Gurgaon Workers News – Newsletter 4 (June 2007)

Gurgaon in Haryana is presented as the shining India, a symbol of capitalist success promising a better life for everyone behind the gateway of development. At first glance the office towers and shopping malls reflect this chimera and even the facades of the garment factories look like three star hotels. Behind the facade, behind the factory walls and in the side streets of the industrial areas thousands of workers keep the rat-race going, producing cars and scooters for the middle-classes which end up in the traffic jam on the new highway between Delhi and Gurgaon. Thousands of young middle class people lose time, energy and academic aspirations on night-shifts in call centres, selling loan schemes to working-class people in the US or pre-paid electricity schemes to the poor in the UK. Next door thousands of rural-migrant workers uprooted by the agrarian crisis stitch and sew for export, competing with their angry brothers and sisters in Bangladesh or Vietnam. And the rat-race will not stop; at the outskirts of Gurgaon, India’s biggest Special Economic Zone is in the making. The following newsletter documents some of the developments in and around this miserable boom region. If you want to get to know more about working and struggling in Gurgaon, if you want more info about or even to contribute to this project, please have a go at:

In the June issue you can find:

1) Proletarian Experiences –
Daily life stories and reports from workers’ perspectives

*** “Needles and Threats”, Local Textile Industry, Part One –
A text on the local textile export industries, including Faridabad Majdoor Samaachaar reports from a young textile worker about his journey from village to industrial city life. Plus stories about how the management of a bigger textile company in Okhla got rid of permanent workers by making use of repression and by taking advantage of the workers’ trust in their official representatives.

2) Collective Action –
Reports on proletarian struggles in the area

*** “No more Heroes!”, Local Automobile Industry, Part Two –
Factory occupation and chain reaction of workers’ unrest at Hero Honda and Shivam Autotech factory in Gurgaon, April 2006. A rough overview of one of the most significant workers’ actions in the area during recent years.

3) According to Plan –
General information on the development of the region or on certain company policies

*** “Red Flags and Welfare Schemes” –
Some symbolic gestures during the Day of Labour.

*** “Extreme Outsourcing”-
Because of rising rents and wages and toll-taking highwaymen, some local call centres make use of internet cafes in order to outsource work; they speed-up the hiring process and put pressure on the less fortunate service workers.

*** “Corporate Watch” –
This month with news items on: DGM India, GVK Bioscience, House of Pearl, IKEA, Maruti, Promed, TCI

4) About the Project –
Updates on Gurgaon Workers News

*** “Hindi Version” –
Introduction to the Hindi version of the Gurgaon Workers News, about to be distributed in the area.

*** Glossary –
Updated version of the Glossary: things that you always wanted to know, but could never be bothered to google. Now even in alphabetical order.


1) Proletarian Experiences

*** “Needles and Threats”, Local Textile Industry, Part One –
Reports from the local textile industry

The series “What are we/you doing…?” puts our daily experiences in the focus, against the general trend of giving more importance to the `big events´ (marriages of the rich and beautiful, election results, cricket World Cup, etc.) than to our own life. The first step in changing our lives is to reflect upon it together, shredding the veil of boredom and misery. Following are three reports from the textile sector. The first report is from a young worker living in Delhi area, telling about his daily life; it was originally published in Faridabad Majdoor Samaachaar (FMS) no. 215, in May 2006. The second report is from a Sona Fashion worker; the third is about LM Sagar Export describing the policy of many textile companies in Delhi’s South, shifting work and workers between various factories, often using official strikes as a pretext to re-structure exploitation. These two stories were distributed in the area with FMS no. 216, in June 2006. All three stories are from the industrial area of Okhla, in the South of Delhi. In order to get some background information on Okhla textile cluster we attach a summary of an academic study by NISIET (2003).

On the rather narrow empirical base of short chats at chai stalls in the more shiny textile area of Gurgaon Udyog Vihar Phase One we can say that at least in terms of basic wages and working-hours the situation is similar compared to the one in Okhla, as is the situation in sector 34 and 37 in Gurgaon. In front of the Orient Craft factory (pics: see web-site), opposite of the Hero Honda factory, two former workers hired through contractors sit and wait for their out-standing money. They report that workers are abused and hit in the factory. But as soon as buyers from America or Europe arrive, everything is all nice-nice again. One of the workers has been kicked out because he returned late from his village in Bihar. He worked at Orient Craft for about seven months. He says that the permanents get about 3,200 Rupees (Rs) per month, their over-time is paid double rate, while the workers hired through contractors get about 2,500 Rs and mostly do piece-work. Orient Craft has about 20 factories in the Gurgaon area. Just across the road in the industrial area of so-called Pace City 1, Sector 37, a permanent worker sits at another chai stall, also waiting for his severance pay. He worked as a skilled tailor in sector 37, in the finishing department of a company making shirts for export. He had a permanent job, but he decided to quit it. The company promised double-rate of the over-time payment after three months of employment, but they never paid. People were abused, wage payments were delayed and the wage was crap anyway, ranging between 2,500 to 2,800 Rs. The worker knows that he might have to return many times in order to get his outstanding money, about 5,000 Rs. Maybe the many job adverts at most of the factory gates in Gurgaon assured him in his decision to leave the job “tailors needed, helpers needed”. The decision of the Haryana government to increase the minimum wage might be more than just a formal move, but a reaction to the wage pressure from below. The conditions in Gurgaon are not only similar to those in Okhla, but also to those in Bangladesh and Vietnam, where there have been major textile workers upheavals in the export zones recently…

What are we/you doing…?

(A nineteen year old worker.) I get up at 6:30 in the morning. For an 8ft by 8ft room in a newly built house in Tekhand we three people pay 910 Rs rent per month. The house has two floors, altogether fifteen rooms, the landlord lives somewhere else. There is one latrine upstairs and one downstairs. At the moment three or four rooms are empty, that is why the queue for the latrine is not that long. There is no bathroom; the men bathe outside, the women inside their rooms. The house where I lived before was much more crowded and the rent for a much smaller room was 920 Rs. At 7 am one of us cleans the alloy pots, the second prepares wheat flour rotis and the third cooks some vegetables, then we bathe. At 8:30 am, after having had rotis, we three go off to work. At the moment I work at the Anand Internationals D-3 factory in Okhla Phase One. Right from the beginning of the shift at 9 am you are immersed in trying to meet the target. Nowadays I make ties – when starting this work the company gave you 12 minutes to finish a tie, then after three days it was 11 minutes, then 10-9-8 and now it is 7 minutes per tie. Because the target was too high I left the Anand Internationals A-185 factory after two months of work. There you got 20 minutes per skirt at the beginning, then 19 minutes the next day and the target time kept on dropping; by the third day it was down to 10 minutes. You have to increase the work speed so much that the body cannot keep up, the work is consuming the body.
My father does handicraft work, he makes metal utensils as a profession. Well-off people in the trade asked him to come to Kanpur, Nagpur, or Nepal. But today – because of steel and aluminium – plates or water-pots made of brass or copper do not sell anymore. In the village I left school after the seventh class and learned how to tailor. When I was fifteen, in 2002, I went to Delhi with an uncle and he got me a job in Okhla Phase One, in the A-257 factory of Raj Mataar. Instead of small sewing machines like in the village there were big Zukki machines and ‘modern fashion’ production in the factory. During the four months of the ‘learning and doing’ period I worked day in and day out from nine in the morning to one in the night. The pressure from the company was a clear “do it or leave it”, and my uncle also said that I should stick to it. I was still in puberty and after four months of working such long hours I fell ill. In Delhi Doctor Usha Maheshvari took a 200 Rs fee and diagnosed TB. I went back to the village and Doctor Pande in Ilahabad took a 20 Rs fee and said that my blood picture is bad. I stayed in the village for four months and bought medicine from Doctor Pandes’ shop, which was 20 percent overpriced, and continued my treatment. When back in Delhi I started working at PeeEmparo Exports factory (F2/6 Okhla Phase One). I worked there for three years and they covered neither ESI nor PF. Every eight to nine months I went to Ilahabad in order to get medicine. Then I made friends with someone in Okhla who gave me treatment.
Then at D-3 factory of Anand International you had to work from 9 in the morning to 12 at night. Official working hours were from 9 am to 9 pm but if a worker finished work at 9 pm then the company would only count working-time till 8 pm, meaning that in order to save one hour paid working time for which you had already worked, which is 16 and a half Rupees, you work till 12 at night! Your company account is sealed on 15th of April, meaning that the company card will expire and you will be made a new one. The numbers on the cards change and the cards are kept in the factory. (meaning that the workers cannot proof their seniority). From the total of fifteen working days I was 30 hours in minus, lacking behind in the race for the target. The company cut 496 Rupees from my wage.
In the factory the target becomes an obsession; if you go for a piss, you get minus (meaning that they cut your wage), if you go to drink water, you get minus. Only when it becomes unbearable do we go for a piss or to get water. Only for the lunch break at 1:15 pm do we get up from the machines. On the board in the canteen it says that a meal is 8 Rupees and a tea is 1.5, but actually it is 12 and 2. If you ask about it they say that the board is just for display. The lunch break is 45 minutes and in order to allow people to get out quickly there are two security guards for checking people; at midnight when people finish work a huge crowd queues up because there is only one security guard. Then it takes ten minutes to leave the factory premises.
For lunch I go back to my room, where there is the food we made in the morning. After eating I leave the dishes like they are so that there is a little time for relaxing.
At 2 pm you are back in the factory behind the machine. At 4 pm there is a fifteen minute tea break; we leave the factory for tea. From 4:15 pm till 6 pm behind the machine, then another tea break, leaving the factory in order to grab some food, and again from 6:15 pm onwards behind the machine.
In the factory there are 300 sewing machines, they are in the basement where it is very hot; even in winter you sweat. One always feels suffocated. Out of the 300 workers there will be 10 who are healthy, the rest of us suffer from this or that illness. No one has been given an ESI card, we pay privately for our treatment and if you are too ill you get fired from the company. In the first floor of the D-3 factory of Anand Internationals there is the office, in the second and third floors the finishing department – cutting threads, removing stains, ironing and packaging. In the fourth floor there are people who earn 15,000 to 25,000 Rupees, they don’t talk to us. In the fifth floor, next to the canteen, chemicals are prepared for washing the clothes. For 500 men and women working in the factory there is only one latrine each in the basement, there is always a queue.
Because nowadays they keep us working until midnight they give us half an hour dinner break at 8:30 pm. We eat at a street stall – the company gives us 20 Rs for food. Then again, from 9 pm to midnight behind the machine. After returning to my room I go to sleep at about 1 am, leaving the dishes from the noon break like they were. At the moment they put 7:30 pm as the time that we finish work on the timecard, so it shows 1.5 hours overtime. The payment for overtime is at double rate, but what does that mean if we actually work 15 hours, from 9 am till midnight? If the working time was from 9 am to 9 pm they would say on the timecard that we stopped work at 6 pm. The timecard is to show to the buyer and the labour department. There is not a day off, neither Sundays nor any other day. The delegates of the buyer GAP or Lenson announce their arrival, and at that day we finish work at 6 pm. In the factory conversations are not like they should be and people misbehave – abuse, swear words, lies, exaggerations, petty cheating. If a piece is wrongly made then you get told off by the line man and the master. Our land-lord at home bickers about our water and electricity consumption.
When work finishes at 9 pm then one of us gets some veggies on his way home from work. In Tekhand the market is very crowded even at 10 pm.. The shop-keepers pack up their stuff at midnight. When back in our room we clean the dishes and make food. We do not even make tea at home. At night we make rice, lentils and roti-bread, the veggies we prepare in the morning. We get veggies, lentils, rice, flour, oil, spices, gas and soap together and each cent is listed in a book; in every respect we have learnt to keep separate accounts of everything one spends. At the moment I live with very close relatives. For food and rent each of us pays about 1,100 Rs, in addition to that 10 Rupees are spent daily on tea and food in the factory. If you work from 9 am to midnight you get 5,000 Rupees, if you work from 9 am to 9 pm you get 4,000 Rupees. Apart from covering my costs here I send money back to the village, because if you fall ill you cannot predict how much money it will cost you. During the four years that I am in Delhi, I have never been well – illnesses have cost me 30,000 to 32,000 Rupees. What hope is there in this kind of existence? You just have to keep on going.

