Labour Crisis In India

Published by MBA Skool Team, Published on November 07, 2012

July 18 witnessed an unfortunate event when mob violence at Maruti’s Manesar plant resulted in the death of a General Manager, HR, Awanish Kumar Dev. The dreadful incident took place amidst mob fury, violence instigated by some of the workers at the Manesar plant, who were protesting against the management’s refusal to recognize an elected trade union. The trade union’s demands of their fundamental rights being violated and their outcry over the company’s lack of attention to their demands, were just a few reasons that instigated the violence, ending in the disaster that followed that night. What transpired that night was not a sudden event. It was the anger and frustration of workers that has been building up for months. There have been various instances in the past too, at this very plant, which have haunted Maruti since years now.


Labour unrest is a rampant issue in the Indian industries. In the past, there have been several instances of labour unrest in plants across India. In Tamil Nadu, for instance, protests at the factories of Hyundai, MRF and Nokia have occurred. The death of a Senior HR Executive at Rico Auto during an attack by the workers at a factory, was another such incident of mob fury. Maruti’s Gurgaon – Manesar plant has also been witness to unrest in the past, due to the death of a worker by alleged police firing.

Leaving aside labour unions, pilots of our country have also gone on strike on several occasions, on account of unpaid salaries and ill-treatment of staff by the airline companies, resulting in firing of staff by the employers. This resulted in heavy losses to the aviation industry which is already suffering from the market slump due to huge accumulated losses over the years.

It has been observed that all the cases of labour unrest in India generally have one thing in common, i.e. vested interests of political parties. The vote bank politics has a major influence in instigating trade unions in creating such situations that result in gaining political mileage. It has been observed that such incidents are more likely to occur at the time of elections. Political parties use the trade unions to revolt against the companies, citing it as some form of a movement to liberate the workers from the shackles, empowering them to exercise force in order to see their demands being fulfilled at any cost. All this is done in the name of general interest of the common man.

Besides political influence, the role of State Governments in deciding the fate of feuds between the management and workers, has a major influence in such incidents of labour unrest. It has been observed that a lot depends upon how the State Governments act upon such incidents : as a peacemaker, or a deal-breaker. The State Governments in the past, have been excessively oppressive on workers protesting against the management of the company. In most cases, there is this whole apathy of management for trade unions. The State Government too, seem to exploit the tussle between the staff and the management for their own advantage.

The industry experts do not see payment of wages as a reason of such labour unrest. The workers are paid adequately, almost at par with their western counterparts, keeping in mind the economy of the country. Also, there is a clear divide between organized and unorganized workers.

Labour unrest has had a deep impact on the industry. The unrest at Maruti’s Manesar plant last year caused a total production loss of about 83,000 units. The company stands to lose Rs. 90 crores per day due to the ongoing crisis in Manesar. This does not help in meeting the demand of its various flagship models such as the Swift and Dzire.

Along with Maruti, the vendors of the various components used in manufacturing automobiles also stand to lose out on sales. Like most other Japanese carmakers, Maruti practices the just-in-time principal of inventory keeping where components are sent at the eleventh hour.

It has also been observed that lockouts and shutdowns have often translated into delays in payments of wages to the employees, adding to the woes of the workers . Negotiations between the management and workers also lead to unhealthy relationships which are not a good sign for the industry.

Various incidents of labour unrest have created futile relationships between the managements and the trade unions. The role of the State Governments in curbing the menace has done little for the cause. The key is to initiate a dialog process which addresses the woes of all the parties. Unless there is proper communication of the demands and needs of workers and the managements, the industry will continue to suffer.

This article has been authored by Akanksha Agrawal from NMIMS.


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