For the third consecutive day, Bajaj Auto workers ? both permanent and those on contract ? continued to skip work at the Chakan plant. Bajaj Auto makes its highly profitable premium sports bikes ? Pulsar, Kawasaki Ninja, Avenger and KTM ? at the Chakan plant, which has a capacity of 1.2 million bikes a year.
The Pune labour commissioner’s office has intervened in the dispute, the genesis of which lies in the demand for a hike correction. “The office of the labour commissioner has not received any notice from the workers’ union of Bajaj Auto regarding work stoppage. However, office held a meeting with the workers and the management on Wednesday to resolve the dispute,? Sambhaji More, assistant labour commissioner, told FE on Thursday.
More, who holds the charge of Chakan Industrial area, said a meeting was held on Wednesday and it was attended by senior management members, including Kailash Jhanjhar (who handles industrial relations at Bajaj Auto) and union representatives. He added that the company management mentioned it had filed an unfair labour practices (ULP) complaint at the Pune Industrial Court and sought an injunction against workers holding demonstrations at the company gate and other areas. The injunction was granted by the court.
More said the workers had approached the labour office earlier and demanded an annual hike correction and an increment of R10,000 and an additional correction of R5,000 apart from the benefits of variable dearness allowance. ?The union had then submitted a separate list of 37 demands, which also seeks clarity on the company’s promotion policy, eligibility for a housing loan of R5 lakh, education loan of R2 lakh and marriage loan of R50,000. These demands were first presented before the company management and when these were rejected, the union approached our office,? More said. The union has also separately demanded a work study at the site (how much production is possible in 480 minutes?), he added.
As the meeting did not yield results, the labour commissioner’s office has called the Bajaj Auto union as well the company management for another meeting on July 8 to discuss the dispute.
Dilip Pawar, president of the Vishwa Kalyan Kamgaar Sanghatna, said there was no offer yet from the Bajaj Auto management to hold any talks. ?This is the third day of our stoppage and this is not good for either the company or the workers,? Pawar said. Pawar said the Bajaj management may be upset with the workers for the stoppage, adding talks may begin soon.
According to Pawar, the union had terminated the wage agreement with Bajaj Auto as the company had not fulfilled a clause in the agreement, which said that there would be a wage revision after three years. This agreement is dated April 2010 and was valid till 2019. However, since the wages were not revised at the end of the three years to March 2013, the Union terminated the agreement, Pawar said.
The union said it did not get any intimation of the proposed July 8 meeting. As per the data with the assistant labour commissioner, the Chakan plant has 904 permanent workers, 350 trainee apprentices, 98 ?earn and learn? workers and 54 contractors who provide some 600 workers on a daily basis. The plant has another 150 staff members.
Rajiv Bajaj, MD, Bajaj Auto, had told Reuters on Wednesday that the company’s output per day at its Chakan plant may drop by a third in June and July owing to the worker strike. Bajaj expects to make 50,000 bikes in June and July each at the plant compared to the 75,000 it makes normally. Workers have disputed this and said it was not possible to make these motorcycles without getting all the workers back to the shop-floor. Even if they hire fresh contract labour, it will take time to train them, they said. “As opposed to our normal production of 3,000 per day, in the month of June, we would be able to do 2,000 and that is because of all the disruptions that have been created internally,” Bajaj had said.
Bajaj Auto’s shares, which fell by 0.66% on Wednesday to close at R1,788.10, made good recovery on Thursday. The Bajaj stock was up 2.54% on the BSE to R1,833.
A research report from Edelweis Securities said there are immediate concerns given an estimated four weeks? dealer level inventory. ?The strike?s impact is likely to be felt if it persists beyond a week. We estimate a daily EPS impact of R0.11/ share and BAL?s higher realisation Pulsar bikes may get impacted with a daily revenue loss of R21 crore, Edelweis said. Assuming a gross margin of 24% for the company?s domestic motorcycle business, this could translate into an R5-crore daily contribution loss, or EPS loss of R0.11 per day. Angel Broking has said it did not see any immediate impact of the strike on the company’s sales given that it has an inventory of around 5-6 weeks in the system. But they would remain watchful of future developments and like to seek more clarity from the management and on this front, an Angel Broking report said.