Labour laws and the Yanam strike

As more Indians go through systematic education, and ready themselves for the job market, it is clear that India needs to upgrade its labour laws. That is one of the lessons thrown up by the t

Published: 13th February 2012 11:25 PM  |   Last Updated: 16th May 2012 05:55 PM   |  A+A-

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As more Indians go through systematic education, and ready themselves for the job market, it is clear that India needs to upgrade its labour laws. That is one of the lessons thrown up by the tragedy at Yanam.

On January 27, two men died in the small industrial town of Yanam, belonging to Puducherry, but located 20 km from Kakinada in Andhra Pradesh. One was MS Murlali Mohan, a union leader. He was detained by the police outside the gates of Regency Ceramics, a tiles manufacturer, when he and his supporters tried to dissuade other workers from going to work at the floor tiles manufacturing unit. Police resorted to a lathi charge, since there was a prohibitory order (There had been daily protests in the factory since January 2, with workers demanding reinstatement of some sacked workers and better wages). Murali Mohan and a few others were reportedly injured when the lathicharge took place, but they were removed to the police station. It was here that he is believed to have vomited. Reports also say he complained of chest pain. By the time he was taken to a hospital, it was too late. He was declared dead.

Murder and Mayhem

The news of his death sparked mob violence, with one group of factory workers heading to the house of KC Chandrasekhar, president (operations), at the ceramics factory, and attacking him. Although he was taken to a hospital, he could not be saved, and died the same day. Yet another group of workers went on a rampage, setting fire to vehicles belonging to the company which also runs an educational institution and damaging other property. After the two deaths, and damage to property running into crores, the company declared a lock out.

Past History

Violent clashes between workers and management resulting in strikes have a long history in India , with quite a few fatalities, in recent years.

A little over two years ago — in September 2009 — a Human Resources manager was killed by workers at the PRICOL factory in Coimbatore, after 35 workers were dismissed over charges of ‘indiscipline.’

In 2008 Lalith Kishore Chaudhary , CEO of Italian auto component maker Graziano Transmissions India, was clubbed to death by 200 workers.

On November 14, 2010 Allied Nippon’s AGM Yogendra Choudhary was beaten to death at Ghaziabad.

In 2009 Ajit Yadav died at Rico Auto, while on July 5, 2005 nearly 150 people were injured after worker unrest at the Honda Motorcycle and Scooter India unit. The same year 10 temporary workers at German MNC EPCOS India swallowed pesticide in full public view.

Nestle made history in 2010 when its workers went on strike for the first time, protesting the sacking of a few employees for below par performance. That June workers went on a 20-day strike at Hyundai’s Tamil Nadu plant, after management refused to recognise the workers’ union. That October 400 employees from Foxconn were arrested after they demanded recognition of their union, affiliated to CITU.

In 2011 alone, the Maruti Suzuki plant at Manesar in Haryana has seen four strikes by workers.

Two Memorable Strikes

A Railways strike led by George Fernandes in 1974 made a mark while in 1981 the Mumbai Mills strike, in which over 3,00,000 took part, led by Dr Datta Samant went on for a year and saw the mills moving out of the country’s commercial capital. Samant was assassinated in January, 1997.

Striking Out

One of the oldest strikes took place at the Buckingham and Carnatic Mills in Chennai, a protest that had even Mahatma Gandhi taking an interest.

The tradition of a trade union leader getting the workers to fight for their rights is a long-standing one. National award-winning film Kancheepuram, set in pre-Independence India depicted the struggle by workers to fight for decent working conditions and basic rights. Similar worker unrest has been growing in the last few years and is common in Haryana, Gurgaon, Andhra Pradesh and Tamil Nadu.

Why are they Striking?

One may ask, when many of the workers in the factories are probably the sole breadwinners of their families, why they risk being sent off, or worse, force the management to announce a lock out. Workers want better working conditions. They also want rules which do not give the management the right to sack them or take action against them which could result in loss of pay. For example: Coming to work late, loitering and lingering over meal and tea breaks, being absent from work too often are some of the reasons a company can use to take action against employees.

Workers also want wage revisions, and a common ground where everyone is paid the same amount for the same work. In many companies, while a certain percentage of staff is on the payroll, with access to medical benefits, leave and other benefits, a big portion of the workforce today is hired on a contractual basis. For example, a worker on the payroll may earn 20,000 per month for a specific job . A contract worker doing the same job in the same company may be paid as little as `4,000. He will not enjoy any medical benefits.

What are the Unions Doing?

The history of trade unions in India meshes a lot with political parties, and goes back to the freedom struggle. When the country began to industrialise (in a small way at first), many political parties tried to gather workers under their own party umbrella. Congress, the Left and even Tamil Nadu’s Dravidian parties have their own ‘union leaders’ in a manner of speaking.

The trade unions offer to help workers get their due — in terms of money and working conditions. Often, such intentions lead to union rivalry. Fighting for such benefits also helps unions capitalise and establish their power over others, and elbow out other unions affiliated to other parties. For example, a person with Left leanings may want to ‘defeat’ his Congress rival and establish his own union in a company. In the past many managements allowed such unions to ‘flourish’ since a good union leader can be an effective bridge between the workers and owners. In fact, it can be a win-win situation for all. Where does the Conflict Lie?

A major portion of strikes takes place in the manufacturing sector. Why is that happening? Economists will tell you that when a country’s economic growth is piling up then workers feel they are not getting enough share in the pie. And demand the same.

Another reason is the working condition in the factories. When Japanese and European companies entered India, they were welcomed by everyone because they were known to acknowledge workers’ rights. This includes specified number of working hours, with decent breaks for lunch and tea/refreshments. However, today, following the example of the Chinese, many companies have begun to cut down the lunch breaks and restricted tea breaks to between five and seven minutes.

The Issue of Contract Labour

Under India’s labour laws, it is tough to fire regular workers. But many companies have migrated to a contract workforce regime. Reports say that in many companies, as much as 80 per cent of the workforce is hired on a contract basis. Their job description is no different from that of a regular employee, but they get paid only a fraction of what confirmed staff get. And they do not have access to health benefits, or a cover for any injuries sustained on the job; above all, they can be sacked at a moment’s notice, without severance benefits. Most agitating workers want the anomalies in contract employment removed. Often, contract workers are hired by availing the service of a particular person, who then takes a cut from the contract workers monthly payment. It is to safeguard their hard earned money that many workers gravitate towards union leaders who come with a political backing. And when many companies refuse to allow unions to flourish, or recognise such unions, demonstrations and strikes take place. Some examples of this are the Foxconn, and Hyundai strikes.

In the case of the Yanam strike, fury over Murali Mohan’s death was also caused by the fact that the union leader was himself sacked, and the workers wanted him reinstated. Workers also alleged that there had been no pay hike for them in over 10 years.

Business Community Takes Note

One heartening development is that industry stakeholders have begun to not only take note of the strikes, but also try for positive mediation. For example, in mid-October last year, 127 investors, analysts and fund managers got onto a conference call with Sonu Gujjar, president, Maruti Suzuki Employees Union. Worried over the continued unrest at Maruti Suzuki’s Manesar plant these high flyers wanted to understand the grievances of the union members. Even though Maruti Suzuki did not recognize Gujjar’s union at that time, the strike was telling enough for the investors to acknowledge Gujjar as a spokesperson.

But one small step is not enough to tackle a problem of gigantic proportions. In 2008, a World Bank report observed, “India’s labour regulations have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labour regulation can attract more labour-intensive investment, and create jobs for India’s unemployed millions and those trapped in poor quality jobs... the window of opportunity must not be lost...”

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