Maruti Suzuki to hike temporary workers’ wages too

By: | Updated: September 29, 2015 1:49 AM

Increase to be along the lines of that for permanent workers

Maruti Suzuki strikeMaruti Suzuki currently has a total of around 11,000 workers at its three plants, of which 5,500 are permanent, 3,200 contract and around 2,800 temporary. (Reuters)

Following a wage hike for its permanent workers last week, Maruti Suzuki is now going to do the same for its temporary and contractual employees. Though some temporary workers at the company’s Manesar plant had staged a protest on Saturday after the wage revision for permanent workers demanding they too be given a hike, sources in the company said that a revision for the former is also in the works so the matter has been resolved.

“It is only a matter of time. The details of it (hike) are being worked out. It would be broadly on similar lines as the permanent workers. There is no trouble at the plant,” an official aware of the development said. Though not confirmed, the hike could be in the region of 10-11%. The average salary of temporary workers is around Rs 15,000.

They get all the benefits of food and transportation as permanent workers but are hired for a period of only seven months.

At the end of this period, these workers can again be rehired after five months.

Even if they are not hired back, most of them become employable because of the skills they acquire and are able to find jobs elsewhere.

Maruti has three category of workers: Permanent, temporary and contractual. Temporary workers are hired directly by the company unlike contractual ones hired through a contractor, with the payment also done through him.

Currently, there are contractual workers at the company’s Gurgaon plant but since 2012, when the plant witnessed labour violence, there have been no such workers at Manesar.

The company currently has a total of around 11,000 workers at its three plants, of which 5,500 are permanent, 3,200 contract and around 2,800 temporary.

While wage revision for permanent workers happen once every three years and for temporary and contractual it is done every year with an average hike of around 10-11%.

Since the labour violence at Manesar in July 2012 in which a senior HR executive was killed, the company does not involve temporary workers in core functions of production. The other change that took place after that incident at the behest of the company’s chairman RC Bhargava was to abandon contractual hiring and instead directly recruit temporary workers. Even at the Gurgaon plant where there are contractual workers, the practise is being gradually phased out.

In July, at the Indian Express Group’s Idea Exchange programme, Bhargava had criticised the practise of hiring contractual labour and instead advocated that companies should be allowed to hire temporary workers without any binding norm that require making the workers permanent after they have put in a specified number of days. He had said that the category of permanent and temporary workers should be different with all major benefits accruing to both albeit with a marginal difference in salary. During a downturn when the temporary workers are laid off, they should be paid a subsistence allowance so that the company easily absorbs them once the rough times are over, he had said.

Last week, Maruti signed a wage agreement with its permanent workers at the Gurgaon and Manesar plants, under which employees will get an average salary hike of around Rs 16,800 per month spread over the next three years. Since the settlement was reached peacefully, managing director and CEO Kenichi Ayukawa also promised to pay Rs 3,000 each to the workers as a one-time incentive.

The wage agreement will be implemented with retrospective effect from April this year and the workers will receive 50% of the increased salary in the first year and 25% each in the remaining two years. So on an average, the salary hike per worker is around Rs 16,800 per month, of which Rs 8,430 will be given in the first year and Rs 4,200 each in the second and third years.

In the 2012 wage agreement, workers had got an average salary hike of Rs 18,000, spread over three years, while in 2009 the average salary increase was around Rs 7,000 per month.


* Average hike could be around 10-11%
* Average salary of temporary workers is R15,000 per month
* For permanent workers, wage revision is for 3 years; for temporary & contractual, it is revised every year
* In recent years, the effort is to move towards temporary workers rather than contractual
* Since July 2012, there are no contractual workers at the Manesar plant

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