NAME-MUKUL JOSHI

ROLL NO-537

QUESTION: Elaborate the Collective Bargaining

procedure or process adopted by the Indian
business organizations.

QUICK INTRODUCTION OF THE COMPANY:

Maruti Suzuki India Limited, formerly known as Maruti
Udyog Limited, is an Indian automobile
manufacturer company, founded by Government of
India in 1981, headquartered in New Delhi, India. It is
a subsidiary of the
Japanese automotive manufacturer Suzuki Motor
Corporation and at one point was a largely government
owned company with 74 % stake held by the
government and 26% by Suzuki Japan. It has been
renowned for producing most fuel efficient affordable
and reliable cars.

INDUSTRAIL RELATIONS:
Since its founding in 1983, Maruti Udyog Limited has
experienced problems with its labour force. The Indian
labour it hired readily accepted Japanese work culture
and the modern manufacturing process. In 1997, there
was a change in ownership, and Maruti became
predominantly government controlled. Shortly
thereafter, conflict between the United Front
Government and Suzuki started. In 2000, a major
industrial relations issue began and employees of
Maruti went on an indefinite strike, demanding among
other things, major revisions to their wages, incentives
and pensions.
Employees used ‘slowdown’ in October 2000, to press
a revision to their incentive-linked pay. In parallel, after
elections and a new central government led by NDA
alliance, India pursued a disinvestment policy. Along
with many other government owned companies, the
new administration proposed to sell part of its stake in
Maruti Suzuki in a public offering. The worker's union
opposed this sell-off plan on the grounds that the
company will lose a major business advantage of being
subsidised by the Government, and the union has
better protection while the company remains in
control of the government.
The standoff between the union and the management
continued through 2001. The management refused
union demands citing increased competition and lower
margins. The central government privatized Maruti in
2002 and Suzuki became the majority owner of Maruti
Udyog Limited.
MANESAR MAYHEM:

In late 2011 and early 2012, labour unrest started in

Manesar plant with Sonu Gujjar, a local labour leader
demanding right to establish an alternative labour
Union due to non allignment of a large section of
workers with existing Union. The company responded
by suspending 11 workers and sending bouncers to
force them to sign blank pieces of paper in the name of
good conduct form.
July 18 2012, saw one of India’s worst labour incident
as Maruti’s Manesar Plant was hit by Violence.
According to Maruti management, the production
workers attacked supervisors and started a fire that
killed company's General Manager of Human
Resources Awanish Kumar Dev and injured 100 other
managers, including two Japanese expatriates. The
workers also allegedly injured nine policemen.
The police rounded up the factory workers and, by the
next day, had arrested over 90 people including all the
newly-elected union leaders. They slapped conspiracy
charges against the union leaders and workers and
started a massive manhunt for other workers on the
charges of rioting, arson, and murder of the HR
manager. In total, the police arrested and charged 148
workers for the incidents of July 18 th and imprisoned
them in the Gurgaon jail. All the injured persons were
discharged in less than a week. MSIL called a lockout
citing security issues and claimed that none of the
workers would be paid for the duration of the Lockout.
MSIL dismissed 500 workers accused of participating in
the violence and thereafter restarted its operation on
August 21, 2012.
Several factors have come into play in this Incident:
 Since April 2012, the Manesar union had
demanded a three-fold increase in basic salary, a
monthly conveyance allowance of ₹10,000, a
laundry allowance of ₹3,000, a gift with every new
car launch, and a house for every worker who
wants one, or cheaper home loans for those who
want to build their own houses.
 According to the Maruti Suzuki Workers Union a
supervisor had abused and made discriminatory
 comments to a low-caste worker, Jiya Lal. These
claims were denied by the company and the
police.
 Maruti said the unrest began, not over wage
discussions, but after the workers' union
demanded the reinstatement of Jiya Lal who had
been suspended for allegedly beating a supervisor.
 The workers claim harsh working conditions and
extensive hiring of low-paid contract workers
which are paid about $126 a month, about half the
minimum wage of permanent employees.
 Lack of Trust between the HR staff and workers.
 Lack of connectivity and active communication
between the management and workers.

The implications of this Mayhem are enormous:

 Operations of the company stopped for a
month.
 Loss estimated to be over Rs 1500 crore due to
Lock out.
 Shares of Maruti plunged due to the violence.
 On top of it, all of its Goodwill was lost.
 Problem of lack of labour resources arises.
 Potential Investors had backed out from investing in
Maruti Suzuki and moreover interested job seekers
has lost their interest due to security reasons.
This huge dispute in Maruti created impact on
Indian Economy also like large amount of
unemployment, GDP got affected and moreover loss
of country resources.
After this huge Dispute company decided to change its
recruitment procedure. It has decided to add or change
its’ norms such as hiring contract workers through
Company HR and not through a contractor. Re-opened
the plant with 300 workers. Fresh recruitment of
permanent workers.

CONCLUSION:
I am concluding this presentation by adding my
thought that employee labour relationship should be
maintained in decorum. Workers to be refrained from
taking law into their hands. Workers must be treated
properly in factories. Most important, Labour laws are
in need of being overhauled and while doing so taking
the opinions of the people concerned both labour
unions and industry leaders is highly recommended.
THANK YOU AND HAVE A NICE DAY!
Submitted to- Ms. Shuchi Priya