This week, Maruti Suzuki India Ltd (MSIL), India’s biggest car manufacturer, launches a new version of its popular Alto car.
But just months before, Maruti’s production line came to a grinding halt following the rapid escalation of a long-standing labour dispute which resulted in the death of the company’s HR manager and over 100 serious injuries.
Nearly 150 former Maruti workers are currently in police custody for violence at the Maruti plant and will find out their charges on Tuesday.
The seeds of the employees’ discontent lie in MSIL’s use of contract workers at its Manesar plant in Haryana state, a practice which fuels job insecurity and reduces wages.
But this September, MSIL made what seemed like an unexpected climb-down on the issue, announcing plans to only work with regular/permanent employees.
“In accordance with the declared policy to not employ contract workers provided by contractors, on the direct production line, the company has started the process of directly hiring them,” states a September press release from Maruti Suzuki.
“The schedule of recruitment has been communicated to all the existing contract workers through the contract agencies and recruitment will start soon.”
On the surface, it reads like good news for MSIL factoryworkers, who have been fighting a bitter dispute against the use of contract workers since the company started.
Sadly, the facts are a little more complex, and differ depending on who you talk to.
Two sides to every story
According to a MSIL worker interviewed by Equal Times (who asked to remain anonymous and has gone into hidden for fear of management reprisals), on 18 July a permanent worker by the name of Jiya Lal was insulted by a supervisor who hurled expletives and casteist remarks at him.
When Jiya retorted, the supervisor made a complaint to the HR department and the management decided to suspend Jiya.
“We could not take this and demanded justice,” our source says. “If Jiya had to be suspended, the supervisor who insulted him should get a similar or more severe punishment.”
But when addressing the media, management sources gave a totally different version of events, claiming the dispute began when a worker attacked a supervisor on the shop floor.
They say that the Maruti Suzuki Workers’ Union prevented the management from taking disciplinary action against the worker, and that later, workers blocked the exit gates and held Maruti executives hostage.
Members of senior management also say that when they tried to meet with union representatives in an attempt to resolve the issue amicably, they were attacked by workers.
But union representatives say that when they met HR officials, they flatly refused to hear the workers’ arguments and made no attempt to either revoke the suspension or take action against the supervisor.
Either way, from there on the situation spiralled out of control.
Workers allege that during the negotiations, management called in a number of security guards who closed the gates and brutally attacked them with sharp weapons and arms.
Workers claim they were joined later by some of the managerial staff and also by police, who beat up a number of workers, many of whom ended up in hospital with serious injuries.
They also claim that it was these people who destroyed company property and set fire to a portion of the factory, and action which resulted in the death ofMSIL’s General Manager for HR, Awanish Kumar Dev.
The long struggle for workers’ rights
The following day the company declared a lock-out which hit not only MSIL workers, but also an additional 190,000 workers at 50 ancillaries.
This was an aggressive move by the company.
A leading manufacturer of passenger vehicles in India since 1983, MSIL produces cars from its two manufacturing units in Haryana at Gurgaon and Manesar.
The facilities have a combined annual production capacity of over 1.5 million vehicles, a number the company expects to expand to 1.75 million by 2013.
For the financial year 2011-12, MSIL’s net profit dipped by 28.6 per cent to 16,351 billion rupees (approximately US$ 309,122 million), allegedly due to adverse foreign exchange fluctuations, higher discounts on vehicles, rising commodity costs and labour unrest in Manesar.
However, at every stage of its amazing growth, MSIL has seen spurts of labour unrest.
It may be due to its failure to build a healthy relationship with the workforce or its shrewdly crafted strategy to do away with existing workforce for new.
But scrutinising the history of MSIL, it is evident that from the beginning the company has been averse to the formation of a union and hence gave prominence always for contract labour.
Any attempt to form a union is obstructed. When workers manage to overcome the many obstructions to its formation, management takes vengeance.
Indeed, the Maruti riots were the aftermath of the workers’ attempts to register a union.
Incidents of unrest and struggle in Maruti since 2000 are due to the workers’ attempts to form a union.
Though the Constitution of India provides Right to Association as a fundamental right, India has not yet ratified ILO Convention 87 on Freedom of Association and Convention 98 on the Right to Collective Bargaining.
And the working conditions at MSIL speak for themselves.
During a nine hour shift, workers are entitled to two seven-and-a-half minute breaks to get a drink or to go the toilet, and 30 minutes for lunch.
They get very low wages and if they take leave, the money is deducted from their salary since pay is calculated as wage plus reward.
The category of workers in MSIL and the monthly wages also vary dramatically: a permanent worker receives 8,000 rupees (approximately US$ 151) in wages and 8,000 in reward; a trainer 6,500 rupee in wages (US$ 122) and 2,250 reward (US$ 42); an apprentice 3,000 rupees (US$ 57) and 1,000 (US$ 18) in reward.
Workers recruited by the company work as an apprentice for the first one year on a small stipend.
They then work for three years as trainee and then as permanent employee with a fixed basic salary and incentive.
As per the company’s annual report, employee costs only make up 1.9 per cent of the company’s total costs (as percentage of net sales).
Unsurprising when you consider than until September about two-thirds of the MSIL workforce were contract workers.
“Management always prefer contract employees,” says Mathew Abraham, an ex-Maruti employee and former president of the Maruti Udyog Employees Unio, which was formed in 1983 and de-registered in 2002, due to pressure from the management.
"The company has no liability towards them, since they are given job through manpower agencies and MSIL has to pay only minimum wages to these workers, who shoulder the same job as any permanent employee."
Back to work
The company withdrew the lockout on 21 August and issued the release quoted at the start of this story.
But after more than a decade of ignoring the pleas and demands of central trade unions, industrial unions and local unions, why has the company suddenly decided that from 21 August 2012 onwards, it would not hire any contract employees?
We can only assume it was an attempt to remove the existing contract workers in the company, who were giving full support to the regular employees in their struggles as well as in unionisation attempts.
Meanwhile, a statement released by The People’s Union for Democratic Rights (PUDR), signed by its secretaries Preeti Chauhan and Paramjeet Singh on 25 September, elucidates some of the fears expressed by the anonymous MSIL worker quoted.
They describe how third-degree torture methods were used by the Gurgaon Criminal Investigation Agency while interrogating the arrested MSIL workers.
Theyalso raise concerns that police forced the arrestees to sign blank papers.
Since it looks like the only intention of the state and police seems to reassure Maruti Suzuki India Ltd. and ensure that production continues, PUDR is demanding “an independent and unbiased” judicial enquiry into the events that led to the death of Awanish Dev.
Today, MSIL is back in business.
Immediately after the lock-out ended, production commenced with 300-odd permanent workers, under heavy police protection, manufacturing about 150 cars per day.
According to media reports, full production has now resumed.
But even now, ex-workers as well as local unions claim that contract workers are still employed at MSIL, despite the company’s claims.
Currently, 145 former workers are languishing in jail while the majority of those who struggled for their rights have been thrown out of their jobs.
Their case will come up for a court hearing on 23 October.
In the interim, on 15 October, the Special Investigation Team probing the incident submitted a charge sheet of around 3000 pages framing 145 workers for murder, attempted murder and destruction of company property among other charges.
Meanwhile, Suzuki keeps marketing itself on its ‘way of life’.