Maruti suzuki manesar Case

PRESENTED BY-
Alan Shany, Ashwini Biridar,
Helen Jose, Rohini George,
Sameera Vasireddy, Sharon Thomas.

 Founded in 1983, Maruti Udyog Limited had few problems in
its labour relationships. The locally hired workforce accepted
the Japanese work culture and the modern manufacturing
processes.
 In 2000, a major IR issue began and employees of Maruti
Udyog went on an indefinite strike, demanding major revisions
of their wages, incentives and pensions. Employees resorted to
‘slowdown’.
 The cold war between the union and the management
continued through 2001. The management did not pay heed to
the union demands because of increased competition in the
automotive sector and lower profit margins.
 The central government prevailed and privatized Maruti
Udyog in 2003. Suzuki of Japan became the majority owner of
Maruti Udyog Limited with 51% share with the public holding
12.5%.

 On 18 July 2012, Maruti’s Manesar plant was hit by violence as
workers at one of its auto factories attacked supervisors, engineers
and other management personnel and burnt and killed a senior
HR executive, injured 100 managers, including two Japanese
expatriates. The mob also injured nine policemen.
 The 14-day-long strike at Maruti Suzuki India's Manesar plant has
been called off, following a tripartite agreement between the
management, workers and the Haryana Government.
 As part of the agreement, the management agreed to take back 64
permanent workers, another 30 will remain suspended. It has also
been agreed that around1,200 casual workers would also be
reinstated.
 Setting up of two committees for grievance rederssal and labour
welfare was also agreed in order to provide a harmonious
working environment at the plan

 IN DECEMBER 2010- The Manesar workers began discussing how
to field their own candidates for a new union instead of being
folded into the Maruti Udyog Kamgar Union (MUKU), the only
recognized company union. MUKU is viewed as a management-
controlled union mainly for the Gurgaon plant workers, whose
spirits were crushed during their own agitations in 2000.
 ON 3 JUNE- The Manesar workers formally applied to form a
separate union called Maruti Suzuki Employees Union (MSEU).
They say the company responded by suspending 11 workers and
sending bouncers to force them to sign blank pieces of paper.
 ON 4 JUNE- The workers struck work on 4 June and held a sit-in
inside the plant for 13 days till their 11colleagues were reinstated,
though the main issue of unionization remained unresolved. They
allege the management next resorted to things like putting
cockroaches and dead flies in their canteen food fact or angry
rhetoric, there‘s little way of verifying.

 Wage disparities between the regular and contracted workers.
Uncertainty in the minds of the contracted workers regarding
their future as employees of Maruti Suzuki.
 From April 2012, the Manesar plant workers’ union demanded a
fivefold increase in salary, a monthly conveyance allowance of
10,000.
 Lack of trust between the HR staff and the workers.
 Lack of connectivity and active communication between the
management and workers.
 According to the Maruti Suzuki Workers Union, a supervisor had
abused and made deriding comments on a low-caste worker.
 Lack of intelligence and information.
 Workers, both permanent and contracted feel that they were not
being given their due share of the huge profits Maruti Udyog was
making with the highest market share in the car industry.

 On 18 July 2011, it is alleged that a supervisor addressed a
worker with a caste slur. Maruti Suzuki’s failure to address
this promptly, through an impartial internal inquiry, is a
violation of other Conventions of the ILO, particularly those
relating to workplace discrimination. This has a bearing not
only on the rights of individual workers, but on the
possibility of enduring industrial peace.
 The management summarily and without following due
process of law dismissed 546 permanent workers, and
terminated the services of over 1800 contract workers. The
termination of these workers, who were known to be
leaders, members or sympathizers of the Maruti Suzuki
Workers’ Union, constitutes impermissible retaliation
against those exercising their right to form and join a union
of their choice.

 The Labour department failed to serve as an appropriate
administrative and adjudicative body of labour matters, especially
those connected to industrial relations. In particular, on multiple
occasions, it did not act on available information that a significant
industrial dispute was underway, and to ensure effective conciliation
proceedingS.
 The police deployed a large detachment at the factory gate and inside
the plant based on complaints and calls from the management of
Maruti Suzuki without adequate cause of action or enquiry or
investigation, thereby serving as coercive pressure on peaceful
worker protest.
 The police failed to act to protect citizens, including their right to life,
and remained a silent observer to the events of 18 July.
 Workers were arbitrarily arrested after the 18 July incident based on
one FIR lodged by the Security Manager of the Company
 The workers were arrested and kept in police custody for several days
and subjected to severe torture. Independent medical examination
sought by the workers’ counsel and directed by court order was
delayed by a month and even then it revealed deep injuries.

