Management Tactics & Illegal Production during Workers Strike A Case of Comstar Automotive

Comstar Automotive is the leading manufacturer of auto components like starters and alternators for cars and light-commercial vehicles in India and worldwide. It was formed in the year 1998 and earlier was known as Visteon Power Train. The companys major partner s are Ford, Volvo, Tata Motors, FIAT, Ashok Leyland, Jaguar, Mazda, Aston Martin Nissan and General Motorsi On August 11 workers at the Comstar Automotive Technologies plant located in Maraimalai Nagar 40 kilometers from Chennaiii were on strike under the banner of Comstar Automotive Technologies Employees Union (CATEU) demanding the recognition of their union and negotiations on a new three-year wage accord to replace that which expired last March. The union has submitted a charter of 35 demands which includes social security benefits to workers, wage revision and recognition of their unioniii. Nearly 425 workers had marched out of the job on August 11 demanding recognition of their union. The company employed around 410 permanent workers and about 350 provisional workers, apprentices and trainees at its Maraimalai Nagar plantiv. The management at Comstar sanctioned only three days of casual leave in a year which violated the minimum requirement of ten days of leave as recommended by the labour department.v On September 2, nearly 300 Comstar workers observed a day long hunger-strike in Kanchipuramvi, the administrative headquarters of the district where the plant was situated, to press for their demands. However the management had tirelessly refused to hear the demands of the workers and has missed all four reconciliation meeting that had been organized by the labour department to sort out the differences. The management was seeking to discontinue the strike through intimidation by illegally hiring 160 traineesvii to keep the company going during the strike period without affecting companys production due to the ongoing industrial action. This case basically highlights a well-known fact that all MNCs have been violating labour law and repudiating the worker even of their most basic right to form a trade union in its workplace. The prevailing IR environment is a stark statement of how workers deal with many issues like poor working conditions, unrealistic work hours, workplace injuries, and on top of it poor wages. What is even more unsettling is that managements adopt shrewd tactics to ignore worker demands and turn a blind eye to their welfare. This case is a classic example of such tactics to suppress striking workers and even using counter accusations as a means to shift focus from the main issue(s). Cases like that of Maruti Suzuki workers strike and the

dilemma of women worker in the garment industry is a blunt disgrace on the part of the management and are the case of corporate corruption that needs a call for a city wide industrial action.

The Company: Comstar Automotive Technologies Pvt. Ltd.

Comstar is a leading multinational company engaged in the Design & Manufacture of Starting and Charging system for Passenger Cars and Commercial Vehicles. It is currently held by Comstar Mauritius Limited and Comstar Holdings Pvt. Ltd., which are in turn held by Comstar International. With a production capacity of 2 million starter motors, 1.8 million starter motor kits and 1.1 million alternators per year, Comstar is a medium sized player in the Indian auto ancillary industry.viii Comstar partners with Global OEMs like Ford, Volvo, Jaguar, Aston Martin, Mazda, Tata Motors and Ashok Leyland Nissan JV. Comstar has its Indian headquarters in Chennai. It currently has two manufacturing facilities India (Chennai) & USA (Tecumseh). Customers in Europe, Africa, South America and Asia are supported from its warehouses in Europe and Japan. Comstar has wide network of Aftermarket partners in Europe & India.ix The company has a workforce of nearly 667 and has built a capacity of 30 lakh starter motors to meet the ever expanding export market. This accounts for 90% of its sales besides the domestic segment. It achieved the peak sales of Rs 320 Crore in 2007. It is expected to be Rs 270 Crore in the current fiscal ending March 31 2010.x Being one of the largest producers of starter motors in the country, Comstar produces on an average about 11 lakh per year and nearly 9 lakh starter kits. Its major global car customers are Ford Motor, Aston Martin, Jaguar and Mazda. It is a major supplier to Ford India in the domestic market segment.xi VISION Of the company: Comstars Vision is to be a highly responsible company, delivering world class products with passion and speed. Quality is a way of life that reflects in whatever we do. Comstar will capture over 20% market share of Global Automotive Starter Business by 2040.

MISSION Of the Company: Comstar India will make its customers successful by applying its employees intellectual capital, rich experience and cost competitiveness in the design & manufacture of world class quality products.

