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Check out this case of unrest.
Labor Unrest at Toyota India
On January 8, 2006, Toyota Kirloskar Motor Private Limited (TKM) announced an indefinite lockout of its vehicle manufacturing plant at Bidadi located near Bangalore, Karnataka. The decision was taken following a strike, which had entered its third day, by the Toyota Kirloskar Motor Employees Union (Employee Union), the only company-recognized union. The lockout notice stated that the strike was illegal as the Employee Union did not give the mandatory 14-day notice period as per the Industrial Disputes Act, 1947.
It also stated that the workers were indulging in violence and destruction. TKM was a joint venture, established in 1997, between Toyota Motor Corporation (Toyota), Japan's largest car company, and the second-largest car manufacturer in the world, and the Kirloskar Group of India. Toyota holds an 89% equity stake while the Kirloskar Group holds the remaining 11%. Toyota has invested nearly US$336 million (INR 15 billion) in the plant with the capacity of producing 60,000 units per year.
Toyota manufactures its world-famous cars like Corolla, Camry, and Innova at the plant. The plant had a total workforce of 2,378, out of which around 1,550 employees belonged to the Employee Union.
On January 6, 2006, the Employee Union went on strike with the demand to reinstate three dismissed employees, ten suspended employees, and improve the work conditions at the plant. These employees had been dismissed and suspended by the company, on disciplinary grounds, for attacking a supervisor and misconduct. TKM declared that it would not rehire nor reinstate those employees culminating in the strike and lockout. TKM made several serious allegations against the Employee Union.
The company said that the striking workers were threatening to blow up LPG gas cylinders on the company premises, obstructing the outward movement of manufactured vehicles, illegally stopping production, and manhandling other workers, who were not part of the Employee Union, to strike.
In response, the Employee Union said that three employees were dismissed because they were actively participating in trade union activities and the company wanted to suppress the trade union. They further said that working conditions at the plant were inhuman and 'slave-like'. The issue took a new turn when representatives from the management at TKM refused to attend a meeting before the Labor Commissioner on January 9, 2006, for resolving the dispute with the union.
The company said that the atmosphere was not conducive for talks as the Employee Union was in a violent and agitated mood. Though the company appealed for two weeks' time to appear before the Labor Commissioner so that the situation could become stable, they were given time only till January 12, 2006. The Employee Union got support from various trade unions and demanded the intervention of the state government to help resolve the dispute in their favor.
TKM continued with partial production of vehicles with the help of non-unionized workers and the management staff, who were specially trained for these kinds of emergencies. However, the company's output had fallen from 92 vehicles per day to 30 vehicles with an estimated production loss of around INR 700 million.
The Company lifted the lockout on January 21, 2006, stating that it was responding to the request from workers who were eager to return to work. The workers were required to sign a good conduct undertaking to maintain discipline and ensure full production. The Employee Union relented and withdrew their strike following a Government Order on January 21, 2006, which was against the strike and referred the issue to the third Additional Labor Court. However, the union said that they would not sign the good conduct declaration specified by TKM.
The unrest had other ramifications as the Toyota spokesperson said that the company would rethink its recent decision to build a second car manufacturing plant in the state. It was also felt that this incident would seriously affect the Karnataka Government's efforts in trying to attract Volkswagen to establish a vehicle manufacturing plant in the state. This was the second dispute involving a Japanese vehicle manufacturer and trade unions in India.
Earlier in July 2005, workers of Honda Motor & Scooters India Limited had a violent clash with the police at Gurgaon, near New Delhi, resulting in a revenue loss of around INR 1.25 billion for the company. This recent rise in trade union activism resulting in violence and business loss has attracted the attention of the national and international media.
With around US$2 billion equity investment since 1991, Japan was the fourth largest investor in India. During the Honda incident, the Japanese ambassador in India had stated that these kinds of incidents would show India in a poor light.
Regards
Mamta
From India, Delhi
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1Check out this case of unrest.
Labor Unrest at Toyota India
On January 8, 2006, Toyota Kirloskar Motor Private Limited (TKM) announced an indefinite lockout of its vehicle manufacturing plant at Bidadi located near Bangalore, Karnataka. The decision was taken following a strike, which had entered its third day, by the Toyota Kirloskar Motor Employees Union (Employee Union), the only company-recognized union. The lockout notice stated that the strike was illegal as the Employee Union did not give the mandatory 14-day notice period as per the Industrial Disputes Act, 1947.
It also stated that the workers were indulging in violence and destruction. TKM was a joint venture, established in 1997, between Toyota Motor Corporation (Toyota), Japan's largest car company, and the second-largest car manufacturer in the world, and the Kirloskar Group of India. Toyota holds an 89% equity stake while the Kirloskar Group holds the remaining 11%. Toyota has invested nearly US$336 million (INR 15 billion) in the plant with the capacity of producing 60,000 units per year.
Toyota manufactures its world-famous cars like Corolla, Camry, and Innova at the plant. The plant had a total workforce of 2,378, out of which around 1,550 employees belonged to the Employee Union.