Sona Fashion Worker

Plot F-63, Okhla Phase One. There is one shift from 9 am to midnight. Only the 20 women employed in the thread-cutting department leave the factory at 9 pm. Fifteen hours of daily work, 30 days per month: our condition is bad. Some skilled workers are given 110 Rs for an eight hour shift, others 115 Rs; this is 13.75 Rs and 14.25 Rs respectively per hour. For lunch and tea break they deduct one hour, so they pay us for fourteen hours per day. Those women who cut threads and other helpers get 1,800 Rs per month, based on an eight hour work day and a 26 day work month. The overtime is paid at the single rate, based on this wage. For the fifteen hour shift the company does not give you tea, but they provide 20 Rs for food. The water-cooler in the factory is broken and the quality of the drinking water is bad. For 80 machines there are two air coolers; the air reaches eight machines and the other 72 sewing workers are soaked in sweat during work.

LM Sagar Exports Worker

FMS no.213 and no.216, March and June 2006
Okhla Phase One – the factories B-48, B-237, B-242, and D-116 manufacture clothes for export. The sign at the gate of all the factories says LM Sagar Exports, but inside on the documents it says JK Textiles, KK Apparels, Manish Apparels, DB Garments, Sonu Enterprises, MM Apparels, HV Enterprises and other names. There was only one general manager and one personnel manager. In order to avoid having to give workers permanent contracts (see glossary) the company had a trick: workers are sometimes listed in the account of one company, sometimes another. In this game of changing names, several months’ worth of workers´ PF money was embezzled as well. The workers kept on working and the PF is deducted from their wages, but the deducted money was not deposited at the PF office. According to the company’s documents, during this period the workers were not employed in the factory! There were also workers employed by contractors inside the factory. Despite all that the workers managed, by all kind of means, to create such a pressure that the company made 1,500 out of 6,000 workers permanent. Officially the shift was 8 hours, but actually workers worked 10 and a half, twelve, and even sixteen and a half hours on a daily basis. The overtime did not show up in the company’s documents and it was only paid at single rate. Most of the casual workers and workers hired through contractors were not mentioned in the company’s records, they neither got ESI nor PF. Those workers employed by contractors did not get the minimum wage mandated by the Delhi government. The management paid less than their stated fixed piece rate. They cut wages under the pretext of bad quality. This was common practice in the company. Bullying by goons was also a common issue in all the factories. The arrangements for drinking water were not acceptable.

In spite of it all the company started to get into difficulties. For four years (since 2002) there have been delays of wage payments. The resistance of the workers grew. Jag Sagar was replaced by Kailash Agraval and Amit Agraval as directing managers. The new directors´ priority was to get rid of the 1,500 permanent workers. By bullying individual workers they managed to kick 250 out of the factory.

…On Saturday, the 11th of February, when the workers of the B-48 finishing department asked the new managing director Kailash Agraval for their January wage, he answered: “How can you have the courage to ask for wages? In two minutes I will kick you all out”. After the weekly Sunday off, when the workers arrived at the factory gate at 9:30 in the morning of the 13th of February, there were five guys with guns and 15 guys with laathis and inside there were guys with hockey sticks waiting as well. The company had brought these people in three vans. At the gate notices with the various companies’ letterheads were attached each listing the names of all workers employed in the finishing department. The notices said that the workers had verbally asked for their final dues and that the company was going to give them. The guns and laathi men stopped the 100 workers from entering. 150 sewing machine operators from the sewing division were let in and they were given the January wage on the 13th of February.
Once the shady deals with the future funds (PF) became known to the workers, the skilled tailors joined a union. On the 15th of February the finishing department workers also gave money to this union and obtained their member receipts. After a complaint by the union a labour officer arrived at the factory on the 16th of February. The personnel manager only talked about the issue of the final dues and said that the workers can do what they want but that they will not be taken back on the job. On the very same day there was a meeting of the union with the director Amit Agraval, where he said that he can get free electricity in Muradabad, that he will re-locate the company there, and that the Okhla workers will get their final dues. By making the notice pay, compensation, gratuity, bonus sum, etc. the question of concern, the conditions were created for striking a deal which did away with 1,500 permanent jobs of workers.
Then at the B-237 factory they managed to force a huge number of workers to resign at one go, after the workers were tricked into a union banner-and-strike-tent action (meaning a traditional union protest) with the corresponding lock-out by the management. After having kicked out most of the casual and contract workers in January 2006, in February the management picked the B-48 factory as their target. On the 13th of February 100 workers from the finishing department were stopped at the gate. Hand-in-hand with another union and the Labour Department the company had arranged this deceptive action. It resulted in getting rid of 100 workers in one go (see passage above).
In April the company singled out the sewing workers of the B-48 factory. On the 12th of April 90 workers were laid off, on the 16th of April another 50, on the 18th of April the remaining 80 workers were laid off (see glossary “lay off”). Being transfixed by the union the workers abstained from taking steps themselves and then again, after complaining about the leaders having sold out, the workers only continued lamenting. In the absence of actions taken by the workers themselves the company, the union and the labour department were successful in tightening the noose – by 1st of May the employment of all permanent workers at B-48 was finished. Only some permanents are left at B-242 and D-116. All the talk about the company shifting to Muradabad turned out to be bullshit, the company opened a new factory in Faridabad, under the name of Target Fashion. Ten of the senior staff were sent there, too. The company sold the machines of the B-237 factory and was taking the machines of B-48 to Faridabad.