MAJOR CUSTOMERS :

Tata, Ford, Volvo, Mazda, Jaguar, Nissan, Ashok Leyland, GM, Fiat, Aston Martin. Major Domestic customer: Ford India. Major Global Customers: Aston Martin, Jaguar and Mazda.

PRODUCT PORTFOLIO : Comstar product portfolio is designed to cater to various segments of vehicle applications and can be customized to best suit Customer requirements. Comstar develops and supplies cutting-edge Go Green Start-Stop technologies for the next generation micro and mild hybrid vehicles. Employees at Comstar constantly challenge themselves to improve and excel in Quality, Delivery, Process and Speed to support its customers. The main product line includes: 1) Starters 2) Alternators 3) Sub Assemblies

The Union: Comstar Automotive Technologies Employees Union

Since 2004, the workers have tried to get the management to recognize their union, and every time failing to do so. The independent union - Comstar Automotive Technologies Employees Union (CATEU) was formed in September 2008, but has not yet been recognized, becoming one of the major causes of the dispute. The CATEU is affiliated to the Centre of Indian Trade Unions (CITU). CITU is a trade union federation which is led by the Stalinist Communist Party of India (Marxist), and the CATEUs president, A. Soundararajan. He has a double role to play, as the party state secretary and also a CPM legislator in the Tamil Nadu state assembly. Over the course of time, the CITU has been actively involved in many militant struggles which are launched by the workers of the auto and electronics industry giants of Tamil Nadu. The role and hence the actions of CITU are directly influenced by the politics of the CPM, which along with the Communist Party of India or CPI has politically dominated the working class to the parties and agenda of the Indian middle class, for decades. CPI(M) led West Bengal had witnessed expropriation of lands for big business projects and banning of strikes in IT and IT-enabled industries.xii In the Comstar strike we get to see that the Stalinists are continuing to spread the reliability on the courts and the police. The Stalinists fully accept and seek employer-recognition for their union on the basis that they will enforce the subordination of workers interests to corporate profitability.

The Stalinists have a very long history of organizing protests. Rather than developing an independent industrial and political offensive of working class, they basically aim at containing, and defusing workers protests and subordinating them to the shrewd manoeuvres with the Congress, AIADMK and other big partners.

The Prevailing IR Environment

The last few years have seen a sharp surge in worker protests in various industries across India. Some examples being: FOXCONN: Foxconn is primarily an original design manufacturer and its clients include Major Japanese, American, and European electronics and information technology companies. ipad , iphone, ipod play station are some of the notable products that the company manufactures. Twelve Foxconn workers and union leaders remain in prison on October 13, 2010 in Chennai, India after On October 9, 2010, hundreds of workers striking the plant were arrested after which twelve Foxconn workers and union leaders remain in prison on October 13, 2010 in Chennai, India The Union formed at the plant was named Foxconn India Thozhilalar Sangam (FITS) union, comprising of more than 1,200 permanent workers and is affiliated to Center For Indian Trade Unions (CITU). The workers have been involved in weeks of struggle to have their union recognized by management so as to negotiate wage rises and other demands. On October 9 police arrested hundreds of workers who had been striking and picketing the plant for several days. Around 319 workers along with the trade union leaders were remanded into judicial custody, remaining workers were let off and around 200 women workers were taken to a bus stop and asked to leave the plant. Moreover, the women were abused and forced off the police when they refused and demanded to be arrested also. On October 13, the court granted bail to 307 workers and the remaining 12 workers and union leaders remain in jail, including A. Soundhirarajan, CITU State General Secretary and E. Muthu Kumar, CITU District Secretary, Kanchipuram and FITS President.xiii Since the workers felt that they were paid very less as the workers at the plant with four years experience were earning INR 4,800 per month, FITS was demanding a basic pay of INR 10,000 along with other additional bonuses and health checks and medical insurance. Finally Foxconn management reached a wage agreement for a wage increase to INR 8,999.

