Ever wondered what would happen if all you are the CEO of a company and one fine day all your labour staff went on strike? What would you do then? How will you tackle that situation? Let’s discuss all these aspects with the help of this article wherein we will be dealing with what is Industrial Unrest, its causes, and the possible solutions to it along with discussing the top 5 Industrial Unrest in India in 2009 and 2010.
What is Industrial Unrest?
Disputes in the Industrial Sector are highly common in mixed as well as capitalisteconomies. When there occurs a conflict between the employers and employees of a company, it usually leads to an industrial dispute. The disputes arise when the employers increase working hours while resisting to increase the wages of the labour and on the other hand the employees or workers ask for better working conditions and are not provided so. In order to achieve their goal, workers are following the path of protests by resorting to gherao, go-slow, demonstrations, strikes etc. and the employers in order to enforce discipline and to safeguard their interest may go for retrenchment and dismissal of employees and in the extreme case may declare a lock out.[i]
Industrial Unrest is defined as a state of disagreement and discord between employers and employees.[ii] This type of unrest results in huge loss of man-days as well as production. Industrial unrest disturbs relations within the country as well as can lead to a lot of chaos in the country with losses running in millions sometimes.According to Labor Bureau, the total number of man days lost because of strikes and lockouts in 2010 and 2009, were 18 million and 13 millionrespectively.[iii]Maximum of the hostile unrests were witnessed in the textile, automobile and manufacturing industries during the years 2009 to 2011 and big companies which were involved were Maruti Suzuki, Nokia, Hyundai, Honda and Bosch. Other extreme cases of industrial unrest include angry workers stoning a man to death who was an assistant general manager of anauto parts maker company named Allied Nippon in the month of November in 2010 as well as a crowd of irritated and furious workers beating a man to death who was the Vice president of HR department of Pricol in the year 2009.
(i) Demand for Wages and Allowances:
The demand for higher remunerations and allowances by the labourers is indeed the most prominent cause of industrial unrests in India. While the pricesin the economy have been increasing constantly at a very high rate, the increment in the rate of wages of these workers could not keep pace with it. This leads them to a situation where they have to resort to methods like strike for raising theirwages.
In India, as the graphs of Ministry of Labour suggest, most of the industrial disputes have been a result of demand for higher wages. The strikes that took place after the year 2008 have shown that approximately 65% of the strikes that occurred after this period were only by reason of wage related issues such as wage increment and equal wages for equal work.Steps should be taken for safeguarding a system which automatically adjusts the process of wages and prices, so that a number of disputes can be avoided in the near future.
(ii) Bonus Demands:
One more important reason of industrial disputes in India is the demand for bonus by the workers. The issue is that the workers also demand to share the profits of the company and the employers do not want to agree to this provision and hence this indirectly leads to strikes.
(iii) Better Working Conditions:
Another major reason behind the industrial disputes in India is also owing to the fact of demand for improved working conditions such as lesser work hours, leaves, better working conditions such as better safe measures, canteen facilities etc.The strikes that took place after the year 2008 have shown that approximately 30% of the strikes that occurred after this period were only for service conditions and in fact about 2 to 3% of the total disputes which arise are a direct result for such a demand.
(v) Other Reasons:
There are so many other groundsas well which are also somewhere or the other responsible for higher frequency of industrial disputes in the country. These causes include but are not limited to need of the employersto recognise the trade unions, abuse of the union president by the employer, introduction of measures related to rationalisation in the factory, strikes having political nature, difference of opinion between competing unions, etc.
Yet another important cause of industrial disputes in the country are Lockouts which are declared by the employers with the purpose to counter the militant workers. Lock out is basically the result of prolonged strikes as well as irresponsible trade unionism.The topmost causes of the increasing number of lock outs are growing wage rate,higher degree of bargaining power of employer, increasing competition rising through the introduction of liberalisation policy as well as lower productivity of the labour etc.[iv]
One of the unhealthy signs of the industrial development in the country is growing industrial disputes. Therefore, the government from the very beginning has taken various steps as well as drafted policies for settling the growing numbers of industrial disputes in the country.The major objectives of the industrial relation policy of India include prevention and peaceful settlement of industrial disputes andthe promotion of better industrial relations.
The Government of India had passed the Industrial Disputes Act in 1947 and this act was later on amended in the year 1956, which was enacted with the aim to prevent and settle the industrial disputes.
Someprovisions of the Act for the settlement of industrial disputes in India:
(a) Work Committees:
The institution of work committees was introduced in 1947 under the Act to promote ways of securing as well as preserving good relations between the employers and the employees. It is concerned with problems arising in day to day working of the establishment and to ascertain grievances of the workmen.[v]This Act empowers the government to require an employer having 100 or more workmen to constitute a works committee. By the end of December 1987, work committees were fully functioning in 546 establishments.