Okhla Readymade Garment Cluster

The development of the garment industries in Okhla started in the late 1950s, although the main boost came during the 1970s and 1980s, when imported, power-operated cutting and sewing machines were introduced. Another shift was the displacement of the raw material industries (bleaching, dyeing, printing) from Delhi during the 1980s and 1990s. Raw material now comes mainly from Uttar Pradesh and Haryana. Migrant workers from Uttar Pradesh and Bihar are the main work-force in the Okhla area. After the printed cloth arrives in Okhla the primary work then consists of cutting, sewing, embroidery, finishing, washing, ironing and packaging. Most of the garments are manufactured for export; the design and samples usually are dictated by the buyer. There are hardly any official figures of how many companies and factories are involved in the process; the NISIET study from 2003 states that there are 500 fabricating and 250 embroidering units in Okhla. The number of sub-contractors is not given. The same report says that 40 percent of the overall export garments come from Delhi and 40 percent of Delhi’s output originates from Okhla. It reckons that 50,000 workers are employed in the area. Knowing that most of the workers are not on the official payroll (see reports), the actual number will probably be three to four times higher. If you wait at one of the several entry points to the industrial area and watch people arriving for the early shift, you get a feel for the real numbers of workers: at the railway-crossing near Apollo hospital alone over 100,000 people pass within two hours. According to the report the average export factory employs 100 people. It lists the following reasons for the development of the cluster: already-provided infrastructure for the factories, short distance to railways and the airport, short distance to raw material supply, easy supply of migrant work-force, and proximity to political and public administration in Delhi. The report categorizes different types of companies in the area:
-the buying house (getting contract from buyer, organising the business, checking quality of sub-contractors),
-the manufacturers (get direct contracts from buying houses, sub-contract parts of the work),
-the machine embroidery units (get contracts from manufacturers),
-the contractors (take contracts from manufacturers and embroidery units and give work to work-shop and house-hold units),
-traders and manufacturers of threads, buttons, fittings (supply to the industry in the area),
-the machine manufacturers and maintainers (provide and repair tools and machines for the industry), -the packaging and transport units,
-the training and administrative bodies.
The study also comes up with following value chain analysis, with the percentage referring to the later sales price: basic raw material (50 to 60 percent), processing of raw material, e.g. bleaching, dyeing, printing (10 to 15 percent), cutting and fabrication (10 to 15 percent), fittings and accessories (7 to 8 percent), finishing and packaging (7 to 8 percent), embroidery and handwork (plus 25 percent on sales price). It reckons a profit margin of 5 to 30 percent for the different kind of companies involved. Most of the machinery is imported, mainly from Japan, particularly from Zukki Machines Corporations. Most companies are family-owned, and the study says that a minimum investment of 100,000 to 150,000 Rs is necessary to get a contract in the area. Between 2000-2003 a down-turn hit the industry in Okhla; according to the study 50 percent of the manufacturing units have been closed or shifted to other areas, mainly Gurgaon, Noida, Faridabad. The study gives two (rather unconvincing) reasons for the closures: the liberalisation of the textile market and the lower minimum wages in Gurgaon (Haryana) and Noida.


2) Collective Action

*** “No more Heroes!”, Local Automobile Industry, Part Two –
Strike and factory occupation at Hero Honda motor-cycle plant and its supplying company Shivam Autotech. Gurgaon, April 2006


After we had a short glimpse at the structure of the local automobile industry in newsletter no.3, now we document how workers made antagonistic use of their central position in the web of social cooperation. The example of the Hero Honda strike is last year’s news. Why bring a workers’ struggle up again, about one year after it took place? Although widely ignored by media and by most of the official organisations, the strike and factory occupation at Hero Honda and Shivam Autotech have been the most important recent workers’ unrests in the Gurgaon area. The wildcat action at Hero Honda was followed by direct actions of temp workers at Honda (HMSI) and Delphi in the following months (see next issues of the newsletter). The important features and lessons of the short period of strike and factory occupation are:

* The unrest hit one of the main cores of the local industry. The Hero Honda factory in Gurgaon is the two-wheeler factory with the highest daily output in India and attached to it are over 240 official suppliers.

* The strike hit with full force, and no notice was given, therefore the management could not prepare a countermove (piling extra stocks, increasing production in other plants, mobilising strike-breakers, etc.).

* The strikers managed to avoid a lock-out situation and the consequent police repression by occupying the factory.

* At Hero Honda the workers hired through contractors were organising the strike, at Shivam it was a united strike of all categories of workers. This is rare in a situation where most of the official strikes are led by and mainly in the interest of permanent workers.

* According to the group of workers who struck, their demands were addressing issues of hierarchy (abolishment of different kind of uniforms) as well as wage questions. The demands were egalitarian, trying to overcome differences within the work-force.

* The workers’ mobilisation spread from the main plant to the supplier, without open or official organisational links. The impact of the strike was noticeable further down the supply-chain (truck-drivers, second-tier suppliers).

* The official unions were outside of the strike. Some positive elements of the strike might be due to the absence of established unions (no strike notice, occupation, involvement of workers hired through contractors), as well as some of the problems, e.g., that there was little support from the outside, necessary during a factory occupation.

* Workers showed that they are able to organise a strike, but during negotiations workers displayed their inability to finish it in their favour. The workers at Hero Honda sent a small delegation for negotiations and they paid for this mistake. The Shivam Autotech workers tried to avoid this, but got bogged down in legal processes and were divided.

* Both strikes showed the volatile situation in the industry, the weak links of capital: the fragile supply-chain and the simmering anger amongst the casual and temporary work-force. In the aftermath the management debates equated the strike at Hero Honda with the suddenness of natural catastrophes.

For the summary of the unrest we rely on some internet and media material, some short conversations we had with workers at the factory gates during the strikes, an article published in the Faridabad Majdoor Samaachaar (May 2006) and a report by comrades from the area, written shortly after the strike at Shivam Autotech. We structured the summary as follows:

*** 1. Overview on the Indian two-wheeler sector

*** 2. Glimpse on the structure of Hero Honda company

*** 3. Strike at Hero Honda
a) Prelude of the unrest
b) Chronology of the unrest
c) Workers’ demands and result of the dispute
d) FMS article ‘Hero ka Honda’

*** 4. Glimpse on the structure of Shivam Autotech company

*** 5. Strike at Shivam Autotech
a) Prelude of the unrest
b) Chronology of the unrest
c) Negotiation Process
d) Outcome
e) Short visit at KDR, a supplier of Shivam Autotech in Faridabad

*** 1. Overview on the Indian two-wheeler sector

India is the 2nd biggest two-wheeler market and manufacturer in the world. The sales numbers increased from around 0.1 million in the early 1970s to 3.76 million in 2000 to 7.9 million in 2006. This is compared to about 1.1 million passenger cars being sold in 2006. About 70 percent of all registered automobiles in India are two-wheelers. The ”market saturation” is still low; in 2000 there were about 10 bikes per 100 adults (aged 18 to 50), a total of 42 million running (registered) bikes. The main growth of the sector started with joint-ventures in the 1980s (Hero Honda, Bajaj Kawasaki, TVS Suzuki, Escorts Yamaha). Export of two wheelers is still limited, both in terms of numbers (about 350,000 in 2005), as well as regionally (mainly other Asian and African countries). Together with pedestrians, riders of two-wheelers also account for 60 to 70 percent of the 300 people who die in road accidents every day in India, 60 to 70 percent of the 1,000 daily permanent injuries, 4,000 daily serious and 18,000 minor injuries. These numbers are rough estimates from 2000, though as you can see above the number of annually sold two-wheelers has more than doubled since then.

*** 2. Glimpse on the structure of Hero Honda company

The Hero Group, directed by the industrial dynasty Munjal, started as a supplier of bicycle components in the early 40s. Over the years, the Hero Group had entered multiple business areas, largely related to the transportation industry. The group bought into multiple areas of raw material processing, such as steel rolling, to the manufacture of subassemblies and components. In 1984/85 Hero Group started a joint-venture with Honda. Both partners held 26% of the equity with another 26% sold to the public and the rest held by financial institutions. Hero Honda became a public company listed on the Bombay Stock Exchange (BSE). In 1999 the joint-venture with Honda became critical, because Honda set up 100% subsidiary Honda Scooter and Motorcycles India (HMSI). The Honda HMSI plant is only 15 km down the road from the main Hero Honda factory. At the day of the announcement of the entering of HMSI into the market, Hero Honda’s share price dropped by 30%, given the outlook of fierce competitions in the two-wheeler segment. But Honda was ready for concessions. First, Honda agreed to delay entry into the motorcycles segment until 2004. It also agreed to form a four-person committee with two members from Hero Honda to examine any new motorcycles that it would release post-2004. Lastly, it offered an opportunity to Hero Honda to share in the equity as a minority holder in HMSI. The fact that both companies also tap into a similar pool of suppliers should make clear that only from a very legalistic and formal view can they be seen as two separate companies. The same is true for the composition of capital of the seven main suppliers of Hero Honda, which are basically subsidiaries of the Munjal Group (for example: Munjal Showa Ltd., Sunbeam Auto ltd., Majestic Auto Ltd. Shivam Autotech Ltd.). The Munjal Group has set up a range of firms to supply components, not just to Hero Honda, but also to other automobile companies. These operations range from the manufacture of shock absorbers and wheel rims to aluminum castings and plastic products. Apart from Honda, the Hero group has joint-ventures with Universal Cycles Plc. from the UK and Bombardier-Rotax from Austria.