 Based on these key findings the ICLR notes that
1) the management of Maruti Suzuki has engaged in significant
violations of law with respect to the right to freedom of
association, the right to collective bargaining and the right to
equal pay for equal work,
2) the Labour Department has been ineffective in ensuring the
rule of law of the State
3) the Police has transgressed its powers amounting to
interference in industrial disputes and yet failed to act when it
should have.

 Japanese work environment is based on a “simultaneous recruiting of new
graduates” and “lifetime-employment” model used by large companies as
well as a reputation of long work-hours and strong devotion to one’s
company.
 Over the last one year of operations at Manesar demonstrate that essentially
the Japanese trick to success is not so different from the rest: the principle
followed is to get more work out of a worker, while at the same time paying
less.
 Workers being forced to steal rest breaks, docking of pay for minor violations
from the law, almost no paid leaves, an army of poorly-paid temps.
 Overtime is a compulsion whenever the company needs it and the privilege of
paid leave is a fantasy.
 Out of a workforce of 2,500, 40% are on contracts, casual or apprentice, but
were doing similar work as permanents and paid very less.
 Once Suzuki gained majority stake, the decision making portfolios has been
gradually taken over by the native Japanese executives
 Even if the Manesar workers were adjusting to the Japanese work culture they
were proud to be in this culture with the new methods of working hard and
new lifestyle.

 Demand of the product was getting reduced.
 Expected fall in demand during crucial festive season,
when car sales touched the peak.
 The Manesar plant is the hub for the key Swift model, which
runs a huge backlog in the retail market. Delay in
production affected the delivery of cars resulting in
disappointment among customers.
 Amount of output was getting reduced
 Estimated loss of more than 90 million dollar.
 Market value of the company is affected. Shares fell as much
as 2 percent on the Bombay Stock Exchange.
 The company stopped operations for 10 working days in
June
 The firm lost Rs 400 crore because of the strike.

 The industrial dispute defined as any dispute or difference
between employers and employers, or between employers
and workmen, or between workmen.
 CAUSES OF DISPUTE
 Differences in salary pay
 Working Conditions
 Unions generally limit themselves to acting as a voice of
permanent employees
 Demand for a new union.
 This dispute made lot of impact in the company such as
Operations stopped for a month, Loss estimated to be over Rs.
1,500 crore, Daily loss of 75 crore, Fear of insecurity to the
employees and their families, Problem of lack of labor resource
etc.
 This huge dispute in Maruti created impact on Indian economy
also like large amount of unemployment, affected the GDP, loss of
country resources.

 The main problem in the company was lack of
communication between HR people and labor.
 Lack of coordination between labor union and HR
department.
 No understanding about the labor problems.
 And enforcement of labor laws was very poor.
 Bad working condition, and lack of proper negotiation.
 After this huge dispute the company decided to add or
change some norms such as - Hiring contract workers
through company HR and not through a contractor ,
Reopened the plant with 300 workers , Fresh recruitment of
permanent workers.
We are concluding this presentation by adding our thought that
; Employee Labor Relationship have to maintain properly and
need to treat workers as Human Beings.

 https://kafila.org/2013/06/03/workers-in-maruti-suzuki-
manesar-plant-justice-delayed-is-justice-denied-iclr/
 http://articles.economictimes.indiatimes.com/2012-07-
22/news/32777541_1_maruti-suzuki-s-manesar-maruti-s-
manesar-shinzo-nakanishi
 http://www.tehelka.com/2013/06/first-on-tehelka-what-
really-happened-at-maruti/
 http://www.theweekendleader.com/Causes/1270/maruti-
mire.html
 http://sdmimd.ac.in/SDMRCMS/cases/CIM2012/9.pdf
 http://www.livemint.com/Companies/lRKRrq32VAFYpL1m
GieWYK/What-triggered-the-violence-at-Maruti8217s-
Manesar-factor.html

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