NOKIA: Nokia India workers, at its plant in the Telecom Special Economic Zone (SEZ) in Sriperumbudur, Tamil Nadu, went on strike on 20th Jan, 2010, after 35 employees were

suspended. The following day another 20 employees were suspended according to Nokia India Employees Progressive Union (NIEPU) xiv. This strike too was part of a series starting in 2009. The Nokia Union is an affiliate of the Labour Progressive Front (LPF). According to the Union, the immediate cause of the strike was the transfer of an employee from one job to another. A Union official observed that the human resource manager was curt and threatened employees with suspension orders. The protests spiralled and Nokia suspended 35 employees, defending the move by saying that "Every company has certain codes and values, the violation of which cannot be brooked," and accusing the suspended employees of "acts of serious misconduct" (IANS website). About 1,200 staff joined the strike although the NIEPU claimed that about 2,000 staff went on strike. Production at Nokia's factory was hit again after workers began another strike on 13th July 2010 demanding higher pay (Business Standard, 14th July 2010). The strike was called off late on 15th night, following tripartite talks. The Nokia management revoked the suspension of 60 workers. The Union agreed to the terms after TN Labour Minister, TM Anbarasan (Financial Express, Jan 22, 2010). However, some employees were still not ready on the ground that the wages offered were too low. A research centre (SOMO) felt that the unionization of Nokia has been a remarkable event in the mobile manufacturing industry. Nokia's workforce in South India had formed a union after a resoundingly successful strike in August 2009. The attempt to improve employment conditions in the leading company in the mobile phone market globally and nationally would have tremendous implications for industrial relations within the whole industry employing around 4.4 million people (primarily manufacturing) at present and expected to rise to 27.8 million in 2020. xv HYUNDAI: A 17-day strike starting 20th April 2009, at Hyundai Motors India Ltd's [HMIL] Sriperumbudur in Tamil Nadu, ended after management and employees reached a settlement when the management agreed to recall some of the suspended workers. The work boycott, resulting in a fall of 4-5% in daily production at the plant, was called off on the fourth day of a hunger strike by some workers at the Office of the Labour Commissioner in Chennai. A Hyundai spokesman said that a settlement had been reached and the management would recall 20 of the 75 suspended workers. The Union is affiliated to the Centre of Indian Trade Unions (CITU) in Chennai, which backed the strike. One of the main demands that the management recognise the Employees' Union, had not been conceded, according to the president of CITU Tamil Nadu arm. He said that the company used to give increments every three years. The previous wage structure ended on March 31, 2009, and the new one was to come into force on April 1. The demands included an increase in the minimum wage, which was Rs 8,000, and explanations for dismissing 65 workers and suspending another 34 (libcom.org). But the Chennai plant was closed again for a few days in July 2009, after another stand-off

with the Union over recognition and reinstatement of workers. A fresh agreement was signed on 28th July with the Union through the intervention of the state Labour Minister, T.N. Anbrarasan . Even though a wage agreement was signed on 23rd July (de facto recognition) it was not accepted by many of the workers and agitations continued. Management conceded the Union's request to bring 9 workers who had been transferred outside Chennai, back to the city by the end of 2009. However, they would not be returned to the main plant but to the subsidiaries. Also out of the 80 workers dismissed earlier on disciplinary grounds, a maximum of 20 would be reinstated. The company also revoked the punitive actions taken over the last two years against members of the Union in the form of wage cuts, withholding of bonus, gifts, gold coin etc. The State Government acted tough also, since the management had reneged on several of its commitments made earlier.xvi

The Incident/Dispute: The chronological Account

Since 2004 the workers of Comstar Automotive Technologies have tried to get the management to recognize their union, and every time failing to do so. In 2008 the independent union-Comstar Automotive Technologies Employees Union was formed. The management refused to recognize the union formed. Instead it began exerting pressure on workers to join a committee formed by the management itself.xvii On 31st March 2011 the workers submitted a 35 point charter of demand to the Comstar India management. The Charter included issues relating to wage revision, social security of workers and recognition of worker unionxviii. However the management did not pay any heed to this and they continued to refuse to recognise the workers union, the Comstar Automotive Technologies Employees Union (CATEU). On 11th July 2011, the union having failed to elicit any response from the management served its first strike notice. As a reaction to discourage the strike the management began intimidating the workers. To thwart any form of freedom of expression, the management resorted to dirty tricks before the strike commenced. On 23rd and 30th July, both of which were Saturdays and normally off days for the workers, the management punished them by cutting 16 days of wages for failure to come to work without any warning. In total 32 days (unconfirmed) of wages were deducted, including for 6th and 11th of August.xix On 2nd September, the workers reemphasised their seriousness and nearly 300 Comstarworkers observed a day long hunger-strike in Kanchipuram, the administrative headquarters of the district in which Maraimalai Nagar lies, to press for their demands.xx On11th August having failed to receive any commitment by the management, all 420 members of the Union (out of total 490 permanent workers and 400 trainees/apprentices that

