Bajaj Auto Workers' Strike Resolution
The fifty-day-long workers' strike at the Chakan plant (Pune) of Bajaj Auto ended on 13 August 2013, with the workers' union unconditionally calling it off and deciding to return to work on 14 August 2013. Around 80% of workers reported for work the next day. The workers' union had called for the strike on 25 June 2013.
It can be termed as a case where, to resolve the industrial relations stalemate created by the workers' union on certain unrealistic issues far from economic reality, a tough stand is bound to bring results due to conviction to the cause.
In management-labour stand-offs, resolving the issues may be easy, but selling the solution to workers is largely difficult. This happened in the Bajaj Auto case, where union leaders pushed themselves to a wall from which there was no exit but to surrender by withdrawing the 50-day-long strike unconditionally.
Strike has never brought a win-win situation in labour management relations. This should be properly understood by workers and their union leaders. Union leaders in this case made mistakes one after another, and the consequences are catastrophic for workers because they did not gain anything and lost 50 days' wages. Twenty-two workers are subjected to disciplinary proceedings. It is not just a loss of salary but also a loss of self-respect and pride for workers. Union leaders have made the workers a laughing stock. On the other hand, management also lost the sale of around 20,000 units in June alone.
This is the first strike at the Chakan plant of Bajaj Auto in its 16 years of operations.
Agreement and Demands
Management and the workers' union executed an agreement in March 2010 for nine years, lasting until 2019, with a clause providing for wage revision every three years. This wage revision was due in March 2013. However, the union arbitrarily terminated the agreement and raised demands on the management. According to the labour department, workers demanded an annual hike of Rs. 10,000/- with an additional correction of Rs. 5,000/-, apart from the benefits of variable dearness allowance. The union then submitted a separate list of 37 demands, which also sought clarity on the company's promotion policy, eligibility for a housing loan of Rs. 5 lakh, an education loan of Rs. 2 lakh, and a marriage loan of Rs. 50,000/-. The union also separately demanded a work study at the site to measure how much production is possible in 480 minutes.
Over and above, the union made an audacious demand of allotting 500 shares of the company to each worker at Rs. 1/- only. The point here is to analyze what inspired the workers' union to raise such an absurd demand. Probably due to the leading perception among workers that automation and improvement in productivity have resulted in significant growth in the company's profitability, and the benefits are not being shared equitably by the management, the union, without giving it serious thought, raised the demand and gave workers false hope.
Management's Response
Management moved to the Industrial Labour Court against the workers' union by filing an unfair labour practice complaint and declaring the strike illegal. The union had no moral courage to face the court and avoided taking the notice. In the meantime, management shifted production to the Aurangabad and Waluj plants and also kept the Chakan plant running through trainees to some extent. From the very beginning, management's strategy was to be tough on the issue of discipline and share demand and make workers' hiring. Further, Bajaj Auto M.D.'s statement that the company will not agree to the demand to allot shares to employees even if the strike goes on for 500 days, as even the top management has not been allotted shares, built further pressure on workers and union leaders.
Actually, employees' stock options have never been offered to blue-collar employees in the Indian manufacturing industry. This practice has only been with a few IT organizations. Tata Motors and Mahindra & Mahindra allotted shares only to top management in the R&D division and not to workers. In manufacturing culture, the loyalty of the employees cannot be bought by giving shares to them. Moreover, the ESOP has never been a part of union negotiations in the Indian industry. It can be said that Mr. Bajaj has done a good job by rejecting this demand firmly from day one. His stand has insulated the entire manufacturing sector of the country from such absurd demands of unions. In the future, workers' unions will think twice before raising such demands.
Side by side, management also suspended 22 workers who were found involved in various issues of indiscipline and go-slow.
Conclusion and Lessons Learned
At the end, the workers' union could not even get a face-saving medium. Suspended workers have not been taken back, and management only assured that suspension cases would be considered "objectively and sympathetically." The cause, as well as the timing of the strike, was wrong. They had to call off the strike without any of their demands, including substituting a new wage agreement, being met.
The lesson from the Bajaj Auto case is clear: management should never compromise with their basic business values and principles. In labour management conflicts, opting for short-term peace will surely breed long-term problems that develop into more complex relationships. Lastly, workers' unions should demonstrate enough maturity while raising demands. Being tough in industrial relations is not always bad.
