underwent a structural change. Higher levels of technology with smaller sets of skilled employees replaced the older, labour-intensive processes. Manufacturing was broken up with ancillary production being outsourced to contract labour. Finally, the economic reforms and liberalisation piloted by the P.V. Narasimha Rao government in 1992, with its mixture of privatisation and labour rationalisation, broke the backs of the powerful, centralised trade unions.

Says Supriya RoyChowdhury of the Institute for Social & Economic Change, in Bangalore, in a paper in the Economic & Political Weekly: “The turn towards economic liberalisation and private sector-driven development has led to a certain loss of interest in the working class… as far as political parties across the left/centre-left spectrum are concerned. This has led to the disappearance of a political/ideological anchoring for the working class movements.”

Anticipating the job losses from amalgamations and closures of redundant units, the government came out with a detailed plan to create a ‘safety net’ and retraining workers for new jobs through a National Renewal Fund. These plans remained largely on paper, and hundreds of workers lost their jobs and became hawkers and casual labourers overnight or swelled the ranks of the unemployed.

Later, the high-growth trajectory in the 2006-08 period had a positive trickle-down effect as sources of employment and better wages marginally neutralised the effect of economic reforms. However, with the current economic slowdown leaving thousands of employees stranded without jobs and social security, collective protest and demands for union recognition have again become the flavour of the season.

“Labour has been neglected since 1991-92. For long they have kept numb because of their insecurities and fear of losing their jobs; but now that they have their back to the wall, they are fighting back. The economic crisis has acted as a trigger,” says Sharit K. Bhowmik, dean of the School of Management and Labour Studies at the Tata Institute of Social Sciences (TISS).

RoyChowdhury points out that the problem is growing at the foundation with the rewriting of employment relations in which a non-permanent (contractual) workforce exists alongside a steadily shrinking permanent workforce. Simultaneously, the decline and closure of the large number of small-scale and unorganised industries has thrown thousands out of jobs with little compensation and social security.

New Forms Of Protest
In the new economic environment, the character of the new labour upsurge is also different. Unlike the 1970s and 1980s, wage demands are not at the centre of the protests. The main concerns of agitating workers seem to be basic issues such as union recognition, high productivity demands and the increasing concern over outsourcing and contractualisation.

Giving an example of the Japanese auto components maker Musashi, based in Rewari in Haryana, Rakhi Sehgal, an activist with the New Trade Union Initiative (a workers’ resource centre), says the firm declared a lockout on 6 April to counter protests by workers against what she called “excessively high production targets”.

Talking of her experience in the Gurgaon industrial belt, Sehgal says, “Companies such as Hero Honda have refused to allow 1,800 casual workers at their Dharuvera plant to join a union of their choice. Cases under the Arms Act and Section 307 (attempt to murder) of the IPC Act have been filed against the leaders.” A questionnaire sent to Honda failed to elicit a reply.

These protests have also highlighted the fact that contractualisation of permanent jobs is a major issue. A Hyundai spokesperson, for instance, admitted that the company has on its rolls 3,000 contract workers against just 1,600 permanent employees. Maharashtra Deputy Commissioner of Labour N.V. Palve pointed out that Glaxo’s Nashik unit had enforced a voluntary retirement scheme for a large batch of temporary workers who had served the company for over two decades. These workers were routinely given work for seven months in a year, and re-recruited after a five-month break.

“M&M in Nashik keeps 500 apprentices constantly on its rolls for executing permanent jobs. Siemens in Nashik ‘promoted’ 157 of the 202 workers as ‘officers’ without changing their duties so that they would be off the union musters,” points out Ashok Ghughe, secretary of the Siemens Workers Union, Nashik.

Much of the current wave of unrest is among contract and temporary workers for whom recourse to legal redressal in industrial and labour courts is closed. “After the Cipla Supreme Court judgement decreeing there is no employer-employee relationship between a company and its contract workmen, legal avenues have been closed. Companies do not throw out contract workers. They just terminate the contract,” says labour lawyer Sreelekha Wagh.

Union leaders admit that the big, central unions are failing to rise to the occasion. Amar Nath Dogra, vice-president of the Bharatiya Mazdoor Sangh, says, “The condition of unorganised workers is pitiable. Millions of them have lost jobs in the past seven to eight months, but they do not have anywhere to go. They do not have anybody to represent them as unions have their limitations and cannot take up their cause.”

But employees in the ‘new economy’ with no union experience are now discovering new forms of organisation. Significant in this are the ‘knowledge workers’ who have begun to form fledgling unions. One such union that has made its presence felt in Bangalore is UNITES (Union for Information Technology and Enabled Services) Professionals India that has seen its membership grow from 15,000 in December 2008 to 18,000 in May. On 1 May —Labour Day — UNITES launched a month-long ‘Stop the Pink Slip’ campaign. “Ever since we predicted in September last year that the Indian IT industry would see 50,000 job cuts in the next six months (a prediction that proved to be correct in just three months), the industry has started taking us more seriously,” says Karthik Shekhar, general secretary of UNITES and a former IBM employee.

