Introduction
Multinational companies (MNCs), at the forefront of globalization,
have grown to almost 80,000 worldwide employing 55 million people
(UNCTAD 2008). Although the recent worldwide financial crisis slowed the
pace of growth, it is unlikely to stall the process, facilitated by the
developments in information, communication and transportation
technologies (Stanton et al 2009). Convergence theorists suggest that
the logic of technology and markets are superseding varying national
cultures towards universally applicable 'best practice'
managerial techniques, for example, the implementation of a range of
specific employment practices identified with so-called High-Performance
Work Systems. Divergence thesis argues that management systems will
continue to reflect the 'footprint' of their national
institutional environment. McGraw and Harley (Hayden 2009) concluded
that in Australia 'there is a pronounced divergence in the HR
practices of overseas workplaces when compared with locals.' We
need therefore to look at what is happening in India in recent years in
industrial relations practices in MNCs and try to fit these into a
pattern.
The last few years have seen a sharp surge in worker protests in
multinational companies across India. In Tamil Nadu, workers at Hyundai,
MRF, and Nokia went on protest strikes. It is not just blue collar
workers who have been aggressively asserting their rights or protesting
and striking. In the private Indian owned sector, pilots of India's
biggest airlines like Jet Airways (some foreign shareholding) went on
strike on separate occasions during 2009. Engineers and other employees
of Air India (government owned) went on strike for 3 days in May 2010.
In Pune, multinational companies such as Cummins Generator Technologies,
Cummins India, Bosche Chassis Systems, Brembo India, lost periods of
work ranging from 20 to 85 days. Other companies affected included
Pricol in Coimbatore. Gurgaon and Manesar near Delhi, the home of the
automobile industry, have seen large scale unrest not only in the large
multinationals but in many of the subsidiaries. The death of a worker on
19th October 2009 at Rico Auto and injuries to 30 others, led to a major
backlash from the firm's striking workers and the All India Trade
Union Congress (AITUC) (The Economic Times 21/10/09).
Although not coordinated or for the same reasons, some are related
to the downturn. For instance, many companies which had paid overtime
and incentives for several years of frenzied growth suddenly became cost
conscious and demanded higher productivity without bonuses (constituting
30-40% of pay). Differences in pay between workers who got small annual
increases in salary and managers who got much greater increases also
caused a grouse. Other issues involved absorption of contract labour,
trade union recognition, inter-union rivalry.
The situation is not peculiar to India. In China, the strikes,
stoppages and suicides afflicting foreign factories on China's
coast in recent years, have shaken the populist image of the
country's workers as docile, diligent and dirt cheap (The Economist
July- August 2010). Disputes in the first half of 2009 were 30% higher
than the previous year's. Guangdong had 36 strikes between May 25th
and July 12th 2010. The new labour law introduced in Jan 2008 gave
workers more contractual rights. Honda workers, better educated and
trained than usual, complained that workers' wages were
disproportionately lower than that of the Japanese managers. A component
maker (gears in Atsumitec) got workers to return from strike only with a
pay hike of 47%.
Honda
The problems in the auto-belt in Haryana date much earlier, from
2005 in fact. On 25th July 2005, about 300 to 700 workers of Honda
Motorcycles and Scooters India (HMSI) were reported injured in a clash
with Haryana police. About 3000 workers were protesting a lockout of
their factory and the dismissal of some colleagues. Trouble broke out
when the workers, staging a protest march, were confronted by police. On
being held back, the workers injured a deputy superintendent of police
and set fire to the SDM's vehicle. This acted as a trigger for the
police to unleash massive retaliatory violence. Incensed Haryana
policemen went berserk and thrashed the agitating workers. Chief
minister Bhupinder Singh Hooda ordered an inquiry into the police
action, although it was termed by Gurgaon deputy commissioner, as
"operations conducted within the boundaries of law" (Sen
2010).
Interestingly, HMSI took the stance of injured innocence, saying it
had nothing to do with the unfortunate incident which had taken place
outside the factory. But the workers were almost always in fear of
management because they had to sign movement sheets for visits to the
toilet or for drinking water, accept shift choice without change,
receive threats of termination in case of less than expected
performance, and stay back each day to complete the production target.