In 2006 Hero Honda sold 3,336,756 motorcycles in India, which means that Hero Honda has a major market share in India (still around 40 to 45 percent) and is the biggest motor-cycle and bicycle producer in the world. In 2007 Hero Honda laid the foundation stone of a third plant in the Gurgaon area (the other two plants are located in Dharuhera and Haridwar). The Gurgaon plant has a daily output of about 6,000 bikes per day and a major dispatch department for spare parts. Spare parts are a big business, given the 42 million running bikes in India (2000).
Hero Honda’s management has been very paternalistic towards its work-force, a mixture of tight social control and employee family outings, of enforced discipline and company cricket teams. This is expressed, for example in the company’s suggestion scheme: “All employees who make a suggestion are given a ballpoint pen. Further, the best suggestion of the year is given the annual award of cash prize and the family is given a plant visit along with a free lunch in the factory cafeteria” (source: “Transferability of Japanese Human Resource Management Practices: Case Study of Honda Japan and its Joint Venture Hero Honda in India” by Ms. Srabani Roy Choudhury ). At the Gurgaon plant the permanent workers were put in a position very distinguished from the rest of the casual work-force, distinguished due to their supervising function and also visually distinguished by differently coloured uniforms. Following are some excerpts from a manager’s study showing that the paternalism at Hero Honda Gurgaon plant starts with recruiting:

“The Gurgaon plant has taken considerable trouble to recruit the right kind of individuals at the shop floor level. The personnel manager at the Gurgaon plant told the researcher that apart from technical knowledge he looked for honesty and earnestness in the candidates. Moreover the integrity of the candidate, past record of alcoholism, vandalism and involvement in union activity is given due consideration. The department has therefore ventured into a time consuming policy of background checks. A candidate’s background is given a thorough checking by contacting his previous employer. Moreover, someone from the plant goes and meets the employees in his previous company, as well as gathers information about him from nearby shops and tea stalls. Hero Honda management supports this sentiment and even rejects a candidate with very good qualifications, if he is found to have some past history of unionism. Honda Japan conforms to the Japanese practice of enterprise union system – with 100 per cent participation of workers up to the level of assistant managers. The Honda union functions at two fronts – collective wage bargaining during the spring offensive and participation through meetings at various levels. The management having had a bitter experience of unionism in the Daruhera plant is keen to establish communication channel with all employees so as to enable the management to react immediately to grievances of the employees”.
(source: see previous citation)

At the time when the strike kicked off at the Gurgaon plant the general division between the 1,400 permanent workers and the 5,500 workers hired through contractors became blatant. The company sent the permanents into holiday, and they went. Interesting is the fact that, like the suppliers, the contractors at Hero Honda are also related to Hero Honda managing Mujal Group. They sub-contract the contracts to other smaller contractors (Sehgal Brothers, Prakash Contractor and Ram Mehar Mann of RSV Enterprises).

*** 3. Strike at Hero Honda

a) Prelude of the unrest

The workers hired through contractors at Hero Honda had been angry for various reasons:

* Although 50 percent of these workers have worked in the plant for more than six to seven years, they are not offered permanent contracts.

* There is a huge wage difference: after six to seven years a permanent worker will receive up to 30,000 Rupees per month while a worker hired through a contractor gets between 2,200 and 6,200 Rupees.

* Most workers have all kinds of trouble because they do not receive a company card, which is necessary for dealing with authorities (e.g., when applying for medical care or other benefits). They are not enrolled in the register, which means that they will not receive PF or ESI.

* Casual/workers (see glossary) hired through contractors are not given work periodically as production targets change. When that happens, Rs 500 is cut from their monthly wage.

* There have been cases of physical harassment of the workers hired through contractors by supervisors and managers of Hero Honda.

We have no idea what finally triggered the dispute. Some people said that a bigger group of workers was not taken back after they returned from holiday (a lot of workers come from far off places in Bihar or Orissa). This is said to have been the final straw. Other sources say that there were some informal gatherings taking place during the week before the 10th of April 2006 where workers agreed on taking action.

b) Chronology of the unrest

10th of April 2006
Strike and factory occupation begins when workers refuse to leave the factory after the end of their shift. For some pictures from the action, visit our makeshift multi-media section on the web-site.

11th of April 2006
Most of the workers have confined themselves within the factory premises demanding regularisation of jobs while another 500 are waiting outside, giving moral and physical support to the workers inside. “The police have prevented us from standing near the gate or raising slogans,” says Sushant, a contract worker from Orissa, who was not allowed by the management to go inside the factory. (source: Labourfile). Hero Honda starts negotiating with the strikers. In a public statement made by Hero Honda, it says: “A section of workers hired by contractors have raised demands on their contractors and have irresponsibly stopped working”. Reply of a worker during an interview with a newspaper: “We want all the 4,000 contract workers to be absorbed in the company as regular employees, so that we do not have to deal with contractors any longer.” (source: DNA Money) The article presented this worker as a “strike leader”, then as a “spokesperson”, while adding that there is no union inside the plant.

14th of April 2006
Allegedly the water supply for the workers inside the factory has been cut on the 13th of April. Hero Honda says in a statement that the ongoing strike at its Gurgaon plant will “not impact” the company’s annual profitability or production targets. “Hero Honda aims to make up the production loss by stepping up production from the current 5,800 units per day to 6,500 units per day, post commencement of operations at its Gurgaon plant,” the company said in a statement in New Delhi.
“Due to the very nature of the business, there are sufficient stocks in the pipeline and at the dealerships,” it said. “The company would also like to clarify that this is a flash strike and there is no formal workers union at its Gurgaon plant. Also, the permanent workers are not supporting this strike,” it added. The canteen stopped providing food for the strikers after the third day of occupation. Some local unionists said that they started collecting money for food.

15th of April 2006
Production at the manufacturing plant in Gurgaon remains suspended for the fifth day in a row. Meanwhile production at Hero Honda’s other plant at Dharuhera is going on as usual. At the retail level some dealers complained of supply problems for a few specific motorcycles. Only a small police force is stationed at the factory, most of them sleeping in the shade. Workers hold assemblies on the factory lawn and put up self-painted posters. Some call centre workers on the other side of the street watch the scene. No one is allowed to enter the factory, the security guards are still in place. Allegedly the police refused to enter the factory premises and management was afraid of creating dangerous situations (dangerous for their factory and machinery).

16th of April 2006
The rather miserable end of the strike. After representatives of the Labour Department refused to enter the factory, both the Labour Department and company management asked for a delegation from the workers. About six to seven workers went to a meeting outside the factory; other people, amongst them local unionists, were not allowed to attend the meeting. The delegation returned and said that the strike was over, promising that some of the demands were met. The workers called off the strike, but those workers who went as a delegation to the negotiation disappeared. People assume that they have been bought off. Allegedly, out of the 5,500 workers hired through contractors only 4,000 went back to work the next day, angry about the fact that a lot of the demands were actually not met (for more on the demands, see below). A contract worker at the gate said that they were granted an Rs 1,000 monthly wage rise. He said that people are not happy with the result, but that they decided in an assembly to stop the strike. It sounded like some strikers (strike leaders?) had suggested to resume work after the negotiations did not proceed. About 20 – 30 workers who took part in the dispute were dismissed. Hero Honda management announced that in order to compensate for the loss of production, output at the Dharuhera plant had been stepped up.

c) Workers’ demands and outcome of the dispute

Some demands of the workers have been agreed to – whether they are actually implemented remains to be seen:
* A 30 percent hike in wages of casual workers. Workers hired through contractors used to getRs 4,000-4,500 a month for an 8 hour shift. That will now be Rs 5,500. In comparison, ITI graduates (skilled workers hired through contractors) get Rs 6,500.
* Besides this 30 percent hike, there will be no difference in dress colour between helpers and ITI graduates. The initial demand to abolish the different uniforms for permanents and temps has not been met.
* The wage of the contract workers will go into a bank and they will have ATM accounts.
* They too will get a gift annually.
This was told by workers at the gate one day after the end of the strike. However, workers seeking casual/contract work at the Gurgaon plant of Hero Honda report that ever since the strike at Hero Honda during April-May 2006, workers hired through contractors are now being hired only at the Haryana rates of Rs 2,400 (this is the minimum wage valid in April 2006). During short conversations in May 2007 workers hired through contractors working at Hero Honda say that those amongst them with ITI qualification get 6,000 Rs per month, those without get 4,800 to 5,000 Rs, which would mean that the strike resulted in a pay hike. Apart from that they tell that there has been little change since the strike. They say that the major changes after the strike were that they received ATM bank accounts and that now all skilled workers, disregarding their contract situation, got white uniforms. Nowadays the helpers hired through contractors have to wear the blue uniforms and the burden of visual minority.

Interestingly, in a discussion amongst managers of various automobile manufacturers managers were quite blatant about how to assess the strike. In an article published in the ”automobile” section of they stated:
“The Hero Honda strike or indeed the floods in Mumbai last year, the transport strike in were all instances when JIT-dependent Motown’s supply chains went for a six.
“When the floods happened not having a single supplier helped us because we had multiple suppliers from whom we could step up supplies to overcome the crunch,” says General Motors’ [manager] Balendran. As for strikes, here too there is a built-in buffer which is violated only when the dispute involves irregular workers. “In most cases, any legal strike that a labour union goes in for is preceded by an advance notice to the management about the strike which gives the management some time to take stock of the situation,” adds Balendran.
Says Hero Honda head of marketing PS Sunder: “We have a stock of 15 days with our dealers so retail sales are not hit.” Adds Ravi Sud, vice president-finance, Hero Honda: “We manufacture 5800 bikes in our Gurgaon plant. If we value a bike at Rs 35,000 then we are losing an estimated Rs 20 crore per day which is loss of sales to dealers and not retail sales. However, we would make up for it by stepping up production to 6500 bikes.”

d) FMS article ‘Hero ka Honda’

Although in the following article there are some repetitions and some statements which contradict some of the information above, we nevertheless want to include it as a report and a kind of summary.

