PPT on Maruti

A CASE STUDY ON INDUSTRIAL UNREST IN MARUTI COMPANY

GROUP- 01Snehlata TuduNirantar Narayan

Lt Col Sanjay Kr Singh

Pradeep Singh

Vishwesh Koundilya

PRESENTATION PATHOverviewManesar Violence-Incident,

Causes, Effect & Action taken.Insights on Industrial Relations

and HR Aspects of MarutiAnalysisPossible SolutionsPictures

3

OVERVIEW India's 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 carsManufacturing facilities are located at

two facilities Gurgaon and Manesar It offers 14 brands and over 150

variants ranging from peoples car Maruti 800 to the stylish hatchback Ritz

About 35% of Company’s production comes from Manesar facility, which accounts for revenues of around $ 220 million a month.

INTRODUCTION : VIDEO CLIP

MANESAR VIOLENCE 18 JULY 2012

Worst ever incident by Maruti Suzuki

WHAT EXACTLY HAPPENED ON THIS FATEFUL DAY???

INCIDENTS

Workers started a fire, that killed the HR Manager and 100 injured.2 Japanese officials were injured.The violent mob injured 9 policemen.The hands & legs of the HR Manager Awanish Kumar Dev were broken, as a result he could not move, & the building was set ablaze and was charred to death.Factory building and many cars were burnt.

Cause of this violence-Demands not met.

Manesar union had demanded the following:1. A five-fold increase in basic salary2. A monthly conveyance allowance of rs 10,0003. A laundry allowance of 3,0004. A gift with every new car launch5. A house for every worker who wants one or cheaper

home loans for those who want to build their own houses.

6. 4 paid weeks of vacation be increased to 7 weeks7. Each worker have 40 days allowance of sick and

casual leave - for a total of 75 days.

A supervisor had abused and made discriminatory comments to a low-caste worker

Workers union demanded the reinstatement of a worker who had been suspended for beating a supervisor.

Harsh working conditions and extensive hiring of low-paid contract workers

Other Causes

AFTER EFFECTS

An FIR was filed with the police.91 employees were arrested & 55 accused

were searched.The recorded CCTV footage has been used to

determine the sequence of events and people involved.

All work at Manesar plant was suspended indefinitely.

Lockout was called and shut down of Manesar plant led to a loss of about Rs 75 crores per day.

Action taken by the ManagementS. Nakanishi, managing director and chief executive of

Maruti Suzuki India declared a lockout saying that safety is more important than business.

Mr. Nakanishi went to each victim apologizing for the miseries inflicted on them by fellow workers.

He said that he will de-recognize Maruti Suzuki Workers’ Union and dismiss all workers named in connection with the incident.

He also announced Maruti plans to continue manufacturing in Manesar.

• The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 750 acres.

• A highly automated factory that produces around six lakh units of most sought after maruti models- the A-star, Swift, Swift DZire and SX4.

• The Plant faced three strikes in 2011 in a span of five months resulting in loss of Rs 2500 crores and shortfall of 83k cars production.

INDUSTRIAL RELATIONS SCENARIO OF MANESAR PLANT

• Maruti employs around 50 % of total Workforce as Contract Labour, which comes around 40% cheaper than on roll Permanent Employee.

• For Contract Workers Wages rates get revised as per minimum wages.

• In Jun11, Workers of Manesar facility tried to form their separate Union to which the Management said- NO.


• Maruti - Suzuki workers launched sit-in strike from June 4 demanding trade union rights.

• Knowing workers’ initiative for a new union, the management forced and threatened workers to sign on a blank sheet to state that they will not join the new union.

• 3,000 workers started a sit-in strike from June 4, 2011 in the Manesar Plant, demanding recognition of newly formed Maruti Suzuki Employees Union (MSEU).

• To put pressure on workers, on June 6 the management dismissed 11 workers including MSEU office bearers for allegedly inciting workers to go on strike.


• Maruti – Suzuki has an in-house union, Maruti Udyog Kamgar Union (MUKU) at its Gurgaon Plant.

• Workers at the Manesar Plant feel that the MUKU is dominated by the management and is not taking up workers’ issues such as wages, incentives, and regularisation of trainees and contract workers.

• However, the management has been maintaining that it will not allow the Manesar plant to have an independent union or a union affiliated with a political party, and they can become part of the existing MUKU union.


• The 13 day long sit-in strike by workers at the Manesar was successfully concluded on June 17. An agreement was reached under section 12(3) of Industrial Dispute Act in the presence of Hon’ble Labour Minister of Haryana.

• Broadly the terms of agreements were as follows:-

1) The 11 dismissed workers were reinstated pending domestic inquiry.

2) No work no pay for the period of strike.

3) The application filed by the workers for registration of a new union on June 3, 2011 will be duly processed by the labour department of Haryana, and

4) Both the parties agreed to cooperate with each other.



• On August 23, Maruti Suzuki suspends 2 workers at Manesar plant (suspended two workers at Manesar plant for indiscipline on the shop floor).

• On August 30, Company management forced a “good conduct undertaking” on workers to check constant labour problems and ensure orderly production, around 20-25 of 950 workers agreed to sign the undertaking.

• On August 31, Maruti Suzuki refused to hold any negotiations. Also, suspended 16 more workers and terminated 12 trainees for creating indiscipline.

• On September 2, Workers from adjoining plants like Hero Honda, Hero Motocorp, Suzuki Motorbike plant extended support .

• On September 7, "Lathi khayenge, jail jayenge... Par union banane ka haq nahi chhodenge.... said MP Gurudas Dasgupta to extend support to the protesting workers at the Manesar plan.

