bajaj auto strike

8/13/2019 Bajaj Auto Strike

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Bajaj Auto Strike: Statement of Vishwa Kalyan

Kamgar SanghatanaHresonance believes in the principle of HearThe Other Party.In keeping with that policy,

Hresonance invited statement of the Union at Bajaj Auto employees, Vishwa Kalyan KamgarSanghatana on the issue of Stoppage of Work and the demand regarding shares of the

Company. Here is their response published unedited. The views expressed here are

exclusively of the VKKS, and not of this blogger.

Statement of Vishwa Kalyan Kamgar SanghatanaStoppageat Chakan, Pune Plant of Bajaj Auto Ltd,

From 25thJune, 2013

We are the only MRTU recognized Union at Akurdi and Chakan plant. We believe that

cooperation is must but conflict is also an expression of some un-addressed lacunae in the

rationale of our system and culture.

We take the opportunity to convey to you our anguish that despite our sincere efforts to

develop good harmonious relations, but the Bajaj management does not changed its anti labor

and anti union approaches and actions. To protect the workers interest, Union had been

compelled to refer the various matters in court of law. At present various matters are

pending before the court of law. There is a need to understand the root causes of the

problem and hence we are giving you the brief background and facts in chronological order:

[Photograph of Mr Dilip Pawar, President of Vishwa Kalyan Kamgar Sanghatana]

Scenario at Chakan Plant before formation of the Union: As you know that Chakan plant

has been set up in the year 1999. In early days management shown lot of dreams to the

employees and created hopes for better future. But over a period of time employees

understood and experienced that management ditched them by giving false hopes and

assurances. Employees started experiencing exactly opposite what was committed to them

by the management. The workers were experiencing various kind of harassments as

follows:

a) The management made overtime compulsory and refused to pay overtime.

b) The management arbitrarily deciding the shift timings and compelling workers to adjust

themselves accordingly.
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c) Workers were getting overloaded with excessive workload and if any worker raised the

grievance he was getting ill treatment by abusive language and punishment.

d) The wages of the workers were low and getting very low yearly increments.

e) There was no job satisfaction among the workers. The tag of WorldClass Companywas just

for namesake. There was totally negative approach towards workers.

f) The workers were getting punished by inhumane way.

Formation of the Union at Chakan Plant:

Because of above mentioned adamant and suppressive attitude of the management, the

workers at chakan plant decided to form union, in the month of January, 2010. There was

tremendous fear among the workers in terms of formation of union but at the same time

harassment of the management was at its peak level and hence they decided to join Vishwa

Kalyan Kamagar Sanghatana (VKKS) which was the recognized union under MRTU for Akurdi

Plant. In due course of time VKKS got official recognition under MRTU for Chakan Plant.

Scenario after formation of the Union:

a) TheFirst General Body Meeting (G.B.M) of Union held on 26th

January, 2010 and afterwards

officially VKKS has been recognized by the Management. The issues got discussed in peaceful

manner and the first Collective Bargaining settlement was signed on 21stMay, 2010.

b) In September, 2010, VKKS got official recognition under MRTU and good relationship got

established. All the issues were getting discussed and resolved across the table and day by

day relationship was getting improved.

Pant Nagar Episode:

a) The Pant Nagar plant got established in the year 2007. In Pant Nagar also chakan episode got

repeated. The situation at Pantnagar Plant was similar to that of the Chakan Plant and

because of this attitude of the management the workers at Pantnagar started agitations in

the month of May, 2012. These agitations at Pant Nagar were the outburst of the angeragainst management harassment and declaration of very low wage increment. Some of the

workers approached VKKS to support their agitation. VKKS suggested the Bajaj Management at

Akurdi to establish dialogue with Pant Nagar workers but management refused to discuss. As a

result of this the workers had no option but to form union. The workers of Pant Nagar knew

that it is next to impossible to get union registration in Uttara-khand and therefore they


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Changed Relationship at Chakan Plant after formation of the Union at Pant Nagar.