The Honda Hero
Faridabad Majdoor Samaachaar no.215, May 2006,

(reported by someone who regularly visits the Hero Honda plant) In the Hero Honda factory in Gurgaon 1,350 to 1,400 permanent workers and 5,500 workers hired through contractors are employed. In addition there are 300 to 400 security guards who are hired through another contractor. On the 15th of April the 5,500 workers hired through contractors suddenly stopped work; the production was put to a halt till 21st of April, when work was resumed. The Hero Honda factory in Dharuhera was not affected. Most of the permanent workers are employed in the motorcycle assembly. About 25 percent of the workers hired through contractors are in the motorcycle assembly and 75 percent in the spare parts division. The workers hired through contractors who have already worked in the plant for years still get re-issued a card with their photograph every three months. On the card with the Hero Honda stamp is written that they have the permission to work on the company premises (meaning that the card is not an official proof of company ID, necessary for a lot of dealings with administrations). In the name of ESI 206 Rupees are currently cut from monthly the wages, but no worker has received an ESI card; the contractor says that if a worker gets ill, we will get him treated. No PF slips are issued.
Daily the spare parts division sends out parts worth 40 to 50,000,000 Rs. There is constant pressure to fulfil the immediate massive demands of the dealers on time. The finished parts are ordered from external suppliers. In the factory there is only coding, counting, packing and sealing machines ; there are no machines to produce parts in the spare parts division.
The workers hired through contractors used to get 2,600 Rs, and a year earlier I saw a supervisor slapping a worker. Last year after the trouble at Honda Motorcycles and Scooters India (HMSI) the wage of the workers hired through contractors at Hero Honda was raised to 3,600 Rs. Then after some deductions some workers received 3,600 Rs and some 4,200 Rs.
Then the contractor refused to take back some workers who had been on holiday. The wildcat strike happened after that. The call to stop work on 15th of April was not made by a union, there were no leaders. The management sent the permanent workers immediately into holiday. The state government immediately got into gear, remembering the troubles at Honda HMSI in June 2005. There were talks of setting the factory on fire… Some people were chosen from the workers and on 20th of April a verbal agreement was given, stating, amongst others: that workers would get a 30 percent wage increase, that 500 workers would be made permanent and that white uniforms would be given to all workers. The workers who announced this agreement to the others disappeared from the factory; they were allegedly bought off by the company. Anger prevailed amongst the 4,000 out of 5,500 workers who arrived at the factory in order to work on 21st of April, “We have been cheated”.
When the strike ended at Hero Honda, the workers of a Honda supplier in turn occupied ‘their’ factory, situated 20 km away.

*** 4. Glimpse on the structure of Shivam Autotech company

Shivam Autotech Ltd. ( based at Binola Village (Gurgaon district) is part of the Hero Group owned by the Munjals. The factory is situated close to the NH8 highway, about 20 km south from the Hero Honda plant. About 80 percent of Shivam’s production goes to Hero Honda. Shivam Autotech is engaged in manufacturing of Hot / Warm and Cold Forging Components. On the 10th of August 2005 Mark Auto Components (MAC), a two-wheeler components manufacturer promoted by the Hero Group, had decided to spin off its Binola unit in Haryana into a separate company named Shivam Autotech allowing it to focus on its forging business activity. According to workers met on the 12th of June 2006 the company only changed its name on 1st of April 2006. The workers are still wearing MAC uniforms as uniforms are distributed each year only in November – December.
The factory is fairly new, production started at 2000. There are about 300 permanent workers, 350 contract/casual workers and 150 trainees. Permanent and Trainee workers all have either ITI certificates or B.Sc degrees. Casual/workers hired through contractors have ITI certificates but none have B.Sc degrees. Permanent workers get a salary of Rs 3000 (net) which must be about Rs 4000 gross they say. A miniscule 2-4% of workers may get salaries up to Rs 8000 net. Workers hired through contractors only get the Haryana minimum wage rates of Rs 2400 and even then the canteen charges are deducted from this amount. Since the work involves forging and metal work, there are no women in the workforce (there are some in the managerial staff). Workers say that Shivam uses CNC machines of various technological levels. The contractors at Shivam are R.N.V. Enterprises, N.N. Associates and Ravipul Enterprise. Just as a piece of information: a supervisor who works for one of the contractors said that he gets 5,000 Rs wage per month in order to manage the workers hired through contractors, to hire them and ensure a sufficient supply of new work-force.

*** 5. Strike at Shivam Autotech

There are various interesting elements in the Shivam Autotech strike. First of all is the fact that it started at the very same day when the occupation at Hero Honda finished. Unfortunately we can only speculate why this happened. Workers must have noticed the impact of the Hero Honda strike, which might have contributed to their decision. When the management decided not to send the buses for the next shift, which is more or less a clear move to a lock-out, it might have thought that now is the time to battle things out, with the main client paralyzed by industrial dispute. The management’s strategy not to send the buses to the villages of the workers is an often used practise. Many bigger local companies prefer to or exclusively hire people who live in villages further away, workers who depend on bus services and who can be left isolated in case of industrial action.
It is also interesting to see that ‘small’ things like the food question became the trigger for a conflict with much more pressing problems in the background. The fact that workers know about the conditions and higher wages in the main Honda plants and refer to these standards when they put forward demands is of major importance. During the struggle it looked like that workers managed to stay together, despite their contractual differences and despite the attempts of the management to single out ‘representatives’, which then could be bought off like in the Hero Honda case. The final outcome of the struggle, which turned into a rather boggy negotiation process, excluded the workers hired through contractors from the wage hike.

a) Prelude of the unrest

Workers had been unhappy since February 2006 since they got increments which were very small about Rs 70 only, whereas the increments of managerial staff were nearly 50% of their salary and the workers’ increment amounted to only 2-4% of their salaries.
Workers were also unhappy since managers were not treated them well on the shop floor. One new trainee was made to sit like a murga (chicken) on the shop floor on making a small mistake. Another senior worker was slapped by a senior engineer.
For 2 years the workers had been requesting management to extend the company bus service up to Bhiwadi (Rajasthan) which was only 3-4 kms from the last pick up at Dharuhera. However the company had been steadfastly refusing since this meant the bus would have to cross state borders and the company did not want to pay the additional taxes etc. to the Rajasthan government. This was a big problem for the workers since Bhiwadi was much cheaper for them to live in and many were complaining that had the company extended the bus service up to Bhiwadi many employees would have shifted there and would have been able to buy their own houses since land was cheap there at that time. Now the same land which was selling for Rs 1000 is selling for Rs 10,000 in June 2006. After the recent SEZ deals the price will have gone up even more.
Workers were unhappy that management was unwilling to seriously discuss these issues during the open houses that were held in the company. They were strictly told to only talk about production issues during open houses and the bus service or financial matters would not be discussed.
Another ongoing problem was the food in the canteen. Ever since management decided to tear down the old smaller canteen and build a new canteen with new food supplier there were problems with quality of food and standards of hygiene. Workers complained that bugs and cockroaches were found in the food. A canteen committee was formed to address these problems. Meetings would be held, management would tell the canteen manager to fix the problems, he’d promise to fix it but there would be no improvement. The workers also complained that food served to staff (staff and workers had different canteen timings) never had these problems and bugs were only found when it was time for workers’ meals.
The catalyst for all grievances crystallizing into a strike unfolded on a Sunday. Cockroaches were found in the dal [lentils] served to the workers. A worker went up to the canteen staff and asked them to stop serving the dal. It was stopped. But after some time, some workers came up to one of the members of the canteen committee and said that the dal was being served again. Satish now went up to the manager and told him to stop serving this dal. He was promised that new dal would be cooked and then workers could have their meal. However, all workers trooped out of the canteen offended at being served the roach-ridden dal again and again. This resulted in management action against the worker who was a canteen committee member. Over the next few days he was called by different managerial staff time and again and asked that when you were present why did you allow the workers to leave the canteen? Why didn’t they wait for the new dal to be served?
Tired of being treated like this, the workers decided that they would place their demands before management and drafted a list of 21 demands, including issues of increment, contract workers’ problems, bus service, canteen service, etc. The workers hired through contractors demanded to be made permanent and to be allowed to wear the same uniforms as the permanents.

b) Chronology of the unrest

21st of April 2006

Workers arriving at bus stops for the 6 a.m. shift found that there were no buses. They started calling the workers who were working the night shift to find out why buses had not been sent to the bus stops. They also called the security staff directly.
Workers for the 6a.m. shift used private means of conveyance to show up at the factory only to be told by the security staff that they should go home as they were being given a holiday. Workers had problems believing this since they didn’t even get Sundays off (trainings were scheduled on this day. This was another bone of contention that training should be held during company time and not on their only day off).
Night shift workers were being asked to get their production figures noted and leave the premises. Security staff told them – why are you worried about the 6 a.m. shift? Those workers will report to duty when they show up. However, sensing that something was wrong, these workers, 600 of them, sat down on one side of the shop floor. Meanwhile, about 100-200 workers were gathered at the gate outside and not being allowed in. A fight erupted between workers and the security supervisor.
So the workers declared a strike. They occupied the factory for 5 days. A list of demands was handed over to the general manager, the vice president and human resource manager.
The canteen was allowed to run for 2 days but after that it was shut down by management. Food was not allowed in from the outside either. It turned into a case of hunger strike for the striking workers even though small quantities of food managed to get smuggled in.
Permanent workers and contract workers came together to occupy the plant for 5 days. They have been together in this fight ever since. All 3 categories of workers are united – permanent, trainees and casuals/workers hired through contractors. Permanent workers have been conscious of including contract workers from the start and have paid attention to their grievances and demands as well.

