MANESAR REPORT

7/28/2019 MANESAR REPORT

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It was formed in 1983. Indias largest passenger car company, accounting for

over 45% of the domestic car market.

First company in India to mass-produce and sell

more than a million cars. Annually exports more than 50,000 car.

Manufacturing facilities are located at two facilitiesGurgaon and Manesar

It offers 14 brands and over 150 variants rangingfrom peoples car Maruti 800 to the stylish hatchbackRitz.


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Avinish kumar Dev, General Manager-HR of Maruti

Manesar plant burnt to death by workers while

setting ablaze along with him on 18th July.

MSIL commented that the riots were not due to thefriction between the white collared and blue collared

workers over working conditions and wages demands

nor of any "exploitation orarbitrariness rather it was

a simple disciplinary matter.


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A shop floor executive when expressed his

displeasure on work attitude of worker and advised

him to be concentrated, that worker slapped the

executive and assaulted openly on the floor. So , Worker was suspended pending disciplinary

proceedings which is minimal action in any industry

in such a situation.

Union made it a point of prestige. Negotiations went on to resolve the matter.


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Management even assured that worker will be

taken back shortly but union leaders were

adamant to revoke his suspension immediately.

This inability sparked the violence. Police has arrested a number of workers of the

Manesar plant under the charges of murder

and attempted murder.


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The violence at Maruti Suzuki Manesar plant was not

a result of a one day agitation, it has its roots far back

from 2000 only.

The Indian labour it hired accepted Japanese workculture and the modern manufacturing process.

In 1997, there was a change in ownership, and Maruti

became predominantly government controlled.

Shortly thereafter, conflict between the United FrontGovernment and Suzuki started.


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Labour unrest started under management of Indian

central government.

In 2000, employees of Maruti Udyog Ltd (MUL)

started an indefinite hunger strike, demandingmajor revisions to their wages, incentives and

pensions at Gurgaon plant as they felt that the

company's current incentives package benefitted the

top management and senior officials.


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Employees used slowdown in October 2000, to press

a revision to their incentive-linked pay.

They started a tool down strike from 3rd October for 2

hours in each shift. The tool-down strike led toproduction being shut down for a total of six hours on

each day.

Consequent to the management's demands,

production at MUL plant in Gurgaon reduced to 200units per day, instead of the usual average of 1,500vehicles.


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Consequently, management suspended 12 employees

and also mandated all employees to sign a good

conduct undertaking before entering the factory

premises.

The employees' unions agreed to withdraw theiragitation if their three main demands were met.

Those included:

I. The withdrawal of the good conduct undertaking

II. Reinstatement of 83 suspended workers

III. payment of wages for the period of strike


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That union was eventually broken by Maruti and

replaced by another which also represented staff at

Manesar. It was the Maruti Udyog Kamgar Union

(MUKU).

Over the next year, around 1,000 workers were

offered a choice of voluntary retirement ortermination.

In 2001, there was another strike for ,against theprivatisation of MUL. The government wanted todisinvest its shares from MUL.


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When the government wanted to sell its shares it held

in Maruti in 2001, workers went on strike because

they feared that their working conditions will become

worse.

After this , on June 4,2011 workers at the plant had

gone on a 13-day-long strike demanding the

recognition of a new union, the Maruti Suzuki

Employees Union (MSEU) because they felt that thepresent union was dominated by Gurgaon plant

workers .


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But they were denied the right to form a separate

union and hence the workers of MSIL went on strike.

The workers said the company responded by

suspending 11 workers and sending bouncers to force

them to sign blank pieces of paper.


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Meanwhile, the file to register MSEU in the labouroffice was cancelled .

Reasons:

A. The employees resorted to an illegal strike;

B. Among those whod signed for a new union, manystill retained MUKU membership;

C. some signatures didnt match with the registeredones.

(However the revolting workers say theyd allresigned from the old union )


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On 28 August, they went on strike again. Result of which

Maruti Suzuki suspended 21 workers on charges ofsabotagingproduction and deliberately causing quality

problems.

Having already gone without a salary for the month, the

workers agreed to sign the agreement which included-

A. Lack of proper personal appearance, sanitation and

cleanliness including proper grooming

B. Conduct in private life prejudicial to the reputation of

the company.