It seems that to take the revenge of Pant Nagar Episode, Management started harassment at

Chakan Plant. Therefore, they decided to vitiate the atmosphere at Chakan. Before, Pant

Nagar Episode the relationship at Chakan was normal, how all of a sudden whole atmosphere

got vitiated? To vitiate the atmosphere at Chakan management started harassing the workers

in following way:

a) Created an issue of line balancing and created unnecessary dispute to take action against

union members.

b) First giving additional manpower, achieving higher targets and then removing additional

manpower and asking for the same level of impossible targets. Based on false targets and

false reports management started giving warning letters, show cause notice, suspension,

pending enquiry suspension and dismissals.

c) From June 2012 (after the Pant Nagar Episode) management started various actions. For your

kind information we are giving it in the following table:

Sr. No. Particulars Numbers

1 Suspensions 22

2 Pending Enquiry suspension 8

3 Show cause Notice and

Enquiry

2

4 Domestic Enquiry 3

5 Terminations / Dismissals 1

d) Management just not stopped from taking false and illegal actions but also refused to review

the increment as per settlement dated 21stMay, 2010. Therefore union had no option but to

terminate Long Term Settlement.Against said termination letter management went to Court.

e) Management were using flexible manpower like earn & learn, trainee and contract workers to

frame false charges against union members and again we have been compelled to file the

cases against Company on the issue of earn & learn, trainee, contract, etc.


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f) Management started giving impossible production targets with an objective of taking action

against union members and hence we demanded scientific time study based on ILO norms.

This matter is also referred to court of law.

Requested for Dialogue: In short the relationship at Chakan got totally disturbed due

toWRONG, UNFAIR and ILLEGAL behaviour of the management. The management always

compelled us to refer most of the issues to court of law instead of resolving the same

through discussions.

The Workers were in vulnerable situation and such situation is not good for any organization

in terms of growth and sustainability. There is entire list of issues which prevents the

development of harmonious industrial relations in the Company. In the absence of a dialogue

and in the face of utter lack of desire being demonstrated by the management, it was very

difficult to either build good harmonious relations, or to adopt reasonable attitude. We were

finding it impossible to maintain relations or to resolve issues amicably.

Requested for Intervention to bring normalcy: We requested to M.D. Mr. Rajeev Bajaj to

save the relationship. We also requested him to give us an opportunity to present our case

with documentary proofs and to prove our position. It is unfortunate that M.D. never took

it seriously. On the contrary the situation further worsened.

Violation of the Settlement dated 21stMay 2010 and other issues in Chakan Plant:

The issue of contract labour, earn & learn, trainees, violation of the settlement dated

21stMay, 2010 are pending before the court of law. Union have been compelled to file cases

on the above matters only because management refused to discuss these issues across the

table.

The Vishwa Kalyan Kamgar Sanghatana and the Bajaj Auto Ltd signed the settlement on

21st

May 2010 deciding the wages and service conditions of workmen working at Chakan Plant.As per the settlement the increase of 12%, 8% and 8% was agreed for the first, second and

third year respectively.

In the settlement dated 21stMay 2010, it was agreed that if the annual increment awarded to

the similar category of employees across the Bajaj Auto Ltd. is higher than the above

mentioned increments in that case higher % of increment will be made applicable to workmen


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covered under said settlement. Management refused to do so and violated the clause no. 17

C of the settlement. And hence Union have been compelled to file case in Industrial Court,

Pune.

Further, in the said settlement, though the settlement is of 9 years, it was agreed that wages

will be discussed and reviewed periodically every 3 years. It was further agreed that for any

reason whatsoever the wages/salary review is not done after every 3 years, both the parties

shall have a right to terminate the settlement for the remaining period. (Clause No. 2-B).

Bajaj Management refused to REVIEWand hence Union had no option but to terminate the

settlement as per the said clause and submitted fresh Charter of Demands. Bajaj Management

refused to discuss demands submitted by the Union and hence Union have been compelled to

admit this matter under conciliation at Labour Commissioner Office, Pune.

Management filed a case against union in terms of cancellation of the registration of the

Union. The matter is pending before the Hon. High Court.

From all above one can understand that the basic objective of the Bajaj Management is to

demolish the Union. They did not like the fact that Chakan workers and Pant Nagar workers

joined the Union. They succeeded at Pant Nagar by paying heavy price and now trying to

adopt same strategy at Chakan.