The last straw proved to be the behaviour of a Japanese Vice-President,
Production, who kicked one worker and pushed off the turban of another.
Although he had to apologise and was sent back to Japan, these led the
workers to get together and make a list of 50 demands for substantially
higher wages, allowances and facilities. The management offered Rs 3000
increase per month per worker. The workers refused to accept the offer
and started to set up a union. The management tried to discourage and
suppress the process. Workers were called individually and advised
against joining the union. The company then lobbied with the Haryana
Government not to allow unionisation and the registrar actually turned
their application down. As the workers' agitation continued the
management took the extreme step of dismissing several activists.
Production was affected substantially. The movement picked up strength
and a manager was gheraoed and even manhandled. Production was halted
for 30 minutes.
The incident was followed by further worker demonstrations, visits
by MPs to the injured workers in hospital, a flash strike by the local
Bar Association, and support from unions of public sector banks and the
public works department. However, in 4 days, the workers of HMSI reached
an agreement with the management in the presence of Haryana Chief
Minister who, congratulated the workers and said, "The episode was
politically motivated.... We will ensure congenial environment in the
industry." The pact stated that the striking workers would resume
duty and not make any new demand for one year. The labour union would
remain. Workers would get full salary for May and June, though after
June 27, the principle of "no work, no pay", instituted by the
Supreme Court, would be implemented. Injured workers, not able to resume
work immediately, would be given paid leave. The 50-odd suspended
workers would be reinstated along with the four dismissed union leaders,
though the company could transfer them to any department, except
manufacturing. The dismissed employees would also give a "separate
assurance letter" to the management, and an undertaking that they
would not engage in any act of indiscipline, before joining duty.
In April 2004, HMSI had set up a Works Committee under the ID Act
with 15 workers and 5 managers in addition to the Canteen, Transport,
Health and Sports Committees. But all worker members were nominated by
the management. The company magazine covered its own achievements and
activities and included employee awards on quality, safety, training
programmes, safe driving of two-wheelers. There was no column for
employee letters or expression. The only employee-related news concerned
marriages, births, deaths. In November 2004 the company announced gifts
of Rs 600 for Diwali and this appeared to be the starting point of the
unrest and later agitations, according to one researcher (Saini 2005).
HMSI suffered problems later as well and the union became affiliated to
the AITUC.
Honda's Chinese factory near Shanghai, suffered a strike on
7th June 2010, less than a week after it settled an earlier dispute by
offering a 24% pay rise (The Economist, June 12-18, 2010).
Maruti Suzuki India
Maruti-Suzuki workers went on strike first on 12th October 2000
when nearly 4,700 employees of Maruti Suzuki (MSIL), formerly Maruti
Udyog Limited boycotted work, protesting the company's demand for
an undertaking from them (Sen 2010). Daily output was cut by 86% as the
company forbade entry to workers not signing the undertaking. The MU
Employees' Union treasurer said that signing it would have meant
losing their fundamental rights. It was also a protest against the
management's decision to link bonus and incentives to productivity
and efficiency. The primary concern of the management was that
production should not stop on account of the agitation. Workers from
suppliers were roped in to do the work and along with supervisors and
managers, Maruti got the plant started within a week's time. There
was also indirect (political) pressure from the BJP Government on the
Union and the issue came up for discussion in Parliament. The management
meanwhile agreed to drop insistence on individual workers to furnish a
good conduct undertaking, but sought certain safeguards, and stipulated
that the law would take its own course in regard to disciplinary action.
The deadlock continued for 90 days. Finally on 9th January 2001, the
strike broke on the management's terms. The Union had to accept the
new terms on production linked incentives and bonus. The face saver was
that no undertaking had to be given. However, the 2000-01 confrontation
did not die down or get resolved.
Post 1991, Maruti had initially lost its dominant 85% market share
in India to new competitors like Hyundai, Daewoo and Tata Motors. But it
groped back to over 50% share in a few years by introducing new models
regularly. The company was held up as a model employer, paying high
wages and using several Japanese management techniques for integrating
employees into the production process. Several initiatives to improve
production and shop floor working through cost cutting were also
launched. In 2002, Suzuki took its shareholding to 54.2%, and the
government exited the venture entirely by March 2004. The company
operationalised another plant and diesel engine production centre in
Manesar, Haryana. The Indian MD was replaced by a Japanese MD. Suzuki
Motors Corporation decided to expand production capacity of its plant in
Gurgaon from the existing 4.5 to 6.0 lakh units and thanked Chief
Minister Chautala for all the support extended to the company. They also
dangled the carrot of other investments by several Japanese companies in
Haryana because of its progressive industrial policy.
