On October 21 2011, a major labour strike ceased when
automobile company Maruti Suzuki agreed to reinstate 64
permanent staff and 1,200 casual workers at its factory in
Manesar. The strike raised concerns about the transparency and
recognition of the present system of trade unions in India, and
this has subsequently been the subject of much discussion
between employees, employers and the Government of India
Maruti Suzuki India (MSI) suffered a series of strikes from
June 2011, when workers went on a 13-day strike demanding the
recognition of a new trade union. MSI did not respond to the
demand and, in September, workers went on a 33-day walkout.
On October 7, MSI workers called for yet another strike and
on October 13, when the strike entered its seventh day, the
High Court prohibited workers from conducting a sit-in strike
within 100 metres of the premises of MSI's factory at Manesar.
Striking workers at the plant were ordered to leave, but they
ignored the High Court ruling.
Following MSI's decision to reinstate the 64 permanent staff
and 1,200 casual workers that were suspended because of their
participation in the strikes, the company's management said it
would improve the industrial relationship in the near future.
However, it remains unclear whether MSI management and workers
will reach agreement on the formation of a new union.
Mallikarjun Kharge, says the system will need to evolve
for better industrial relationships
MSI suffered an estimated loss of Rs 15 billion (US$306.7
million) as a result of the continuous labour strikes in 2011.
And the company's share price dropped 2.14% to Rs 1,033.80 on
the Bombay Stock Exchange on October 14 2011, when the labour
strike entered its eighth day.
The MSI joint venture accounts for a 50% share of India's
car market, and legal practitioners say that the labour dispute
has had a strong impact on the country's automobile industry.
Trilegal partner Ajay Raghavan says: "The automobile industry
is suffering great loss because of this labour strike. They are
seeking measures to reduce the possibility of strikes in the
The strike has raised concerns about the present system of
trade unions in India. The Ministry of Labour has called for
further discussions between the GOI, employers and employees on
improving the transparency and recognition of trade unions.
Labour minister Mallikarjun Kharge told the Economic
Times that the present system would need to evolve for
better industrial relationships. "The present system of
verification, such as secret ballots and check offs, needs to
be closely examined further for evolving an important system
that is more transparent and brings out proper
The Ministry of Labour did not interfere in the MSI labour
dispute as much as it had done in previous large scale labour
strikes. For example, Hindustan Unilever (HUL), which has 35
factories across India, suffered a labour strike at its Bombay
factory five years ago. The labour commissioner, Maharashtra,
required the company to pay wages to its workers until their
retirement date, even if they were not working. HUL posted an
HR manager at every factory after the labour strike to improve
communication and transparency between management and the
In recent years, some legal practitioners have noted that
the regulators and the courts in India have been coming up with
more balanced decisions whereas previously they were
However, Raghavan says that it is too early to say if this
is indeed the case. "The labour tribunals have still shown a
pro-labour attitude in most of their judgments," he says. "On
the other hand, we are seeing the judgments from the High Court
and Supreme Court taking a more balanced stand. At the moment,
it is perhaps too early to say that the courts have been moving
towards a more balanced stand, but at least we see employers'
rights being recognised in some cases."
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