None at work

Over the last two years, potests had become a routine phenomenon at Pricol, the Coimbatore-based auto components manufacturer. Ever since a section of the employees who came under the All India Central Council of Trade Unions (AICCTU)-Tamil Nadu questioned the wage agreement (in 2007) that was in force, the relationship between the union and the management had turned frosty. But still, few would have predicted what happened on September 21 this year. A section of disgruntled workers employed at the company’s Kuniamuthur unit, who were dismissed earlier in the day on account of “misdemeanor”, went to Pricol’s main factory at Perianaickenpalayam with iron welding rods and brutally assaulted to death the company’s Vice President (HR) Roy J. George.

If the Pricol incident grabbed the headlines for the tragedy it ended in, the simmering tension between workers and management of various other high profile companies across the state such as Hyundai, Nokia and MRF is blowing apart Tamil Nadu’s image of an investor-friendly state—a virtue the government has been effectively using to garner investments both from within the country and abroad.

In Hyundai Motor India (HMIL), between April and July this year, employees struck work for about 23 days. Though the company had a Worker’s Committee that handled wage negotiations, a section of the permanent workers (300-400 of the 1,500 employees) deemed it fit to form a politically-affiliated union with the support of the Centre of Indian Trade Unions (CITU). “The issue here is not about pay but more about bad working environment. In our opinion, the employees can be treated a lot better. The workmen hate their ‘robot like’ existence and want to exert their individuality,” says A. Sounderarajan, General Secretary of state CITU. Hassled by production loss, Hyundai, which has made the Chennai plant its global hub for production of i10 and i20 models, reportedly threatened to move its production out of the facility.

On August 14th this year, there was a flash strike at Nokia’s manufacturing facility in Chennai. The issue for these youngsters (mostly between 18-21 years of age and 70 per cent women) was the wage hike. They felt that the hike that finally came after five years was too inadequate and wanted a salary in line with similar factories in the neighbourhood. Nokia did not have a union then and the strike took the company by surprise. Now a union affiliated to a political party has been formed and negotiations are on. The handset major, while reiterating its commitment to amicable wage settlement, maintains that its existing salary levels are very competitive, well above the recommended wages by the government and that its employee practices follow the spirit of International Labour Organisation (ILO) conventions.

At MRF, the workers have been pressing the management for recognising the majority union instead of ad hoc wage settlements with a “puppet union”. The 2004 wage settlement had been totally dissatisfactory. According to them, workers at the Arakkonam (TN) and Pondicherry factories were getting less than half the salary of the Tiruvottiyour plant (main unit at Chennai) for same work experience. When the 2008 settlement was made and the discrimination continued, workers in Pondicherry and Arakkonam plants resorted to a strike, which along with a lockout lasted 120 days. D. Christopher, General Secretary, United Worker’s Union (UWU), accuses the management of being non-transparent. “Their variable pay-outs are hidden in complexities and it finally doesn’t make much difference to our pockets,’’ he says, adding, “the court has now passed an order to the state to identify the majority union which has to be heard. If this is not implemented, we will resume our battle.’’ MRF had reportedly lost Rs 1,000 crore in production.

Experts say that not recognising the right union or for that matter any union at all is proving to be a major irritant among the employees. While MRF refused to comment, Hyundai spokesman said: “HMIL stand is that it will not recognise any outside union as both the management and HMIL workers are happy with the worker’s committee and the way they have looked after worker interest. So it sees no point in accepting or acknowledging any outside union led by vested interests and politically motivated.’’

Lack of communication is another trigger. According to Ganesh Chella, CEO, Totus Consulting, a company involved in strategic and operational HR solutions, most managements don’t have a clear policy that in turn needs to be communicated through HR. Quite often, today’s HR is focussing only on talent management and not human relations. “And in turn many HR managers don’t have the courage to point out to the management when they see a conflict between management philosophy and day-to-day operations,’’ he says.

At Pricol, experts point out that the management did not engage in talks in the initial days (in 2007) with AICCTU because they went on strike without registering the union. Sometimes playing by the rule book has its own limitations. Talks early on could have diffused the situation and prevented the tragic consequences, they add.

Entry of contract workers into the shop floor has become another source of heartburn. In fact, contract workers far outnumber permanent employees— at times in the ratio of 3:1. Hyundai, for instance, has 6,500 contract workforce against 1,500 permanent workers. Nokia has only contract workers, currently numbering 8,000. In Arakkonam, MRF has 5,000 contract workers against 1,400 permanent staff. This is adding to insecurity among the permanent workers, who fear that only a fine line divides the two sides in terms of skill sets and that they could be replaced any time.

Also, contract employees get paid significantly less for the same work. “If there is no equal pay for equal work, there is bound to be employee discontent,” Chella points out. Contract workers have far lesser benefits/rights, hence greater scope of exploitation.

The Tamil Nadu government, for its part, has been living in denial and resorting to quick fixes to bring a strike/lockout to an immediate end. “Our labour climate is very good—less than 1 per cent of man-days are lost in Tamil Nadu, which has the maximum number of factories (42,452) and workforce (14,37,910),” says M. Velmurugan, Director, Guidance Bureau, the state’s single window agency for investments. He maintains that the state’s investment climate is healthy and proposals worth Rs 11,000 crore are close to finalisation. Many in the government, it appears, are oblivious of the data the State Labour Department has released, which show an increasing incidence of strikes and lockouts in the state over the years. It was 51in 2006, 66 in 2007 and 86 in 2008.