So much has been written on Maruti strike. This blog is not
an exception too. I was avoiding writing one more post on Maruti - I have
already written two – but the strike has highlighted too many nagging issues in
Industrial Relations, and it is difficult not to write yet again.
In this series of posts [this is the first one, more to
follow] is my list of issues and thoughts:
employment [and accompanied exploitation] of contract labour is a symptom as
well as a disease.
You may ask me ‘If it is a symptom then, what the real
disease is.’ The real disease is that the firms are not allowed to resize their
operations depending on business exigencies. The Indian Government made changes
to the Industrial Disputes Act in the seventies when populist measures were
order of the day.
The amendment is preventing employers from downsizing their
establishments without permission of the Government which was [then], as a rule,
never given, and actually expressly denied. The natural reaction is to engage few
workers in permanent cadre and a large number of contract labourers so that
they can be removed without much problem. This is not to say that the
engagement or exploitation of contract labour was not prevalent earlier. But it
would be correct to say that even good employers started acting with great
caution [read paranoia], because there was completely irrational, nay idiotic,
implementation of the policy of the Government to control retrenchments and
Justice Mr. Rama Jois’s judgement in the case of Stump, Schuele
and Somappa [this was later over-ruled] makes good reading in which he has
discussed the arbitrary rejection of application for closure.
[To quote: “To make the point more clear, I shall refer to
paragraph 25 of the judgment in the case of Excel Wear case (supra). Wherein
the Supreme Court posed the following questions:
(i) Is it possible to
compel the employer to manage the undertaking even they do not find it safe and
practicable to manage the affairs ?
(ii) Can they be asked to go on facing tremendous
difficulties of management even at the risk of their person and property ?
(iii) Can they be compelled to go on incurring losses year
after year ?
The answer is implicit in the questions, an obvious NO. The
further discussion in the paragraph would show that if one of the above grounds
constituted the real basis for an application seeking permission for closure,
not according of permission would be unreasonable and the fact that closure
results in unemployment of workmen would also be not a valid ground to deny the
The fact is that industrial establishments must be allowed
to adjust their size according to business exigencies; the need is now more
when the vicissitudes of economies and business environment is the order of the
day post-globalisation and liberalisation unlike in the past.
If you employ 99 persons the restrictions do not apply to
you [the Chapter V-B of the Industrial Disputes Act applies if one hundred
workmen are employed] but if you employ one more, then it does! This is
completely irrational. Pakistan has found a better answer to this issue and
perhaps we may do well to copy them in this matter. In Pakistan, the permission of the Labour Court is required
only if the employer is terminating the employment of more than 50% of the workmen.
Now the debate can be about the number, but undoubtedly it makes a better
I said that contract labour was a symptom as well as a
disease. What’s this disease? It is one of exploitation. With so much
unemployment – remember that Maruti was able to recruit workers during
the recent strike too – unscrupulous employers have been taking advantage and
employing contract labour in the jobs where normally permanent employees should
be employed. They save money and escape the legal restriction of applying for
You find this so rampant in the industry that unfortunately
some HR Managers have stopped thinking of it as a wrong practice. And now we
also have another category called ‘temps.’ There are firms that are thriving on
this malpractice! They employ literally a million in this way. That is what a
firm recently announced.
Added to this is the phobia MNCs have about Indian labour
laws [not unjustifiably]. I know of one international hotel chain that has
prescribed to its Indian avatar that they will not employ more than 900
permanent staff. But the hotel is doing exceedingly well. Net result – about 600
‘permanent’ contract employees, this excludes estimated 300 more ‘temporary’
contract employees. If you visit a service industry, you will add to your
vocabulary – there are permanent contract employees, temporary contract
employees, there are temps and so on.
One inspection visit to Gujarat’s [in]famous industries in
Surat and Silvassa will tell you that almost every industry is employing
contract labour in the ratio of 1:10. There are reports of engaging child
How does one resolve this extremely complicated situation?
The answer, to my mind, lies in making laws which recognise the realities of
business and allow them to adjust size. That cannot be escaped. Adopting the Pakistan
model is also not a bad idea. And implementing those laws well.
Unfortunately we have reached a situation in which laws seem
to be made for the right thinking, conscientious members of the society and enforcement
of law is nobody’s responsibility.
Maruti Suzuki strike has brought forth many ills of
Industrial Relations in India. More about it in the posts that follow......
But in the meantime, Maruti Suzuki workers are on strike
again! It is a different kind of ‘Chakka Jaam.’