Maruti Strike

Case study report on

Labour unrest at Maruti

Company suffered a decline of market share. As Maruti’s salary structure comparatively higher than most manufacturing companies, due to this competition and decline in profit, the company could not live up to the expectations of the employees. As a result worker unrest started to grow in the company. In September 2000 the Maruti Udyog Employees Union went on an indefinite strike if their demands were not met. The employees were demanding a new incentive scheme, improved pension scheme, better work environment and filling up of supervisory vacancies. However the management refused to accede to these demands. Production fell by around 40 % for a period of 3 months. During this period the engineers at the managerial positions manned the assembly lines to ensure that production does not stop completely. The top management of Maruti was under some pressure to negotiate with the workers. However, the government decided not to interfere directly and the management insisted that the workers stop the agitation and agree to adhere to the code of conduct specified by them. The strike ended in January 2001 with the union members agreeing to by the code of conduct. About half of the employees (40) suspended/terminated during the course of the agitation were not taken back on duty. Thus the management retained the upper hand after the strike ended and the work culture at Maruti changed significantly after this. Some of the changes which took place were as follows:

1. The sense of job security that the workers enjoyed at Maruti diminished. In subsequent years a number of non-performers were asked to opt for a Voluntary Retirement (VRS) and by introducing VRS, 1251 jobs were reduced.

2. De-recognized Maruti Udyog Employees Union (MUEU) by dismissing the union members and the MUEU was not allowed to conduct a single general body meeting after the lockout and recognized new union called Maruti Kamgar Union and it was set up in...