MRF: Tiring Labour Problems at Tamil Nadu MRFs strife with workers over productivity standards in its Thiruvottiyur

plant had earlier ended in lockouts in December 2007. The problem started with the companys refusal to pay thecash reward to its 1,470 employees as the plant did not meet its productivity standards. Theselockouts were lifted only in February 2008, after the state governments intervention. Thelockout was lifted on February 5th 2008 and the problem was temporarily resolved. Later, onMay 5th 2009, MRF signed a wage agreement with the MRF Arakkonam Workers WelfareUnion (AWWU), its recognized union following high court order. But, another union, MRFUnited Workers Union (UWU) accused the company of underpaying the employees and lackingtransparency. The average salary at Arakkonam unit was around INR 4-5,000 while MRFs ownemployees at Tiruvottriyur unit were paid basic and DA and the wages were more than double. Moreover, the number of contract workers was more than double the permanent workers at the Arakkonam factory. UWU wanted the company to recognize the union, which was formed in2003 and is said to have the majority. The UWU has approached the management many times tomake it the sole bargainer of the workers by recognizing it. However, the management was least bothered about finding the majority union and recognizing it. The UWU also accused thecompany of taking anti-union actions against its members. They said that the union memberswere unjustly removed from work and there were many disciplinary proceedings on falsegrounds. From May 9th 2009 onwards the UWU went on a strike, demanding reinstatement of 250 workers (most of them dismissed for unionization), recognition of the union and discussionof the salary revision with the union. The strike was supported by the workers at MRFPuducherry, who followed suit by engaging in strike. On May 17th 2009 MRF managementannounced a lockout. The union moved the High Court (HC) seeking a solution for the troubles. On May 19, 2009, the HC directed the two unions UWU and AWWU and the MRF management to maintain the status quo, subject to the management taking a decision on a recent wage settlement agreement. The lockout was lifted on May 28th 2009. However, the workers did not return to work and remained stern on their demands.UWU soon filed a petition in Supreme Court (SC) stating that the HC should have given an injunction along with status quo. The union also wanted the court to direct MRF and labour department to implement International Labour Organisations (ILO) directions about recognition of the majority union. On June 8th 2009, the bench at SC refused to intervene in view of the petition coming up for hearing in the HC on June 9th 2009. The counsel said in the court that there were no laws regarding the recognition of trade unions in Tamil Nadu. On this, the bench expressed the need for considering amendments to the Trade Union Act and observed that It is high time the Government considered amending the Trade Union Act. The strike brought dire effects to the company. Troubled by the labour issue at MRF, Honda Motorcycles and Scooters Industries (HMSI), a major customer of the company turned to Falcon Tyres, MRFs competitor. Many of the MRF dealers were also affected by the strike. The union too had to take the beating as many of its members were arrested during the protests including hunger strikes. The strike continued through July and August, reducing the production at MRF considerably. MRF blamed the strike at Arakkonam on militant unionism. The management of MRF sincerely believes the misled workmen, the general public and the Government agencies should not be influenced by vilification campaigns, being relentlessly carried by the splinter

group and their leaders. The company also said the strike had cost it more than INR 1,000 crore. On September 9th 2009, the HC directed the State Labour Commissioner to verify whichunion has got majority. The court also asked the MRF management to approve whichever union proves the claim. Eventually, the union won as the management had to recognize it. After an ordeal of 125 days, neither the company would get its lost business, nor would it be easy to gain back the workers trust.
MRF has declared a lockout at its Kottayam plant in Kerala due to labour issues. The lockout took effect from 5 am on June 22, 2011 , Wednesday, according to the companys announcement to the stock exchanges. Labour union sources told ET the plant hasnt been functioning for the last four days. The loss from the plant is Rs 22 crore in four days

Q#1Assuming the accusations of the union about MRFs anti-union actions are real, what actions do you suggest to solve the labour dispute? Q#2How did the strike affect MRF? Who is at a loss, the company or the employees?