Collective bargaing maruti suzuki manesar plant case study

maruti suzuki manesar plant crisis ppt collection bargaining and trade union

1. COLLECTIVE BARGAINING ASSIGNMENT NAME : CLASS : ROLL NO : TOPIC : Jayesh sharma Bcom (P) 778 (17016503060) Maruti Suzuki Manesar Plant Case Study

2. Maruti Suzuki India Limited (MSIL) has been established and incorporated since 1983. MSIL is a subsidy of the Suzuki Motor Corporation, Japan. Maruti Suzuki has been renowned for producing the most fuel efficient, affordable and reliable cars and therefore has been the leader of the Indian car market for over the past two and halve decades. Manufacturing facilities are located at two facilities Gurgaon and Manesar Maruti Suzuki India Limited

3. India's largest passenger car company, accounting for over 45% of the domestic car market First company in India to mass-produce and sell more than a million cars Annually exports more than 50,000 cars It offers 14 brands and over 150 variants ranging from peoples car Maruti Alto 800 to the stylish hatchback About Maruti Manesar Plant

4. On 18th July 2012 at Maruti’s labour plant, industrial disputes broke out when workers became aggressive and over 96 staff members were injured while also leading to the death of a human resource manager. More then two-thirds of the employees were involved in the strike, causing Maruti to lose about INR 75 crores ($11.81 million) in revenue and INR 8 crores ($1.3 million) in operating profit daily while also halting Maruti‟s production line causing it to lose around 1200-1400 units daily. What Happened In Manesar Plant

5. The company knew that trouble was brewing, they knew that some workers planned on registering a separate union and the company had already prepared legal documents for a possible expulsion of workers from the premises. Maruti Suzuki management tried to back a single union, the Maruti Suzuki Kamgar Union, for both Gurgaon and Manesar plant. This union had been set-up by forces close to management after the lock-out at Gurgaon plant in 2000/2001. Development of the Strike

6. “On 3rd of June, eleven leaders of the workers went to Chandigarh to meet the Labour Department to complete the formalities regarding registration of our union on June 3, 2011. On the morning of that day, the labour department officials faxed the news of our application to the management. On the morning of June 4, 2011, through struggle, we were able to retrieve some of the blank signed papers from the management. By the afternoon, it became clear that the management was using all kind of tricks to break our unity. In such circumstances, we were forced to go on flash tool down strike from the afternoon of June 4, 2011.” Development of the Strike

7. On the 4th of June after the change between morning and late shift around 2,000 workers stop work and remain in factory. Later on, the C-shift would not be refused entry by management and these workers largely remained outside the factory. During this initial stage, workers raised various issues and demands: low wages, incentive cuts, few breaks. The workers have demanded that the temporary workers should be given preference for permanent posts in new departments, which the company is currently building on the premises. Development of the Strike

8. Differences in salary pay Working Conditions Unions generally limit themselves to acting as a voice of permanent employees Demand for a new union Causes

9. Operations stopped for a month. Loss estimated to be over Rs. 1,500 crore Fear of insecurity to the employees and their families Problem of lack of labor resource Maruti changed its recruitment policy Goodwill affected. Impact on Company

10. Large labor- unemployed GDP affected Loss of country resources Disturbance- affecting the common man Impact on Economy

11. Lack of communication between HR people and labour Lack of coordination between labour union and HR department PROBLEMS

12. CAUSES

13. “If the floor supervisor is rude and even slaps us, he is awarded with a promotion but in case a labourer dares to reply, he is issued a notice on grounds of disciplinary action," said Rajender Kumar, a technician PROBLEM FROM WORKERS VIEW POINT

14. Revenge for June's strike. Cockroaches and dead flies found in the food in the hurried lunch-break that workers earn in the canteen ½ km from the working station. The tea was without tea leaves or sugar in the 7 minute break The company doctor give heavy doses of „instant‟ medicines even on minor complaint so that disruption of work could be prevented. One day‟s wage cut of Rs.1500, two days Rs.2200, three days cut of Rs.7-8000 is implemented, so that almost the total month‟s wage is cut. One second late into punching-card entry is a day‟s wage cut, but they have to give full production for that day too. PROBLEM FROM WORKERS VIEW POINT