22nd to 25th of April 2006

During this time the Labour officer (B.S. Yadav – sits in the mini secretariat and Binola village comes under his circle) and management tried to negotiate with the workers. The Deputy Labour Commissioner arrived on the 4th day. A higher AITUC official also visited the workers. Together all of them brokered the strike to be broken on the 5th day – 25th of April. See copies of agreement.

c) Negotiation process

Workers had submitted paperwork to register an independent union. The first set of applications was ‘lost’ by the labour office. A second set of application papers has been submitted but again it has run into roadblocks.
There was one meeting with the DLC when he came to the plant on 24th of April. Another meeting was held on 8th of June when he asked the workers to resubmit 5 copies of the list of demands but this time to exclude the items on which an agreement has already been reached. He also asked the workers to submit an authorization letter signed by all workers, that they authorize the 5-10 workers to serve as their representatives and will abide by whatever agreement these workers hammer out with the management on their behalf. Workers were expected to submit these papers to the Labour Officer, B.S. Yadav, by 13th June.
There have been several meetings with the management. Workers were asked to sign a 3 year agreement whereby the workers would get small increments but agree not to ask for salary raises for the next 3 years.
The workers submitted a Rs 10,000 package for 3 years under which all workers would get a Rs 5000 raise in the first year, Rs 3000 raise in the 2nd year and Rs 2000 raise in the 3rd year.
Management has not accepted this proposal and is only willing to talk about Rs 1000-1500 raises in total over 3 years. This is unacceptable to the workers.
Mr. L.R. Parudhi, legal advisor to the Munjal Group has been inducted into the management team and has declared that he will not allow salaries to rise. Workers are also unhappy with his inclusion and would like to include a legal advisor in their team since Mr. Parudhi talks legal mumbo-jumbo during the meetings which the workers don’t understand and therefore stalls the negotiations.
Workers also report that the financial negotiations are stuck because management wants to know why they should raise the workers’ salaries by so much when the prevailing rates at nearby plants are not this high. Workers compare it to the Hero Honda plant in Dharuhera which does have an independent union and where the prevailing salary is much higher. Workers tell that permanent workers there get Rs 25,000 and workers hired through contractors get Rs 6,000. Even at the Gurgaon plant of Hero Honda, permanent workers get Rs 18,000 and contract workers get nearly Rs 6,000.
According to the agreement signed on 26th of April 2006, the 10th of June 2006 was the last date by which all negotiations were to be completed and agreement to be reached.
However, 10th of June has come and gone and negotiations are stalled on the financial aspect. The DLC has asked the workers to sit quietly as he is working on their behalf. Meanwhile, the workers have been asked to re-submit the same documents to the LO and are now starting to feel that they are being given the run-around.
Workers are being called in groups of 2-4 and management is trying to persuade them to agree to a works committee and drop the demand for forming a union. In exchange they’ll be given money.
Sometimes workers are asked by senior engineers to come with them to off-site places just to hangout and have a chat, only to find that when they get there, management is also there and tries to persuade them to drop plans for union formation.
Sometimes 2-3 workers are picked up and driven to some place where again they are persuaded/intimidated to drop union formation plans.
Workers report that so far they are all together and they are trying to counter management efforts to break them and/or create misunderstandings among them by creating very strong channels of communication amongst themselves. All proceedings of meetings/dealings etc with management are duly reported to the workers. They also try to go in a bigger group of 10 to 25 workers to the negotiation appointments

d) Outcome

With the end of the strike a short first agreement was signed, the workers ensuring work discipline and the managers that training would henceforth take place within regular office hours, not on
Sundays. Bus service would be provided until Bhiwadi. There would be special food twice a week, like the staff gets.
Later on workers representatives signed a settlement with management for Rs 2700 wage increase over 3 years (far less than the Rs 10,000 package they had presented management). They get 60% increase this year, and 20% increase each year after that. There is a reworked incentive scheme. Unfortunately, the workers hired through contractors are not covered in the wage hike, but they do get to participate in the productivity incentive scheme. Another outcome is that the management decided to replace all security guards. In general they have been too supportive of the workers during the strike.

e) Short visit at KDR, a supplier of Shivam Autotech in Faridabad

From a truck driver who had to return the metal parts during the strike at Shivam Autotech we got to know that Shivam is supplied by KDR Forgings in Faridabad, Ballabhgarh twice a day. The KDR workers must have noticed the strike. The industrial area of Ballabhgarh already looks more like second tier suppliers, no nice architectural lay-out and nice facades like at Shivam. KDR is about 70 km away from Shivam; the truck drive takes about one and a half hours.
Our info is based on very brief chats with a couple of workers at the gate as they were entering the morning shift, with the head of security who came to check what we were up to, and with a worker whom we talked to later in some detail.
KDR Forgings is a medium sized factory in the vast industrial belt beyond Faridabad, at Plot No. 32 sector 25, Faridabad. It’s owned by one Rajesh Juneja, who along with his family owns 8 factories in Ballabhgarh, four that do forging work, three that do more final CNC work on the gears and one lower down in the production chain where iron sariyas (forged parts) are made. From Juneja’s CNC factories, the product is sent also to America. However, of this particular KDR unit, Munjal’s Shivam Autotech is among their two main buyers, the other being QH Talbros, also located in Faridabad.
KDR Forgings has about 160 workers, who work in 2 shifts of 12 hours each, 8 am to 8 pm to 8 am. Only about 7-8 are permanent, the rest are directly employed by the company, not through a contractor, but not permanent. Their wage levels are about 2,000 for a helper and Rs 2,500-3,500 for an operator. The one worker we spoke to in detail was a final checker who earns Rs 7,000 presumably for a 12 hour shift work.
Concerning the strike at Shivam, those we spoke to said that yes they had known of it because the parts from the factory had come back. During those days, they did work for other buyers. However, since Shivam is such a major buyer, it meant that production was lower than usual. Workers during those days worked only for 8 hour shifts. However since they seem to be regular workers and not contract, there were no lay-offs for the 5 days.


3) According to Plan –
General information on the development of the region or on certain company policies

*** “Red Flags and Welfare Schemes” –
The 1st of May, a great day for symbols and symbolic announcements.

Mayday is the public day when to praise or re-claim labour, the day which allows those in power to ignore the plight of the labourers during the rest of the year. A day of symbolic parades and airy announcements. A friend reported that 300 people took part in the Mayday demonstration, which paraded through Okhla industrial estate. Every morning 200,000 people march in a long tired procession through one of the several entry point of this textile industrial area in the south of Delhi (see report in this newsletter). No red flags, but thousands of pent up demands. According to a worker active in the union in Gurgaon 2,000 to 3,000 took part in a Mayday celebration.
The Haryana government used the occasion of the 1st of May to announce further paper tigers, further welfare scheme for the local workers. We will have to see whether an increase of the minimum wage actually makes a difference in every day life (see report from a call centre cleaner below), how many people actually receive the announced benefits. On one hand we can see that the majority of workers are employed outside the legal frame-work, on the other hand there is an actual wage pressure in certain sectors (e.g. skilled industrial workers), due to the boom. The Haryana government announced two welfare schemes, a) a health insurance scheme for building workers of the “unorganised sector” and b) a housing scheme for industrial workers:

a) “After a hefty hike of about 37 per cent in minimum wages this year, the state government has decided to give welfare cover to all labourers and workers engaged in the unorganised sector by realising a cess of one per cent on all constructions whose value is Rs 10 lakh or more. This amount will be purely meant for the welfare of construction labourers, who get engaged in the work for 90 days at a stretch. This will benefit around three lakh persons involved in such work at any given time of the year. It would cover various risk factors, including mediclaim and insurance. The money would also be used to set up night shelters and other facilities for the beneficiaries. These were non-existent so far. At least 30,000 works of this nature were in progress in the state at any given time, claimed the authorities concerned. It is stated any worker desirous of availing the benefit of the scheme was required to submit an affidavit. There was no need of any attestation from anyone. The authorities have revealed employers or owners of buildings who fail to follow the new rule will be dealt with strictly as this rule envisages imprisonment of three months, a penalty of about Rs 25,000 or both”

b) “The Haryana Government has decided to construct labour colonies near the major industrial townships under a new state plan scheme “Construction of Labour Colonies in Industrial Estates, Parks and Towns” for the convenience of the labourers. A sum of Rs. 50 lakh has been earmarked for the scheme”.

