Samsung India factory workers on their 25th day of strike at Sunguvarchatram near Kancheepuram on October 3.
| Photo Credit: VELANKANNI RAJ. B

The story so far:On October 15, the Tamil Nadu labour department announced that the month-long strike at Samsung’s manufacturing facility in Sriperumbudur has ended after successful negotiations between the workers and company management. The Samsung India Workers’ Union (SIWU), affiliated to the Centre for Indian Trade Unions, announced the withdrawal of the strike and said they will return to work on October 17. While workers have raised various economic demands such as an incremental increase in their salaries over the next two years, at the heart of their protest is the demand for the recognition of SIWU. The management has continued to stonewall this particular demand, and the workers have resorted to the judicial route, with the matter now pending before the Madras High Court.

When did Samsung India start?

The South Korean company, Samsung commenced its operations in India in 1995. The biggest generator of revenue for the company in India are smartphone devices, with most of these manufactured at its second plant in Noida, Uttar Pradesh. Its facility in Sriperumbudur was established in 2007, and produces consumer durables such as televisions, refrigerators, washing machines and air conditioners. It employs close to 5,000 workers. In 2022, the company signed an MoU with Tamil Nadu government, through an investment of ₹1,588 crore, to set up a new plant to produce compressors for refrigerators.

How do East Asian firms view unions?

Forming a workers’ union in a foreign-owned enterprise in India is a challenge in itself, with the need to pass through several political-bureaucratic loops to get it registered. However, getting it recognised by the management has often proved to be even more difficult. Labour subordination and disciplining has remained the default setting of most East Asian companies operating in India, especially in the past two decades. Some notable workers’ protests in different parts of India have been at manufacturing facilities with East Asian capital — Honda Scooters and Motorcycles in 2005, Maruti Suzuki in 2011-12, Wistron in 2020 and Foxconn in 2021. The stressful working conditions in these factories are shaped and determined by their management philosophy, which largely draws inspiration from the Japanese production method called Kaizen — that is, continuous improvement to increase work intensity and reduce idle time. Over the years, through offshore supply chains, global manufacturing in the electronics industry has been reordered into just-in-time production — a system in which products are created to meet demand rather than in surplus or in advance of need. As companies adopt this model to increase efficiency, the output is ramped up ahead of product launches and peak sales periods. It leads to punishing work ethic, regimented culture of rules and unyielding deadlines.

It is in this context that the demand for representative associations is pertinent from a labour-centric perspective. However, past experiences — the ready reference being Maruti Suzuki workers’ struggles to form a union — reflect the reluctance of managements. They remain extremely wary of unions, especially those with communist affiliations, and are apprehensive of their militant actions. As is visible in the present case, while there has been some conciliation towards other demands, Samsung has remained adamant on not recognising SIWU.

Also read | On Samsung workers’ right to unionise

What about labour in South Korea?

Companies in South Korea such as Samsung are called Chaebols. These are large, diversified business conglomerates owned and controlled by families or their close kin for generations. Chaebols have dominated South Korean economy since the 1960s and have also had significant links to the country’s polity. Their origins can be traced to the encouragement and support provided by the authoritarian military dictatorship to rebuild the economy post the Korean war in 1953. The export-led growth strategy of Chaebols was dependent on their labour management strategies which was a combination of minimising labour costs, and intensification of work. Since then the work environment has moved from militaristic labour control and subordination in the 1970s to more paternalistic management practices such as welfare schemes and subsidies in later years. According to scholars Seung-Ho Kwon and Michael O’Donnell, as independent trade unions emerged in the country in the 1980s, the Chaebols brought in automated production systems, introduced external subcontractors and restructured as well as decentralised their operations to curb labour power (including transnational investments). Presently, Samsung, founded by Lee Byung-chul in 1938, is the country’s largest Chaebol.

What are the concerns for India?

The prolonging of the strike causes concerns for both central and State governments — for the former, regarding India’s manufacturing ambitions and becoming an alternative to China, and for the latter, who are forced to strike a balance between attracting foreign investments and signifying its political-governing philosophy of dignity and justice. The resolution of the issue is therefore a matter of prestige and urgency rather than any pro-labour development.

Anand P. Krishnan is a Fellow at the Centre of Excellence for Himalayan Studies, Shiv Nadar Institution of Eminence, Delhi NCR, and an Adjunct Fellow, at Institute of Chinese Studies, Delhi.