Why stoppage?

From the above mentioned facts and considering the Bajaj History it is now very clear to the

union that Bajaj Management will never share their profitability with workers. Bajaj

Management always shared profit with the management staff by Paying BONUSES &

INCREMENTS but always refused to share the profitability with the workers. Earlier we

thought that at least this sharing can be done by getting reasonably good wages and better

service conditions. But management always refused to do so and never consider profitabilitywhile deciding wage rise and hence to get permanent solution in terms of profit sharing we

demanded 500sharesin the month of January 2013. Bajaj Management did not respond to

this demand. Therefore union have been compelled to go on stoppage from 25th

June,

2013. Only after stoppage, Bajaj Management is trying to highlight this issue. While


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addressing the press, Mr. Rajeev Bajaj rejected this demand by saying ridiculous.How this

demand is ridiculous? On the contrary this demand is very much PRO-COMPANY.

This demand is made in order to motivate workers for better performance and increase

prosperity. The prosperity due to better performance should be shared with workers, not fully

but to some extent, so that they are bound to feel themselves as a part of the Company. Also

accepting this demand will be a tribute to Late Shri Jamanalalji Bajaj who believing in

Gandhian philosophy of Trusteeship. This demand is based on Trusteeship and will improve

harmony & peace in the Company. Thus this demand is to the advantage of both the parties.

Also this demand will generate direct stake of workmen in the overall performance of the

Company and also induces motivation not only to perform better but also become vigilant &

cooperative in inter-functional integration of the work organization.

In last few years the Performance of the Company is outstanding but workers could not get

their due share.

PARTICULARS / YEARS 2001 2002 2003 2005 2006 2007

TOTAL CAPITAL EMPLOYED 3150 3682 4253 5501 6325 7233

INCOME 3964 4402 5070 6322 8106 10076

EXPENDITURE OTHER THAN LABOUR COST, 3169 3395 3826 4752 6037 7803

DEPRECIATION & INTEREST

VALUE ADDITION 795 1007 1244 1570 2069 2273

EMPLOYEES SHARE IN VALUE ADDITION 244 237 283 249 274 301

CAPITAL SHARE IN VALUE ADDITION 551 770 961 1321 1795 1972

EMPLOYEES SHARE IN VALUE ADDITION (%) 31 24 23 16 13 13

CAPITAL SHARE IN VALUE ADDITION (%) 69 76 77 84 87 87RETURN TO CAPITAL (%) 17 21 23 24 28 27

Gross Profit 369 587 788 1086 1580 1728

Net Profit 249 518 534 764 1123 1237Ratio of Employees Share & Income 6.16 5.38 5.58 3.94 3.38 2.99


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The above table reveals that though the Performance of the Company got improved

drastically, Employees share in Value Addition reduced drastically from 31% to 12%. Even

among Employees the share of workers is negligible as against management staff.

All workers i.e. around 1450 workers are getting around Rs.300/- per Pulsar. It means per

worker per Pulsar amounts to 22 PAISA !!!

Share Holder & Management Staff get around Rs. 16700/- per Pulsar

Governments get around Rs. 10000/- per Pulsar

Dealers get around Rs. 10,000/- per Pulsar

What about workers who creates this wealth? They are getting only around Rs. 300/- per

Pulsar & Per worker it is 22 PAISA.

Therefore, what is wrong in demanding shares?

VISHWA KALYAN KAMAGAR SANGHATAN

President General Secretary


9/13

Mumbai:Its a month since workers atBajaj Auto Ltds Chakan plant struck work but

neither the management nor the union appear to be giving in over the issue of wage hikes

and the allotment of discounted company shares to employees.

The Chakan plant employs 1,486 workers, of which 900 are permanent, 364 are trainees,and the rest are part of the learn and earn employment-promotion programme run by the

state employment exchange. The strike began on 25 June. The Vishwa Kalyan Kamgar

Sanghatana (VKKS) labour union wantsBajaj Autoto allot 500 shares each to all workers at

a price of Rs.1 per share, besides a wage hike and better working conditions.