*** “Extreme Outsourcing”-
Because of rising rents and wages, local call centres make use of internet cafes in order to outsource work.

The boom in BPO (Business Process Outsourcing – e.g. of call centre work) creates demands amongst workers and the boom in real estate gnaws on the boom of BPO. Recently bosses of local call centres and BPO companies complained about
a) rising rents,
b) rising wages of the IT/BPO workers and
c) about additional costs due to toll-taking highwayman on the Delhi-Gurgaon expressway.
They try to counteract the rising costs by
d) out-sourcing night shift work to internet cafes
e) finding new fields of outsourcing
f) rationalizing the hiring process
g) putting more pressure on the wages of the rest of the work-force, e.g. cleaners, security guards.

a) rising rents
In a newspaper article of the 12th of April Mr.Kapoor, a directing manager of a local BPO complaints: “Apart from availing the large English speaking talent pool to run their businesses, companies headed towards India for its affordable real estate, too, as BPOs require large areas of real estate compared to other businesses. But, in the last couple of years, India has almost lost the advantage. In cities like Gurgaon, Delhi and Bangalore, the rentals are almost equal to that in US. In Gurgaon, the rental in SEZ is Rs 75 sq ft per month which is more than $ 1.5 in US. In US, one will get ready to move in facilities where as in India one has to invest to refurnish the entire space”.

b) rising wages
Another article on the same day states that IT-wages in booming Gurgaon have become the highest in India: “Salaries of IT professionals in Gurgaon, which has seen an IT boom only in the last few years, are the highest in India and comparable to that in IT capital Bangalore, a survey by CyberMedia-Dice has found. The average annual salary of job-seeking IT professionals in Gurgaon is Rs 6 lakh plus, while in Bangalore it is Rs 6 lakh. This leaves Delhi far behind at Rs 4.89 lakh”. Also the wages of the call centre workers increased in the bigger call centre hubs: “Wages have increased 15-20 per cent in the last three years and continue to rise. A newcomer joining a call-centre in a metro is likely to be paid anywhere between Rs 15,000 and 18,000”. One way to counteract the rising local wages is to re-located work to other places. In May the market-research company Azure advertises jobs for Spanish speaking people in Gurgaon, who are ready to move to Ahmedabad. The wages offered are 17,000 Rs per months for a full-time job, which is about 8,000 Rs less than the rate in Gurgaon or Noida.

c) rising tolls
Apart from rents and wages the call centre operator in Gurgaon will also have to pay more for getting their workers driven to work. The expressway was built by private developers who rejected state subsidies; instead they will introduce a toll system. An article on the 2nd of May says: “What’s spurring the increasing interest [of private developers] in road projects are rosy traffic projections. Says Subroto Choudhary, executive director, DS Constructions that gave a negative grant [to the state] of Rs 61 crore to construct the Delhi-Gurgaon expressway: ‘Our models suggested a manifold increase in traffic density on the (Delhi-Gurgaon) stretch. In fact, passenger car unit density at the time of tendering (2001) was 60,000 and that number now stands at 1.3 lakh. With this kind of traffic, toll collections would enable us to comfortably cover all our costs, including the negative grant'”.

d) outsourced again
Some friends wrote the following description of an internet cafe in the Delhi area which was transformed into an outsourced call centre unit at night. This is one way how the managers of the local BPO industry try to curb the wage pressure from below:
“Microgate internet-cafe is located in the basement of a three-story building, easily one of the better constructions of the area. Narrow steps lead to a tin door, which is usually open at all times. The ten feet by ten feet basement hall is divided into four sections: A small reception area next to the stairs, a cubicle with a table and a revolving chair for Guddu, the owner, a small empty space, where the technical and managerial staff of the cafe sleep at night, and a hall, which is the main cafe space.
Guddu provides better services than many cafes of the locality. There is round-the-clock supply of water, electricity and internet connectivity at Microgate.
One night, a couple of weeks ago, we used Microgate’s services to send off a few urgent emails. It was late and by midnight we were the only customers. Some of the staff were dozing on makeshift beds in the sleeping corner and most of the lights had been switched off. At about 1:00 PM however, people started trickling in young men, in one’s and two’s, sometimes a helmet in hand. They began taking position on the vacant seats, behind the till now blank screens. Before long, a semi-American accent was confirming participation in Pope John’s funeral.
A few months before, a middle level manager of an elite international call centre contacted Guddu. The proposition was to share some load of that call centre in return for sum of forty thousand rupees a month. Guddu agreed. He hired some out-of-work and some working agents who had prior experience of the industry on ‘payment on performance’ basis, from 2:00 AM till 10:00 AM.
With no frills of dinner and snacks, pick-up or drop, and no facilities like toilets, cash coupons or tickets to multiplexes, Guddu operates an ‘international call centre’. He manages a complete gamut of campaigns and products, just like any other Business Process Outsourcing unit in Noida and Gurgaon. For the agents of this international call centre, there is no accent training, minimal process training, and a more informal relationship with the boss. Unlike many other premium call centres, less monitoring, supervision and surveillance takes place here, even as the work contract is more fragile. The call centre aspect of the operations of the cyber cafe has been closed since last week for about one month now, as the contract has expired; and while Guddu finalises his deal with the next company, his team of agents has moved on”.
(“Chronicling the Remote Agent: Reflections on Mobility and Social Security of Call Centre Agents in New Delhi” by von Taha Mehmood und Iram Ghufram)

e) finding new fields of out-sourcing
Local BPO companies try to find new markets, after the market for straight-forward telephone services is saturated. From a newspaper article: (17th of May 2007)”In an office in the southern port city of Chennai, Indian analysts pore over stock market data for a London-based fund company, searching for investment opportunities. Some 1,200 miles (1,900 km) away in Gurgaon, on the outskirts of Delhi, Indian lawyers have taken over research and patent filing for several Western technology and healthcare companies. Patent research can be done in India at $50 to $80 an hour, compared with $150 to $350 in the United States, said R. Sivadas, chief executive of Scope e-Knowledge Centre Pvt. Ltd. in Chennai. Average billing rates in the knowledge process sector are 40 to 50 percent higher than those in the call centres”.

f) rationalize the hiring process
A little story from a job interview at Teleperformance call centre, Gurgaon, Udyog Vihar Phase One. The entrance room is chilled, so is the woman at the front desk. Four young men sit silently in a circle of chairs, they do not talk to each other during the whole next hour. They came for a so-called “walk-in” interview, the equivalent to a drive-in, it seems. Fast job, fast food. From their age one would guess that it is their first job, they seem nervous. From the next room we can sudden cheering and applause, but it sounds like a routine, like on command. Then the already hired invisible agents start to sing a Michael Jackson song. May be this is how they try to heat silenced young men and women up for their coming verbal piece-work. After an hour the front desk lady tells the first young man to enter the glass-front meeting room in the middle and to pick up the receiver. We all can hear the phone ringing inside the room. The young man enters and starts to talk, with a submissive facial expression. After two minutes he leaves the booth, his face now expressing disillusionment. “Not short-listed”, he mumbles and leaves the building. The next one enters. The same process and outcome. It took four minutes for the HR person on the other end of the line to single them out. Not suitable for international calls, yet. The third one is successful; he can sit down again and wait for his face-to-face interview.

g) pressure on service workers’ wages
Another way for the management to lower costs is to put pressure on those workers who have a less favourable bargaining power than the actual call centre employees, e.g. the cleaning and house keeping workers. A less symbolic move around the 1st of May 2007 was undertaken by the management of the BPO company Evalueserve, First India Place, MG Road Gurgaon. The company changed the contractor of the house keeping and cleaning workers. The workers did not loose their jobs, they were just shifted from one pay-roll to the other, but they suffered a severe cut in wages. While the Haryana government uses the 1st of May to portray itself as ‘worker friendly’, these workers who do the cleaning job in one of Haryana’s model KPOs (knowledge business outsourcing: see article above) companies do not receive the new Haryana minimum wage of 3,500 Rs, instead their wage is cut by 500 Rs, from 2,500 Rs to now 2,000 Rs. They also only get the canteen food left-over by the call centre employees, meaning that often enough there is only stale or no food at all. When asked for an ESI card or PF slip the contractor answers: “Tomorrow, tomorrow”. Six months ago the land-lord increased the rent for a plastic-tarpaulin jhuggi from 700 Rs to 800 Rs. A proper stone-built room in the same area is about 1,200 Rs, meaning that for the land-lord the jhuggis are much more profitable…
(for more info on the local call centre world: see newsletter no.1)

*** Corporate Watch –

On the web-site ( you can find some news items on the following multi-national companies in Gurgaon area, just click on “List of Companies.” The list is boring in a general sense and it smells like shareholders oi-stress sweat, but it might possibly be useful once shit hits the fan or a picket the factory gate. For a longer list of companies situated in Gurgaon have a look at the web-site as well.

News items this month on:
DGM India
GVK Bioscience
House of Pearl


4) About the Project –
Updates on Gurgaon Workers News

*** Hindi Version, One –
Introduction of the Hindi version of the Gurgaon Workers News, about to be distributed in the area. If you want to get hold of an electronic version of the Hindi Gurgaon Workers News, please drop us an e-mail.

