Factory lockdowns and strikes have been hitting the auto industry for long, but some serious issues have arisen in India over the last few years which, experts say, can be tackled only if labour laws are changed.

While there is no clear picture yet on how to cope with mounting labour problems in the industry, auto companies say they are doing their best to resolve such issues.

Better communication Analysts, however, add better communication between management and employees is the only way to avoid strikes. And, the Government, of course, needs to work a lot in this space.

Whether it was the killing of Graziano Transmission’s Chief Executive at its Greater Noida plant in 2008 or that of the General Manager (HR) at Maruti Suzuki India’s Manesar plant in 2012, all such issues were triggered by poor communication between employees and employers.

“Until and unless the Government reforms the labour laws, and both employer and employee interests are equally considered in the new labour laws, such situations are likely to occur more often,” Abdul Majeed, an auto expert and partner at PriceWaterhouse, told Business Line .

“The foremost issue for any argument to arise is lack of trust.”

A ‘trust-building’ exercise, where both workers and management meet at least a quarter or every six months to discuss the challenges and the necessary measures being introduced could be some of the first steps in resolving these problems, he adds.

However, there are some Catch 22-like situations, too, when managements and employees are unable to iron out issues, especially when workers or unions get political backing.

Companies say many times unions also create issues and raise certain demands when the industry or the economy is in a bad shape.

For example, the recent demand by Bajaj Auto employees seeking CSR funds for education of their children and equity shares at a discounted price had triggered a major stand-off between workers and the management. Another instance was Shriram Pistons and Rings’ employees’ demand for forming a union.

Once employees form a union, there could be more trouble in the future, say experts.

Apart from demanding better benefits (such as huge wage hikes), they also participate in political rallies as also those held by other unions.

Contract labour So, is contract labour the answer?

Not really, they add, because contract workers may take time to gain the expertise that permanent employees bring with them (most of them are well-trained).

“To retain production quality, we need some of the workforce as permanent workers. They have to develop knowledge and scale for a long time, and that’s very important,” Kenichi Ayukawa, Managing Director, Maruti Suzuki India, told Business Line . The company’s Gurgaon plant has people with expertise and now, it expects the same at Manesar to further develop the company.

“The Manesar plant is just seven-eight years old and it takes time for such an environment to grow and people to become more mature,” he said.

He agreed that better communication was required to recognise from both sides – the company and the workers.

More and more companies are trying to engage workers, especially outsourced ones, through participation and communication activities, says Anurag Malik, Partner – People and Organisation, at EY.

“Basically, multiple stakeholders will have to work together, including the Government, auto sector industry bodies, local community and individual companies,” he added.

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