Dr Ashwani Mahajan
The whole nation was in a shock after the incidents of barbaric killing of the managing director of Maruti Suzuki in a worst labour management dispute of recent times. The concerns of the industrial world are obvious. However, such kind of violent incidents are not confined to Maruti only; many other companies have also faced such violence.
Though many companies have played a role in the development of automobile sector in the country, Maruti has a special status, not only in terms of the market share, but also because this company has revolutionised the car market. Starting from 800 CC model to latest luxury models, this company has given many popular cars to the country. In the year 2009-10 the company sold more than a million cars with total sales revenue of Rs. 29623 crores.
Liberalization means End of Strikes and Lockoutsunder Liberalisation
In the era of liberalization and globalisation, strikes and lockout were not heard for long. There was a time when strikes and lockouts were a normal phenomenon in industry (both private and public sector). But now strikes and lockout are exceptional. In 1989, there were 1397 strikes and 389 lockouts where 1364 thousand labourers were involved. In 2008 number of strikes and lockout got reduced to 250 and 182 respectively. Normally strikes and lockouts may be treated as indicators of labour troubles. But can we conclude that relation between management and the labour are so sweet that there are no disputes left now. But perhaps it is not so!
Through there is a provision of strong labour laws for protection of labour interests, according to which labour has facilities like PF, ESI and others. But these facilities apply to only those labourers, who are regular employees of a firm. Labour hired through contractors and directly on contract basis,is not covered by these labour laws. Menace of contract labour has been on rise in the last two decades of liberalization. At a result insecurity amongst labour is on rise as they are subject to various types of exploitations.
What Maruti Dispute Means?
Maruti strike has been in news for the last one year. Labour- management dispute is not only affecting the production and profitability of the company, Maruti has also been facing a fearof losing its market share to other players. It is believed that Maruti is set to lose rupees 2500 crores during this strike. Uniqueness of this strike is that labour is not asking for higher wages, but demanding reinstatementof suspended labourers and recognition of independent labour union. So called agreement between labour and the management has also been subject of controversy, as the management has forced the labour to accept the condition of controversial ‘good conduct’.
Though in the past two decades strikes and lockout had vanished, but the way this dispute has turned highly violent ultimately, is forcing us to think. It may be an indication of rising unrest amongst the labour due to exploitative tactics.
Many Reasons for Labour Unrest
In this era of globalization, a tradition has started to employ labour on contract basis. Regular employment of labour or even other workers is no longer in practice. Guards, Sweepers, Drivers or even Clerks and Accountants are employed on contractual basis. In manufacturing sector, either the work is outsourced from ancillary units or through contractors by way of contract labour. As and when regular employees retire, they are replaced by the contract labour. These contract worker are not covered by any labour laws and therefore they normally do not stand to gain any thing by going on strike. Any dispute with the management may lead to loss of their employment.
Maruti is no exception to this rule. Though, there are 10,000 regular employees of Maruti, an equivalent number of labour is employed on contract basis. Whereas regular worker gets on an average Rs. 18,000 per month, temporary labour gets hardly Rs. 6,000 per month. Now Maruti says that it may stop keeping labourers on contract basis and will assign their core work to the regular employees only.
Not that Maruti and other employers keep labour on contract basis and therefore pay low wages, fear of losing job is yet another factor in keeping the wages low. This kind of exploitation has been encouraged under globalization. Statistics reveal that the share of profits in net value added, which was 19 percent in 1989-90, has gone up to 56.2 percent in 2009-10. The share of compensation of employees (which includes wages, salaries, contribution of employers to the provident fund and social security payments), which was 78.4 percent in 1989-90 has gone down to merely 41 percent in 2009-10. This shows that the capitalist while attempting to increase profits have consistently been reducing the compensation of employees. Though money wages during this period have increased by four times, real wages have actually come down, as prices have increased by 4.4 times during this period. Another point we note is that the average wages in industry were Rs. 75281 annually in 2009-10, which on the outset looks insufficient for a decent living.
One can conclude from the analysis above that reduction in the number of strikes and Lockouts does not in any case imply that labourer are not being exploited or management is taking full care of labour or working conditions have improved. The fact is that except the institutions run by central and state governments, where recommendations of various pay commissions are implemented, in other segments of the economy, not even dearness allowance is available to the employees. Even at the lower and middle management level promotions and pay hikes are linked to so called ‘performance’. Many a times workers do not get even minimum wages and except a few specialised jobs, most of the labourers are forced to work at a very low wage rate. Pockets of the companies are getting deeper, whereas labour is unable to lead a reasonable and decent living. Private sector companies are making huge profits and even public sector companies except a few companies like Air India are also earning handsome profits. In 1990-91 profitsof Central Public Sector Undertakings,before tax was Rs. 3820 only, this increased to Rs. 124126 crores, in 2009-10.
Under these circumstances it is in the interest of the nation in general and workers in particular, that labour laws are suitably amended and contract labour be treated at par with regular employees of the company for which they are working. Companies should also mend their outlook and employ labour on regular basis. This would change the attitude of workers towards the company and their commitment level would also increase.
(The author is Associate Professor, Department of Economics, PGDAV College (University of Delhi)
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