• On September 10, The Management said‘Maruti Suzuki won’t tolerate indiscipline’. Company sought a “good conduct bond” from workers to control indiscipline in production and quality .

• On September 13, Maruti Suzuki India appeared to be planning to recruit 100 new permanent employees to replace the existing ones. Also, the company decided to give the current workers time till September 19 to sign the "good conduct bond" before replacing them with new workers.


• On September 15, The labour unrest at Maruti Suzuki's Manesar plant spread to Suzuki Casting Division, Suzuki Motorcycles in Gurgaon , threatening to further escalate tensions in the area.

• On September 16, Maruti freezes operations over labour trouble at both Manesar and Gurgaon plant.

• On September 22, “We should not make losses, but profitability will be reduced,” Maruti chairman RC Bhargava said.

• On September 30, Management decided to only suspend 44 terminated workers and workers agreed to sign the Good Conduct Bond. In 33-days duration of strike, company’s production reduced by 22000 cars


• On October 3rd, Management accepted entry of permanent workers, but not of temporary workers in premises.

• On October 7th, Some temporary workers got their final dues, but others went on strike as they didn’t received it.

• On October 8th, The workers inside factory along with Suzuki Castings, Motorcycles workers went on sit down strike, those who were hired during lockouts also got involved in it.

• On October 14, About 1,500 police personnel entering the factory and asking the striking workers to vacate the premises as per the Punjab and Haryana high court order. The high court declared the current strike illegal.


• On October 21, A long strike at Maruti Suzuki India's Manesar plant has been called off this morning following a tripartite agreement between the management, workers and the Haryana Government.

Tripartite Agreement involves :

64 permanent workers were taken back.

30 workers remained suspended.

Good Conduct Bond was signed.

“No Work No Pay” rule was agreed upon.


• On November 14, Trade union leader Sonu Gujjar quits with 30 suspended workers at Maruti's Manesar plant, including their two leaders Sonu Gujjar and Shiv Kumar, had quit the company, taking home amounts ranging between Rs 16 lakh and Rs 40 lakh


STRIKE CALLED OFF• At last on 21ST OCT, the Strike was called off by

Workers.• On 22nd oct, production resumed in manesar

plant.

Industrial Relations insights : Possible Reasons of Labour Unrest

• Increasing number of Contract Workers in Core activities with visible Wage difference and not being treated fairly.

• Insensitivity towards handling Contract Labour issues and leaving it to the contractors.

• Increasing Contract Workforce with no job security attracted trade unions under whose umbrella they thought of getting job security.

• Using Contract Labour workforce as cost cutting tool with flexibility to tell NO at any point of time.

Possible Reasons of Labour Unrest

• The faulty recruitment of young workers having Political influence.

• Absence of proper verification checks leading to anti-social elements getting employment.

• Young Workers not fully oriented to adapt to the work culture where punctuality, discipline and productivity are basic workplace values.

• While chasing relentless production targets, management seemed oblivious to the urgent signals being sent out by restive workers.

• Slow wage rise and fast inflation resulted into impatient militant workforce.


• No Orientation of shop floor executives towards People issues. They were lacking in people management skills.

• There was a definite disconnect between shop floor employees and their officers thereby undermining the important aspects of keeping the channel of Communication and Negotiation open at all times.

• Young Workers not fully oriented to adapt to the work culture where punctuality, discipline and productivity are basic workplace values.

• While chasing relentless production targets, management seemed oblivious to the urgent signals being sent out by restive workers.

• Slow wage rise and fast inflation resulted into impatient militant workforce.


• “ Profit at any cost” – This kind of motive allowed practice of exploitation of social resources. Appropriate sharing of wealth should be practiced by all companys.

• There was a lack of understanding of human values and ethical practices. This resulted in NO semblance of ownership/sense-of-belonging towards the employer.

• HR Division and the whole management system was not Proactive to have inside information and emotional interface. There was no prior information of labour conditions.

• Lastly, the Labour Reforms.

Industrial Relations insights : Possible Solutions to Labour Unrest

• Workers should be fully oriented to imbibe the Work Culture and be given sufficient training in respect of Do’s and Don’ts of workplace before sending them to shop floor.

• A fully transparent and effective grievance redressal mechanism. Joint management councils to take up workers issues and speedy solution.

• Strengthening HR processes to enable HR and shop floor people to take independent decisions related to workers matters so that they do not feel the necessity to go to union.


• Trade Union of Workers should be used in a constructive way to build values and ethics thereby treating the organisation, its employees including management officials as one family.

• Recruitment mechanism strong enough to filter out all undesirable elements. Background check should be effective.

• Handle young workforce with Dignity, as they now not only aspire to get their share of profits but are sensitive about their Dignity more than the job.

• A fully transparent and effective grievance redressal mechanism. Joint management councils to take up workers issues and speedy solution.

• Strengthening HR processes to enable HR and shop floor people to take independent decisions related to workers matters so that they do not feel the necessity to go to union.


• Develop measures to prevent workers from being taunted and humiliated, and pushing them to a breaking point.

• Right balance in engagement of contract workers vis-à-vis permt workers with equal wage parity. Also have a policy on recruitment and absorption of contract workers as permanent well laid out.

• The sacrifice of Awanish Dev should not go in vain. The Employee Relations in Indian Manufacturing industry must find a Paradigm Shift as also the archaic Labour Reforms.

Four Industrial Relations insights from the Maruti Suzuki Strike

Insight 1: Contract Labour is just indicative of larger issues

Insight 2: The need to use a mature approach to Industrial Relations

Insight 3: Industrial Relations requires proactive management

Insight 4: The ability to handle and resolve a conflict is a business requirement

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Thank You….

PPT on Maruti

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