On January 6, 2006, the Employee Union went on strike with the demand to reinstate three dismissed employees, ten suspended employees, and improve the work conditions at the plant. These employees had been dismissed and suspended by the company, on disciplinary grounds, for attacking a supervisor and misconduct. TKM declared that it would not rehire nor reinstate those employees culminating in the strike and lockout. TKM made several serious allegations against the Employee Union.
The company said that the striking workers were threatening to blow up LPG gas cylinders on the company premises, obstructing the outward movement of manufactured vehicles, illegally stopping production, and manhandling other workers, who were not part of the Employee Union, to strike.
In response, the Employee Union said that three employees were dismissed because they were actively participating in trade union activities and the company wanted to suppress the trade union. They further said that working conditions at the plant were inhuman and 'slave-like'. The issue took a new turn when representatives from the management at TKM refused to attend a meeting before the Labor Commissioner on January 9, 2006, for resolving the dispute with the union.
The company said that the atmosphere was not conducive for talks as the Employee Union was in a violent and agitated mood. Though the company appealed for two weeks' time to appear before the Labor Commissioner so that the situation could become stable, they were given time only till January 12, 2006. The Employee Union got support from various trade unions and demanded the intervention of the state government to help resolve the dispute in their favor.
TKM continued with partial production of vehicles with the help of non-unionized workers and the management staff, who were specially trained for these kinds of emergencies. However, the company's output had fallen from 92 vehicles per day to 30 vehicles with an estimated production loss of around INR 700 million.
The Company lifted the lockout on January 21, 2006, stating that it was responding to the request from workers who were eager to return to work. The workers were required to sign a good conduct undertaking to maintain discipline and ensure full production. The Employee Union relented and withdrew their strike following a Government Order on January 21, 2006, which was against the strike and referred the issue to the third Additional Labor Court. However, the union said that they would not sign the good conduct declaration specified by TKM.
The unrest had other ramifications as the Toyota spokesperson said that the company would rethink its recent decision to build a second car manufacturing plant in the state. It was also felt that this incident would seriously affect the Karnataka Government's efforts in trying to attract Volkswagen to establish a vehicle manufacturing plant in the state. This was the second dispute involving a Japanese vehicle manufacturer and trade unions in India.
Earlier in July 2005, workers of Honda Motor & Scooters India Limited had a violent clash with the police at Gurgaon, near New Delhi, resulting in a revenue loss of around INR 1.25 billion for the company. This recent rise in trade union activism resulting in violence and business loss has attracted the attention of the national and international media.
With around US$2 billion equity investment since 1991, Japan was the fourth largest investor in India. During the Honda incident, the Japanese ambassador in India had stated that these kinds of incidents would show India in a poor light.
Regards
Mamta
From India, Delhi
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I think a lockout is a vital tool provided by the Industrial Disputes Act of 1947, as the workmen have been bestowed with the right to strike. However, what is pertinent to note is that the management has to be very tactical in utilizing this tool. Timing is the only factor that can make it work, no matter how correct you may be in your point, at the end of the day, the result is what matters.
Management of Toyota, are you listening?
Regards,
Ravi
From India, New Delhi
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Management of Toyota, are you listening?
Regards,
Ravi
From India, New Delhi
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Hi,
Whenever there is large-scale violence and an uncontrollable discipline problem, the management has no other option but to resort to the last weapon of declaring a lockout. This decision must be well-thought-out, with all pros and cons taken into consideration.
In the present case, the fact that the lockout was finally lifted after the workers agreed to most of the terms shows that the decision of the management paid off.
Cyril
From India, Nagpur
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Whenever there is large-scale violence and an uncontrollable discipline problem, the management has no other option but to resort to the last weapon of declaring a lockout. This decision must be well-thought-out, with all pros and cons taken into consideration.
In the present case, the fact that the lockout was finally lifted after the workers agreed to most of the terms shows that the decision of the management paid off.
Cyril
From India, Nagpur
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Hi Cyril,
I think you have not properly gone through the contents. This is not what management wanted, and I think that the workers had their say last. I am again emphasizing that the timing of the lockout is very vital. Make them vulnerable, and they will have to mellow down, from where you can take advantage and maintain discipline.
Regards,
Ravi
From India, New Delhi
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I think you have not properly gone through the contents. This is not what management wanted, and I think that the workers had their say last. I am again emphasizing that the timing of the lockout is very vital. Make them vulnerable, and they will have to mellow down, from where you can take advantage and maintain discipline.
Regards,
Ravi
From India, New Delhi
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Hi Ravi,
I am sorry, from Mamta's narration "that the union relented and agreed to withdraw the strike," I got a different impression. There cannot be two opinions that the decision has to be properly timed to get the maximum advantage for the organization.
Cyril
From India, Nagpur
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I am sorry, from Mamta's narration "that the union relented and agreed to withdraw the strike," I got a different impression. There cannot be two opinions that the decision has to be properly timed to get the maximum advantage for the organization.
Cyril
From India, Nagpur
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There cannot be any excuse for gross insubordination, attacking a supervisor, and challenging his authority in the plant. Discipline, promoting good order, is essential to the smooth, productive, and safe operation of any organization. Without discipline and the work rules which are its framework, there is chaos.
