Given the general industrial calm of the last decade and more, and the fact that the share of organised labour in the country’s workforce is falling, the rash of strikes in automobile and component companies (Hyundai, Mahindra & Mahindra, MRF and others) over the past few weeks comes as a surprise—but not to those who have been tracking the manner in which large companies use workers. And, as always, there is a difference between a proximate cause, like a flashpoint, and the underlying malaise. In the case of Mahindra & Mahindra, it was a face-off between a security guard and a worker talking on the phone while working; in the case of Hyundai, it was some of the company’s 12,000-odd workers who wanted to be recognised as a trade union. At the Honda scooter factory some time ago, the immediate provocation was a Japanese manager getting physical with a worker who he thought was being recalcitrant. Such relatively minor incidents will always be there on a factory floor. The important question is not who started the fire, but why the fodder was so ready to burn.
It is well known that, in their effort to cut costs in bitterly competitive markets, company managements have been resorting to the steadily greater use of temporary or contract workers. So much so that between 15 per cent and 20 per cent of the workforce in much of the automobile industry is accounted for by workers who are not only paid as little as a third of a regular employee but also suffers from a lack of job security. The wage differential will inevitably be a matter of daily heartburn, especially if workers from the two categories are standing next to each other on a shop floor and doing the same or comparable work. That resentment would inevitably manifest itself in a variety of ways, one being an effort to form a union of temporary workers so that they could get into collective bargaining (and company managements have of course been resisting the formation of unions).
The problem did not boil over when the automobile industry was enjoying a sales boom, because company managements were happy to buy peace by offering wage hikes—something they are reluctant to do in today’s business environment. Nor was flash-point reached when companies hit by the downturn announced production cuts and 3- and 4-day working weeks. In the case of Hyundai, large numbers of workers were laid off in December. The acceptance of these decisions could well have lulled managers into complacency. But anecdotal evidence suggests that there were warning signals too, like falling attendance levels. Perhaps the explanation is that it takes time for alienation to reach a point where it precipitates industrial action. It could also be that the workers chose to strike when their employers were expanding production to meet rising demand, and therefore vulnerable to production stoppages. Hyundai therefore has had to agree to not suspend the core strikers and has opted for a face-saver which says it can take action once the disciplinary proceedings are complete.
The moral of the story, of course, is that there is a huge HR challenge here and, after years of industrial calm, companies need to be more alert to the rumblings within, and address problems before they boil over. Companies also need to ask themselves whether having rigid caste systems on the factory floor, with one caste getting high wages and plenty of benefits while another gets neither, is a sustainable (and desirable) pattern of employment.
