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Collective Bargaining Case Study Companies In India

Maruti Workers Struggle

PRESSRELEASE
International Delegation Releases Report and Calls On the Indian Government to Address Violations of the Labor and Human Rights of Maruti Suzuki Workers

Today, 27 June, 2013, the International Commission for Labor Rights (ICLR) released the report entitled, “Merchants of Menace: Repressing workers in India’s new industrial belt, Violations of workers’ and trade union rights at Maruti Suzuki India Ltd.”

This report is the outcome of an extensive fact finding mission by an international delegation. The delegation visited India from 25-31 May 2013. The International Commission for Labor Rights (ICLR) convened this delegation to investigate alleged violations of workers’ and trade union rights at the Manesar plant of Maruti Suzuki India Ltd (MSIL). This report is getting released at a time that marks one year of the incident at the Maruti Suzuki Plant in Manesar, Haryana that led to the arrest of 147 workers, termination of 546 permanent and 1800 casual workers. The workers continue to be denied the right to bail and a fair trial with expediency.

Releasing the report at the press conference, the President of the ICLR, international lawyer Jeanne Mirer, said: “The government of India must ensure that the state of Haryana, as well as Maruti Suzuki, respect internationally-recognized labor and human rights. These include guarantees regarding the freedom of association and collective bargaining, under ILO Conventions 87 and 98 and core civil rights – of speech, of protest, of freedom from arbitrary detention and from torture – protected by the International Covenant on Civil and Political Rights, as well as the Universal Declaration of Human Rights.”

The delegation, which included labor lawyers and labor rights experts from the U.S., Japan, France, South Africa and India, met widely with workers and their families, civil society organizations including trade unions, the public authorities, and industry associations. MSIL, however, refused a meeting in spite of multiple requests.

The delegation found that auto workers at MSIL-Manesar had consistently raised labor rights issues with management, including:
• The physical and psychological strain associated with having to produce one car approximately every 45 seconds.
• The lack of adequate rest time for meals and bathroom breaks.
• A wage structure where up to half of monthly pay is based on productivity and other subjective factors, and where even taking a sick day will cost workers a quarter of this discretionary pay.
• An average of two hours of unpaid overtime a day.
• Reliance on a highly precarious workforce, where 75% of workers are contract labor, trainees, or apprentices. These workers earn dramatically less than full time workers and have no job security or benefits.

In response to these conditions, the workers at MSIL-Manesar chose to form an independent union, believing that the company-imposed “yellow” union did not represent their interests. After a long period of struggle to have their union recognized by the Labour Department of the state of Haryana, the union – the Maruti Suzuki Workers Union (MSWU) – was registered, but MSIL refused to negotiate in good faith.

On 18 July 2012, following two months of MSIL’s refusal to bargain with the MSWU, and as a direct outcome of casteist invective hurled by a supervisor at a worker, violence broke out at the MSIL-Manesar facility. Furthermore, there are strong reasons to believe that MSIL management brought thugs known as “bouncers” into the workplace, dressed as workers, to instigate violence. One management official died in the conflict and many workers were injured. It remains the case, as of July 2013, that there has been no independent investigation of the violence, or of the underlying industrial dispute.

At this moment, 147 MSIL-Manesar workers remain in custody without charges or bail; many have been subjected to beatings and torture. Eleven others connected to the MSWU struggle – workers, family members and supporters – were recently arrested during a protest, and are still in custody. There are other troubling instances of illegal collective punishment: the delegation found that the police subjected the family members of workers to extensive harassment and even beatings, as a means of trying to force the workers themselves to surrender. The workers have informed the delegation that they are determined in their pursuit of justice. They have advised us that on July 18, they will resume a hunger strike and indefinite sit in demonstration the site of the Manesar plant.

MSIL summarily dismissed 546 permanent workers and 1800 contract workers. The dismissals were in some ways utterly arbitrary: many of those who were terminated were not even present at the plant when the violence took place on July 18.

The delegation established that
(1) The management of MSIL has engaged in significant violations of law with respect to the right to freedom of association, the right to collective bargaining and the right to equal pay for equal work, protected under ILO Conventions 87, 98 and 111.
(2) The Labour Department has been ineffective in ensuring the rule of law
(3) The Police has transgressed its powers in ways that amount to gross and inappropriate interference in industrial disputes, and yet failed to act to protect industrial peace when it should have.

