New Delhi: Maruti Suzuki India Ltd’s worst labour crisis since 2001 ended suddenly on 21 October with a tripartite agreement reached between the management, the union representatives and the government of Haryana, where India’s largest car maker has its production facilities.

Centre of attention: An October photo of Maruti Suzuki union leader Sonu Gujjar addressing workers at the Manesar plant. Photo: Ramesh Pathania/Mint

While few are talking on record, the exit of the union leaders has split the workforce at Maruti Suzuki down the middle and, more importantly, may mean the end of any meaningful labour activism at the company in the foreseeable future. Analysts say it may have also raised the stakes for other corporate entities in the Gurgaon industrial belt confronting similar labour trouble.

Conversations Mint had with several people, including officials from the labour department, a Maruti Suzuki executive and some of the workers who eventually quit the company with Sonu Gujjar, the principal leader of the agitation, reveal the behind-the-scenes intrigue that preceded the financial settlement.

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The aftermath

The alleged sellout by union leaders has left most workers stunned and bitter.

The sellout may have taken place as early as on “Day 1", said Ashok Kumar, a worker at Maruti Suzuki’s Manesar plant. “They disappeared. They never attended the gate meetings, leaving most of us wondering what has gone wrong."

Govind Kumar Walia, 53, a former Maruti employee who claimed he was offered a similar deal a decade back and rejected it, supports the action of Gujjar and the other unionists.

“I think Gujjar and his colleagues have done the right thing," Walia said. “They are not dismissed, nor (are they) suspended. So they can easily get a job anywhere. It is better to live life like that than wasting time in the legal process."

Walia says the company’s aggressive posture back in 2001 led to his dismissal. He now says that going on strike was the “biggest mistake" of his life.

“A similar kind of offer was made to us as well," Walia said. “But we were united and the offer did not deter us, and hence our services were terminated."

As a result, Walia and his colleagues could not find work at any of the other factories and were forced to look for an alternative livelihood, while pursuing a legal battle with Maruti Suzuki for the past 11 years.

“What I have learnt in so many years is that you have to look at your family first, and then anything else," Walia said.

While Gujjar refused to be interviewed, others disclosed that similar thinking may have forced their hand.

Shiv Kumar, one of the other union leaders, said he has told his former colleagues they had no option. “We had to think about ourselves and we thought we did the right thing," he said.

The inside story

It now transpires that Gujjar and his colleagues, who eventually left the company, were placed under investigation by the company after conclusion of a negotiated settlement with the striking employees on 21 October. While it agreed to take back 64 sacked workers, the fate of 30, including Gujjar, was uncertain.

Even while the investigation was on, the company opened negotiations with the 30 employees at Hotel Chaupal in Gurgaon and an agreement was clinched 12 days after the agitation concluded.

A person who helped broker the deal said it was clear that the company did not want the 30 union members back.

“They were told that if the company terminates your services, then you will be eligible to get your PF (provident fund) and other wage-related bonuses that add up to Rs1 lakh. Nothing more than that," said the person on condition of anonymity. “If not, then take the money and resign from the company."

The person added that negotiations commenced with an offer of Rs5 lakh and gradually increased to Rs12 lakh. “At this point, the labour department intervened and the workers settled for anywhere between Rs14-16 lakh," said the person.

However, a spokesperson for the labour department denied any involvement in the negotiations.

“Our role ended immediately after the strike ended. We didn’t have any role to play in this," the spokesperson said.

A top official from the company confirmed that the workers were paid, but declined to share details.

Another person familiar with the tripartite negotiations between the Haryana government, the company and the workers said the state administration played an important role in the financial agreement being reached. The government had to ensure that the state’s image as a destination for investment wasn’t damaged by labour unrest, this person said.

A Maruti Suzuki spokesperson maintained that a “full and final settlement" was reached, but declined to divulge further details.

The workers who were reinstated are upset because they had to take a 74-day pay cut for going on strike for the cause of the suspended workers. Maruti follows a “no work, no pay" policy.

“We feel cheated," said Ashok Kumar. “They are traitors. We don’t know what will happen to our demands now. We fear we will have a management-backed union even in Manesar now."

Workers of the Manesar facility applied for the registration of a new union with the Gurgaon labour department on Monday and elected a new governing body.

Ram Mehar Singh has been nominated as president and Sarabjit Singh as general secretary of the Maruti Suzuki Workers’ Union.

The fallout

Reactions to the deal have been sharp, with some bitter workers even referring to the settlement as a bribe.

“It’s a dirty game played by the company management," said D.L. Sachdev, general secretary of All India Trade Union Congress (AITUC), an affiliate of the Communist Party of India. AITUC supported the protests.

“It highlights the concern of (anti-graft activist) Anna Hazare, who has been telling the government to check corruption in the private sector," Sachdev said. “If we can punish a person who takes bribe, then why do we spare one who gives bribe."

Praveen Sinha, senior adviser at Delhi-based FES India, a firm that advises companies on labour issues, said both the company management and the union has set a bad example.

“The union has lost trust after this incident," Sinha said.

“I see a clear divide emerging between the plant-level union and the central union (such as AITUC, the Centre of Indian Trade Unions and others), which is a dangerous development for the labour movement in the country. There is a feeling of strong resentment in the central trade union as they have been let down big time by these trade union leaders," he said. “All this while they had been fighting for their cause."

Some companies in the neighbourhood, too, take a dim view of the transaction.

“Maruti has set a very bad precedence by doing this," a top official from an auto component company said on condition of anonymity. “This is not a permanent solution to this problem. You are a large company and you can afford to pay such an amount, but you need to think about the others as well."

Shally Seth Mohile in Mumbai contributed to this story.

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