The employer-employee relationship is built around a simple fact: Employees are compensated for their service and are expected to respond to the direction and control of the employer; at the same time, the employer has the responsibility to provide a safe, healthy working environment and to recognize the dignity, as human beings, of its employees.
If, in fact, the employees "were often made to stretch their working hours without sufficient relaxation and compensation" and "that working conditions at the plant were inhuman and 'slave-like'", then there is a legitimate basis for fact-finding and resolution without workplace disruption. On the other hand, if there is no provision in the labor agreement for overtime compensation and rest periods, then that oversight lies at the feet of the Union.
Further, if treatment of employees is so "inhuman and slave-like," it seems to me that Toyota would have difficulty in attracting employees, which is not the case where workers were "... eager to return to work."
I am not familiar with the terms and conditions of the contract between the Company (Toyota) and the Union (Toyota Kirloskar Motor Employees Union), but if there is not a mechanism for resolving employee complaints, disputes, or issues, the only recourse is power - lockout or strike - the winner (if there is one in a labor dispute) is usually the one who has "suffered" the least. (Employees without income go into debt or forego some elements of their lifestyle; Companies lose revenue as costs soar since a limited number of cars are being produced by inefficient, poorly trained, substitute workers who present safety hazards to themselves and co-workers, and in some cases, depending on the length of the work stoppage/slowdown, market share to competitors.)
Where an employer resorts to "lockout" prior to or instead of the discussion of the facts, violence can be expected. After all, the employer is depriving the employee of his/her livelihood without reason or just cause. Who would not react violently when one's source of income has been denied?
The mechanism for such dispute resolution is a grievance procedure that allows the lowest level of management to discuss and resolve minor problems on the floor with the employee (with or without representation). In the event a major issue arises (such as the termination and suspensions described above), which is beyond the scope and authority of the lowest management person, the issue shall be reviewed at the management level possessing such authority, and the Union executive with similar authority. Both parties agree to respect the final decision. In the event, the parties do not agree on the decision, a disinterested third party (the courts, an arbitrator, etc.) can be recruited to listen to both sides and issue a decision to which both parties will be bound.
The dispute resolution procedure provides a means to resolve workplace issues while all employees (exceptions being those who have been suspended subject to termination for major offenses) are on the job, producing products and revenue for the employer.
The incident at Toyota was a public relations disaster for both parties, and may have unanticipated consequences for the economy in the future.
PALADIN
From United States,
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The employer-employee relationship is built around a simple fact: Employees are compensated for their service and are expected to respond to the direction and control of the employer; at the same time, the employer has the responsibility to provide a safe, healthy working environment and to recognize the dignity, as human beings, of its employees.
If, in fact, the employees "were often made to stretch their working hours without sufficient relaxation and compensation" and "that working conditions at the plant were inhuman and 'slave-like'", then there is a legitimate basis for fact-finding and resolution without workplace disruption. On the other hand, if there is no provision in the labor agreement for overtime compensation and rest periods, then that oversight lies at the feet of the Union.
Further, if treatment of employees is so "inhuman and slave-like," it seems to me that Toyota would have difficulty in attracting employees, which is not the case where workers were "... eager to return to work."
I am not familiar with the terms and conditions of the contract between the Company (Toyota) and the Union (Toyota Kirloskar Motor Employees Union), but if there is not a mechanism for resolving employee complaints, disputes, or issues, the only recourse is power - lockout or strike - the winner (if there is one in a labor dispute) is usually the one who has "suffered" the least. (Employees without income go into debt or forego some elements of their lifestyle; Companies lose revenue as costs soar since a limited number of cars are being produced by inefficient, poorly trained, substitute workers who present safety hazards to themselves and co-workers, and in some cases, depending on the length of the work stoppage/slowdown, market share to competitors.)
Where an employer resorts to "lockout" prior to or instead of the discussion of the facts, violence can be expected. After all, the employer is depriving the employee of his/her livelihood without reason or just cause. Who would not react violently when one's source of income has been denied?
The mechanism for such dispute resolution is a grievance procedure that allows the lowest level of management to discuss and resolve minor problems on the floor with the employee (with or without representation). In the event a major issue arises (such as the termination and suspensions described above), which is beyond the scope and authority of the lowest management person, the issue shall be reviewed at the management level possessing such authority, and the Union executive with similar authority. Both parties agree to respect the final decision. In the event, the parties do not agree on the decision, a disinterested third party (the courts, an arbitrator, etc.) can be recruited to listen to both sides and issue a decision to which both parties will be bound.
The dispute resolution procedure provides a means to resolve workplace issues while all employees (exceptions being those who have been suspended subject to termination for major offenses) are on the job, producing products and revenue for the employer.
The incident at Toyota was a public relations disaster for both parties, and may have unanticipated consequences for the economy in the future.
PALADIN
From United States,
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This topic is also covered in Wikipedia and About.com. You can find more information by using Google. Apart from that, you can also refer to additional information at: Labor discipline books
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From Vietnam, Hanoi
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From Vietnam, Hanoi
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