The realisation of their fundamental right to form a registered trade union to collectively bargain for better terms of employment is at the heart of the protests by Samsung India workers’ at Sriperumbudur in Tamil Nadu. They want to meet the South Korean giant on equal terms across the negotiating table to jointly frame a collective agreement regulating their work conditions.

The State government responded by forming a ‘workmen committee’ to resolve the problem and resorted to police violence to quell the workers’ strike which began on September 9. Labour law expert and Madras High Court lawyer, senior advocate R. Vaigai, pointed out that the State’s action was akin to putting the cart before the horse. Legally, she said, the registration of the trade union named Samsung India Workers Union (SIWU) under the Trade Unions Act, 1926 should have preceded the formation of the workmen committee. The unleashing of the police, rather than following the tenets of the 1926 law to register the trade union and facilitate a democratic atmosphere for collective bargaining under the Industrial Disputes Act of 1947, gives the impression that the government is on the side of the Samsung management. On the other hand, the State government and Samsung have alleged that SIWU is backed by the Centre of Trade Unions (CITU). Samsung has further objected to the inclusion of its name in SIWU.

On the right to form a union

The Supreme Court in B.R. Singh versus Union of India in 1989 upheld the right to form associations or unions as a fundamental right under Article 19(1)(c) of the Constitution. The State or the courts could “reasonably” restrict the formation of unions, associations, cooperative societies under Article 19(4) of the Constitution only if there is danger to public order, morality, sovereignty or integrity of India. The restrictions must be based on logic and not arbitrary. The necessity to form unions is obviously for voicing the demands and grievances of labour. “Trade unionists act as mouthpieces of labour,” the court noted.

Also read | Don’t blow Samsung workers’ issue out of proportion, CITU told

It is the obligation of the State, acting through the Registrar of Trade Unions, as the regulatory authority under the 1926 Act, to register trade unions and give individual workers their voice. The benefits of registration under the 1926 Act include immunity from both civil and criminal action. Section 4 of the Act notes that even seven members could apply for registration of their union. Under Section 6, the Registrar has to merely examine whether a trade union’s rules conform with the rules of the Act. Speaking to Frontline, A. Soundararajan, CITU Tamil Nadu Secretary, has accused the State of “blocking SIWU’s registration”.

On collective bargaining

The Madras High Court, in Rangaswami versus Registrar of Trade Unions, succinctly defined the history and object of the Trade Unions Act as “the organisation of labour to enable collective bargaining”. ‘Collective bargaining’ is defined in Article 2 of the International Labour Organization (ILO) Collective Bargaining Convention of 1981 as negotiations between employees and employers or their organisations to determine working conditions and terms of employment. The product of successful collective bargaining is a collective agreement. Collective bargaining is statutorily recognised in the Industrial Disputes Act. The Act provides that in case of failure of collective bargaining, the State steps in to refer the matter to a conciliation officer. The case is further referred to a labour court or an industrial tribunal if the conciliation officer does not succeed.

The roots of collective bargaining trace back to the late 18th and early 19th century when the coal miners struggled for basic conditions. Collective bargaining has protected workers’ rights post the economic depression of the 1930s and the Second World War to evolve as a norm along with the emergence of the democratic form of governance globally. In India, traces of collective bargaining could be found in the 1918 Ahmedabad Mills strike led by Mahatma Gandhi in which he initiated the formation of a committee of arbitrators drawn from both the workers, who were seeking a wage raise after the revocation of their plague allowance, and their employers.

Eminent labour law scholar Sir Otto Kahn Freund referred to the level playing field offered by collective bargaining with the expression, “power stands against power”. Susan Hayter, in an ILO document, termed freedom of association and the right to collective bargaining as fundamental workers’ rights. Former U.S. President Franklin D. Roosevelt in a Senate address in 1937 said the “denial or observance of this right means the difference between despotism and democracy”. The National Labour Relations Act or the Wagner Act in the U.S. marked the refusal of an employer to bargain with a workers’ union as an ‘unfair labour practice’. The same spirit is reflected in the Fifth Schedule of India’s 1947 Act, which lists an employer’s refusal to “bargain collectively, in good faith, with recognised trade unions” as an unfair labour practice. The celebrated U.S. Supreme Court case, National Labor Relations Board versus Jones & Laughlin Steel Corp held that employees have a fundamental right to organise and select representatives of their own choosing for collective bargaining. The court said any act on the part of the employer to prevent the “free exercise of this right” would amount to discrimination and coercion to be condemned by the competent legislative authority.

