New Delhi: In a move that may bring closure to the industrial discord at Maruti Suzuki India Ltd’s Manesar plant, the company has decided to revise the pay structure of workers at the facility.
India’s biggest car maker also agreed to their demand for a separate union, marking a climbdown by Maruti’s management that may hold the key to resolving the labour unrest that plagued its plants last year and pointing the way to other companies dealing with agitated workers in the industrial belt.
“Their pay revision is due. We have set up a committee, which would evaluate their demands and negotiate those with the company management,” said S.Y. Siddiqui, managing executive officer (human resources and administration). “The wage settlement process will begin in March and it is expected to be completed by April-May.”
The company has agreed to the demand of the Manesar workers for a union, separate from those of their colleagues at the company’s Gurgaon plant. Both Gurgaon and Manesar are located in Haryana.
“It’s their right to form a union and nobody can stop them from doing that,” Siddiqui said. “We are really happy for them.”
Maruti’s resistance to the new union was one of the reasons for the strike that had hit output thrice last year (during June-October). The resultant drop in output coincided with the festival season in India, which traditionally sees a spike in sales and would have allowed the company to partially make up for the industry-wide slump in demand during the year owing to an economic slowdown.
Siddiqui said the company has a lot of young workers at both plants and it has understood that it needs to respect their demands. “Twenty years back, the profile of workers was different. Now, almost 70% of our workforce is in the age group of 24-26 years. These young guns always look for improvements.”
The move will help stabilize the situation not only at Maruti, but the entire industrial belt in Haryana, which is home to several auto companies and auto parts makers.
“It is in the favour of the economic environment in Haryana, which had taken a hit because of the frequent strikes in the region,” said Abdul Majeed, auto practice leader at PricewaterhouseCoopers Pvt. Ltd. “A two-way communication can sort out a lot of such kind of differences.”
The Maruti move comes after Hero MotoCorp Ltd, the world’s biggest two-wheeler maker, raised salaries towards the end of last year to avoid the strife that the car maker went through.
Maruti workers struck work thrice last year over issues such as the growing number of temporary workers, improper working conditions, wages, leave and the demand for a separate union.
The end of the series of strikes—which caused a revenue loss of Rs 2,500 crore to Maruti Suzuki—led to a controversy after revelations on 3 November that 30 workers, who led the protests, were paid by the management to exit the company.
The workers received a combined Rs 4.2-4.8 crore, according to media reports. However, the company hasn’t confirmed this.
Maruti’s move to revise pay is similar to the method adopted by group unit Suzuki Powertrain India Ltd to settle disputes at its plant.
Mint reported on 12 November that Suzuki Powertrain agreed to most of the demands, following a 14-day strike that ended on 21 October. The company supplies engines for the best-selling models of Maruti Suzuki.
The car maker is in touch with the state government over the registration of the new union, Siddiqui said.
“We have been coordinating with the Haryana government,” he said. “The verification process will be over by 10 January. By mid or third week of January, the workers should have their own union.”
Maruti had previously opposed the demand, saying that outside “political influences” were behind it.
Siddiqui admitted that “overwork” last year triggered workers to go on strike. “There was a huge demand in the market last year, especially for models like the DZire and the Swift,” he said. “There were occasions when there was a need for extra work. There was a huge pressure on production. Better communication with the workers should have avoided these strikes.”
Siddiqui said India has the potential to become one of the world’s leading car manufacturers and that the company’s latest moves should be seen in light of this.
“Companies should have the tenacity to handle such situations. The company is also in the process of increasing its workforce, although it may see some delay in the commissioning of a third assembly line at Manesar,” he said. “Commissioning of the third line depends a lot on market demand, but we can’t sit idle because it takes time to train the workers.”
The company will hire 365 workers in this fiscal and at least 750 in the next one, Siddiqui said. A decision on whether to delay the Gujarat plant opening will be taken at the board meeting on 23 January, he added.
Regarding Suzuki Powertrain’s suspended leader, Sube Singh Yadav, Siddiqui said that the investigation into his conduct is continuing and a solution would be found by the end of the month.