Regards,
Anil Kaushik
www.businessmanager.in
The fifty-day-long workers' strike at the Chakan plant (Pune) of Bajaj Auto ended on 13 August 2013, with the workers' union unconditionally calling it off and deciding to return to work on 14 August 2013. Around 80% of workers reported for work the next day. The workers' union had called for the strike on 25 June 2013.
It can be termed as a case where, to resolve the industrial relations stalemate created by the workers' union on certain unrealistic issues far from economic reality, a tough stand is bound to bring results due to conviction to the cause.
In management-labour stand-offs, resolving the issues may be easy, but selling the solution to workers is largely difficult. This happened in the Bajaj Auto case, where union leaders pushed themselves to a wall from which there was no exit but to surrender by withdrawing the 50-day-long strike unconditionally.
Strike has never brought a win-win situation in labour management relations. This should be properly understood by workers and their union leaders. Union leaders in this case made mistakes one after another, and the consequences are catastrophic for workers because they did not gain anything and lost 50 days' wages. Twenty-two workers are subjected to disciplinary proceedings. It is not just a loss of salary but also a loss of self-respect and pride for workers. Union leaders have made the workers a laughing stock. On the other hand, management also lost the sale of around 20,000 units in June alone.
This is the first strike at the Chakan plant of Bajaj Auto in its 16 years of operations.
Agreement and Demands
Management and the workers' union executed an agreement in March 2010 for nine years, lasting until 2019, with a clause providing for wage revision every three years. This wage revision was due in March 2013. However, the union arbitrarily terminated the agreement and raised demands on the management. According to the labour department, workers demanded an annual hike of Rs. 10,000/- with an additional correction of Rs. 5,000/-, apart from the benefits of variable dearness allowance. The union then submitted a separate list of 37 demands, which also sought clarity on the company's promotion policy, eligibility for a housing loan of Rs. 5 lakh, an education loan of Rs. 2 lakh, and a marriage loan of Rs. 50,000/-. The union also separately demanded a work study at the site to measure how much production is possible in 480 minutes.
Over and above, the union made an audacious demand of allotting 500 shares of the company to each worker at Rs. 1/- only. The point here is to analyze what inspired the workers' union to raise such an absurd demand. Probably due to the leading perception among workers that automation and improvement in productivity have resulted in significant growth in the company's profitability, and the benefits are not being shared equitably by the management, the union, without giving it serious thought, raised the demand and gave workers false hope.
Management's Response
Management moved to the Industrial Labour Court against the workers' union by filing an unfair labour practice complaint and declaring the strike illegal. The union had no moral courage to face the court and avoided taking the notice. In the meantime, management shifted production to the Aurangabad and Waluj plants and also kept the Chakan plant running through trainees to some extent. From the very beginning, management's strategy was to be tough on the issue of discipline and share demand and make workers' hiring. Further, Bajaj Auto M.D.'s statement that the company will not agree to the demand to allot shares to employees even if the strike goes on for 500 days, as even the top management has not been allotted shares, built further pressure on workers and union leaders.
Actually, employees' stock options have never been offered to blue-collar employees in the Indian manufacturing industry. This practice has only been with a few IT organizations. Tata Motors and Mahindra & Mahindra allotted shares only to top management in the R&D division and not to workers. In manufacturing culture, the loyalty of the employees cannot be bought by giving shares to them. Moreover, the ESOP has never been a part of union negotiations in the Indian industry. It can be said that Mr. Bajaj has done a good job by rejecting this demand firmly from day one. His stand has insulated the entire manufacturing sector of the country from such absurd demands of unions. In the future, workers' unions will think twice before raising such demands.
Side by side, management also suspended 22 workers who were found involved in various issues of indiscipline and go-slow.
Conclusion and Lessons Learned
At the end, the workers' union could not even get a face-saving medium. Suspended workers have not been taken back, and management only assured that suspension cases would be considered "objectively and sympathetically." The cause, as well as the timing of the strike, was wrong. They had to call off the strike without any of their demands, including substituting a new wage agreement, being met.
The lesson from the Bajaj Auto case is clear: management should never compromise with their basic business values and principles. In labour management conflicts, opting for short-term peace will surely breed long-term problems that develop into more complex relationships. Lastly, workers' unions should demonstrate enough maturity while raising demands. Being tough in industrial relations is not always bad.
Regards,
Anil Kaushik
www.businessmanager.in