THE SUNDAY STORY India’s manufacturing sector is shedding permanent jobs and hiring casual hands to increase profits. This has divided the labour movement and stoked tensions. The Manesar violence is a symptom of a worsening problem

Each morning, factory hooters call out to India’s 50 million industrial workers, many of whom stand by their stations and repeat a single set of tasks with an unerring regularity until the hooter sounds again to signal the end of the first shift and the start of another.

Manufacturing employs just 11 per cent of India’s workforce, but the sector and its workers are seen as a bellwether for the economy as a whole.

A senior general manager in Maruti Suzuki’s Manesar plant was killed and several managers were injured in a violent confrontation between the workers and the management, an incident that prompted national dailies to speak of the “bad old days of militant trade unionism.” Yet, industrial unrest is at historic lows in terms of the numbers of incidents and man-days lost. During 1973-74, nearly 3,00,000 strikes were called prior to the Emergency; in 2010, just 429 such incidents occurred, according to data from the V.V. Giri National Labour Institute.

What accounts for this shift? Has the Indian factory become a safer, better-paid and more secure workplace?

Data suggests the opposite: Today, Indian workers are paid less in real terms than they were fifteen years ago, have less job security, and yet are less likely to strike. The incident at Maruti Manesar signals the end of the all-powerful union capable of controlling the factory floor, rather than its return. Instead, industry’s reliance on casual workers has created informal leaderless networks that operate outside the framework of strikes and settlements that undergird union activity.

“The shop floor is divided into those who work and those who make them work,” said Bhupen Singh*, who spent 20 years in a tool factory at Faridabad. “Workers and supervisors have an inherently antagonistic relationship.” In his time, unions and managements worked to bridge this divide. The unions presented worker demands to the management and also enforced discipline on the shop floor.

In the aftermath of the strikes of the 1970s, data from the Annual Survey of Industries — calculated by economist C.P. Chandrasekhar — show that real, inflation-adjusted wages for workers increased by nearly 40 per cent in 15 years, from 1981-82 to 1994-95, and then fell 15 percent in the next 15 years.

Dropping wages

Wage payments, as a percentage of the net value created by firms, have dropped from 30.3 per cent to 11.6 per cent over 30 years, as profits have increased from 23.4 per cent of the net value to 56.2 percent, suggesting that firms have become more efficient, but wages have not risen in proportion with profits. The rise of cheap casual labour — stripped of health benefits, provident funds and pensions — could explain this trend.

“There are various kinds of casual work,” said Babu*, a 19-year-old casual worker. “Company casuals employed by the company itself; on-roll casuals working in the company but listed on a contractor’s employment rolls; and off-roll contract workers who work in the company but do not appear in wage books.”

Babu is short and slender and combs his hair with an IIT aspirant’s side parting. In 2000, workers like him accounted for 38 per cent of employment in the organized sectors, such as manufacturing and construction, according to NSS data; by 2010, they accounted for 58 per cent. In this current downturn, manufacturing has shed 5 million casual jobs in five years. Such dizzying shifts make it impossible to form stable unions.

Babu’s first job was at a pharmaceutical factory that made everything from syringes to pills. The company refused to hire him because he was only 16, but a contractor hired him “off roll” to load and unload trays of hot, sterilised bottles into a machine again and again for eight hours a day for a below minimum wage sum of Rs. 2,400 a month, for a year.

He then worked an “on-roll” job at an electrical components company that employed 300 permanent and 1,200 casual workers. There, he stood at one spot and tightened screws for eight hours for a minimum wage of Rs.4, 847 a month. “The contract workers had to stand through out,” he said. “Only the permanent workers could sit.” The permanent workers had their union, but didn’t fight for the contract workers. “If we sat on a stool, the permanents would make us stand up.” Babu started taking toilet breaks to rest his legs, until a supervisor caught him. He quit soon and joined a factory that made shoes for many different brands, including Puma.

He was hired as a company casual, except that the company refused to pay its workers. “We kept saying, ‘clear our accounts and let us resign,’ but the company refused because it had no money for a settlement. Union workers fight for better wages; contract workers fight to be paid at all.”

Unpaid workers

In 2011-12, “India Inc.” owed its workers at least Rs. 711 crore in unpaid wages, according to Lok Sabha data. This doesn’t include “off-roll” workers or instances wherein the matter never reached a labour court. Workers say they almost never approach courts because they rarely get justice. Bhupen Singh, the retired tool worker, has been fighting for his arrears since 1997; last year, labour courts had a backlog of 13,527 cases, which rose to 13,642 this year.

Without courts or unions, workers like Babu have adopted novel and disruptive ways of compelling managements to pay heed to their demands.

One afternoon in December last year, the workers were summoned for an hour-long lecture on fire safety. In May 2009, an industrial fire at Lakhani killed at least 10 workers and injured several more. “If the hooter blows during factory hours, immediately leave your line and gather in an open space,” said a manager. The workers nodded their assent.

The next day, the hooter rang at 10 a.m., the workers rushed out of their stations and gathered outside, but there was no sign of fire. The supervisor also rushed out; the workers saw him coming and began chanting “Give us our wages, give us our wages.”

“This continued for months. Someone would go blow the hooter and we would all rush out of the plant,” said Babu. “When the management came out, we would demand our wages. The supervisor couldn’t say anything, his payment was four months late.” Workers also slowed the assembly line to a halt, until they were eventually paid a part of their wages, but the company still owes Babu and his friends.

The industrial action at Lakhani is not an isolated incident; worker broadsheets like Mazdoor Samachar detail several instances of broad-based, leaderless protests for wages and better working conditions. This activity is very hard to quantify as it falls outside the classification of ‘disputes,’ ‘unrest,’ ‘strike’ or ‘lockout.’ At times, such activity is not easy to direct or control as in Maruti, where the union had no control over its members because the company had dismissed its leaders.

K. Ramkumar is the Executive Director of the Board of ICICI Bank, and a friend of Awanish Dev, the manager who perished in violence at Maruti. “What happened in Manesar was murder — it was a crime,” said Mr. Ramkumar. “No amount of inequality gives you the licence to kill.”

Separately, Mr. Ramkumar believes that “a window is broken” in the shared edifice of management and unions. “This window must be fixed soon before there are more stones thrown and more windows broken.”

“Industrial leaders cannot say we want complete freedom to run our companies, and if it infringes on the rights and well-being of our employees, they should put up with it,” said Mr. Ramkumar, “But unions must put aside their suspicions of management, be willing to [arrive] at a charter for a violence-free workplace.”

Such a charter, Mr. Ramkumar said, would need to consider the disparity in wages between permanent and contract workers on the one hand and worker and managers on the other.

After a summer of strikes last year, Maruti agreed to let its permanent workers at Manesar form a union of their own, but dismissed those who led the agitation. In November last year, an anonymous worker contributed a prescient analysis of the future of operations of the plan in a local newspaper. “Sahibs don’t understand the situation… In these last few months, a handful of workers had risen to the position where they could control the workers … By dismissing exactly those men, the management has thrown away a valuable tool.”

(*Names have been changed)