In August, 2005, the Maruti Udyog Employees Union (MUEU) sought the
Prime Minister Dr Manmohan Singh's intervention to resolve several
issues with Suzuki management since the Suzuki management had summarily
dismissed 24 Union activists without holding any enquiry, another 36
after ex-parte enquiry, and 32 more for not signing the improper and
illegal undertakings imposed by the management. Twenty-six were
charge-sheeted and "compelled" to take VRS, while hundreds of
other employees also took VRS, not exactly voluntary. The Union also
alleged that Maruti Udyog had replaced over 2000 permanent employees
with contract workers, following the October 2000 dispute. The PM met
them on 3rd August and voiced apprehension in taking up the issue, as
the echo of the labour trouble at Honda's facility had barely died
down.
A Maruti spokesperson said the company's Union (formed by
ex-employees of the company) had long since been de-recognised and
therefore was not representative of the workers. The workmen had been
notified that only those workers could enter the factory who gave an
undertaking in writing that they would not indulge in any activity which
adversely affected the production and discipline and that "workmen
who do not give the undertaking would be deemed to be on illegal strike.
In terms of the contract of employment the workmen are duty-bound to
adhere to norms of discipline and give normal output". Suzuki,
which had already increased production from 5,50,000 in 2005-06 to
nearly 8,00,000 in 2008-09, decided to step up capacity further to one
million per annum by 2009, earmarking Rs 9000 crores investment for
2008-2011. Exports had also risen significantly (The Economic Times
5/5/09).
Bosche
The Bosche Group, India, manufactures world-class hydraulic brake
systems for 2- wheelers, 3-wheelers, passenger cars, utility vehicles,
light commercial vehicles and agriculture tractors. The corporate office
is located at Pune, and various modern manufacturing plants at Chakan,
Jalgaon, Manesar (Haryana) and Sitarganj, Uttarkhand. The group employs
about 15,817 countrywide and registered consolidated sales of Rs. 50,087
million in 2005-06 (Bosche Website). The company claims that its regular
employees are paid above average salaries. However, this does not appear
to stem the tide of strikes at its various units in India.
The Mico Bosch Labour Union (MBLU), Jaipur Plant, went on an
indefinite strike from November 10, 2008, (Bosche Press Release,
21/1/09), even though a four year wage agreement with the Union was
valid till 31.05.09. After repeated appeals by the management failed to
end the strike, management raised a dispute with the Rajastan Labour
Department and claimed that the Union resorted to violent means to
prevent movement of vehicles to the plant and scuttled the production
process. The timing of the strike synchronized with a continuous market
decline for the Automobile Industry. On December 5, 2008, the Labour
Department, vide its Order under section 10 (3) of Industrial Disputes
Act 1947 prohibited the strike by MBLU and ordered all striking
employees to report for work immediately. A fresh Memorandum of
Settlement was signed, the indefinite lock out was lifted and workmen
associates were allowed to return to their duties with effect from
21.1.2009.
Established in 1982, Robert Bosch India Chassis Systems Ltd (RBIC),
Pune, is a wholly owned subsidiary (stake of 95.87%) of the Bosch Group
in India, employing about 2020 personnel (Bosche website). The Union was
established after Bosch Chassis Systems took over the plant in 2006. On
July 18th, 2009, workers at this plant went on strike demanding pay rise
as agreed to earlier and equal pay for equal work. 'Precariously
employed' workers such as trainees and non-permanent employees
earned only 25-30% of regular wages. The strike was led by Bosch Chassis
Systems Kamgar Sanghatana (BCSKS) and supported by the International
Metalworkers Federation affiliates in the region (IMF website), despite
a 3-year agreement signed on November 3, 2007, giving average wage rise
of around 60 per cent and stipulated rises for each year. At that time
Bosch had informed the Union that the two wheeler brake unit was being
handed over to Brembo, an Italian company, and that 50 workers were to
be transferred to the new company. The workers had protested and signed
an agreement with Bosch and Brembo, only after a clause was included
stating that, in the event of closure or relocation of Brembo, the
transferred workers would be re-employed by Bosch.