The production loss amounts to 25,000 units, saidKailash Zanzari,vice-president of

manufacturing. However, he said that there has been no shortfall in despatches to dealers

so far.

While the company doesnt expect demand to pick up before the festive season kicks in

later this year, as a result of lower production, dealer inventory is likely to come down from

four weeks to a week, he said.

The company is very open to take up the wage negotiation issue, but it wont change its

stance on the allotment of shares as it doesnt see any merit in such a move, he said.

There is no question of allotment of shares. However, we are committed to a salary review

but only after normalcy in production is restored. We wont do it at gunpoint, he said.

The labour trouble has broken out at a time when companies are paring production and

undertaking scheduled closures of their plants. Though none of Indias two-wheeler firms

have reported production cuts, dealers are grappling with unsold stocks.

Companies typically go slow on dispute resolution when demand falls since it helps them

get rid of excess inventory and put them in a stronger negotiating position, experts said.

Duringa slowdown, companies can afford to adopt a wait-and-watch policy, said

Pranabesh Roy, dean, academics, at Jamshedpur-based Xavier Labour Research Institute.

An analyst at a domestic brokerage, who declined to be identified, said workers may have

to settle for less and compromise on their demands when sales are down, one of the

reasons it could take longer for the issue to be resolved.
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Following the slowing economy, high interest and fuel costs, auto sales in India hit a decade

low in fiscal year 2013. Even demand for two-wheelers, relatively insulated compared with

cars, contracted to a four-year low.

In 2008, when auto sales contracted in India following the global economic slowdown, atleast three firmsApollo Tyres Ltd,MRF LtdandBosch Ltdhad a standoff with workers.

Unable to reach an agreement, the companies had resorted to lockouts.

Zanzari ruled out a lockout, adding that irrespective of market condition, Bajaj Auto is keen

to resolve the issue.

The market condition is not that important, he said. What is critical is restorat ion of the

culture.

Meanwhile, Bajaj Auto has been shifting production of the models produced at Chakan plant

to its facility at Waluj in Aurangabad.

In the month since the strike has begun, Bajaj Auto has shifted 40% of its production to the

Aurangabad unit, which produces the Pulsar, Avenger and KTM models.

In a statement on 24 June, the company said 798 workers had reported to work that day

and that it would produce 1,900 vehicles at Chakan and 1,100 Pulsars at Waluj.

These are false claims as all the workers engaged in core production jobs are with us,

said Dilip Pawar, president of the labour union, adding that he plans to intensify the stir.

Bajaj Auto has appealed to the industrial court to declare the strike illegal. It said the

workers went on strike three days before the actual date on which they were to resort to line

stoppage. The hearing is due on 29 July.
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11/13

AUG 13:

The workers union at Bajaj Autos Chakanplant has withdrawn its strike. Union memberswill resume work from August 14, bringing the curtains down on the 50-day saga, whichbegan on June 25.

The unions announcement came hours after Rajiv Bajaj, the motorcycle majors ManagingDirector, agreed to extend the deadline to resolve issues from August 12 to August 16. Lastweek, he had told the striking workers that if no progress was made on the matter, thecompany would consider permanently moving half of its production from Chakan to otherplants.

The withdrawal of the strike comes on the heels of several rounds of discussions betweenthe Vishwa Kalyan Kamgar Sanghatana (VKKS) Union and the Bajaj Auto management,including some presided over by senior labour officials from Maharashtra.

In a statement, Rajiv Bajaj said: A strike is invariably a lose-lose proposition for all

involved, not only in financial terms, but also in terms of internal morale and externalreputation. I am very pleased that the VKKS has unconditionally called off its strike atChakan. More importantly, I hope that the decision is a reflection of their understanding,however late, of their erroneous choice of direction.

The strike, termed work stoppage by the workers, hinged on the VKKS demand that eachof its 900 members be given stock options to the tune of 500 shares, for a price of Re1/share. The company had categorically rejected this demand. The union had alsoterminated a nine-year wage agreement prematurely, and demanded the reinstatement of22 workers suspended for various reasons.

