Reflections: Strikes and Lockouts in 2014 ER Part 1

Reflecting on past events is essential. It tells us trends. And very different points of view. It also points to issues before us. And hopefully it helps us learn and find a better way ahead. “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action” said Peter Drucker.
So let us review the ER in 2014. This is the first part in the series of blog-posts. I have divided this note according to subject, and it is not in date-order.
I have not drawn conclusions. Often it is unnecessary to draw conclusions – particularly when they are obvious. And when facts are put forth to well informed readers like you!  
[This review is being published in parts. The second part will be published in two days.] We begin with the story of Toyota Kirloskar.
Trouble at Toyota Kirloskar
This is what I wrote in my blog on this case: “The issue involved in the present strike or lockout is said to be a wage dispute. Toyota has offered Rs 3050 while the workers want Rs 4000 increase. If this is the real issue, then it sounds funny that the parties are breaking negotiations for a mere Rs 950 gap which is seen as not a very wide gap. Obviously there is something more than meets the eye. 
What was that? 
Remember that when you create a boundary, you also create a battle line! Toyota says “Managing Toyota Way and establishing a Toyota culture is not negotiable. That’s where the boundary is! The issue is also how skilfully managers can do it. Toyota Kirloskar has always had a bad record of industrial strife. Almost since inception, there have been repeated strikes and lock-outs.
The EPW article provides a plausible explanation. It says [quote]
Another important aspect of TPS is the element of labour control that is inherent in its production system. The control is so intense that it takes every single movement of workers into account and categorises these movements as those which “produces added value, produces no added value but necessary and produces no added value and unnecessary”. There are supervisors in every work group to monitor and regulate the movements of workers. These “value-added/subtracted movements” of workers also constitute an indicator in their performance appraisal by their supervisor. The lower performance points could lead to punitive actions like reduction of a salary and even to termination of jobs on the grounds of “non-performance”. Completion of a particular piece of work under the TPS is determined by production demand without taking into consideration the availability of workers, so as to minimise the cost of production. Studies conducted in Toyota units in India and other parts of the world also showed that TPS is the major cause of health concerns for workers (George 2006). The workers at TKML interpret the unique system of Toyota production to be “less hands, more work and less pay”.”[unquote]
Workers who were locked out in March went back to work in the third week of April when Government ordered them so. What was the achievement? This is what the news report says:
While the union has yet to drop its demands for higher wages and better benefits, it has agreed to end its strike and take its demands to the industrial disputes tribunal of Karnataka. "The wage and benefits and holidays are the key issues referred to the court for adjudication," Shekar Viswanathan, vice chairman of Toyota Kirloskar, said.”
Bajaj Auto and Maruti Suzuki take positive steps towards reconciliation
I have blogged several times about the Industrial Relations situation in Bajaj Auto. The IR situation there is marked by some ‘interesting’ clauses in settlement. This is what I wrote:
The BA management and VKKS had entered into a long term agreement. The VKKS and BA signed the settlement on 21st May 2010 covering the wages and service conditions of workmen at Chakan Plant. It stipulated an increase of 12%, 8% and 8% was agreed for the first, second and third year respectively.
But the settlement also provided that if the annual increment awarded to the similar category of employees across the Bajaj Auto Ltd. at any plant is higher than the above mentioned increments in that case higher % of increment will be made applicable to workmen covered under said settlement. Here was a management which had granted a hefty increase to Pantnagar workers, so they were now victims of their own game. Obviously BA refused to do increase in wages automatically. VKKS alleged violation of the relevant clause no. 17–C of the settlement. So VKKS has filed an unfair practice complaint before the Industrial Court, Pune.
There were some hidden issues. Workers hated the way they were treated and there was quite an animosity, while the management obviously feared loss of control if the union organised the Pantnagar workers. Finally both the sides saw reason, came to agreement. A hefty increase of Rs 10,000 was granted.
All is well that ends well! But the Union has made some very positive moves and you can read about it on my blog published earlier.
Maruti Suzuki had a tough job on hand. Repairing relations within the plants and repairing the public image which had taken severe beating. PUDR had published a report ‘Driving Force’ in May 2013 focusing on labour unrest at Maruti Suzuki. The newspapers carried the stories that did not put the auto giant in good light.
That was followed by International Commission for Labor Rights publishing its report titled ‘Merchants of Menace.’ [Both reports are available as free downloads on internet]. It hit out at Maruti Suzuki badly, some say it was well deserved.
About 200 workers are still in jail, and they are forgotten men in the game played by Press, Maruti Suzuki, partisan State Government and political leaders. So a PR exercise was essential.
“The old system, it has come to realise the hard way, was an unreliable and unjust way of hiring and retaining workers. "A contract worker cannot possibly have any commitment," explains RC Bhargava, chairman of MSIL. "He doesn't see a future for himself in the company. Instead of motivation and accountability, we have suspicion and witch-hunting. It impacts capacity utilisation and performance adversely."”
…. As the contract system is being phased out, MSIL is aiming at a mix of 70% permanent and 30% of company temps. Today, the mix is around 50:50. "Given our experience of the last two decades of business cycles—the peaks and troughs —this would be an ideal mix of workers," says Siddiqui. [News Report ET Apr 1, 2014]
We wish them well! They have a long ground to cover.
Before we stop here in this first part, here is a food for thought: This is what Frank Dane says about Unions – ‘A system devised to protect the inept from the unconscionable.’

And we will reach out to you in the second part to continue this review. What’s your response to this blog-post? Do write, your comments will further learning of ER professionals.

Wishing you a very Happy New Year,
Vivek S Patwardhan
"What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others."

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