India’s largest footwear manufacturer, Bata India Ltd, has fired 11 shop managers and suspended 140 shop employees in West Bengal, after they refused to keep the outlets open for longer hours on all days of the week, as the company battles to improve competitiveness in a crowded branded-footwear segment.
According to a company spokesperson, the company’s management has been negotiating for the last six months with shop managers and employees to work on a rotational-shift basis even as they stick to a 48-hour week, with a full weekend off as the shops will stay open for an hour longer.
Currently, the shops stay open from 10am to 6pm and employees come in for half a day on Saturday.
Elsewhere in the country, Bata’s outlets have started keeping longer hours to improve the company’s slacking sales and profit. In recent months, Bata has been facing stiff competition from other local manufacturers such as Khadim and Sreeleathers, who keep their outlets open 365 days a year.
Meanwhile, the sacked managers, who belong to AITUC, a union affiliated to the Communit Part of India (CPI) moved the local court against their dismissal.
Bata, which is headquartered in Kolkata, has a history of aggressive trade unionism.
In July 1998, Bata’s expat managing director, Keith Weston, was severely assaulted by the company’s union leaders at the Batanagar factory, which is around 50km away from Kolkata. The assault came after the company refused to revoke the suspension of some workers.
The three union leaders responsible for the assault on Weston were dismissed subsequently.
Sources who did not wish to be identified say the state chief minister, Buddhadeb Bhattacharjee, is keeping a close watch on the current situation.
The government leadership is anxious about the incident and believe it will tarnish the state’s image as an attractive destination for the retail business.
It is likely that the chief minister will himself step in if asked to do so by the Toronto-based Bata family, said a source.
Bata’s third quarter, which ended September 2006, saw a 21% decline in gross sales to Rs178.5 crore from Rs227.6 crore in the previous year. Its net profit decreased 15.3% to Rs6.1 crore from Rs7.2 crore in the same period in the previous year.
The company is yet to announce its annual results ending December 2006.