After Brembo failed to implement wage rises in 2008 and 2009 and
Bosch in 2009, and the Union's General Secretary was suspended, the
Union served a notice of 'stoppage of work'. But instead of
negotiating with the Union, company management lodged a complaint
against the Union with the local Industrial Tribunal, which, however
ruled that the strike was not illegal. The IMF Regional Representative
felt that "The success of the struggle will have far reaching
benefits ... (on) wages, working and service conditions of precarious
workers and trainees, ... for Bosch ... and the Pune region and
strengthen the efforts of unions to tackle the widespread use of
precarious workers by the companies" (IMF 2009).
On March 8, 2010, Bosch Limited, Bangalore declared a 'Lock
Out' at its Naganathapura Plant. The decision was taken (ostensibly
for safety) because workmen associates of the plant resorted to physical
intimidation of managers and officers of the plant during their
agitation. After the wage settlement had expired in Dec. 2008, a new
Charter of Demands was submitted by the recognized Union of the plant,
Mico Karmikara Sangha--Naganathapura (MKS-N), on 29.07.2009, demanding
substantial increase in wages, enhanced medical facilities for family
members etc. The average cost to company (CTC) of a workman associate at
the plant was claimed to be about Rs. 37,000 p.m (Bosche Press Release
March, 2010). During the 14 sessions of negotiations, the company
offered revision of wages equal to what was offered in the last
negotiations, substantial improvements in hospitalization facilities and
transfer of around 45 indirect workmen to direct production areas,
without reaching conclusion. MKS-N resorted to a Go Slow and subsequent
Tool Down from Feb. 2010 which continued till 6.3.2010. Revenue loss for
the plant was claimed at Rs. 60.4 million in the month of February,
2010.
Management requested its managers and officers to man the assembly
lines for three Sundays, in order to partially make up the shortfall in
production and claimed that office bearers of MKS-N physically
intimidated and threatened the managers when they were entering office.
Thereafter the MKS-N declared a Tool Down from 8.3.2010 onwards.
Cummins
Cummins India Limited (CIL) is a 51 percent subsidiary of Cummins
Inc. USA, the world's largest independent diesel engine designer
and manufacturer. Set up in 1962 in India, it is a leading manufacturer
of diesel engines with a range from 205 hp to 2365 hp, serving the power
generation, industrial and automotive markets and those for gas and dual
fuel engines. The company's values include integrity, innovation,
delivering superior results, corporate responsibility, diversity, and
global involvement (Cummins India Website). This is in contrast with the
labour relations practices.
The company informed BSE that the production associates at the
company's Kothrud plant in Pune had started an agitation demanding
re-opening of a six month old wage agreement, signed under conciliation.
The workers had held a massive demonstration outside the Dahanukar
Colony facility on September 14, 2009 bringing all operations of the
company to a standstill and thereafter resorted to an illegal strike
from September 15. Other plants continued to be operational (Business
Standard, 16th Sept 2010). The company vice president said a tripartite
agreement had been signed, mentioning details about wages, incentives
and so on but that members of the Union Committee had been violating the
agreement by refusing to perform on the shop floor. On Sept 16th the
management issued suspension notices to the 11-member Committee of the
Kirloskar Cummins Employees' Union (KCEU). The workers refused to
accept the notices and staged a dharna. The treasurer of the Union,
claimed that the company had not paid incentives of around Rs 12,000 for
the last three months to any of its workers, and that the 11 office
bearers of the Union had been working without salary for the last two
months. The management sought a written undertaking from the KCEU that
the workers would not resort to any violent measures and maintain a
secure work environment on the company premises. Workers did not give
the undertaking, since Union leaders said this was an unfair demand,
which would make the Union 'teeth-less'. However, talks
between the Union Committee and the management continued on 17th. There
was a complete lock-out the next day and the KCEU approached the Labour
Commissioner on 19th, requesting his intervention to solve the issue.