the company hires) as per the notice submitted by them about the strike, started their strike in front of the factory gate. The key demands by the workers could be summed up as 1. That Comstar management recognizes CATEU as the legitimate representative of the workers. 2. That the company management engages in immediate negotiations with the employees union and settle for a rightful wage. 3. Dismiss the false case and disciplinary action taken against the members of CATEU. 4. That the government legislates and implements strictly implements labor laws including the right to form Trade Unions and the workers right to strikexxi

The workers proclaimed that Comstar gave workers just three days of casual leave per year, well below even the ten days of leave recommended by the labour department. xxii The permanent workers, all of whom are in a single grade, demanded the pay to be raised by at least Rs 15,000 (currently they got about Rs 16000/month). The tedious work hour of 9.5 hours to be changed was also a key demand. The factory ran on 3 shifts- 7.15am-4.45pm, 4.45 pm-2.15am and mid-night shift of 9.45pm-7.15am. With a 30 minutes meal break and two 7 minutes tea breaks in each shift. Workers found the work hours very tedious and stressful. They travelled for over 3 hours and then worked for 9.5 hours. The company provides transportation. While most of them did not have major issues about safety, there are always minor injuries, especially hand injuries due to malfunctioning of machines. There had been lost time cases where workers had injured their fingers badly, but no compensation was paid to them, only medical treatment through a private medical company was provided.

Comstar management seeked to break the strike through intimidation. It victimized some of the more militant strikers and dragooned the apprentices, who had been employed by the company only temporarily and as part of their schooling, into doing the strikers workxxiii. Not just that, the management had also employed 200 trainees to cover for the permanent workers. 11 Manager from corn star were issued show cause notices by the labour department for violating the industrial Disputes Act, which prohibits such retaliatory behaviour. Despite the strike the management maintained production of 40% by ill practices. Besides being adamant, the management also slapped false cases against the key union leaders, including its general secretary and treasurer. Two charge sheets were filed against two leaders for assaulting the management staff, besides 5 workers suspended for stopping the company buses, 3 served show cause notices for tearing management notices and additional notices served against 14 workers for instigating the strike. The management started an Employees Committee represented by 6 employees and 5 management staff to undermine the union and the strike by its members. The Labour Department on its part kicked it in with the conciliatory process on 29th September 2011 under Industrial Disputes Act, And issuing a failure of conciliation notice by the Assistant Commissioner of Labour (Sriperumbadur) on 10 August 2011.xxiv

Three conciliation meetings were called by Tamil Nadu labour department on 19th August 2011, 22nd August 2011 and 24th August 2011. The management, on the false pretext that they were beaten by the union leaders and therefore in protest refused to attend the meetings. On Aug 27 the Tamil Nadu labour department issued notice to Comstar Automotive Technologies Pvt Ltd to attend the conciliation meeting to sort out the differences. Despite this the management refused to attend further conciliations and did not show up for the fourth conciliation meeting. The workers threatened to go on a hunger strike day long hunger strike on Friday protesting the non-cooperation of the management in the conciliation meetings. This resulted in the management being pressurized to attend the conciliation meetings. During the conciliation talks, the management agreed to withdraw the show cause notice issued to three workers while refusing to do the same for seven others. The labour department had suggested the union should withdraw the strike Sep 9th and the management should not take any disciplinary action against the striking workers or deduct their pay for the strike period On the issue of union recognition, the labour department had suggested conduct of elections for the Five Men Committee (similar to workers' committee).[9].But much of the efforts of the labour department went in vain. By October 1rd 2011, 20 failed conciliatory meetings had occurred, mediated by the labour department, 3 of which were not attended by the management. All the striking workers rallied outside the Deputy Labour Commissioners office on October 3rd 2011 to press for their demands. The strike lasted 54 days with the workers settling with a word from the management that the issues shall be discussed. Both the management and the workers agreed to the advice given by the labour court. On 4th October the strike was called off and production was resumed within a couple of days.