When Politicians, Employers or other leaders talk about development, about economic progress or ‘Shining India’, they mean places like Gurgaon. They mean rising DLF towers, the growth rate of Maruti or Hero Honda, the increase in textile export. They also mean, but do not mention, the shanty towns of the building workers, the 12 to 16 hours day of the factory workers, the people displaced for the SEZ. When they talk about progress, they mean the six-lane expressway, the computer programmed stitching machine in Udyog Vihar, the automatic-dialler in the call centre. They also mean, but do not mention, that for most of us their progress will result in further submission, their expressway only an accident-prone way to a pro-longed night-shift, their computer controlled machine the rhythm-stick which makes us move faster and faster. It is time for us, those who construct, tailor, weld, assemble their progress, to find our own way to a better life.

Together, we have the experience we need, we just have to start sharing it and use it in future struggles. We came from Bengal, Bihar, UP or the long way from the work on the fields or in our traditional crafts in the nearby village. With the help of friends and family we managed to find a first place to stay in this strange new place called Gurgaon. We have worked in small work-shops, or through contractors in big factories, we have sold vegetables or cigarettes on the market. We manage to raise children, despite the water-shortage, despite the pressure from the landlord, despite the little income. We have found ways with other work-mates to resist the managers pressure to make us work on Sundays. We have seen the police repression at Honda Manesar. We might have failed to make the contractor pay our outstanding wages, but we have learnt for the next time.

The aim of this monthly publication is to share workers’ experiences. It is independent from any organisation, party, union. It is meant to tell about conditions in companies or living areas in Gurgaon. We can use it to tell others about problems with certain contractors or administrations, about successful or unsuccessful attempts to resist harassment by authorities or to enforce better working conditions. Given that most of the companies in Gurgaon have links with the rest of the world (textile for export, call centres call abroad, multi-national automobile companies), we also want to publish related workers’ news from other countries. You can show or read the publication to your friends, neighbours and co-workers. You can tell us or write to us your own story, anonymously. This can be a first step to build new relation-ships and links amongst each other. Links which are stronger than their games to play us off against each other: permanents against workers hired through contractors, locals against outsiders, Hindus against Muslims and so on.

In this issue there are two stories, one from workers employed as security guards in Gurgaon and one about a struggle at Fashion Express, a textile factory in Gurgaon Udyog Vihar Phase I, plot 100.


*** Glossary –

Casual Workers
Contract Workers
Exchange Rate
Lakh (see Crore)
Lay off
Minimum Wage
Ration Card
Wages and Prices
Workers hired through contractors

The All India Trade Union Congress (AITUC) is the oldest trade union federation in India and one of the five largest. It was founded in 1919 and until 1945, when unions became organised on party lines, it was the central trade union organisation in India. Since then it has been affiliated with the Communist Party of India.

Business Process Outsourcing: for example of call centre work, market research, sales.

Centre of Indian Trade Unions, a national central trade union federation in India. Politically attached to CPI(M), Communist Party of India (Marxist). Founded in 1970, membership of 2.8 million.

Casual Workers
Workers hired by the company for a limited period of time.

Contract Workers
Workers hired for a specific performance, paid for the performance.

1 Crore = 10,000,000
1 Lakh = 100,000

DA (Dearness Allowance):
An inflation compensation. Each three to six months the state government checks the general price development and accordingly pays an allowance on top of wages.

Deputy Commissioner, Head of the District Administration.

ESI (Employee’s State Insurance):
Introduced in 1948, meant to secure employee in case of illness, long-term sickness, industrial accidents and to provide medical facilities (ESI Hospitals) to insured people. Officially the law is applicable to factories employing 10 or more people. Employers have to contribute 4.75 percent of the wage paid to the worker, the employee 1.75 percent of their wage. Officially casual workers or workers hired through contractors who work in the factory (even if it is for construction, maintenance or cleaning work on the premises) are entitled to ESI, as well. Self-employment is often used to undermine ESI payment.

Exchange Rate:
1 US-Dollar = 43 Rs (March 2007)
1 Euro = 57 Rs (March 2007)

Haryana State Industrial and Infrastructure Development Corporation

Slum Hut

see Crore

Lay off
Lay off in the Indian context means that workers have to mark attendance, but they actually do not work and receive only half of the wage.

Minimum Wage:
Official minimum wage in Haryana in March 2007 is about 2,500 Rs per month for an unskilled worker, based on an 8 hour day and 4 days off per month.

A locally elected village administrative body in charge of village-level issues.

PF (Employee’s Provident Fund):
Introduced in 1952, meant to provide a pension to workers. Officially applicable to all companies employing more than 20 people. Official retirement age is 58 years. Given that most of the casual workers belong to the regular workforce of a factory, they are entitled to the Provident Fund, as well. So are workers employed by contractors. If workers receive neither PF nor ESI they also do not show up in the official documents, meaning that officially they do not exist.

Ration Card
Officially the so called ‘governmental fair price shops’ are shops were ‘officially poor’ people can buy basic items (wheat, rice, kerosene etc.) for fixed and allegedly lower prices. In order to be able to buy in the shops you need a ration card. The ration card is also necessary as a proof of residency, but in order to obtain the ration card you have to proof your residency. Catch22. Local politics use the ration depots and cards as a power tool which reaches far into the working class communities. Depot holders are normally working in the hands of local political leaders, in return they receive this privileged position, which often enable them to make money on the side.

Superintendent of Police, Head of the District Police.

In India staff includes managers, supervisors, security personnel and white-collar workers.

In general trainees work as normal production workers, they might have a six month up to two-year contract. Depending on the company they are promised permanent employment after passing the trainee period. Their wages are often only slightly higher than those of workers hired through contractors.

VRS (Voluntary Retirement Scheme):
Often a rather involuntary scheme to get rid of permanent workers. Particularly the VRS at Maruti in Gurgaon made this clear, when 35 year olds were sent in early retirement.

Wages and Prices:
When we hear that a cleaner in a call centre in Gurgaon, an industrial worker in Faridabad or a rikshaw-driver in Delhi earns 2,000 Rs for a 70 hour week, which is about the average normal worker’s wage, we have to bear in mind that they often came from West Bengal, Bihar or other remote place in order to get this job. In order to put 2,000 Rs into a daily context here are some prices of goods and services:
– Monthly rent for a plastic-tarpaulin hut shared by two people in Gurgaon: 800 Rs
– Monthly rent for a small room in Gurgaon (without kitchen), toilet and bathroom shared by five families: 1,300 Rs
– Monthly rent for a small room in a new building in central Gurgaon, single toilet and bathroom: 4,500 Rs to 8,000 Rs
– Half a kilo red lentils on the local market: 25 Rs
– Kilo rice on local market: 14 Rs
– 1 Kilo Onions and 1 Kilo carrots on local market: 25 to 30 Rs
– McChicken: 40 Rs
– Bus ticket to nearest bigger bus stop in South Delhi: 14 Rs
– Daily Newspaper: 3 Rs
– One hour internet in a cafe: 20 Rs
– Bottle (0,7l) of beer at Haryana Wine and Beer shop: 50 to 70 Rs
– Cigarettes (10), cheapest local brand: 25 Rs
– Cinema (new) ticket Saturday night: 160 Rs
– single entry for swimming pool: 100 Rs
– Starbucks Coffee (Latte Medium) in Shopping Mall: 59 Rs
– Faulty shirt on Faridabad local market: 40 Rs
– Single gas cooker plus new 2 litre gas cylinder: 720 Rs
– Re-fill gas (2 litres – once every month and a half): 100Rs
– Second-hand bicycle: 600 to 1,000 Rs
– Two simple steel pots: 250 Rs
– One litre Diesel: 30 Rs
– Driving license in Haryana: 2,000 to 2,500 Rs
– Start package pre-paid mobile phone (without the phone) 300 Rs
– Phone call to other mobile phones: 1 Rs
– Minimum dowry poor workers have to pay
for the marriage of their daughter: 30,000 Rs (80,000 Rs more likely)
– One month mobile phone flat rate: 1,500 Rs
– Compaq Laptop: 50,000 Rs
– Flight Delhi to London: 28,000 Rs
– cheapest Hero Honda motor-bike (150 cc): around 40,000 Rs
– Ford Fiesta: 587,000 Rs
– four hours on Gurgaon golf course: 800 Rs (info from golf course worker earning 2,400 Rs monthly)
– Two-Bedroom Apartment in Gurgaon: 3,000,000 to 5,000,000 Rs

Workers hired through contractors
Similar to temporary workers, meaning that they work (often for long periods) in one company but are officially employed by a contractor from whom they also receive their wages. Are supposed to be made permanent after 240 days of continuous employment in the company, according to the law. A lot of companies only have a licence for employing workers in auxiliary departments, such as canteen or cleaning. Companies usually find ways to get around these legal restrictions, e.g., workers services are terminated on the 239th day to avoid workers reaching eligibility criteria to become permanent. In many industries contract workers account for 60 to 80 per cent of the work force, their wage is 1/4 to 1/6 of the permanents’ wage.

4 Responses to “GurgaonWorkersNews no.4”

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