15. Forced to fill an undertaking form, which means that in case of any problem, workers cannot raise any objections against management . PROBLEM FROM WORKERS VIEW POINT

16. Worker‟s demand to establish an independent union Maruti Suzuki Employees Union (MSEU)in the company. Currently , the company has one recognized union – Maruti Udyog Kamgar Union which is dominated by workers at the Gurgaon plant WORKERS DEMAND

17. “ Unhappy workers have found out a new way to disrupt ongoing work at the plant by creating serious defects in quality of the cars, so they would fail the compulsory vehicle inspection (VI) quality test.” MANAGEMENT VIEW OF PROBLEM

18. Workers indulging in deliberate attempts to reduce output and are compromising customer interests Revenge for the June strike. Refused to sign good conduct form which aims at ensuring the production of good quality products. Employees are being charged with sabotage and causing quality problems in the cars produced. MANAGEMENT VIEW OF PROBLEM

19. "In the last three days, a series of serious quality problems have been observed in the vehicles produced. For example, vehicle door was not properly clamped leading to doors falling during production, wiring harnesses were found cut in produced vehicle, dents were noticed on the body and critical components were not fitted on to vehicles. Such deliberate acts, if not detected during quality checks, would have led to serious implications and directly harmed customers," a senior company official said. MANAGEMENT VIEW OF PROBLEM

20.  Suspension of 10 workers  Dismissal of five  Discontinued the services of six trainees.  Also suspended four workers for "instigating indiscipline" a week before  Another four suspended in late July for manhandling supervisors.  Charges of sabotage and causing quality problems in the cars produced.  On 14th August; police force of 500 send to occupy the factory to „prevent violent activities‟ ACTION TAKEN AGAINST EMPLOYEES

21.  The company terminated 11 workers and suspended 38 on August 29th and 30th on false charges demanding a „good-conduct bond‟ with the state police and administration, the media, and „bouncers‟ on its payroll as its willing pawns.  The Maruti Suzuki Employees Union (MSEU) is demanding as an immediate measure, the withdrawal of the charge-sheet, termination, suspension of the 49 workers. The workers are sitting day-and-night at the factory gate, peeling off the layers of Maruti Suzuki‟s “way of life”. ACTION TAKEN AGAINST EMPLOYEES

22. Trade union would be established with prior conditions: - 1. Members of the trade union to be nominated with consent of both workers and management. 2. The leader of this union would be appointed by the management. If not agreed then management would move to plan B. 3. Technology oriented operations reducing demand of man power. Trade Union Establishment

23. • They have to Properly Co Ordinate with each other • Proper rules for indiscrimination in salary • They have to control the public pokers • They should try to understand the labour‟s problem. FOR MANAGERS

24. Labour Law A minimum time rate of wages A minimum piece rate Non-Discrimination of people at Workplace. Local Hiring Leave without wages Working hours, holidays and overtime Employee rights in Manesar

25. Labour Laws tweaked by Maruti Enforcement of the Labour Laws was not followed strictly . Differences in Salary Pay. Working Conditions. Lack of proper negotiations. Employee rights in Manesar

26. Necessary changes done after the event Hiring contract workers through company HR and not through a contractor. Reopened the plant with 300 workers Fresh recruitment of permanent workers Terminate the services of 500 permanent workers . ( Involved in Violence) Employee rights in Manesar

27. Employee Labour Relationship should had been maintained in decorum. Flexibility is the key, not the cheapness. Treat workers in the factory like humans. The workers should refrain from taking law into their own hands. This would be a wrong reading. Companies hire temporary (temps) and contract workers not only because they are cheaper, but because they can be laid off when they are not required. Flexibility is the key, not the cheapness. What could had been done in order to avoid the event