IR Theory
There have been two major industrial relations issues highlighted in this case. 1. The management refusing to provide recognition to the trade union of Comstar and its attempts to negotiate over three year wage accord 2. The management retaliating to the strike by hiring apprentices and involving them in direct production. A Trade Union means a combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen or employers for imposing restrictive conditions on the conduct of any trade or business and includes any federation of two or more unions. As stated before, nearly 400 workers at Comstar Automotive Technologies plant in Chennai started a strike on August 11, 2011 demanding recognition of their union, the Comstar Automotive Technologies Employees Union (CATEU), and negotiations on a new threeyear wage accord to replace that which expired on March 2010.xxv

Now, The trade unions act, 1926 provides for the registration of trade unions however Recognition of a trade union is very different from Registration of the union. Recognition means the expressed recognition of a registered trade union by an employer or by an employers association for the purposes of collective bargaining. Hence, although it is a fundamental right to form Trade Unions and a statutory right to get it registered, there is no corresponding legal obligation on the employer management to recognize any particular trade union, whether registered or not, even if they are truly representative.xxvi Thus even though Comstar employees demanded for the recognition of CATEU, the management of Comstar was not legally obliged to recognize the union. Now the second IR issue that forms a fundamental part of the case is the involvement of apprentices and trainees in the production. Now, as per law, apprentices and trainees are prohibited from directly getting involved in production, but Comstar hired additional trainees to continue with the production even while the strike was going on.xxvii Hence Comstar violated the law as per the Id act by directly involving trainees in the production activities. Thus it can be seen in this case that even though the workers had formed a Trade Union to negotiate with the management over the issues they were facing, since the recognition of trade union is not mandated by the law, the workers were helpless. Recognized Trade Unions are necessary to build a healthy Employer union relationship as it provides grounds to the employer for understanding and appreciating the needs of the union. Hence a central legislation should be passed for the lawful recognition of Trade Unions. However until that happen certain states have already taken a step forward in that direction. For e.g. Tamil Nadu government stated that they would consider enacting legislation for making it mandatory for the foreign firms to recognise trade unions xxviii. Similarly The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 is also a step towards the lawful recognition of Trade Unionsxxix.

Current Scenario
The Comstar strike lasted 54 days after which the workers started work on Oct 3, 2011, heeding to the agreed advice given by the state labour department. This nearly two month long strike can actually be traced back to March 2011, when the first charter of Demands was communicated to the management. During this period there have been two charge sheets, 5 suspensions, 3 show cause notices, and notices against 14 other workers by the management. Not only that, the workers went on a day long hunger strike, had been striking legally for 54 days, and had lost at least 16 days payxxx while the management conveniently went on to employ interns to illegally maintain 40% (unconfirmed figure)xxxi production level during the strike.xxxii The management also ignored the labor department and didnt appear for 3 conciliatory meetings called by the department. Under pressure because of the workers

hunger strike on Sep 2, the management finally did attend the conciliatory meetings, though they had missed 20 meetings during the course of the strike. After all of this, the labour departments advice, pertaining to both the union and the management was: 1. To seek the court's decision on the issue of wage deduction 2. Withdrawal of disciplinary action against the workers and 3. To start wage negotiations with a six-member worker's committee but without the union banner.xxxiii The labor union took a wait and watch stance on the issue, and decided to resume work after agreeing to the above advice. CATEU G. Sec. Mr. Natarajan stated, 'We will wait and see the management's attitude before chalking out our next course of action. As of now for next one month we don't plan to strike work,'xxxiv A lot of discussion ensued on the role of the CITU, the CPI(M) affiliated body to which CATEU was affiliated. CITU has been known to have nexuses with business houses and attracting businesses to set up plants with cheap arrangements while trading off on labour welfare. They have been accused of banning strikes in IT and IT-enabled industries and using police and goon violence to enforce the expropriation of peasant lands for big business projects, in West Bengal. In the Comstar case they are criticised for continuing to preach reliance on the courts and police. Speaking at a rally on the evening of August 19, Soundararajan and CITU District Secretary Muthukumar advised the workers to respect Indian laws and the police, claiming that the law enshrines workers right to a union and that the government and the entire state apparatus are bound to uphold this right.xxxv There was no legal proceeding that ensued at any time during or after this strike. The status of the CATEU is not ascertainable at this point in time. It is also unclear if any of the other demands of the union were eventually met by the management. However, the company is operating and according to unaudited results, the Company reported net losses of Rs. 5.6 crore on an operating income of Rs. 343.8 crore during the financial year 2011-12, as against net profit of Rs. 4.6 crore on an operating income of Rs. 298.5 crore during the financial year 2010.xxxvi