Conciliation is a process by which a third party uses its persuasive power to settle the industrial disputes between the other two parties. This act provides for the Government to appoint officers for conciliation and also to constitute the board of conciliation, representing employers and workers for promoting the settlement of various industrial disputes.
(c) Court of Enquiry:
The idea of having a court of enquiry has been borrowed from the British Industrial Courts Act,1919. When conciliation proves to be unsuccessfuland does not yield the desired results then the matter must be referred to the Court of enquiry so that investigation can be made on the dispute and report can be submitted to the Government within 6 months.
The adjudication stage is the last and final one in the settlement of disputes. In the cases where the parties are unable to settle the disputes despite going through all the above techniques, the only option left with them is Compulsory Arbitration which involves statutory bodies like Labour courts, Industrial Tribunal and / or National tribunals.
(i) Labour Courts:
Labour Courts were set up by the State Governments for considering the disputed matters like discharge or dismissal of workmen, suspension of employees, legality of strikes and lock-outs etc.
(ii) Industrial Tribunals:
Industrial tribunals were set up by the Government and are of two types which includes State tribunals and National tribunals. These tribunals are primarily responsible for adjudicating disputes involvingprofit sharing, bonus, wage etc. The award of these tribunals has a binding effect on both the concerned parties. Furthermore, in recent years some other practices have also been introduced for settling industrial disputes in the country which include formation of Joint Management Councils, adoption of theIndustrial Truce Resolutions in 1962 etc.
TOP 5 INDUSTRIAL UNRESTS IN 2009 – 2010
1. Mahindra and Mahindra – 2009
In May 2009, workers at M& M facility located in Satpur, Nashik plant protested against the suspension of Mahindra union leader MadhavraoDhatrakby the management of the company on disciplinary grounds. The tool down strike finally reached a compromise after 15 long days.This strike led to production loss of more than 6,000 units in 13 days, estimated to be approximately Rs 325 crores. Owing to the 15 days the production of cars likeXylo, and Scorpio was hit the most.
2. Pricol – 2009
A fully planned murder took place in the Periyanaickanpalayam unit in Coimbatore, Tamil Nadu on 21stSeptember, 2009when the workers attacked the company’s Vice President Roy J George aged 47 years with iron rodsand wooden sticks on his head. He succumbed to multiple injuries the next afternoon on 22nd. Four staff members of Pricolwere also injured. The reason for this unrest was the dismissal of 42 workers on the ground of indiscipline. It was also said in one of the reports that the person who hatched this conspiracy was none other than the President of All India Central Council of Trade Unions (AICCTU). 19 people were acquitted and 8 were convicted in this case by the court.
3. Rico Auto Industries – 2009
In October 2009, India’s automobile hub in the Gurgaon-Manesar belt came to a near standstill when around 90,000 workers from different auto and auto component started protests.[vi]The strike which started on September 17th was for the demand of higher wages as well as recognition of their union among other things. Things turned really ugly when a Rico employee lost his life during a protest by two groups of workers against the company management’s earlier suspension of 16 of their colleagues.The strike only came to an end after 50 long days when the management agreed on the reinstation of some employees.
The production of several component manufacturing units was severely affected and the impact felt of this strike was global.
4. Hyundai Motor India – 2010
Hyundai Motor Company, who is India’s second largest car maker had to incur a loss of Rs 65 crore due to a production halt at its Sriperumbudur manufacturing plant in Chennai.This was a protest by 150 to 200 workers who were demanding the reinstatement of 67 employees who were suspended in December 2009. It raninto a total production loss of approximately 2,200 cars.According to Hyundai Motor India Employees Union (HMIEU), the18 day long strike was finally called off on 7th May, 2010 after the signing of an agreement whereby the company would take back the fired employees on humanitarian grounds.
5. MRF Tyres – 2010
Production at tyre major MRF Tyres’ three manufacturing plants namely Arakkonam, Puducherry, and Thiruvottiyurinin Chennai was stalled after 800 employees stuck work from October 10th, 2010 while demanding end of labour contract. The company suffered a total loss of over 1 lakh units per day. The strike ended on October 20th. Strike was organised by MRF United Workers Union (UWU).
CONCLUSION Workers think of striking as a defense tool when they feel like they have been exploited at the hands of their employers. Possibility of strikes can be largely ruled out only if the employers understand the employees’ need to strike. If the demands of employees would be fulfilled beforehand, the possibility of a strike will be highly reduced and there won’t be such huge losses to the company as well as to the company. The Labor Minister of India at the 77th Annual General Meeting of the All India Organization ofEmployers (AIOE) firmly stated that violence and confrontation has no place in a growth-oriented economy and violence of any form in industry cannot
Article Written By- Gauri Choubay
Law Student– DME School of Law
(HRDI Work From Home Internship)
[v]Kemp and Co. Ltd. V. Its Workmen (1955) 1 LLJ 48 (LAT)