C. Habitual neglect of cleanliness as major misconducts


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The second truce agreement was signed on 30September.

On 7thOctober, the workers had been on the third

round of strike. They alleged that contract workers and trainees were

refused work when they reported for duty after the

end of one-month agitation.


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The workers demanded that the casual workers betaken back, as regular workers had resumed their

duties. They also demanded the reinstatement of 44

regular employees still under suspension.

The company obtained an order from the High Court

not allowing the workers to strike inside the factorypremises.


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With no water and food, the workers then decided tocome out and continue with their strike

Finally, the third agreement was signed on 21st

October. Under the agreement, the companypromised to reinstate 64 out of the 94 suspended

workers. The remaining 30 workers remained

suspended till further enquiry.


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A Grievance Redressal Committee and a LabourWelfare Committee was to be set up with

representatives from both the management and the

workers.

The workers were not paid wages or salary for the

period of the strike. But the company has agreed to

take care of the request for transport facilities.

The three agreements signed last year didnt mentionthe workers demand for a union even once.


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Initial reports claimed wage dispute and the incidentto be caste-related.

According to the Maruti Suzuki Workers Union a

supervisor had abused and made discriminatorycomments to a low-caste worker.

However , these claims were denied by the companyand the police.


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Revenge for Junes strike.

Cockroaches and dead flies found in the food in the

hurried lunch- break that workers earn in the canteen

km from the working station.. The tea was without tea leaves or sugar in the 7

minute break.

The company doctor gave heavy doses of instant

medicines even on minor complaint so that disruptionof work could be prevented.


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The workers claimed harsh working conditions andextensive hiring of low-paid contract workers whichare paid about $126 a month, about half the minimumwage of permanent employees.

The percentage of contract labour hired was about40% and same work was been taken from them aswas being done by permanent workers.

If a worker is few minutes late, then his half daysalary is cut. If a worker takes one day leave, he

looses about 1,500 Rs to 2,000 Rs as salary cut invarious forms of incentives and allowances. If aworker takes two day leave, he almost looses all theincentives.


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One days wage cut of Rs.1500, two days Rs.2200,three days cut of Rs.7-8000 is implemented, so that

almost the total months wage is cut.

One second late into punching-card entry is a dayswage cut, but they have to give full production for

that day too.

Forced to fill an undertaking form, which means that

in case of any problem, workers cannot raise anyobjections against management


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Workers demand to establish an independent unionMaruti Suzuki Employees Union (MSEU)in the company.

Since April 2012, the Manesar union had demanded afive-fold increase in basic salary

Monthly conveyance allowance of 10,000

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 paidweeks of vacation be increased to 7 week plus eachworker have 40 days allowance of sick and casual leave -for a total of 75 day.


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Unhappy workers have found out a new way todisrupt ongoing work at the plant by creating serious

defects in quality of the cars, so they would fail the

compulsory vehicle inspection quality test.

Source:http://www.ndtv.com/


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Workers indulge in deliberate attempts to reduceoutput and are compromising customer interests.

It was there revenge for the June strike.

Refused to sign good conduct form, which aims atensuring the production of good quality products.

Employees are being charged with sabotage and

causing quality problems in the cars produced


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The root cause of the whole incident is the underlyingaggression and the anger of the workers.

Lack of control and discipline at the Manesar plant

Absence of a proper protocol and employee

satisfaction. There are around 3,500 to 4,000 workers employed in

the factory, but their status differs significantly

Permanent workers at Manesar compared their wages

to the wages of permanent workers at nearby Honda,

Hero Honda or Maruti Gurgaon plant and voiced

anger about the fact that they earn only half as much.


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According to Para 9C(1) of Industrial Disputes Act,1947, every industrial establishment employingtwenty or more workmen shall have one or moreGrievance Redressal Committee for the resolution of

disputes arising out of individual grievances. The company has only one recognized union

Maruti Udyog Kamgar Union which is dominated byworkers at the Gurgaon plant.

The production capacity of Maruti has gone up from10 lakh units in 2009-10 to 12.7 lakh units in 2010-11, but there salary has not gone up at all.


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Overtime is a compulsion whenever the companyneeds it and the privilege of paid leave is a fantasy

Bouncers were there in company against the workers

Till today, the promised grievance redressalcommittee and labour welfare committee are yet to be

set up.

