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Prof. Santanu Sarkar
XLRI, Jamshedpur

The Peoples Management fiasco in HMSI is a classic example of, how small issues can escalate to a big
Industrial Dispute. The core values of HMSI Global were not followed and the administration was not
welfare centric. The workers resort to the formation of a Union affiliated to AITUC (Marxist) for the
protection of their demands. The Management was not conciliatory and uncompromising for which the
labour unrest took a violent turn and seek the attention of media. With the intervention of political parties
and union the labor unrest was settled and the management has accepted all the demands put forward
earlier by the workers.
HMSI management has suffered huge loss in production in the month of May,June 2005 because
of labour dispute.
HMSI has total work force of 3,000 employees out of which 2,000 are in workers category, out of
which 1300 are conformed workers and 700 are contact workers. In addition 1300 are supervisory
roles and 700 trainees and 300 apprentices.

HR policies of HMSI were in alignment with the philosophy of parent company. They believe in
two fundamental believes: respect for individual differences and Three Joys.
The HR department was expected to organize training programmes and facilitate culture building
among the employees. But the position of asst. manager, training was vacant.
The news letter published by the company never addresses the employee related matters.
The employees welfare measures were followed the by organization but it was not up to the
expectations of the workers .The differences were there in their medical insurance entitlements.
The dissatisfaction of the workers went to a new level when their demand of a good Diwali gift
got rejected by the management. They felt bad because their competitors were offering better gifts
than HSIL. This resentment has promoted unionization in the factory.
The resentment took a new turn when one of the workers was dismissed because he violated the
norms of Movement Sheet. The workers were denied holidays even if they have serious
circumstances. They were threatened of termination. No worker has guts to raise their voices
against the management.
The managers of the factory showed partiality in job posting of workers, which resulted in the
bickering among the workers class. The managers would not let the workers meet the top
management to share their grievances rather they encourage the scenario and stop the workers to
get united.
The workers were unhappy about the idiosyncratic attitude of one of the VP (Japanese nationals)
of the factory. In one of the incident, the VP manhandled one of the workers in a friendly manner.
This matter was taken seriously by the workers, which resulted in the transfer of the VP. But the
management did not take any action against the VP.
In march 2005, the workers put forward a demand of 50 items which comprises of increase in
(wage, increment, house rent allowance etc)
The management with reluctance offered the workers a compensation of Rs.3000 on the condition
that, workers not form a union. The workers rejected the offer.
The management did everything to stop the workers to go for a union. But the workers, with the
help of local leaders filed for the registration of union but the registrar denied registration because
of lobbying and pressure of HMSI management.
The workers in protect, adopted go slow tactic and management take it as a indiscipline and
suspended 4 workers on charges of insubordination and unrest.
These actions of the management led to widespread discontent then all the workers (permanent or
trainee) under the leadership of suspended workers ghareod the management and beaten one
senior official.
The Management took it a gross indiscipline and suspended 50 workers without enquiry and this
make the situation more explosive.
In the meantime with the help of AITUC (chief. Gurudas Dasgupta) the HMSI labour union was
registered and the new and old demands of the workers were placed before the management.
The conciliatory proceedings started by the labour commissioner could not materialize because of
uncompromising stand between Union and Management. He filed a confidential report to
Haryana Government.
In pendency of the conciliatory proceedings, the management asked the workers to sign a
statement of good conduct and no unionism, to enter the factory unconditionally, but the workers
refused to sign the agreement and the management did not allow them.
To maintain production the management hired temporary workers. But in June 2005 a agreement
was reached to allow the 50 suspended workers on the condition that earlier 4 suspended workers
cant be reinstated and to allow workers to enter premises in batches of 400(with good conduct

HMSI taking the past experience in other plant locations did not allowed the workers to enter the
factory which resulted the shutting down of plant as the temporary workers left because of fear.
This unrest if May, June,
July 2005 the production was
severely affected.
On July 25th 2005 ,
workers staged a rally in front of
district authorities. The workers resorted to violence and destruction of public properties which
cached the media attention.
The administration subsequently decided to call the workers for truce and tell them to assemble at
secretariat. But the meeting got ugly and 700 workers got injured by police action. The police
also booked them under different sections of IPC. The police brutality was reported in media and
it was condemned from all corners.
After this incident a court of enquiry was set up by the Haryana Government. On July 30 th 2005,
an agreement was arrived at between the workers and HMSI. The main percepts of the agreement
were there shall be no new demands from workers in one year ,the union was allowed by the
management , 54 suspended workers will be reinstated(with a unconditional letter of apology),
and the trainees will be abosorbed followed by a test.
After this turmoil the management and workers relationship changed. The union was allotted a
temporary office. Union played a challenging role to protect the interest of workers who got
arrested and injured in the meeting.
The union managed to get decent hikes in wages, medical benefits for families of workers and
hike of Rs.2000 as Diwali gift. The union played a constructive role in bridging the gap between
aspirations management and grievances of the workers.
As one of the direct consequences of the unrest, the company revamped and intensifies its
training functions. The company also nominated seven workers representative who would bring
the workers grievances to the notice of the management and the union leaders.
Analysis of the Case:

The labor unrest happened because the issues of the workers were not addressed by the top
management. It could have been avoided with the timely intervention of the management.
The management was not serious about the demands of the workers and in case of diwali gift
matter; it could have been handled by the management in a better manner.
The Management stooped the workers to form union which was wrong as they have legitimate
rights to form union.
The Managers were biased and authoritarian in nature, which resulted in groups. This was not
reported to the higher management. This could have been avoided.
The Workers does not have any forum to put forward their grievances. Instead they were warned
to be terminated for various genuine reasons, I could have been avoided.
The head of the training department was vacant for a long period of time. If it would have been
filled up by the management.
The incident of VP (Japanese National) man handling could have been dealt properly by the
The suspension of the workers could have been done with an enquiry. It could be avoided.
The labor dispute could have been settled inside the factory. Because of rally, the matter gone
outside and took the attention of media. It could have been restrained.

The position of asst. Manager was vacant in the training department.

The Employee welfare was poor.
Biased Behavior shown by the Managers of HMSI in job postings.
VP of HMSI carries a bad reputation because of his idiosyncratic behavior and
HMSI intervention in Union formation at Gurgaon plant.
Higher Japanese Management did not know about the workers problems.

Workers were unhappy about the Diwali gift given by the management.

The post-frodist production system increases the stress of the workers at the shop floor.
The Workers were not given holidays even in serious circumstances, instead the workers
were threatened to be terminated.
The workers were not allowed to change a shift temporarily for some obligatory
No workers dare to speak up against the management. The grievance redressal system
was bad.
No enquiry was held before theHMSI
of the worker.
Police Brutality on the workers.
Wages given to the workers were not as per industry standards.
Management interference in Union formation.

Causal Model of the labor Unrest Happened at HMSI Plant)