Speaking at the press conference, N Vasudevan, National Secretary of the New Trade Union Initiative observed that ‘the basic issue is the management’s refusal to allow the formation of a union of the workers’ choice and the Government of Haryana abandoning its impartial third party role in labour disputes. Instead government has acted as an agent of capital. Maruti Suzuki has consistently violated the fundamental Right to Freedom of Association of workers. On 22 May 2013, rejecting the bail of 9 Maruti Suzuki workers, the Punjab and Haryana High Court said “the incident is most unfortunate occurrence which has lowered the reputation of India in the estimation of the world. Foreign investors are not likely to invest the money in India out of fear of labour unrest.” The legal plea of 9 workers went unheeded. All these reflect a complete lack of rule of law in this country and the lack of the government and the judiciary’s capacity and will to ensure that corporates abide by the law. This is what is lowering the reputation of this country’.
To ensure that justice is not further or forever denied, the delegation recommends:

• Immediate release of the 147 MSIL workers currently detained in Bhondsi Jail (Gurgaon), as well as of the 11 detained at Kaithal Jail.
• A public commitment by the Haryana state police to cease and desist from the arbitrary arrests of workers seeking to defend their occupational interests. The police must also end the harassment of workers and their families.
• The constitution of an independent and impartial judicial inquiry to investigate the full scope of events that led up to the industrial violence on 18 July 2012, as well as subsequent events, including but not limited to the custodial torture of workers.
• The full reinstatement of all workers who were at MSIL-Manesar as of 17 July 2012, whether permanent or precarious workers.
• Enforcement of tripartite machinery – bringing together the state labor administration, employers’ representatives and worker representatives – to ensure that MSIL enters into constructive good faith negotiations with the union of the workers’ choice.
• The delegation also asks that the Haryana State Human Rights Commission act to investigate the abuses outlined above.

The members of the delegation expect to pursue these pressing issues of state and corporate abuse of Maruti Suzuki workers and their families. The government of India must ensure that the state of Haryana, as well as MSIL as a private actor, respect internationally-recognized labor and human rights. These include guarantees regarding the freedom of association and collective bargaining, under ILO Conventions 87 and 98 protecting trade union rights, as well as core civil rights – of speech, of protest, of freedom from arbitrary detention and from torture – protected by the International Covenant on Civil and Political Rights, as well as the Universal Declaration of Human Rights.

The delegation was composed of the following:
• Ashwini Sukthankar, member of the Board, International Commission for Labour Rights
• Chere Monaisa, National Labour and Economic Development Institute of COSATU, South Africa
• Franceline Lepany, Labour Lawyer, France
• Immanuel Ness, Professor of Political Science, City University of New York, USA
• Masuo Kato, former chief of the International Bureau, Zenroren, Japan
• N. Vasudevan, New Trade Union Initiative, India
• Ranjana Padhi, People’s Union for Democratic Rights, India
• Yasuhisa Ota, retired worker and trade unionist at Suzuki, Hamamatsu, and member of the Japanese Institute of Labour Movements

This report has been written and circulated as a matter of urgency, given the risk of imminent harm to workers, their families, and the organization that they struggled to shape and defend. It is necessary to emphasize, both to MSIL and the government of India, that on each level – for the workers, their families and their union – the internationally-recognized principle of human rights and labor rights must apply: justice delayed is justice denied.

Please find the ICLR report titled Merchants of Menace: Merchants of Menace: Repressing workers in India’s new industrial belt, Violations of workers’ and trade union rights at Maruti Suzuki India Ltd

For more information:
Jeanne Mirer, President, ICLR
N Vasudevan, Secretary, NTUI

Read more:
At Maruti Suzuki: We Shall Win
Workers in Maruti Suzuki Manesar plant: “justice delayed is justice denied”
Stop the Police Brutality Against Maruti Suzuki Workers
Unions and Sarpanches Support Maruti-Suzuki Workers: Suzuki refuses to negotiate with Union


Case Details:

Price:

Case Code:HROB109For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Human Resource/ labor relations/ industrial relations/ Collective Bargaining
Case Length:19 Pages
Period:2005-2008
Pub Date:2008
Teaching Note:Not Available
Organization: General Motors
Industry:Automotive
Countries:USA

Abstract:

This case is about the collective bargaining agreement between one of the world's leading automobile manufacturers, General Motors Corporation (GM), and the United Auto Workers in late 2007. The agreement, which a number of experts have termed as 'historic', was the result of a very complex bargaining process.

GM, which dominated the US market till 1980, with a market share of 46 percent, saw its market share decline steadily after the entry of Japanese competitors. In addition to issues relating to its products and marketing, GM's fortunes were severely affected with under-funded pension liabilities, rising employee and retiree healthcare costs, and a decreasing market share in the US automobile market.


The company's US market share fell to less than 25 percent in 2006. In 2007, GM inked a new labor contract with UAW which, analysts felt, would change the competitive landscape of the US auto industry and go a long way in ensuring GM's survival. Analysts felt that the deal also showed the changing role of the labor union in the 21st century.

Issues:

» Understand the challenges faced by GM in the US automobile market while competing with Japanese competitors.

» Understand the impact of GM's healthcare and other legacy costs on its ability to compete in the US automobile market.

» Understand issues and concepts related to the collective bargaining process, and, also study how GM negotiated a historic deal with the union that was expected to contribute to its turnaround strategy.

» Explore and discuss the changing role of trade unions in the 21st century.

Contents:

Key Words:

Collective bargaining, Negotiation, Collaboration, Trade union, Strike, social contract, Labor union, Labor contract, Human Resource, attrition program, Turnaround, Strategy, Competition, Japanese competitors, competitive advantage, restructuring, VEBA, Healthcare, GM, Ford, Chrysler, Toyota, Honda, UAW

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