But the stalemate continued since no one from the company turned up
for the meeting. The company confirmed that they were not very keen to
restart operations unless the Union Committee signed the undertaking
(Business Standard, 16th Sept 2010). The company claimed that the Labour
Commissioner had directed the workers to join work and that an enquiry
would be conducted against the 11 Union Committee members for resorting
to violence during the strike. They would remain suspended. The Union
said they had assured the Labour Commissioner that the workers would
continue the agitation without creating any violent situation. The
strike continued for more than two months and it was only on 20th
November that workers resumed regular duties. Cummins India duly
informed BSE about this. Shares of the company had declined 0.87%
(Reuters, Fri Nov 20, 2009).
Nokia
Nokia India workers, at its plant in the Telecom Special Economic
Zone (SEZ) in Sriperumbudur, Tamil Nadu, went on strike on 20th Jan,
2010, after 35 employees were suspended. The following day another 20
employees were suspended according to Nokia India Employees Progressive
Union (NIEPU) (IANS website). This strike too was part of a series
starting in 2009. The Nokia Union is an affiliate of the Labour
Progressive Front (LPF), labour wing of the ruling DMK Party. According
to the Union, the immediate cause of the strike was the transfer of an
employee from one job to another. A Union official observed that the
human resource manager was curt and threatened employees with suspension
orders. The protests spiralled and Nokia suspended 35 employees,
defending the move by saying that "Every company has certain codes
and values, the violation of which cannot be brooked," and accusing
the suspended employees of "acts of serious misconduct" (IANS
website). About 1,200 staff joined the strike although the NIEPU claimed
that about 2,000 staff went on strike (Times of India, 10th February,
2009).
Nokia raised a dispute with the Labour Department the next day. But
the employees refused to end their agitation despite being asked by the
Labour Commissioner's office to resume duty. The
Commissioner's advisory included also directions to the management
to sort out the row by January 25th. Nokia said it was talking with its
workforce and hoped that the matter would be resolved quickly. The Nokia
campus houses its assembly plant and also their suppliers Foxconn,
Wintek, Salcomp, Laird and Perlos. This plant can churn out around
500,000 mobile phones a day and has the highest productivity among all
Nokia plants across the world (IANS website). Nokia has about 8,000
staff at the facility, including around 3,700 permanent workers (some
went on strike), around 2,000 trainees and 1,000 contract workers. The
total number of workers in the SEZ, including that of the suppliers is
about 30,000.
Production at Nokia's factory was hit again after workers
began another strike on 13th July 2010 demanding higher pay (Business
Standard, 14th July 2010). Nokia did not comment on the strike or report
production loss, but said in a statement that a long-term wage
settlement was being discussed and that the wage deal offered was among
the highest in the region in similar industries. The strike was called
off late on 15th night, following tripartite talks. The Nokia management
revoked the suspension of 60 workers. The Union agreed to the terms
after TN Labour Minister, TM Anbarasan (Financial Express, Jan 22,
2010). However, some employees were still not ready on the ground that
the wages offered were too low. Nokia had said in April that mobile
handset production at the India plant had crossed 350 million handsets
over its four years of operations (Economic Times Bureau, 15 Jul, 2010]
A research centre (SOMO) felt that the unionization of Nokia has
been a remarkable event in the mobile manufacturing industry.
Nokia's workforce in South India had formed a union after a
resoundingly successful strike in August 2009. The attempt to improve
employment conditions in the leading company in the mobile phone market
globally and nationally, would have tremendous implications for
industrial relations within the whole industry employing around 4.4
million people (primarily manufacturing) at present and expected to rise
to 27.8 million in 2020. The research, based on extensive interviews,
indicates that decent employment is still an elusive concept in mobile
manufacturing. The research included 100 Nokia workers of all kinds and
collaboration with 'Penn Thozilalargal Sangham' (PTS) (Women
Workers' Organisation), which is active in the area (100 women from
Nokia are members), and with Corporate Accountability Desk (CAD),
Chennai, an activist group researching corporates. 'Precarious
employment' in the form of temporary, contract, probationary and
apprentice jobs, appeared to be the norm.