Shekhar alleges that software firms are adopting unfair means to cope with the economic downturn by increasing working hours, and even forcing workers to resign. “If employees give in and sign up for peaceful terms, they will be allowed to leave on the back of a resignation; or else they are terminated and their names put up on the National Skills Registry — a black mark for any future employment,” claims Shekhar. He said sexual harassment in the work place was another problem his union had pledged to pursue. The issue was highlighted when a Nokia employee allegedly committed suicide following sexual harassment by a manager. “This is a violation of the Supreme Court-advised ‘Visakha guidelines’ that Nokia did not have a committee to probe such cases. The guidelines require all firm to set up a five-member body with at least three women on board to prevent such incidences.”

However, Raju Bhatnagar, vice-president of the IT industry’s apex body, Nasscom, doesn’t think unionisation posed much of a threat or that it was necessary at all. “They (UNITES) have a membership of about 18,000 people which is a minuscule percentage of the total 2.2 million employees in the IT industry,” he says.

From the traditional party-controlled unions in the core, manufacturing sectors had an ideological agenda. But the new forms of unions are now more often issue-based, sometimes led by NGOs. For instance, in Tirupur, a major export centre for knitwear garments, unions have moved from organising workers in the workplaces to working with them in their neighbourhoods. “The unions work with the workers to claim basic amenities and benefits from social welfare schemes through better negotiation with the government authorities. Through this, they have been able to enroll new members, even among women workers,” says M. Vijaybhaskar, a professor in Madras Institute of Development Studies, who has researched new trends in unionisation.

Public Sector Imbroglio
But unlike the private corporate sector, employees in the public sector are more organised. And their unions, built up assiduously in the Nehruvian period, still have teeth.

In recent months, the bone of contention has been the Sixth Pay Commission recommendations, submitted to the government on 24 March. After the commission’s report, the Justice Rao Committee had proposed an average 30 per cent hike in basic pay plus dearness allowance, effective 31 January 2007, for the officer-level employees of PSUs.

Failure on the part of the management to adhere to these recommendations sparked the recent MTNL strike on 19 and 20 May. R.S.P. Sinha, chairman and managing director of MTNL, said meeting the 30 per cent fitment demand of the employees was not “feasible” as the organisation’s salary bill had already gone up from Rs 1,000 crore in 2003 to Rs 2,200 crore in 2009. Members of the officers’ association that went on strike, however, say the CMD refused to hold talks with them, and instead announced a unilateral, paltry wage rise of 5 per cent. The strike was withdrawn after two days following MTNL withdrawing its “wage sop”.

Similarly, workers of all the nine units of defence PSU Bharat Electronics also called a strike on 28 May, demanding a wage increase in line with that given to officers. Steel units and the unions of Bharat Heavy Electricals (BHEL) are also in the process of launching similar agitations.

Significantly, the new trend is for white-collar employees leading these agitations. In the case of the oil sector strike in January in which all the 12 PSUs took part, it was the officers who objected to the manner in which dearness allowance and wage scales were computed under the Justice Rao Committee recommendations. The strike was withdrawn after the Essential Services Maintenance Act (ESMA) was imposed and 64 striking officers suspended. But there is simmering anger and discontent that could erupt again.

What Lies Ahead?
Agreeing that industrial agitation has increased in recent months, Amit Mitra, secretary general of Ficci and director-general of the All India Organisation of Employers (AIOE), says though the number of units facing strikes and agitations are fewer, the number of mandays lost is substantial. “Industrial strife has increased mainly due to strikes in PSUs which are large employers across sectors. Fewer PSUs are involved, but the number of workers involved and mandays lost is significantly higher compared with the earlier period,” says Mitra (see ‘No Comfort’ on page 32).

With technological progress in manufacturing and skill sets becoming more important, the cost of disruption in production has also become costlier. Mitra claims a strike for one day in the banking industry causes a loss of Rs 1,000 crore. “During the 1960s and 1970s, the strikes were in core industries employing unskilled or semi-skilled workers. The kind of militancy we are seeing today is different, started as they are by white-collar, educated employees. The cost burden is, therefore, higher since educated workers are typically more productive and better paid.”

In the case of the 14-day strike at M&M’s Nashik unit that manufactures the Xylo, Bolero and several other car brands, the workers union president Dhatrak estimated the loss at Rs 350 crore. This was denied by a company spokesperson who said it was difficult to put a figure to the loss due to work stoppages.

If the government and unions fail to provide a structured outlet for resolving disputes, more desperate and violent alternatives will crop up.

Taking a leaf out of the book of the Epcos workers that used suicide as a threat to register their demands, in April a group of 40-50 dismissed contract workers in Nashik chained themselves on the terrace of Rajiv Gandhi Bhavan, the municipal corporation building. They threatened to immolate themselves if they were not provided employment. They also hung huge banners highlighting their cause. They were dissuaded by police authorities and local politicians from carrying out their threat, but there is no guarantee others will not take to similar or even more violent means.