It took just about a week for Sonu Gujjar to convert his carefully cultivated image of a new-age workers’ hero to that of a traitor — an adjective being used quite liberally these days by his followers who had once trusted him implicitly. In many ways, this is a familiar script — there have been not-so-publicised instances in the past in which the so-called union leaders have led a troop of disgruntled workers to stop production only to slyly broker a side-deal with the management.
Gujjar has since denied receiving Rs 40 lakh from Maruti Suzuki, as the media had reported, and told this newspaper in an interview that he and 29 other suspended employees got Rs 16 lakh each, which included dearness allowance, provident fund and the salary due if they had worked till they were 52 years of age.
But even in his darkest hour, the 27-year-old ex-trade union leader, who had ironically once won the MD’s trophy for best employee, has taken the ultimate revenge on his former employer. Questions are being asked on whether India’s largest car maker deviated from best corporate governance practices by helping Gujjar and other suspended for indiscipline cut a sweet deal for themselves and leave the company.
To be sure, nobody can fault Maruti on following the letter of the law.
A week after the deal with the 30 workers, the Maruti management finally broke its silence and said the settlement was arrived at with the full concurrence of the Haryana government and within the ambit of the Industrial Disputes Act of 1947. The spokesperson also said the company was well within its legal rights to offer a settlement to an individual that is higher than the general severance rules. Legal experts agree that the Act only prescribes a floor – 15 days for every completed year of service – and, not a ceiling, for severance packages. Even as there is no official word on the specifics of the deal, the management’s decision was perfectly legal.
Some consultants also say Maruti’s decision to pay top-up cash to a few of the trouble-makers was an HR masterstroke. By taking these people out of the equation, the company can hope to put production back on track at the Manesar factory, where the company has lost an estimated output of 83,000 vehicles since June. After all, the frequent strikes washed away 60 per cent of the company’s profit in the second quarter ending September, leaving the management with very few options.
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Its worries, however, perhaps made India’s largest car maker forget one vital thing: that it’s not enough for an industry bellwether to follow only the letter of the law, and not the spirit behind it. Here’s why. First, Gujjar and company got a hefty payout for creating trouble, while their colleagues in the same factory had to forfeit 74-days’ worth of wages for participating in the strike. It’s highly unlikely that such an action on the part of the management will help bridge the trust deficit with workers.
Second, Maruti’s deafening silence on the extra payouts till a week after the deal was struck is baffling. The minimum the company should have done is to make adequate disclosures on the specifics of the deal. After all, the same company was quite proactive in giving daily accounts of its losses during the strike. Apart from nipping-in-the-bud conspiracy theories such as bribing and active involvement of state politicians and so on, proper disclosures would have given investors better clarity on the management’s thinking.
After all, it wasn’t just another routine deal; the people who left after the payouts were responsible for the sharp erosion in the company’s stock prices. By refusing to lift the veil of secrecy over the deal, Maruti has done more damage to its image than what the prolonged strike could ever have.
Also, going by the rumblings, there is no guarantee that Maruti will not see another flare-up. As Debi N Saini, professor and Chairperson, HRM Area, MDI Gurgaon, says, the management needs to become more aware of the writing on the wall, and not sit on its laurels — the present victory and the year 2000 victory at the Gurgaon plant that had led to the present compliant union there. Most workers at the Gurgaon plant are older, unlike the young Gen-Y Manesar workers, who are less tolerant if challenged.
Going beyond Maruti, here is more food for thought. According to the Annual Survey of Industries (ASI) under the ministry of statistics, the share of wages in industrial expenditure has been dipping over the years, while the value created by labour has been increasing. Net value added by workers in the 10 years ending 2008-09 has gone up three times to over Rs 6 lakh, while salaries as a proportion of net value added fell sharply from 18 per cent to 11 per cent. The data lend credence to the growing concern that workers are not getting their due. Is that the reason there has been a sharp increase in workers’ protests?