Labour problems dog multinationals in Tamil Nadu

June 28th, 2010 - 1:36 pm ICT by IANS  

By Venkatachari Jagannathan
Chennai, June 28 (IANS) All is not well on the industrial labour front in Tamil Nadu, with simmering discontent among workers in multinational companies leading to strikes and shutdowns, threatening the southern state’s reputation as an ideal investment destination.

Tyre-maker ATC Tires’ plant in Tirunelvelli has been closed down for more than a month. Japanese auto component vendor Yazaki Wiring Technologies’ facility near here has been served with a strike notice by its workers’ union.

Labour problems at Hyundai Motor India flare up at regular intervals. The newly-formed workers union at Ford Motor India has written to the state government to intervene on its behalf.

Non-recognition of unions by the companies and low wages are said to be the common reasons behind the labour unrest.

On the strike at ATC Tires, the Centre for Indian Trade Unions (CITU) State Secretary R. Karumalaiyan told IANS: “Initially workers were asked to work on a 12-hour shift. It was later reduced to nine hours. The wage per day is Rs.120 while wage rate under the rural employment guarantee scheme is Rs.100.”

The company does not have any permanent worker on its rolls though the total work force employed at its factory is around 700, he said over phone from Tirunelvelli.

Attempts by IANS to reach ATC Tires’ top officials for their reaction ended in vain.

At Yazaki Wiring Technologies, workers are agitating for the early conclusion of the wage agreement talks.

“The company is in an expansion mode supplying to Ford India and others. There are around 700 workers out of whom only around 90 are permanent. A worker who has put in 12 years of service in the company will get a salary of around Rs.5,800. The company wants the worker to earn more through production incentives,” union sources told IANS.

Yazaki Wiring officials were not available for comment on the issue.

Trade unionists said much of labour problems could have been avoided had the Tamil Nadu government passed a law making it compulsory for companies to recognise the majority trade union and pursued presidential approval for the amendment to the Industrial Standing Orders Act with the central government.

“States like Maharashtra, West Bengal and Kerala have passed a law for companies to recognise trade unions. The amendment to the Industrial Standing Orders Act prescribes the ratio of permanent to contract workers in a factory,” S. Kumarasami, state president of the All India Central Council of Trade Unions (AICCTU), told IANS.

CITU’s state general secretary A. Soundararajan said “though MNCs have works committees to discuss issues pertaining to their workers, these do not have any legal standing.”

The state government in April announced the setting up of a committee to study the experiences of other states in passing a law to make trade union recognition compulsory by corporations. But trade unionists termed the move as an election gimmick.

The state goes to the polls next year.

Industry lobbies like the Confederation of Indian Industry (CII) are not against the existence of unions.

“Unions are a reality. While we can suggest to our members on having cordial relationship with the unions we cannot go beyond a certain limit,” CII’s Southern Region head S. Gopalakrishnan told IANS.

Tamil Nadu has in recent years attracted a lot of investment, particularly in automobile and auto ancillaries manufacturing, and observers say continuing labour unrest could deter future investments in the state.

The CII’s southern chapter had organised meetings with trade unions and companies last year to foster better ties between the two in view of the worsening industrial relations and possible impact on fresh investments.

According to the state government, strikes and lockouts have come down during 2009 as compared to earlier years.

Figures released by the labour department show 2006 saw 51 strikes and lockouts which went up to 66 in 2007, 86 in 2008 and then came down to 49 in 2009.

Tamil Nadu claims to have the largest number of factories (around 43,000) and workers (around 1.4 million) in the country.

Meanwhile, the Coimbatore-based auto component maker Pricol is having informal talks with its work force though refusing to recognise the AICCTU-affiliated union.

“The company has paid the workers pending wages and bonus and reinstated some dismissed workers,” A.S. Bhuvaneswari, state deputy general secretary of AICCTU, told IANS.

Pricol hit the headlines last year when its HR (human resources) executive was killed by agitating workers.

(Venkatachari Jagannathan can be contacted at

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