Hyundai
A 17-day strike starting 20th April 2009, at Hyundai Motors India
Ltd's [HMIL] Sriperumbudur in Tamil Nadu, ended after management
and employees reached a settlement when the management agreed to recall
some of the suspended workers. The work boycott, resulting in a fall of
4-5% in daily production at the plant, was called off on the fourth day
of a hunger strike by some workers at the Office of the Labour
Commissioner in Chennai. A Hyundai spokesman said that a settlement had
been reached and the management would recall 20 of the 75 suspended
workers. The Union is affiliated to the Centre of Indian Trade Unions
(CITU) in Chennai, which backed the strike (libcom.org)
One of the main demands that the management recognise the
Employees' Union, had not been conceded, according to the president
of CITU Tamil Nadu arm. He said that the company used to give increments
every three years. The previous wage structure ended on March 31, 2009,
and the new one was to come into force on April 1. The demands included
an increase in the minimum wage, which was Rs 8,000, and explanations
for dismissing 65 workers and suspending another 34 (libcom.org).
But the Chennai plant was closed again for a few days in July 2009,
after another stand-off with the Union over recognition and
reinstatement of workers. A fresh agreement was signed on 28th July with
the Union through the intervention of the state Labour Minister, T.N.
Anbrarasan (Economic Times, 29/7/09). Even though a wage agreement was
signed on 23rd July (de facto recognition) it was not accepted by many
of the workers and agitations continued. Management conceded the
Union's request to bring 9 workers who had been transferred outside
Chennai, back to the city by the end of 2009. However, they would not be
returned to the main plant but to the subsidiaries. Also out of the 80
workers dismissed earlier on disciplinary grounds, a maximum of 20 would
be reinstated. The company also revoked the punitive actions taken over
the last two years against members of the Union in the form of wage
cuts, withholding of bonus, gifts, gold coin etc. The State Government
acted tough also, since the management had reneged on several of its
commitments made earlier.
The Hyundai Motor India is the group's largest overseas
production base and is fully owned by the parent group. The integrated
unit at Irungattukottai, 30 kilometers from Chennai was built in record
time with an initial investment of more than Rs. 2500 crores.
Incorporated in May 1996, it can roll out 120,000 cars and 130,000
engine transmission units per annum, with almost 85% localized content,
to be increased further. The first pilot Santro was ready in a
record-breaking 17 months with 70% localized content. Hyundai brought in
14 Korean companies and helped them set up base in India for sourcing
components. The total vendor base consists of 60 companies located at
the plant site itself (livemint.com)
Incidentally, the company's main Czech plant and the
ancillaries, faced a series of wildcat work stoppages in December
2009-January 2010, in regions affected by long term high levels of
unemployment, ranging from 10 to 17%. The common aspect was also the
acute reaction of the bosses, either sacking activists or threatening
dismissal and legal charges. (libcom.org).
Mitsubishi Chemicals
MCC PTA India Corporation Private Ltd (MCPI), a subsidiary of
Mitsusbishi Chemicals Corporation (MCC), one of the world's top ten
chemical companies, was established in 1997 in Haldia, West Bengal.
Construction was completed quickly and production started in April 2000
with a capacity of 350,000 tonnes per annum. Expansion with an
investment of Rs 1665 crores led to a second plant (capacity 8 lakh
tonnes) being commissioned in mid-2009 and the total capacity increased
to 11.5 lakh tones at Haldia, with an expected turnover of $ 900 million
by end-2010 (Times of India, 10th Feb 2009].
As part of the 'core-periphery model' (Das 2006) of
Japanese management, the regular skilled employees and the unskilled
non-regular employees formed two distinct groups. The latter were
unionized (common practice in most large enterprises in the local area)
and agreements (with earned and sick leave, festival holidays, annual
bonus, statutory HRA and retrenchment benefits) were signed with them,
although they earn much less than regular workers. Eleven elected
operators' representatives (one member for every 20 operators) meet
managers formally in a Department Representatives' Committee for
raising employment issues. But when it came to unionization, MCPI tried
'to build and sustain a strong, manager-driven corporate culture
and such strategies that help to build cooperative relations with the
employees and avoid unionisation or union substitution'.
Apparently, 'there was an attempt at unionisation but failed due to
lack of support according to management' (Das 2006).