I am certain that the vast majority of the workmen at Chakan never supported the unionsstand, and that in the end this has been the most important reason the VKKS union has hadto call off their strike, said Bajaj.

On behalf of the management I assure all the 22 workmen who are suspended pendingenquiry that their cases will be considered objectively and sympatheticallyin the collectiveinterest of all stakeholders.

Dilip Pawar, President, VKKS, said the strike had been withdrawn to protect the interests ofthe workers. He expressed confidence that their demands, such as wage revision and better

working conditions, would be resolved in time.


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The strike at Bajaj Autos Chakanplant came at a time when cuts in production in the automobile sectorin the Pimpri-Chinchwad-Chakan belt led to many job losses, especially for contract workers.

This, together with the fact that Bajaj doesnt hire contract labour, helped the management impel the

union to withdraw their 50-day strike at the two-wheeler plant unconditionally.

The union had clearly chosen the wrong time to strike work, in the midst of a downturn that adversely

impacted this industrial belt -- one of the leading automobile hubs in the country.

The automobile industry has invested about Rs 50,000-crore (Rs 500-billion) in the Chakan belt.

Experts say about 40,000 contract workers, accounting for 80 per cent of the automobile workforce in this

belt, have lost their jobs.

There are about 200,000 workers in the automobile sector across the Chakan belt, primarily in small-

scale units.

We realised contract labour does not have the same commitment. So, we decided to hire only

permanent workers in the core areas of operations, says Rajiv Bajaj, managing director of Bajaj Auto.

However, the company has an earn while you learn trainee scheme, under which trainees get the same

wages as permanent workers.

About half of these trainees are absorbed in the company, depending on their performance and the

plants requirements.

At Bajajs Chakan plant, there are about 900 permanent workers and about 500 trainees.

During the strike, the trainees, who werent part of the union, kept the factory from being shut, churningout about 1,200 bikes, about a third of the normal production.

The unions demand that the wage agreement be cancelled and a new one be put in place didnt have

much teeth.

Bajaj has always ensured despite being a two-wheeler manufacturer, wages at the company are

benchmarked with those at large car companies in the belt, including Tata Motors, Volkswagen and

Mahindra & Mahindra.

Bajaj says its average salaries of about Rs 25,000 a month are comparable to the best in the region.

For contract workers, the average wages in the belt are Rs 7,000-12,000 a month.

Though the workers union at Bajajs Chakan plant received some support from local politicians, such as

a few Shiv Sena leaders, and activists such as Medha Patkar, its key demand of shares for workers,

something not seen in any Indian automobile company, didnt strike a chord with national and state level

politicians.


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During a recession, a demand for shares and scrapping a wage agreement that offers a 12 per cent

salary increase every year cannot win the hearts of workers, says a senior central union leader.

Bajaj Auto, unlike Maruti (Gurgaon-Manesar) or Volkswagen (Chakan), which have production capacity

based in a single area, has the flexibility to move production out of Chakan to other plants located in

Pantnagar and Aurangabad in a short time.

The companys management says the process could have taken a month. And, this doesnt entail major

costs, as many of the vendors are common across locations.

That is why Bajaj had given an ultimatum that it would permanently shift half its production from Chakan

to other locations if workers did not return to work.

It was able to quickly shift production of about 1,000 bikes, to be produced at Chakan, to Aurangabad.

Both major automobile companies, as well as the 8,000 small and medium units (mostly vendors) in the

region have cut production. For instance, Mahindra & Mahindra has done away with 1,000 temporaryworkers at its Chakan and Nashik plants.

The Pune labour commissioner has issued a show-cause notice to Bajaj Auto for allegedly

employing workers who are not licence holders and trainees at the production line in its

Chakan plant, where existing employees have been on a strike since June 25.

According to sources, the company has been given three days to respond to the notice,

which followed a complaint from the workers' union.

The union alleged that the company started using workers, who did not have licences, at

the production line following the strike by its existing employees.

It further said using of 'learn-and-earn' trainees by the company for full-time production was

in violation of the state's labour laws.

Under the 'learn-and-earn' scheme of Maharashtra, a trainee is given a diploma after

completion of a four-year course, which comprises both theory and practical training.

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