References
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i

http://www.made-from-india.com/showroom/comstar-auto/ ii http://www.scribd.com/doc/128254812/Com-Star-automotive-technologies-workers-strike iii http://www.socialistworld.net/mob/doc/5267 iv http://www.wsws.org/en/articles/2011/09/indi-s05.html. v http://www.wsws.org/en/articles/2011/09/indi-s05.html vi http://socialism.in/index.php/chennai-comstar-workers-strike/ vii http://www.socialistworld.net/print/5267 viii http://www.icra.in/Files/Reports/Rationale/Comstar%20Automotive_r_20092012.pdf ixix http://www.comstarauto.com/index.html x http://articles.economictimes.indiatimes.com/2010-02-18/news/28416278_1_export-market-ford-motordomestic-market xi http://www.comstarauto.com/index.html xii http://www.wsws.org/en/articles/2011/09/indi-s05.html xiii http://revolutionaryfrontlines.wordpress.com/2010/10/22/chennai-india-union-leaders-and-workersremain-in-jail-in-strike-at-foxcomm-plant/ xiv http://www.thehumanfactor.in/01092012/storyd.asp?sid=1789&pageno=3 xv http://www.freepatentsonline.com/article/Indian-Journal-Industrial-Relations/252553888.html xvi http://www.freepatentsonline.com/article/Indian-Journal-Industrial-Relations/252553888.html xvii http://www.wsws.org/en/articles/2011/09/indi-s05.html xviii http://in.news.yahoo.com/striking-comstar-automotive-workers-plan-fast-063419610.html xix (unconfirmed) http://tnlabour.wordpress.com/2011/12/15/strike-by-comstar-workers/ xx http://www.wsws.org/en/articles/2011/09/indi-s05.html xxi http://socialism.in/index.php/down-but-not-out/ xxii http://www.wsws.org/en/articles/2011/09/indi-s05.html xxiii http://www.wsws.org/en/articles/2011/09/indi-s05.html xxiv http://www.sify.com/finance/comstar-automotive-workers-strike-continues-for-28th-day-news-nationalljhmumbeibg.html xxv http://www.wsws.org/en/articles/2011/09/indi-s05.html
xxvi

http://industrialrelations.gov.mt/industryportal/industrial_relations/registrar_of_trade_unions/trade_union_r ecognition.aspx xxvii http://zeenews.india.com/business/news/companies/comstar-automotive-summoned-to-attendmeeting_29174.html xxviii http://www.thehindu.com/news/national/tamil-nadu/tn-to-consider-legislation-for-recognition-of-tradeunions/article880159.ece xxix http://bombayhighcourt.nic.in/libweb/acts/1972.01.pdf xxx http://www.smetimes.in/smetimes/news/industry/2011/Sep/23/comstar-automotive-strike-enters-44thday626071.html xxxi (Unconfirmed) http://tnlabour.wordpress.com/2011/12/15/strike-by-comstar-workers/ xxxii http://www.wsws.org/en/articles/2011/09/indi-s05.html xxxiii http://twocircles.net/2011oct04/comstar_automotive_workers_resume_duty_after_54day_strike.html xxxiv http://sg.news.yahoo.com/comstar-automotive-workers-resume-duty-54-day-strike-110714872.html xxxv http://www.wsws.org/en/articles/2011/09/indi-s05.html xxxvi http://www.icra.in/Files/Reports/Rationale/Comstar%20Automotive_r_20092012.pdf