There was a huge communication gap between the

first level of supervision and the top management. They lacked maturity of a good union leader which is

expected out of union leaders of any big company.


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Fact is that in this country there are only 10% workersin the organized sector who have a union. 90% are not

unionized at all.

With the service sector, trade unions had taken a back

seat. But in the last few years the manufacturing sector

has again starting seeing light of day, and the growth in

the automobile sector is the most visible, which is why

we are seeing many more such incidents.


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External leadership i.e, the senior people at tradeunions which are at national level, they were doing

their bit in terms of mentoring the younger leaders.

They must train them on their rights, duties and

responsibilities.

There has been a breakdown in the process of how to

handle grievances and employee engagement.

Supervisors should be the first ones to know the

grievances of the workers even before a union does .


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Suspension of 10 workers Dismissal of five

Discontinued the services of six trainees.

Also suspended four workers for "instigatingindiscipline" a week before

Another four suspended in late July for manhandling

supervisors.

Charges of sabotage and causing quality problems inthe cars produced.


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According to Chairman R.C. BhargavaManesar labour problem is essentially a

political issue and not a problem which

involves any significant demand from theworkers.


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Certain practices which increase this Gap betweenWorker and Management needs to be abolished.

Like :-

a) Separate sitting place for Management & Workersi.e. staff should have office space within the

production area .

b) Proper connect between staff and workers,

involvement of families of workers should be heldoccasionally in get togethers.


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Separate shift timings for staff and workers ( Thereshould be no G Shift at factory premises)

Separate Increments, Bonus schemes and declaration

of these Separately etc Role of supervisor should be limited to only

production related Instructions to be given to workers

and all behavioural and discipline related issues

should be dealt by HR / IR Team Technology oriented operations reducing demand of

man power


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Establishment of a new trade union for ManesarPlant and only one trade union should be formed.

Trade union should be established with prior

conditions: -

1. Members of the trade union to be nominated with

consent of both workers and management.

2. The leader of this union should be appointed by

consent of both management and trade unionotherwise the labour will be pro-management.


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Code of Conduct- Falling standards ofmanufacturing.

Basic sanitary enhancements demanded by theworkforce

Improved hygienic conditions at workplace reducesemployees dissatisfaction.

Managements have to learn how to handle thecontract labourers.

Companies should conduct better background checkfor all staffs & even contract labourers.


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The Industrial Disputes Act, Section 5 B does not allowany company to either close or undergo anyretrenchment.

In 2001, the finance minister in his budget speech

mentioned that they are going to change this clause. Hesaid that the cut off from 100 persons will be increased to

1, 000 persons and retrenchment allowance which is

about 15 days for every year of service would be

increased to 45 days. This is something where a tripartitediscussion can take place. That flexibility to retrench andadd manpower should be there.


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There is a need to change the focus from job protectionof a few to enhancement of jobs for many.

Good practices on employee engagement and

communication is top priority. This should cover

welfare, grievances, product line issues...everything.

Training for supervisors and union leaders.

we need a pro active labour department who do take

their role as going and inspecting companies andauditing labour unions and the antecedents of theirleaders very seriously.


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Reforms in labour laws; Factories Act (1948), contractlabour act (1947), trade union act (1926), Industrial

Disputes Act (1947)...each of these acts needmodifications.

This doesnt means that changing the acts alone will

change the culture. Education and training should

happen and Acts are there to aid it.


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The govt should work towards forming a separatelegislation regarding whether they can form trade union

or not.

Bipartite bodies should be encouraged.

Rights & duties of contract labourers should be clearly

defined .

Contract labourers should also get some privileges.

Advisory board of Haryana should be formed


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The percentage of contract labour should beregulated.

The minimum wages need to be fixed.3.

Proper working conditions should be supervised. Fixing of basic wages


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Marutis stocks fell about 9 percent Due to the strike, waiting periods for diesel variants

of three models -- Swift, Dzire andSX4 haveincreased further by up to one month and this has an

impact on its sales during this month due to theproduction loss.

The loss is not just to Maruti but also to the industryas spill over effect of this unrest.

Tarnished image of India for new FDIs. Investors may not like to invest in Haryana.


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MANESAR REPORT

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