A CASE STUDY ON

INDUSTRIAL UNREST IN
MARUTI COMPANY

Group-8

Anil Kumar – 21 PGDM ABPM-51

Sankeerthi – 21PGDM ABPM-59
Tulasi – 21 PGDM ABPM-69
Sneha – 21 PGDM ABPM-80
Sanket- 21PGDM ABPM-90
 OVERVIEW
 India's largest passenger car company, accounting
for over 45% of the domestic car market
 First company in India to mass-produce and sell
more than a million cars
 Annually exports more than 50,000 cars
 Manufacturing facilities are located at two facilities
Gurgaon and Manesar
 It offers 14 brands and over 150 variants ranging
from peoples car Maruti 800 to the stylish hatchback
Ritz
 About 35% of Company’s production comes from
Manesar facility, which accounts for revenues of
around $ 220 million a month.
2
 MANESAR VIOLENCE 18 JULY 2012

Worst ever incident by Maruti Suzuki

WHAT EXACTLY HAPPENED ON

THIS FATEFUL DAY???
 INCIDENTS

Workers started a fire, that killed the HR Manager and

100 injured.
2 Japanese officials were injured.
The violent mob injured 9 policemen.
The hands & legs of the HR Manager Awanish Kumar
Dev were broken, as a result he could not move, & the
building was set ablaze and was charred to death.
Factory building and many cars were burnt.
 Cause of this violence-Demands not met.

 Manesar union had demanded the following:

1. A five-fold increase in basic salary
2. A monthly conveyance allowance of rs 10,000
3. A laundry allowance of 3,000
4. A gift with every new car launch
5. A house for every worker who wants one or cheaper home
loans for those who want to build their own houses.
6. 4 paid weeks of vacation be increased to 7 weeks
7. Each worker have 40 days allowance of sick and casual leave
- for a total of 75 days.
 Other Causes
A supervisor had abused and made discriminatory
comments to a low-caste worker
Workers union demanded the reinstatement of a
worker who had been suspended for beating a
supervisor.
Harsh working conditions and extensive hiring of low-
paid contract workers
 AFTER EFFECTS
An FIR was filed with the police.
91 employees were arrested & 55 accused were
searched.
The recorded CCTV footage has been used to
determine the sequence of events and people
involved.
All work at Manesar plant was suspended
indefinitely.
Lockout was called and shut down of Manesar plant
led to a loss of about Rs 75 crores per day.
 Action taken by the Management

S. Nakanishi, managing director and chief executive of

Maruti Suzuki India declared a lockout saying that
safety is more important than business.
Mr. Nakanishi went to each victim apologizing for the
miseries inflicted on them by fellow workers.
He said that he will de-recognize Maruti Suzuki
Workers’ Union and dismiss all workers named in
connection with the incident.
He also announced Maruti plans to continue
manufacturing in Manesar.
 Industrial Relations insights : Possible Reasons of Labour Unrest

• Increasing number of Contract Workers in Core

activities with visible Wage difference and not being
treated fairly.
• Insensitivity towards handling Contract Labour
issues and leaving it to the contractors.
• Increasing Contract Workforce with no job security
attracted trade unions under whose umbrella they
thought of getting job security.
• Using Contract Labour workforce as cost cutting
tool with flexibility to tell NO at any point of time.
 Possible Reasons of Labour Unrest

• The faulty recruitment of young workers having Political

influence.
• Absence of proper verification checks leading to anti-social
elements getting employment.
• Young Workers not fully oriented to adapt to the work
culture where punctuality, discipline and productivity are
basic workplace values.
• While chasing relentless production targets, management
seemed oblivious to the urgent signals being sent out by
restive workers.
• Slow wage rise and fast inflation resulted into impatient
militant workforce.
 Possible Reasons of Labour Unrest

• No Orientation of shop floor executives towards People

issues. They were lacking in people management skills.
• There was a definite disconnect between shop floor
employees and their officers thereby undermining the
important aspects of keeping the channel of
Communication and Negotiation open at all times.
• Young Workers not fully oriented to adapt to the work
culture where punctuality, discipline and productivity are
basic workplace values.
• While chasing relentless production targets, management
seemed oblivious to the urgent signals being sent out by
restive workers.
• Slow wage rise and fast inflation resulted into impatient
 Possible Reasons of Labour Unrest

• “ Profit at any cost” – This kind of motive allowed practice

of exploitation of social resources. Appropriate sharing of
wealth should be practiced by all companys.
• There was a lack of understanding of human values and
ethical practices. This resulted in NO semblance of
ownership/sense-of-belonging towards the employer.
• HR Division and the whole management system was not
Proactive to have inside information and emotional
interface. There was no prior information of labour
conditions.
• Lastly, the Labour Reforms.
 Industrial Relations insights : Possible Solutions to Labour Unrest

• Workers should be fully oriented to imbibe the

Work Culture and be given sufficient training in
respect of Do’s and Don’ts of workplace before
sending them to shop floor.
• A fully transparent and effective grievance redressal
mechanism. Joint management councils to take up
workers issues and speedy solution.
• Strengthening HR processes to enable HR and shop
floor people to take independent decisions related
to workers matters so that they do not feel the
necessity to go to union.
 Industrial Relations insights : Possible Solutions to Labour Unrest

• Trade Union of Workers should be used in a

constructive way to build values and ethics thereby
treating the organisation, its employees including
management officials as one family.
• Recruitment mechanism strong enough to filter out
all undesirable elements. Background check should
be effective.
• Handle young workforce with Dignity, as they now
not only aspire to get their share of profits but are
sensitive about their Dignity more than the job.
 Industrial Relations insights : Possible Solutions to Labour Unrest

• Develop measures to prevent workers from being

taunted and humiliated, and pushing them to a
breaking point.
• Right balance in engagement of contract workers
vis-à-vis permt workers with equal wage parity. Also
have a policy on recruitment and absorption of
contract workers as permanent well laid out.
• The sacrifice of Awanish Dev should not go in vain.
The Employee Relations in Indian Manufacturing
industry must find a Paradigm Shift as also the
archaic Labour Reforms.