CASE STUDY ON STRIKE AT MARUTI SUZUKI INDIA LTD. (JUNE 2011)

Brief Introduction to the case

The case is about Maruti Suzuki India ltd an oldest automobile company

Two facility locations are at Gurgaon and Manesar, south-west of New Delhi.

The Case is based on the situation of labour unrest at the Manesar plant occured in June 2011

The detailed analysis will include the cause of the unrest, its consequences& the final settlement of 13 day long strike

Problem Faced by the Management

Maruti being an oldest player has faced many labour relations problem right up from sept 2000 till 2012.

Due to which, it has faced a dipped market share Production loss of around 12000 cars and 4.2 billion

rupees Delayed bookings and no-advances Leading to borrowings for working capital

requirements.

Cause of the Problem

All of the problems have taken place due to 13-day long strike at Manesar plant of 2000 workers on the following issues:

There was a huge difference in the status of permanent and contractual workers

Workers’ demand was to recognize a new union named Maruti Suzuki Employees Union (MSEU)

Management had forced its workers to join an existing union at Gurgaon named Maruti Udyog Kamgar Union which workers said is a Pocket Union of Management.

Contd.

The Management asked its workers to sign a “Good Conduct Bond” which workers refused to do so

Due to the different views of both parties, workers went on strike on 4th June,2011

The strike led to dismissal of 11 employees by the management

Main trade unions AITUC, CITU, HMS, INTUC, UTUC formed a joint-action committee which led to the number of striking workers to 3000.

Implication of the strike as per Indian Labour Laws

As per the Contract Labour Act 1970, every contract worker has a right of being given Parity of Pay and some benefits for similar work which were absent at Maruti’s place.

As per the Trade Unions Act, 1926 Management has no right to restrict workers to form a union

A statement given by an ex-labour secretary that management has no right to force its workers to sign any kind of good conduct bond, it should be mentioned in its standing orders itself.

Contd.

As per the Industrial Disputes Act,1947 there should be prior notice to be given before going for strike which was absent and which makes the strike illegal.

On June 10th The Haryana Govt. declared it as an illegal strike but which was still continued

Final Settlement

On June 17th the strike was called of in the labour court.

Management reinstated its 11 sacked employees for a domestic inquiry

There was no-wage for no-work period of strike The registration process for the new union was

started and Finally both parties agreed to work with

cooperation.

Alternative Solutions

Settlement through a Works Committee

Collective Bargaining

Voluntary Arbitration

Suggestions

Maruti must implement all the terms mentioned in

the agreement to form a Grievance Settlement

Authority and a Labour Welfare Committee.

Management must follow best corporate

Governance practices

It must learn from the industry to be a model

employer

Contd.

Management must ensure a parity among its

employees.

HR system should be responsible for having sound

relations at shop floor also

Maruti should eliminate its so called

“Mahapanchayat” system.

Questions Analysis

What is the basic reason of strike at MUL? What are the difficulties faced by the

labours ? What are the results of strike ? What could have been done before the

problem started?

Conclusion

Poor Industrial relations are bad for everyone Maruti being an oldest player should have learnt to

maintain its relations For sustainable success, one has to go through the

phase of trade-offs It is the duty of the management to solve the

problems of its people empathetically.