Case Study-1

Labour Law-II

Workers on Strike at Hyundai Motor India’s Chennai Plant

CHENNAI: This is an other industrial unrest after Maruti Suzuki labour problem. Now Hyundai Motor’s
workers also demanding high wages.India’s leading car maker Hyundai Motor India management’s
intransigent attitude and denial of genuine trade union rights has again force its workers to take strike
action. It is to be noted that Hyundai Motor India employees have been demanding a long-term wage
settlement benchmarked against the wage hike announced at Maruti Suzuki Ltd.
This is On 30 October 2012 workers led by Hyundai Motor India Employees’ Union (HMIEU) launched
strike action at Irungattukottai near Chennai. As Tamilnadu police denied permission to conduct a
peaceful protest action near the factory, workers are holding the protest demonstration at Assistant Labour
Commissioner Office at SIPCOT Industrial Complex.
A section of the workers at Hyundai Motor India Limited (HMIL)’s plant at Sriperumbudur, near
Chennai, continued their strike for the third day on Friday (2 November 2012). However, the workers’
attempt to have their concerns addressed by the Tamil Nadu government failed.
It is worth mentioning that Hyundai Motor India Limited (HMIL) on 18 October 2012 announced the
successful completion of its wage settlement negotiations with the United Union of Hyundai Employees
(UUHE). According to the statement the three year wage settlement with UUHE will be from April 1,
2012 and remain effective until March 31, 2015. The wage increase ranges from Rs. 11,000 to Rs. 13,000
excluding components like the variable dearness allowances and other welfare benefits. The employees
will get 40% of the wage increase in the first year and 30% in the next two years.
Facts :
2007: United Union of Hyundai Employees (UUHE) was formed.
2008: During a strike action management dismissed 87 workers.
3 October 2012: Workers Demanded wage settlement
18 October 2012: The company signed a historic wage agreement with UUHE
30 October 2012: Workers started strike at plant near Chennai.
1 November 2012: A S Soundararajan, Member of Tamilnadu Legislative Assembly and Honorary
President of HMIEU raised the issue in the legislative assembly
This strike action comes on the backdrop of a recently concluded wage agreement between the Hyundai
India management and United Union of Hyundai Employees (UUHE) on 18 October 2012.
Key demands of the striking workers are:
Reinstatement of 27 workers, who were sacked by the management in the year 2008.
Recognition of the HMIEU by the management or to hold a secret ballot election to decide the majority
union. Renegotiation of the recently concluded wage agreement with the UUHE.
Meanwhile, in a statement, HMIL said production at the facility was according to schedule, and the
number of striking workers had dropped from 180 to 150 on November 2, 2012.
R Sridhar, general secretary, Hyundai Motor India Employees Union (HMIEU), which is backed by the
Centre of Indian Trade Unions (Citu), said on Friday, about 600 people had participated in the strike. For
the last two days, the union had said the number of striking workers was 700.
On Tuesday, the company produced 2,054 cars, while on Wednesday, the number rose to 2,157.
Yesterday, the number of cars produced was 2,176 cars.
Meanwhile, HMIEU’s attempts to seek the intervention of the state government did not yield any result.
Incidentally, A Soundararajan, general secretary, Citu, is a member of the state legislative assembly.
HMIEU is demanding the HMIL management reinstate 27 suspended employees, negotiate a wage
agreement with HMIEU and recognise HMIEU. HMIL, however, said it recognised United Union of
Hyundai Employees (UUHE), which had 1,300 of the 2007 permanent workers under its fold, as the
official union. The company had signed a historic wage agreement with UUHE on October 18, 2012. It
has categorically stated it wouldn’t recognise any other union. About 400 employees who aren’t members
of UUHE have signed and accepted the wage settlement.
Hyundai Motor India on first day of strike, in a statement, said around 130 workers from the CITU-
affiliated Hyundai Motor India Employees Union (HMIEU) “disrupted work illegally” at its factory,
affecting production for about 78 minutes. The company produces 2,000 cars every day and the
production loss because of work disruption is estimated to be 59 cars, said the statement.
However, according to HMIEU representatives, around 700 workers are participating in the “strike”,
across shifts. The demands include reinstatement of 27 suspended workers and salary negotiations. The
Korean car manufacturer has a three-year wage settlement with another union, the United Union of
Hyundai Employees (UUHE), which the company has recognised. HMIEU is not recognised by the
company.
The statement says: “Hyundai Motor India has already recognised UUHE as the official union, which has
a majority membership of over 1,300 permanent workers amongst a total strength of 2007 permanent
workers. The company is categorical that it will not recognise any other union.”
HMIEU was formed in 2007 and affiliated to Centre of Indian Trade Unions (CITU). During a strike
action in 2008 the management dismissed 87 workers. Even after prolonged negotiations between the
HMIEU and the management with the involvement of Government officials, still 27 workers remain
dismissed, while others who were charged with similar offences were reinstated. It is significant to note
that dismissed workers include office bearers of the HMIEU.
On the other hand, the management has swiftly recognized the United Union of Hyundai Employees
(UUHE) soon after its formation in May 2011 and signed a wage agreement. HMIEU allege that it is
unfair labour practice as the management neither informed nor consulted HMIEU, even though the union
has submitted charter demands on various issues including wages in February 2012. R Sridher, General
Secretary of HMIEU alleges that, the management has been forcing workers to accept its anti-worker
wage agreement with UUHE.
On 1 November, A S Soundararajan, Member of Tamilnadu Legislative Assembly and Honorary
President of HMIEU raised the issue in the legislative assembly and called for intervention of the state
government to find a solution to the dispute at Hyundai Motor India. A meeting between the management
and the HMIEU union in the presence of the State Labour Minister is scheduled to be held in the late
evening on 1 November 2012.
Recently petition filed before the Madras High Court seeking an injunction against the union organising a
demonstration on the factory premises, the company had said that for each day of production loss, it
would lose about 2,100 cars, at a total worth of over Rs 63 crore. Its annual turnover is about Rs 20,000
crore, on an investment of about Rs 9,000 crore.

1. Identify the problems in case and state your solution with respect to Labour Law. (10 marks)