Shyamal Majumdar: Return of labour militancy?

HUMAN FACTOR

The industrial disputes in Honda and Toyota have shattered the record of a decade of relative peace

India's labour dispute record has shown considerable improvement in recent years. According to the latest ministry of labour data, the number of strikes declined from 808 in 1994, to 257 in 2004. After a peak of close to 12 million man-days lost to strikes in 2000, only 4.2 million man-days were lost due to strikes in 2004.

Despite the encouraging numbers, the sight of 400 Toyota Kirloskar workers blocking the entrance to the Deputy Labour Commissioner's office in Bangalore before a scheduled "peace" meeting between the management and the unions on Monday was unnerving. For it brought back memories of another Black Monday in July last year when protests by Honda Motor employees took a violent turn. Though better sense prevailed this time and the Toyota plant workers dispersed after the management representatives failed to turn up for the meeting, the question on everybody's mind is whether labour militancy is taking centre stage yet again after a few years of relative calm.

The fears suddenly seem real. Apart from the dispute in Honda, there were several other examples of industrial unrest in 2005. And in each of these cases, the management had to beat a hasty retreat after taking a tough stand initially. Honda, which had at one point insisted that all the employees at the Gurgaon plant should sign a good conduct undertaking and return to work, was forced to eat humble pie and reinstate all the 57 workers it had fired. Tata Motors, which saw a flash strike by 300 workers attached to its transport section on June 7, revoked its plans to outsource general transportation from a contracting firm. S Kumar's closed down its Mysore factory for over a month after an "illegal strike" by its workers. The issue was resolved but only after the management made concessions. The same was the story in companies such as Apollo Tyres and a few others.

This is not the first time that the Toyota plant at Bidadi faced labour trouble. Workers had gone on strike in 2001, and again in 2002, in a dispute that lasted nearly two months. Then a spat with workers was avoided in April-May 2005 after the management agreed to a 15-20 per cent wage hike. But the truce was obviously short-lived and the management declared a lockout due to what it calls an illegal flash strike by the union following the dismissal of three workers and suspension of 10 others.

An HR consultant blames the Toyota and Honda managements for the impasse and feels the issue should have been handled in a more sensitive manner. They say Japanese managements have hardly made any effort to learn how to deal with India's highly politicised unions, which traditionally take an anti-management stance for their survival. In Japan, the culture is completely different. For instance, the relationship between a labour union and the company management is generally very close in Japan. Both white- and blue-collar workers join the union automatically in most major companies. In fact, in most corporations, many of the managerial staff are former union members. Any regular employee below the rank of section chief is eligible to become a union officer and they usually maintain their seniority and tenure while working exclusively on union activities. Such things are unheard of in India.

The HR consultant also says that Toyota didn't help its cause by periodically threatening to set up its next plant in North India if the industrial climate does not improve in Karnataka. "The management goofed up on both the PR as well as the HR front," he says.

While there is some merit in what the consultant says, it would be a pity if all these incidents were to detract from the urgent need for labour reform. In any case India's labour laws are a prisoner of a vocal minority of organised labour (such as the ones in Toyota or Honda) against the majority in the unorganised segment. India's total workforce is about 500 million today. Of that, a minuscule 4 per cent works in the organised sector. Also a World Bank study entitled Doing Business, released last year, rated India as among countries with the most rigid labour laws with a score of 48, while China had only 30 and Hong Kong zero, which simplifies the least rigid labour laws.