A vision that could have ended in a fatal air crash, a project that was bailed out by the government on the bidding of a bereaved mother, also the prime minister of the nation - the rest is history. That Maruti Suzuki actually rode on wheels for over three decades to become India’s largest passenger car company is a testament to the perseverance of a relatively unknown Japanese car manufacturer, who reportedly parked himself in Delhi and stayed on till he bagged the 26% stake in the joint sector joint venture in 1982. Today, that stake is at 54.2%.
The Maruti-Suzuki story is a case study of success that was considered unachievable, of parallel evolution of Labour Laws and the Indian Economy over the past three decades. The strike at Manesar is significant in contextualizing labour laws in today’s globalised times, particularly when the globalization phenomenon itself is under challenge.
Over the years, India has witnessed a fairly successful transition from a restrictive, licence-raj economy to one of open sectors and markets. Policy changes and reforms have driven the process. In so far as Labour Laws are concerned, there have been no new laws and minimal amendments. The winds of change have been created by the rulings of the Supreme Court, particularly on the issue of workers’ rights to strike. The seventies and eighties represented the pro-labour approach. The Court in the Crompton Greaves Case (1978) held that “a strike cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable”. But in 1995 the Apex Court in the Case of Syndicate Bank v. Umesh K. Naik (1995) affirmed the ‘No Work No Pay’ principle, disallowing payment of wages for the duration of the strike in holding that organized labour had acquired the power of holding society to ransom.
Maruti Suzuki consolidated in Haryana, initially Gurgaon and thereafter Manesar, being in the same state and offering cheap and available labour, as well as various other incentives. Things were hunky dory till such time the workers went on strike in 2000-01. The protests were aimed against salary cuts and intensification of work, which ostensibly were the outcome of Suzuki acquiring the controlling stake, hence the loss of the public sector comfort zone.
The 2000-01 legal battles were fought in two jurisdictions. The Union filed a writ petition for being permitted to join work without insistence of signing of the ‘good conduct bond’. The Chandigarh High Court, which in an earlier ruling held that Maruti Udyog Ltd. was not an instrumentality of the state, upheld The Delhi High Court was approached by the company for a decree of permanent injunction to restrain workers from demonstrating within the radius of 500 metres of the residences of the directors, and from blocking their entry to the corporate office. The Court injuncted the workers accordingly, specifically drawing attention to the unanimous judicial view that such demonstrations can be permitted only at a distance of 100 metres.
that the management’s requirement of obtaining undertaking in order to ensure non-violent conditions in the factory before permitting striking workers to enter.
The Delhi High Court was approached by the company for a decree of permanent injunction to restrain workers from demonstrating within the radius of 500 metres of the residences of the directors, and from blocking their entry to the corporate office. The Court injuncted the workers accordingly, specifically drawing attention to the unanimous judicial view that such demonstrations can be permitted only at a distance of 100 metres.
During the 2001 strike, the Company derecognized the Maruti Udyog Employees’ Union which had spearheaded the workers’ agitation, and recognized the Maruti Udyog Kamgar Union, a new Union, which is reportedly regarded by the strikers as a pliable pro-management body, the basis for the demand to register a new union being a key issue in the current agitation. On this point, the management’s position is inflexible, and the governmental authority has rejected the application for registering the new union.
The management’s efforts to enforce order in the plant by suspending four workers on July 28th 2011 led to a day-long ‘tool down’ strike. Over the course of the next month, further dismissals and suspensions intensified the grievances which were amplified to include ‘absence of proper breaks, low wages and equitable treatment of contract workers. Specific grievances were made of the two seven-and-a-half minute tea-and-toilet breaks, the thirty minutes lunch break, and salary cuts for taking holidays – all of which are long existent and industry specific. The workers at the Gurgaon plant work, who are subject to similar hours and conditions of work, did not join the strike.
The other issue which has formed a road block is the requirement that the workers sign a ‘good conduct bond’ before entering the plant. A four sentence undertaking which acknowledges the company’s right to dismiss workers indulging in go slow, work to rule, intermittent stoppage of work, etc. has raised concerns on the legality and purpose of the bond in the present dispute. It is not unusual for such undertakings to be sought and even given in a collective bargaining process; the question in a volatile situation such as this is one of bargaining powers and duress. The workers interpreted this condition to be effectively a ‘lockout’ while the management was trying to achieve was to make the entry conditional.
On October 1st, with workers agreeing to sign a modified ‘good conduct bond’ matters appeared to be resolved, but within two days, the strike was resumed within the factory premises on the issue of the contract workers, and continued unabated. On October 7th, the Haryana Government stepped in slapping a ‘breach of agreement’ notice on the workers under Section 29 of the Industrial Disputes Act, on October 12th, for having reneged on their commitment to the management.
The Company filed a civil writ petition seeking and obtaining a direction from the Punjab and Haryana High Court, requiring the workers to observe their strike at least 100 metres away from the facility premises of the plant and to refrain from disruption of the plant’s operation. Fortunately, the strike was resolved and as this goes into print, the strikers would be back at work, after signing the good conduct bond. Hopefully, the recognition has dawned on all concerned, that the impasse benefits nobody – workers, management, shareholders, customers, suppliers and the State.
In the short term competitors may gain, in the long term the implications are more serious.
Kumkum Sen is a partner at Bharucha & Partners Delhi Office and can be reached at kumkum.sen@bharucha.in
