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Wednesday, 20 August 2014 00:00
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Shobhana's edit

Unions must behave responsibly in workers’ interests


The firm manner, in which Rajiv Bajaj has dealt with the unions, ever since labour troubles broke out at Bajaj Auto’s Chakan plant 15 months back, has paid off with workers finally coming around. From the very start, Bajaj rightly refused to give in to the union’s demands, some of which were to say the least, preposterous; at one point workers were asking for 500 shares each at R1 apiece as stock options apart from demanding that half the firm’s expenses on corporate social responsibility be spent on them. Bajaj also demonstrated he was serious about shifting production out of Chakan to Aurangabad.

In the final analysis, the blame for the disruption at the Chakan unit must rest with the workers who would have been better off accepting the management’s wage offer which was reasonable, especially since Bajaj had pointed out to them that the company wasn’t faring well in a slowing economy. That the unions have finally capitulated, accepting a marginal increase of R1,280 over the management’s offer of between R9,000-10,000 is evidence of their limited bargaining power and inability to hold out. Indeed, given the challenging environment, the workers needed to have behaved a lot more responsibly; the loss of man-days resulted in the company producing fewer units—at 38.8 lakh in FY14, down from 42.2 lakh units in the previous year. While that can be made up and is, at worst, a financial setback for the company, what is unfortunate is that the work culture has been vitiated and as Rajiv Bajaj told this newspaper, the company’s image too has been somewhat tarnished.

Bajaj has observed that 99% of the workers had no problem with the management’s wage offer and that it was the unions that were not accepting it. If this is indeed a fact, it would mean the union leaders were acting against the wishes of the majority, which is unacceptable. Indeed unions must realise that they cannot be high-handed and must go along with the views of the workers else, at some point, they will be marginalised. Moreover, in a situation where there are several unions, these must desist from one-upmanship. In general, it cannot be the workers’ case that they are not adequately compensated; CMIE data shows that auto sector employee costs rose 3.3 times over the decade compared with 3.1 times for the overall manufacturing sector. If they continue to be unreasonable, it will only prompt managements to organise manufacturing facilities and vendor bases such that production can be quickly shifted from one location to another. And they will resort to greater automation. Some of this may be already happening. If Maruti’s production has risen 3.4 times over the last decade or so, the number of workers has gone up by just 2.5 times. Companies, for their part, will strive for greater productivity and consequently the level of employment generated for every million rupees of output will fall. Irresponsible behaviour by workers will only hasten this process.


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