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Will Manesar-style labour unrest spread to the rest of the country?

There are four actors who should address the four factors behind the breakdown of employee relations, says Visty Banaji

Published: Dec 21, 2012 06:05:21 AM IST
Updated: Jan 7, 2013 05:18:03 PM IST
Will Manesar-style labour unrest spread to the rest of the country?
Image: Adnan Abidi/ Reuters
Trade union members hold demonstrations against the sacking of workers at the Manesar plant. Worker dissatisfaction often does not have constructive outlets

I am using ‘Manesar’ as a convenient shorthand for a catastrophic breakdown in employee relations. What happened in that particularly tragic event is unknown to most of us. I am trying to tease out the generic lessons and causes of such breakdowns, not the unique events that triggered the violence there.

Manesar was not the first time we saw industrial disharmony degenerate into violence. In November 2010, an HR executive at Allied Nippon died after workers attacked him. In 2009, Pricol’s HR vice president was murdered in Coimbatore. In 2008, an Italian CEO was beaten to death. Such episodes indicate there are underlying causative factors, and that we have not eliminated them to any significant extent. Despite the so-called waking-up post Manesar, there is no apparent reason to believe such explosive situations will not recur.

There are four causes and four actors behind such unrest. Let me explain this with a modern parable.

On May 6, 1937, the hydrogen-filled Hindenburg airship burst into flames over Lakehurst, New Jersey. Subsequently, the more expensive and less efficient helium was mandated to fill airships. Let’s transpose this to our context and imagine that airships remain a key means of transport in India.

A revenue-hungry government, prompted by a lobby of hydrogen manufacturers, raised duties on helium so that airship operators had to switch to hydrogen to compete with other modes of transport. The safety authorities were ‘managed’. But the airship operators didn’t stop there. To reduce costs further they bought the cheapest hydrogen, with impurities that raised inflammability. Moreover, they didn’t have skilled operating and maintenance engineers, whose experience might have partly reduced the dangers of using hydrogen. The need for rapid turnarounds at docking ports also meant quicker—but riskier—procedures were forced through.

After several airship disasters, questions about who or what was responsible began to be asked:

  • Did the risky docking procedures trigger the final spark?
  • Were relatively inexperienced and untrained supervisors responsible?
  • Was it because airship operators decided to use cheaper hydrogen?
  • Or were the government (for imposing high duties on helium) and hydrogen manufacturers’ (for engineering tariffs) the real culprits?
Let’s now come to the subject at hand and apply our analogy.

We begin with employee relations policies. Our labour laws are archaic, and, given the attitudes of unions, are likely to remain so. The laws do not allow flexibility to increase or reduce workforces as the exigencies of business demand, and there is no ‘exit’ policy. The labour laws and the attitude towards administering them make it difficult to quickly make changes to improve productivity, deal with indiscipline or poor performance.

Consequently, most industries increasingly resort to contract labourers for competitive survival. (Airship operators shift to hydrogen.)

The policy framework may have made contract workers necessary for dealing with business fluctuations, but some employers increasingly resorted to them for reasons of cost. There were instances of them being paid a third of what permanent workers got. Suddenly, what was a moderate practice 10 years ago, caught on like wild fire, till it reached a point where companies had a workforce with 50 to 60 percent contract labourers. (The use of cheaper hydrogen although it was more inflammable.)

Over time, employee relations began to be treated lightly, because the militant unions of the ’70s were a thing of the past, and India was on a growth trajectory. It became difficult to attract talent to industrial relations roles. Also, a constant churn at managerial levels meant bonds did not form between them and the labour. It was sometimes the local don who managed the employer’s contract labour through fear and might. (A shortage of skills necessary for managing hydrogen-filled airships.)

Once organisations started competing against global players, some of them wanted to change the attitude of Indian workers. But when new practices were imposed in an authoritarian way there was burning resentment and, sometimes, fierce resistance.

Where unions had been defanged, worker disaffection had no constructive valve and the pressure became less containable. (The final spark came from risky work practices.)

What we have are the factors and the actors (government, employers, employee relations managers and unions) who are capable of influencing them. We should not call any one a villain. Each of them should improve or correct one or more of the factors.

Post Manesar, I don’t think much has yet been done to tackle the fundamental causes. To prevent its recurrence I don’t think we have a choice but to do so.

(As told to Ashish K Mishra)
Will Manesar-style labour unrest spread to the rest of the country?

Visty Banaji is CEO, Banner Global Consulting. For more than three decades, Banaji has worked in the field of human resources at some of the biggest names in corporate India: Tata Motors, Godrej group and Alstom. He now runs an independent human resources consulting firm.

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(This story appears in the 11 January, 2013 issue of Forbes India. To visit our Archives, click here.)

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  • Employer Labour Relations

    Rightly said in the blog, there are so many cases of violence is seen from past many years that are mainly occurred due to the reason of bad employer and labour relations. For the betterment of work and productivity, it is highly required that there exists good communication levels between the management and employee. For this, even a new relations department is set up in many firms. To know more about employer and labour relations, visit us

    on Feb 5, 2013
  • Swati Parab

    We need to understand and evaluate the reasons behind the unrest and the acute hate for the Senior HR Management. Handling labour issue is sensitive task. All incidences and violence have happened were not overnight reactions. But many hidden chronic atrocities and small incidences were behind all violences. Treat employees with due respect and handle the matters understanding the psychology and state of mind of employees and working and living conditions of employees. Make them understand difference between right and wrong through certain psychological forums. Employee relation is very important. Gaining confidence of employees is very important aspect. Secondly, we need to upgrade our Labour Laws and should ensure from both the angles employer and employee. Management need to be proactive in order to hinder the future violence. If necessary take legal and security precautions well in advance. Our LABOUR ENACTMENTS should be such which should ensure the justice for both Employer and employees.

    on Dec 28, 2012
  • A.v.v.kumar

    Post Manesar and evn before alos labour unrest lead to the death top executives of the organisations 27th Jan\'2012 Mr Chandrasekhar President Opn) Regency Ceramics was killed. There willbe a parity in the wages between Contract Labour and Regular employees and as such there is separate schedule for Minimum Wages for Contract Labour. The employers will take the advantage for reduction of Labour cost. A.V.V.Kumar

    on Dec 28, 2012
  • Ashok Ghose

    Business is getting extremely complex, margins have to be maintained though the prices of the product cannot be increased due to the intense competition at the market place. It is just like tight rope walking for business. Mr Banaji\'s analogy with the learning\'s of airship case with Maruti\'s case is an eye opener and very true. With the rising cost pressures on the large manufacturing business we should be ready to face more such ugly events lik Maruti, there is no easy answers.

    on Dec 27, 2012