Introduction The case examines the industrial relations problems at Toyota Kirloskar Motor Private Limited (TKM), an Indian

joint venture between Japan based Toyota Motor Corporation and Kirloskar Motors. The case discusses the various reasons and the respective developments, which led to the dispute between the management and the employees of TKM. It elaborates the incidents, which led to a prolonged strike and lockout at the company. It also reflects how politics affects labour relations and hence, industrial growth in the Indian context. The case highlights the growing number of instances of clashes between the employees and the management of companies in India, which is often guided by external parties such as trade unions and political parties. An overview of the case

Toyota Motor Corporation (TMC), the worlds second largest automobile manufacturer, had entered into the Indian market in 1997 through a joint venture with Kirloskar Group. The new entity was called Kirloskar Motor Private Limited (TKM). TKM established its manufacturing facility at Bidadi near Bangalore in the Indian state of Karnataka. Toyota had a well designed production process but its labour relations were disturbed. Employees were sent abroad to be trained for the Toyota Production System (TPS). Owing to their production process and JIT inventory model workers were required to overtime frequently which would entail 12 hours of work. They were also not allowed to take ample breaks. The company also opposed formation of a union, which was later formed nonetheless. At the same time TKM had been able to establish foothold in the car market in India. In 2002 suspension of two workers on the basis of performance appraisal lead to strike followed by lockout. In 2005, the management denied accepting TKMEUs affiliation to CITU, but agreed to a 15% raise to avoid unrest. 15 workers were suspended in February 2004 on account of unruly behavior and disruption of work. Three of these employees were dismissed after a one year long investigation and appraisal. The TKM Employees Union (TKMEU) declared strike, demanding reinstatement of the workers. Two days after this strike on January 08, 2006 TKM declared a lockout. TKMEU blamed management of heavy workload and occupational hazards like respiratory ailments due to lack of safety equipment and major spinal cord problems due to lack of rest. They also said that the issue was of job security and not wages. Management refuted these arguments by saying that there was ample job security and safety. The company blamed TKMEU of strike without notice, and TKMEU blamed TKM of lockout without notice, and termination without notice. The issue was presented to the DLC by TKM. When TKM arrived for the hearing on being called for the second time, the DLC asked the strike ad lock out to be withdrawn, the three workers kept in abeyance and no action be taken against protesting workers till the tribunal gave a final decision. TKMEU agreed, but TKM did not agree to the recommendations after delaying their decision for 4 days. After a few days TK suddenly lifted the lock out, demanding the workers to sign a good conduct bond without notifying if their demands had been met. At the same time, the Karnataka government probably in an attempt to maintain an investor

friendly image declared the strike illegal. The workers agreed to life the strike without signing the good conduct bond. TKMEU continued to get support from CITU, but work was resumed at the factory under doubtful situations. The union served a notice to the government about going on strike from March 23rd, 2006. The government once again sided with TKM and declared the strike as illegal and banned it. The result was that non-unionized workers were able to maintain a certain level of production throughout the strike. Hence, Toyota maintained smooth supply inspite of the unrest. And, inspite of the governments attempt to look investor friendly Toyota decided against setting up any more plants in the state owing to continuous unrest. This resulted in loss of investment and employment opportunity for the state.

Recommendations:

TKM should not have forced its workers to work overtime, and should have compensated them for it, according to the provisions of Industrial Disputes Act. It is better to specify the guidelines for overtime in the job description. The management of TKM was always on a path of confrontation with the employees union. They should have been more co-operative and introduced a system of periodical meetings and a proper grievance redressal system. The union, together with the management of TKM, should have establish a broadly applicable set of enforceable industrial minima to regulate the pay and working conditions TKM should have adhered to all legal procedures laid down by ID Act, like minimum notice period and pay for retrenchment, assuring principle of natural justice etc. The management was very particular about following stringent production norms, and did not take into consideration the comfort level and minimum requirements of working conditions. They should have been more sensitive to the workers. In cases of indiscipline or misconduct, there should be a proper procedure of enquiry within a specified period, and the process should be transparent and involve the participation of workers union as well.