MARUTI UDYOG LIMITED

SHRM
SUPRIYANKA GOVEKAR

RECENT ISSUES AT MARUTI, MANESAR PLANT

Maruti Suzuki has two plantsin Gurgaon and Manesarboth surrounded by pockets
with a sizeable Jat population. The combined output from the plants is about 5,000
vehicles per day.

Maruti Suzuki vehicle production facilities in Manesar and Gurgaon have been
temporarily halted due to the ongoing Jat protests

Violent agitation by Jats seeking reservation in jobs and educational institutions

It suspended operations at these northern auto plants after protests disrupted the
supply of some components.

It had stopped manufacturing at the Manesar and Gurgaon plants

The automaker said it was trying to find other parts suppliers not affected by the
protests, adding it would resume normal operations

Five people have so far died in protests in Haryana, the BBC reported

The agitation by the Jat community, led protesters blocking major roads and railway
tracks across the state, disrupting surface communication for a week.

LABOR UNREST IN 2011-2012

In late 2011 and early 2012, labour unrest started in the Manesar Plant with a local labour
leader demanding right to establish an alternative labour union due to non
alignment of a large section of workers with the existing union.

On 18 July 2012, Marutis Manesar plant was hit by violence as workers at one of its
auto factories attacked supervisors, engineers and other management personnel and burnt
and killed a senior HR executive, injured 100 managers, including two Japanese expatriates

The companys General Manager of Human Resources had both arms and legs broken by
his attackers, unable to leave the building that was set ablaze, and he was charred to
death. The incident is the worst-ever for Suzuki since the company began operations in
India in 1983 and one of the most terrible industrial crimes in the history of India.

The Manesar plant workers union also demanded a fivefold increase in salary

In addition to this compensation and normal weekend/holidays, the union demanded the
current four paid weeks of vacation be increased to 7 weeks, plus each worker to have 40
days of sick leave and casual leave amounting to 75 days

Production at the Manesar plant was affected due to this tussle between the workers
union and the automaker

Work was impacted for months and production losses of few thousand crores

After the initial disruption at Marutis Manesar Plant in Haryana, workers were
asked to sign Good Conduct Bond before they could start their work

As per the bond:

the workers would not resort to go slow, intermittent stoppage of work, stay-instrike, work-to-rule, sabotage or otherwise indulge in any activity, which would
hamper the normal production output of the company.

This magnified the wave of unrest and the strike went stronger after that

Demanding of good conduct bonds from workers as per conditions before

allowing them to resume work is an arbitrary act and it also amounts to unfair
labor practice as given in the Industrial Disputes Act, 1947.

Maruti Suzuki Indias management enforced the workers to sign a good conduct
bond for entering the plants premises due to diffused indiscipline by workers
and acts of sabotage and production of defective vehicles, impacting output.

REASONS FOR LABOR UNREST

LABORS SIDE:

Demand for a new union for Manesar plan

Differences in salary pay:

Contract laborers-less pay(no special benefits)
Permanent laborers-high pay (with special benefits)

a.
b.

Did not get any part of the profit that the company earned by
exceeding the targets

Long working hours

Harsh working conditions

Wages were deducted for taking casual leave

MANAGEMENT SIDE:

Felt that new union would bring political influence

Managements insistence on workers to accept and sign the good

conduct bond

Lack of proper negotiations

Lack of communication between HR people and labour

Lack of coordination between HR department and labour union

Discrimination between workers (Contract workers & permanent

workers)

IMPACT ON COMAPANY

Operations stopped for a month

Loss estimated was over Rs. 1500 crores

Fear of insecurity to employees and their families

Problem of lack of labor resource

STEPS TAKEN BY MARUTI

Soon thereafter, the company dismissed a third of its regular

workforce at the unit, declared an indefinite lockout

The company undertook a programme to regularise all contract

workers engaged in core production activities

The entire recruitment process was then routed through the

companys own human resource department.

Maruti decided to scrap the practice of hiring contract workers

Maruti began the process of hiring new workers on a permanent basis

The company increased wages by a record 50 per cent for permanent

workers at its Manesar and Gurgaon facilities

RECOMMENDATIONS

Good conduct bond should have acceptable conditions

The demand for new union should be fulfilled only if the union is not
politically influenced

Healthy work culture should be imbibed at the work place by providing

good working environment for the workers and by keeping them
motivated towards their work thereby avoiding such bonds

Monthly meetings should be held between management and workers

to address various HR/IR issues

Setup a grievance redressal committee

Formation of labour welfare committee