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
From India, Delhi
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181The 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
From India, Delhi
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Thank you for providing an analysis of the latest incident on labor-union relationships. This kind of analysis is beneficial for young and upcoming HR professionals. However, I have a different take on your analysis. While you have not written anything wrong per se, the analysis seems biased towards one party, i.e., management, with less equanimity in the analysis.
Bajaj Auto Strike Analysis: Being Tough Pays Sometimes
Yes, management can be tough, and this toughness often leads to growth. The word "sometimes" in your heading is crucial. Why could Bajaj Auto's management show "toughness"? Was it due to their sound management practices? This question has not been analyzed. Many times, management has a lot of skeletons in their own cupboard, preventing them from taking a tough stand lest these skeletons start tumbling out.
Secondly, the strike has been withdrawn. Is it a tactical retreat by the labor union? Has a lid been put on a simmering cauldron? In that case, there is a possibility of the lid blowing off with far greater force as pressure builds. However, this aspect has not been studied in your post.
Thirdly, the analysis did not provide an example of the opposite—how management has shown unwarranted "toughness" and it has backfired.
On 22-07-2012, you posted in this forum titled "Maruti Violence: Issues Need To Be Addressed." The analysis was impartial, not tilted towards either management or the labor union. However, this balanced view is not seen in the above post.
By the way, pilots and other staff of Kingfisher Airlines have not been paid salaries for more than a year. Why have no erudite management professionals or labor matter experts come to their rescue? Why are the labor laws silent? Why is the law or labor ministry silent? None of the professional bodies of HR, like NHRD or NIPM, has come forward and filed Public Interest Litigation (PIL) on their behalf. Why do experts speak or act quickly and favorably on behalf of the mighty and not on behalf of the weaker side?
Sir, you have not felt the need to write a small post for the harried staff of Kingfisher. I hope you find the time to do so, albeit belatedly.
Regards,
Dinesh V. Divekar
From India, Bangalore
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Bajaj Auto Strike Analysis: Being Tough Pays Sometimes
Yes, management can be tough, and this toughness often leads to growth. The word "sometimes" in your heading is crucial. Why could Bajaj Auto's management show "toughness"? Was it due to their sound management practices? This question has not been analyzed. Many times, management has a lot of skeletons in their own cupboard, preventing them from taking a tough stand lest these skeletons start tumbling out.
Secondly, the strike has been withdrawn. Is it a tactical retreat by the labor union? Has a lid been put on a simmering cauldron? In that case, there is a possibility of the lid blowing off with far greater force as pressure builds. However, this aspect has not been studied in your post.
Thirdly, the analysis did not provide an example of the opposite—how management has shown unwarranted "toughness" and it has backfired.
On 22-07-2012, you posted in this forum titled "Maruti Violence: Issues Need To Be Addressed." The analysis was impartial, not tilted towards either management or the labor union. However, this balanced view is not seen in the above post.
By the way, pilots and other staff of Kingfisher Airlines have not been paid salaries for more than a year. Why have no erudite management professionals or labor matter experts come to their rescue? Why are the labor laws silent? Why is the law or labor ministry silent? None of the professional bodies of HR, like NHRD or NIPM, has come forward and filed Public Interest Litigation (PIL) on their behalf. Why do experts speak or act quickly and favorably on behalf of the mighty and not on behalf of the weaker side?
Sir, you have not felt the need to write a small post for the harried staff of Kingfisher. I hope you find the time to do so, albeit belatedly.
Regards,
Dinesh V. Divekar
From India, Bangalore
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The Title "Being Tough Pays Sometimes"
The title "Being Tough Pays Sometimes" may not sound appropriate, as it sends the wrong signals for all the wrong reasons. It would mean that an oppressive, exploitative, and unfair management can win if it plays tough. This kind of celebratory attitude will only breed discontent and disharmony.
Rather than focusing on the management's response, it would be worthwhile to examine whether the demands made were justified and fair. It was not a struggle for regularization of services, parity of pay, or any issue that has been pressing for years or kept on the back burners. There cannot be anything better than a three-year wage revision, especially in a scenario where it is even ten years. Moreover, forcing it ahead of schedule when it would have started in a few months is unfair. Also, the demands put up do not seem justified prima facie.
