Sriperumbudur may not be on a straight line with Manesar, but the simmering discontent over wages, the ding-dong battle between the management and ‘outside’ trade unions and the preference for contract labour in the industrial belt, 40 km from Chennai, are issues that are very real.
Besides being home to some of the leading names in the global automobile industry, such as Hyundai, Nissan, and BMW, the area, along the gleaming Chennai-Bangalore Highway, has attracted investments in electronics from Nokia, Foxconn, Flextronics and Samsung. Several component suppliers have also set up shop. It is a high-stakes affair for the State government too, as industrial peace and conducive investment climate were planks on which it attracted the companies.
“It has been 11 or 12 years since the first automobile plant came up there. In the first five or six years, everything progressed well. The workers got absorbed, and none even cared to find whether a trade union existed in the company. For that matter, no new employee does, as the atmosphere in Tamil Nadu is different. For many, a trade union is a… matter of ridicule,” says trade unionist and CPI(M) leader A. Soundararajan.
But things started changing when the focus shifted to contract employment. It was not about wages alone but the way, in which workers were treated, he adds. Blaming the companies and globalisation for striking at collective bargaining, the root of trade unionism, Mr. Soundararajan, an MLA, estimates that only 20 per cent of the one lakh people employed in the belt are permanent workers. Contract workers are in a precarious situation, suffering disparity in wages, he says. As per law, where the nature of work is perennial, the companies should not employ people on contract.
Advocate and honorary president of the non-partisan United Labour Federation V. Prakash lists the main issues: “Freedom of association is not permitted, majority union is not recognized, large-scale employment of contract labour is rampant and those on contract are paid low wages.” Moreover, some companies do not source from ancillary units that have trade unions, he says. Over time, there have been exceptions like Nokia, which has allowed an ‘outside’ union.
Since the contract workers are not issued identity cards and appointment orders, it becomes difficult for them to seek remedy under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981, which recognises the precarious nature of contract employment and stipulates that whoever has worked 480 days be made permanent.
“The prevailing situation of ‘outside’ trade unions trying to gain a foothold poses a challenge to the management, which hitherto remained comfortable with internal unions or workers committees. Many have started “expressing concern, and the authorities are alive to the situation,” says an official of an industry body.
The 2012-13 policy note of Tamil Nadu Labour and Employment Department observes that “Secondary and tertiary sectors have seen differential growth rates and have impacted the industrial relation scenario in different ways. The secondary sector has seen substantial Foreign Direct Investments in technology- intensive sectors like the automobile industry. This has thrown up challenges of harmonising cross-cultural differences and integrating global management practices with local work contexts.”
Automaker Hyundai, one of the leading companies in Sriperumbudur, which is resisting the entry of ‘outside’ union last witnessed a strike in June 2010, resulting in the loss of two days of production and Rs.130 crore, according to a spokesperson. It does not employ any ‘contract worker’ in core production functions.
“We employ over 5,000 permanent workers, including trainees and apprentices, in core production areas. These trainees and apprentices are approved by the government of Tamil Nadu,” the spokesperson said. There are a total of 3,000 contract workers. The number of those connected with the production functions like material handling and drivers who shift the finished cars from the production line to the dispatch yard is 1,110. The rest of the contract workers are in support functions of housekeeping, canteen, security and logistics.
One of the key drivers of contract employment is the emphasis of the companies on reining in expenditure to become more competitive. While refusing to divulge how much of the total expenditure goes towards labour costs, the spokesperson said the industry norm is two per cent.
Multinational auto major Ford in nearby Maraimalai Nagar has also encountered labour issues for similar reasons.
Consumerism is also contributing to the growing tension between managements and workers. “It is adding to the social tension,” says Mr. Soundararajan, while Mr. Prakash underscores the need for workers to be given Sunday off as family time. “They work and spend money on alcohol and become another machine.”