Despite this strategy, there has been simmering tension among the
MCPI unions following the victories of the Trinamool Congress in
Panchayat and Lok Sabha elections during 2008 and 2009. The Nationalist
Contractors Union (contract workers of Mitsubishi, owing allegiance to
Mamata Banerjee's union wing, INTTUC) raised several issues
relating to the contract workers' pay discrepancies with permanent
workers, non-lucrative incentive schemes, reduction in bonus, etc.
Agitations before the gates were followed by dharnas, and a reported
whole night gherao of the HR head. The CITU Union did not protest. Work
was disrupted again at the plant on 7th December 2009, demanding
permanent jobs for 150 casual workers and a raise for the rest.
Mitsubishi has about 513 permanent employees and around 600 casual
staff. The Union blocked the Mitsubishi gates, disrupting work through
the day and causing extreme worry to its Japanese management. The GM
(HR) said: " not a single employee could enter the premises. Around
noon, some of the workers associated with the production division were
allowed entry. Because of that, there was some work in the processing
unit ... but there was little or no work in the loading, unloading and
despatch sections. There was no one to man the canteen and the guards
too, joined the Cease-Work" (http://www.ilovekolkata.in).
At Haldia Petrochemicals next door, CITU had demanded a 300 per
cent hike for contract workers and gained a 100% increase in wages after
a major strike earlier. The siege at Mitsubishi was lifted late on 8th
following the management's written assurance to look into their
demands. Work resumed from the night shift.
It is interesting that MCPI did not hesitate in setting up one of
its largest plants abroad, in West Bengal, knowing its long history of
militant unionism and leftist government. Obviously it relied on its
strategy of centralization of decisions and the manning of 'all key
posts by Japanese managers from its main establishments'. In line
with its 'competitive strategy, its main objective in HR has been
to formulate, develop and maintain unique work culture in tune with
harmonious industrial relations with committed employees involved in
world class manufacturing. Work practices include Total Quality
Management (TQM), Justin-Time(JIT), Kaizen and 5S and Total Productive
Maintenance (TPM, covering the entire life of all equipments)' (Das
2006).
In MCPI, educated, highly skilled employees enjoy regular terms of
employment and are recruited through stringent selection procedures.
Relations with them are based on 'skill or knowledge based pay,
elaborate communication and complaint procedure, and team work' .
More than half of them are in the officer category and 'even the
receptionist is designated as Executive-Secretary. There are no clerical
workers. The remaining are operators (selected from local ITIs, science
colleges and polytechnics) classified into five categories with the
basic pay of the highest category being double that of the basic pay of
the lowest category'. In general, wage levels are 'much
higher' than locally prevailing rates but are not linked to
seniority or bargained annually. In addition all of them go through
extensive training, ranging from work practices to fire fighting. In
2002-03 'all unskilled and non-core jobs in MCPI were done by 388
contractor workers' (only 313 permanent employees including 106
executives). Even though Contractors' workmen got double the
statutory rates, their wages were lower by 40% than the lowest wage in
the regular category. Contractors got 812% of the total workers'
wages as agency fee. But 'contract workmen were not restricted to
unskilled jobs'. For example in the Instrumentation Department, 3
skilled technicians were under a contractor. These and other skilled
contractors' workmen, like crane operators and welders got about
50% more wages than the lowest category workers (housekeeping, gardener,
office boy) (Das 2006).
Conclusion
One finds several indications of convergence in MNC operations in
India. However, although technical excellence is demonstrated in these
companies, there cannot be conclusions about 'best practices'
since many of the managerial actions have led to poor employee
relations. The converging trends are:
1. The location of strikes and unrest have shifted to newer
industrial areas like Gurgaon, Manesar, Pune, Jaipur, Chennai,
Bangalore, away from the traditional hotbeds of union militancy like
Bengal or Ahmedabad, as well as to fast-growing, modern industries like
automobiles, auto ancillaries, telecom equipment, etc. away from
traditional industries or areas of veteran unionism.
2. Some of the unrest is related to the recession of 2007-08, but
several started much earlier and have continued even after the recession
has eased significantly. Many of them are in fact related to the issue
of union recognition or managerial aversion towards unions. In the
mobile phone industry, SOMO contends that the overall policy of the
companies seems to be the strategy of creating a 'reserve army of
cheap labour' in the area, available whenever required and
vulnerable to retrenchment at will. The insistence on hiring a very
young workforce, mostly women, preference for workers who are recruited
from far-off towns and villages over local youth, intolerance of any
attempts to form associations or unions, and keeping wages at a
subsistence level, all point to this approach. An earlier report quoting
workers in mobile companies stated, 'There are no trade unions in
any of the factories of the workers we met.... (and that) managers
reportedly said that there is no need for unions' (SOMO :Corporate
Geography 2009). Among managements the perception is that outsiders are
creating trouble for political reasons.