Rather than "acting tough," which sounds like the media trying to whip up sensationalism, it is more apt to consider it as standing up against unjustified demands. Since this is a "lose-lose" scenario, management too cannot be credited with a win.
The query put forth by Dinesh Divekar is much more pertinent and has far-reaching consequences and thus merits more concern and attention.
"By the way, pilots and other staff of Kingfisher Airlines have not been paid a salary for more than a year. Our erudite management professionals or labor matter experts, why have none of them come to their rescue? Why are the labor laws silent? Why is the law or labor ministry silent? None of the professional bodies of HR like NHRD or NIPM has come forward and filed Public Interest Litigation (PIL) on their behalf! Why do experts speak or squeak quickly and favorably on behalf of the mighty and not on behalf of the weaker side?"
Attribution: https://www.citehr.com/469377-bajaj-...#ixzz2d3SR5Yg0
Strangely, there has been total silence on this issue.
Warm regards.
From India, Delhi
Acknowledge(4)Amend(0)
The title "Being Tough Pays Sometimes" may not sound appropriate, as it sends the wrong signals for all the wrong reasons. It would mean that an oppressive, exploitative, and unfair management can win if it plays tough. This kind of celebratory attitude will only breed discontent and disharmony.
Rather than focusing on the management's response, it would be worthwhile to examine whether the demands made were justified and fair. It was not a struggle for regularization of services, parity of pay, or any issue that has been pressing for years or kept on the back burners. There cannot be anything better than a three-year wage revision, especially in a scenario where it is even ten years. Moreover, forcing it ahead of schedule when it would have started in a few months is unfair. Also, the demands put up do not seem justified prima facie.
Rather than "acting tough," which sounds like the media trying to whip up sensationalism, it is more apt to consider it as standing up against unjustified demands. Since this is a "lose-lose" scenario, management too cannot be credited with a win.
The query put forth by Dinesh Divekar is much more pertinent and has far-reaching consequences and thus merits more concern and attention.
"By the way, pilots and other staff of Kingfisher Airlines have not been paid a salary for more than a year. Our erudite management professionals or labor matter experts, why have none of them come to their rescue? Why are the labor laws silent? Why is the law or labor ministry silent? None of the professional bodies of HR like NHRD or NIPM has come forward and filed Public Interest Litigation (PIL) on their behalf! Why do experts speak or squeak quickly and favorably on behalf of the mighty and not on behalf of the weaker side?"
Attribution: https://www.citehr.com/469377-bajaj-...#ixzz2d3SR5Yg0
Strangely, there has been total silence on this issue.
Warm regards.
From India, Delhi
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If Mr. Kaushik's intention was to grab attention with a sensational, attention-grabbing headline, then he has achieved it! Otherwise, I do not see any toughness here. The Union was irrational, unjust, unreasonable, and went over the top. Whereas, the Management was right, good in law, and firm with clarity from the beginning. Of course, remember that the Management's strategic stand was easy due to the Union's overconfidence and unjustness aimed at probably earning some quick brownie points from its members.
Lessons Learned from the Outcome
The outcome is as expected. The lessons to be learned here are:
1. Trade Union militancy days are over.
2. Employers and employees need to partner with each other rather than just trying to profit off each other.
3. When on the right side of the law, ethics, and business practices, the management can afford to be firm and withstand pressure tactics and strikes.
4. An organization needs to have sustaining power financially and recourse to alternate production facilities to withstand long periods like 50 days in this case.
5. MSMEs face a huge disadvantage here, which should be understood, appreciated, and addressed effectively and appropriately.
Regards,
From India, Mumbai
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Lessons Learned from the Outcome
The outcome is as expected. The lessons to be learned here are:
1. Trade Union militancy days are over.
2. Employers and employees need to partner with each other rather than just trying to profit off each other.
3. When on the right side of the law, ethics, and business practices, the management can afford to be firm and withstand pressure tactics and strikes.
4. An organization needs to have sustaining power financially and recourse to alternate production facilities to withstand long periods like 50 days in this case.
5. MSMEs face a huge disadvantage here, which should be understood, appreciated, and addressed effectively and appropriately.
Regards,
From India, Mumbai
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