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Labour strike – Nokia’s salary revision irks employees

While the liberalised economy of India has been great for investors, large corporations and highly skilled professionals, it has not been so great for the average shop floor worker. Corporations throughout India try to find some way around the labour laws to pay their workers less than they should. It is an open secret that every large corporation in India employs a large number of contract and temporary workers to avoid paying them the benefits that a permanent worker is entitled to. Also, in the last few months, there have been reports of labour strikes in industries across the country.

            Labour strike - Nokia's salary revision irks employeesThe latest strike is happening in Nokia, the Finnish mobile phone giant, that has its plant located in Sriperumbudur. In its state-of-the-art facility, Nokia runs three shifts, churning out mobile phones that cost between 1,000 INR (20 USD / 15 EUR) and 20,000 INR (415 USD / 290 EUR) which are sold in India and other markets. The company has over 8,000 employees on its rolls, including 5,500 women. Nokia started operations in 2006 and recruited a large number of workers who had completed high school as well as technical diploma holders and trained them. A newly recruited worker gets around 3,500 INR (75 USD / 50 EUR) a month with promises of a gradual increase in pay. The company also provides pick-up and drop facility for all its employees.

Workers have been demanding a raise in pay since August 11. The management met with workers’ representatives and offered an increase of 800 INR (17 USD / 12 EUR) for those who had worked one year for the company, 950 INR (20 USD / 14 EUR) for those who had completed two years and 1200 INR (25 USD / 18 EUR) for those who had been with Nokia for three years. Workers on the other hand, have been demanding a uniform increase of 1,500 INR (31 USD / 21 EUR) for everyone. The management did not accept this. As a result, the workers had decided to go on a flash strike within the facility from August 13. The strike was started by those who had completed the second shift and they were joined by others who had come for the third shift.

While we hope the matter would be eventually sorted out amicably and the employees get their due, the increasing number of strikes across the country presents a distressing scenario. Large corporations must realise that employees are a very important part of any company and should give them their fair share of the pie. Unhappy and disgruntled employees reduce productivity and can negatively affect the quality and quantity of goods produced. On the other hand, there can be no greater asset for a company than a loyal, dedicated and happy workforce. To get these qualities out of a typical employee, there is only one way – treat him/her well and pay him/her adequately.

After the closed, highly regressive days of the licence raj, the Indian economy began to be liberalised slowly from the nineties. This has unleashed the potential of India both as a large market and a good location for corporations, both domestic and multi-national, to set up shop here to tap the growing market as well as the relatively low cost of manufacturing products here due to the availability of skilled labour at low wages. Different states began competing with each other to attract as many investors as possible and the better run states were able to convince many a corporate to start a facility to cater to the domestic market as well as for exports. This was good for those who were entering the job market as several opportunities were available for those who had the right skills.

The southernmost state of Tamil Nadu (TN) is one of the few states to have taken maximum advantage of a liberalised economy. As India’s most urbanised state (43.86% of the population lives in urban areas) and the state with the second highest per-capita income among large states, Tamil Nadu is one of the handful of states with a literacy rate of above 75%. TN also ranks first in terms of the number of registered enterprises in the entire country and the industries are well spread out throughout the state instead of being clustered around one or two cities. Blessed with an even distribution of wealth, a technically well trained and equipped workforce with a large percentage of them fluent in English (TN has the largest number of engineering institutions in the country), a relatively long coastline and state policies designed to attract a variety of industries, it’s no wonder that Tamil Nadu is a highly industrialised state when compared to the others. Wisely, successive state governments have made it a policy to build a highly diversified economy with equal emphasis on the services, manufacturing and agriculture sectors.

With an economy that is not overly dependent on any particular sector, TN is a great place to find the best talent from a variety of fields. Though the city of Chennai is known as “the Detroit of South Asia” for the large number of automobile and allied industries located here, it is also a leading Information Technology centre. In recent years, the government has promoted the growth of electronic industries in and around the town of Sriperumbudur, located close to Chennai. Chennai has emerged as the Electronics Manufacturing Services Hub of India.

In order to sustain this favorable growth, It would be prudent for the top management of large corporations to remember this: If you pay peanuts, you get monkeys.

Many thanks to Ronin for his contribution to this post!

Written by An alien Earthling