The Indian Supreme Court has recognised the importance of collective bargaining to achieve social justice in modern industrial life (Karnal Leather Karmchari versus Liberty Footwear Company). The court, in Ram Prasad Vishwakarma versus The Chairman, Industrial Tribunal, noted how labour was at a “great disadvantage” before the “days of collective bargaining”.

On the right to strike

The right to strike labour is a legal right recognised with certain restrictions under the Industrial Disputes Act. The Supreme Court described strikes as a “form of demonstration” by workers for their rights. For example, they include various forms like ‘go-slow’, ‘sit-in-work’, ’work-to-the-rule’, ‘absenteeism’, etc. The court has observed the right to demonstrate and, therefore, the right to strike, as important weapons in the armoury of workers. The right is recognised by almost all democratic countries. The ILO considers the right to strike as a corollary of the right to organise.

However, the 1947 Act does not recognise the right to strike as absolute. Section 22 prohibits strikes in breach of contract or without giving employer notice within six weeks before striking or within 14 days of giving such notice; or before the expiry of the date of strike specified in the notice or during the pendency of proceedings before a conciliation officer and seven days after the conclusion of such proceedings. In the All India Bank Employees case, the Supreme Court said the right to form an association was a “guaranteed” one, but the methods used by the unions to achieve their purposes must adhere to the existing industrial laws of the land.

The criticism against the involvement of CITU in the workers’ efforts to register a labour union is countermanded by the provisions of the Trade Unions Act itself. Section 6(e) of the Act provides for not only the admission of “ordinary members” from the workforce of a facility in a trade union but also the inclusion of “honorary or temporary members” as office-bearers to form the executive of the union. Section 16 of the same Act permits the constitution of a separate fund for “political purposes”. Under this provision, a registered trade union may constitute a separate fund, from contributions separately levied, to promote the “civic and political interests of its members”. The section allows these funds to be used to even pay for a candidate to contest elections to any legislative body constituted under the Constitution. The fundamental right to free speech of the workers includes their right to political expression.

On the ‘workmen committee’

While the State Industries Minister claimed the discussions with the committee had led to a resolution, The Hindu quoted the striking workers saying the ‘workmen committee’ was composed of employees who backed the company.

Section 3 of the 1947 Act covers the constitution of a ‘works committee’. The statute empowers the appropriate government to direct the employer to form a ‘works committee’ consisting of an equal number of representatives of employers and workers engaged in the establishment. The workers in the committee have to be chosen “in consultation with their trade union, if any, registered under the Indian Trade Unions Act, 1926”. The provision is also replicated in the yet-to-be implemented Industrial Relations Code of 2020. Hence, the law mandates the registration of a trade union before the formation of a works committee.

What is in a name?

Samsung India has complained to the Labour Commissioner that the use of the name ‘Samsung’ in the SIWU was a violation of the Trade Marks Act, 1999.

Section 29(5) of the 1999 Act states that a registered trade mark is infringed if it is used as the name or the part of a trade name or the name or part of the name of a business concern. Trade unions are not trade or business concerns dealing in goods or services. Section 2(h) of the 1926 Act defines ‘trade union’ as a “combination” primarily formed to regulate relations between/among workers and employers. U.S. courts have evolved the principle of ‘nominative fair use’ which involves utilising as much of the distinguishing design elements of a brand logo to reasonably associate the union and the company.

File picture of workers of a Samsung facility during a strike to demand higher wages at its Sriperumbudur plant near Chennai on September 11, 2024.
| Photo Credit: Reuters

Police have detained around 100 striking workers and union leaders protesting low wages at a Samsung Electronics plant near Chennai, as they were planning a march on Monday (September 16, 2024) without permission, police officials said.

The detention marks an escalation of a strike by workers at a Samsung home appliance plant near Chennai. Workers want higher wages and have boycotted work for seven days, disrupting production that contributes roughly a third of Samsung’s annual India revenue of $12 billion.

A senior police official of Kancheepuram district, Sankar Ganesh, told Reuters by telephone that around 100 workers were under “preventive arrest”, without elaborating.

Another police officer on condition of anonymity said the detentions were made due to a lack of permission to hold a protest march.

Samsung did not respond to a request for comment.

Workers have since last week been protesting at a makeshift tent near the plant, demanding higher wages, recognition for a union backed by labour group Centre of Indian Trade Unions (CITU) and better working hours.

Samsung is not keen to recognise any union backed by an outside labour group.

A. Jenitan, a union leader of CITU, told Reuters that police also detained one of their senior leaders, E. Muthukumar, who was leading the Samsung protests.

“The workers have been asked to return to the (strike) tent,” he said.