Tamil Nadu Curbs Right to Strike in Auto Component Industries

B. Sivaraman

If Karnataka, with Bangalore as the IT Capital of India, has banned workers’ strikes in IT industry, Tamil Nadu, with Chennai as the ‘Detroit of India’, now bans strikes in auto components industries. These socalled advanced States impose such strike bans by declaring them as ‘public utilities’ in a gross misuse of a provision in the Industrial Disputes Act (ID Act) that empowers them to ban strikes in notified public utilities.  Going one step further, the State of Gujarat has even amended the ID Act itself to enhance its powers to ban strikes for one year followed by two successive years in any industry notified as public utility, though the original ID Act provides for such a ban only for six months.

Tamil Nadu accounts for 70% of car exports and 25% of auto component exports from India. There are 100 major and medium auto component units in the state employing 45,000 workers and around 4,000 small and micro enterprises with another 80,000 workers. Most of them are concentrated in the auto hub of Sriperumpudur-Oragadam-Ambattur belt.

But thanks to slowdown in the economy under the Modi regime, the industry is facing a glut. Vehicle sales were down by 8% in 2018–19 but they declined by 16% in April this year. Orders are down for many auto component units in this Chennai MSME auto components cluster. Many are idle. Wages are delayed and unions are not allowed. A wave of unrest is widely anticipated.

Incidentally, Chennai and its surroundings indeed witnessed a spate of struggles by the workers of automobile and auto component units. In the last one year itself, struggles were witnessed in Yamaha Industries, MSI, Royal Enfield, Asahi India Glass Ltd., and NHKF Krishna Automotive Seating, and labour disputes have been reported in around 60 companies here. Anticipating a rise in labour militancy, the AIADMK government has renotified the ban on strikes in auto component units by dubbing them public utilities.

But the trade unions, which are exceptionally strong and active in Tamil Nadu, are not taking it lying down. S. Kumaraswami, All-India President of AICCTU who is leading unions in many auto and auto component industries like Pricol and Hyundai and who is also labour lawyer of note, says his union would challenge the very constitutionality of the notification of auto component units as “public utilities”. His union has also written to Labour Secretary not to notify the GO and is already in touch with opposition parties like DMK and CPI(M) and their unions and they are planning a for a concerted joint campaign on the issue and a high-profile convention in August.

What exactly is a public utility? The law is a bit vague and open-ended on this question. The First Schedule under Section 2 of the Sub-Clause VI of the ID Act lists 27 industries which may be declared as public utilities and automobile or auto components do not figure among them. But then the category of “public utility” has not been precisely defined in Section 2(n) of the ID Act as to which ones constitute public utility and which ones do not. The sub-clauses (i) to (v) of Section 2(n) merely lists some entries which are permanently considered to be public utility services and after that sub-clause (vi) also empowers the appropriate government to declare ANY industry notified under the First Schedule of the Act to be a public utility service.

However, the power to notify any industry as public utility in Schedule 1 is based on subjective satisfaction of the appropriate government. Thus, the law leaves the definition of public utility somewhat open-ended even while attaching the caveat that public emergency or public interest should be involved.

The overzealous governments bend over the backwards to roll red carpets to multinationals and domestic corporates to invest under Modi’s Make-in-India and interpret this provision in the ID Act as carte blanche for ban on strikes. This despite the Supreme Court clarifying repeatedly that ban on strikes is not absolute but has certain limitations.  S. Kumaraswami points out that, “Even while entering into MoUs with MNCs, the State government promises in the MoU that the industry would be declared as a public utility to ban strikes if it witnessed labour unrest, which is patently perverse”. Even more ridiculous is the case of Uttar Pradesh government which has declared all the industries in the NOIDA export processing zone whose exports exceed 30% of the production as public utilities! In other words, if the exports are at 30% or above it remains a public utility and if falls to 29% it ceases to be so!

Unfortunately, labour jurisprudence in the country has not advanced far enough to check misuse of this provision by State governments. No trade union litigant has challenged iy in the higher judiciary yet the arrogation of arbitrary powers by the governments is misusing this provision for a blanket ban on strikes even in purely commercial enterprises by declaring them as public utilities where no public interest or public emergency is involved.

Of course, Section 22 of the ID Act doesn’t provide for a blanket ban on strikes but only lays down that the workers employed in industries notified as public utilities cannot go on a strike without giving notice 6 weeks before striking and during 14 days of giving such notice or before the expiry of the date of strike specified in such notice. Also, workers should not participate in any strike during the pendency of any conciliation proceedings before a conciliation officer and 7 days after the conclusion of such proceedings. CITU Kancheepuram District Secretary Muthu Kumar argues, “This in practice however nullifies the very right to strike as the managements go on dragging the conciliation endlessly. The new labour code on industrial disputes even proposes that workers cannot go on strike if after failure report the dispute is referred to courts for litigation and courts can take years to give their verdicts”.

A scenario of militant outbursts and acute physical insecurity for the employers can be avoided only if the higher judiciary intervenes and checks misuse of this provision by governments to deny right to strike and settlement of labour disputes through the institutionalised process of collective bargaining.


Jun 16, 2018

B. Sivaraman [email protected]

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