3. Many are related to global competition, and manpower utilization
techniques consistent with high tech productivity and production. Labour
flexibility is a dominant concern for management in all the cases, and
has led to increasing use of non-regular workers. Das (2006) reminds
that 'different types of employment contracts exist even in Japan
including non-regular employees ... part-time and temporary workers
engaged directly by the company and contract workers who are registered
with a third party'. The non-regulars are 'growing in
proportion crossing one third of total employment in 1997'.
4. A lot of the problems relate to managerial styles--summary
suspensions and dismissals, pay cuts, intolerance for any interference
in their own production plans, insistence on written undertakings of
good conduct--and a poor understanding of industrial relations in South
Asia and their political linkages. There are several examples of
pseudo-participative systems where committees are formed but workers
have little or no influence on decision-making. Several Indian companies
use Japanese managerial and work practices like teamwork, total employee
involvement, Kaizen, 5-S, suggestion systems and rewards, among which
are Jayashree textiles, Ingersol-Rand, Alstom Power, Infar India and
Hindustan Unilever. But in all of these, unions are involved in the
schemes and in their introduction.
5. Workers are resorting to violence and are hitting back at
management over perceived injustices. Management also have amply
demonstrated insensitivity to workers' sentiments and perceptions.
This is particularly true of the Haryana cases, but also indicated in
others. About the unions involved it can be concluded that, although the
left unions (AITUC, CITU) are active in several cases, regional unions
affiliated to ruling groups are equally active. While some degree of
political adventurism has contributed to union muscle-flexing, the MNCs
do not appear to have learnt that this is part of the Indian IR
scenario.
6. Although Collective Bargaining is being used, it is often
failing to resolve prickly issues and workers are demanding reopening of
negotiations within 6 months to one year.
7. There is also a demonstrated inability on the part of the
multinationals (except MCPI) to handle conflicts bilaterally and they
are taking recourse to the state Industrial Relations machinery or
government ministers. The MNCs are taking advantage of states'
support for industrialization and suppression of unions, as in Haryana.
But such recourse is also inviting politicization. Interestingly, while
the multinationals have not always exhibited sensitivity to Indian
labour concerns they have not been backward in taking advantage of the
adversities in the Indian labour market. For instance, the use of
contract and casual labour, the payment of significantly lower wages for
some sections of labour, the proneness of state governments to overlook
many aspects of labour rights in the interests of investment, are areas
where multinationals have shown considerable alacrity.
Some of these cases also indicate some degree of divergence as
well. While Maruti's confrontation with its workers over the issue
of production and remuneration changes was triggered by the competition
created by globalization, the manner in which it dealt with the problem
indicated very close resemblance with Honda's handling of its
union. Its strategy was characterized by:
--close links with the industry-friendly state government
--ability to read the central government's favourable stance,
regardless of the political affiliation (neither NDA nor UPA governments
intervened on behalf of the workers)
--introducing changes in the employment structure (from permanent
to contract)
--de-recognition of the union
These characteristics ensure that 'employment and work
practices are more similar to the host country than that found in joint
ventures' or in the operating country. In terms of international
human resource strategies this is a good example of the global vs local
issue in managing subsidiaries. This may hold true of other Japanese
companies operating in India as well (328 as of June 2006).
MCPI's union avoidance strategy has been fine-tuned for the
location it is in and till now appears to have been reasonably
successful. However, there appear to be chinks in its armour, and the
fact that this has not been replicated in other MNCs across India,
indicates the delicacy of the strategy.
Nokia had tried to avoid unions
The Haryana Government's solicitousness for industries'
concerns has also provoked unions to enlarge company disputes into
industry-wide movements.
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Ratna Sen is Professor (Retired), Indian Institute of Social
Welfare & Business Management, Kolkata E-mail: ratnasen46@yahoo.com