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DEPARTMENT OF MANAGEMENT STUDIES

SRI RAMAKRISHNA ENGINEERING COLLEGE


[Autonomous Institution,ISO 9001-2008 Certified, Approved by AICTE and
Affiliated to Anna University, Chennai]

Vattamalaipalayam , NGGO Colony Post


Coimbatore 641022

LEGAL ASPECTS OF BUSINESS (12BA1105)

Term Paper

Labour Issues

Submitted by

Marks
15

Student Signature

Date:

Faculty Signature

Abstract:
This term paper is about a Premier Instruments & Controls Ltd. (PRICOL) and also
consists of the diastral incident which took place in plant-II in Kuniyamathur, Coimbatore.
22.09.2009 was a bad day for the HR manager who was attacked by the workers with the iron
rod; he lost his life due to serious head injuries. Reaction and response of the Government
and other industrialists in Coimbatore for the incident are enlightened in this paper. The
research methodology is desk research. The paper concludes with the questions raised by the
industrial experts relating this incident to the impact of the society. Finally such industrial
disputes can be put to an end by few suggestions mentioned in this paper.

Introduction:
PRICOL Limited (formerly known as Premier Instruments & Controls Ltd) was
established in 1974 at Coimbatore in Tamil Nadu, and commenced manufacturing operations
in 1975 in the precision engineering field of automotive instruments. Today, PRICOL is the
market leader enjoying about 53% of the automotive instruments market share. Denso
Corporation, Japan is the Joint Venture Partner with PRICOL since 1997.
The company is engaged in the manufacture and export of a complete range of
automotive components starting from instrument clusters, dashboard meters, fuel sensors, oil
pressure switches, speedometer drive cables, fuel cut off valve, filter suction, etc.
The other group companies English Tools, PRICOL Travels, PRICOL
Technologies, PRICOL Packing Limited, PRICOL Cargo, Xenos Technologies, PRICOL
Properties Limited, PRICOL Corporate Services Ltd, Synoro Technologies, PRICOL
Academy of Excellence, PRICOL Software, Carcerano PRICOLtech, Ananya Innovations
and PRICOL Holdings Limited.

Product range of the company includes parts for:

Motorcycles, Scooters, Three Wheelers & ATVs

Cars, SUVs and MUVs

Trucks and Buses

Tractors and Construction Equipment

Fleet Management Solutions

Sintered Components.

Labour Issue in PRICOL:


Sept 22nd 2009
The killing of a HR manager at a factory in Coimbatore by workers, sparked off by
the sacking of dozens of their colleagues, can in no way be condoned, but it raises questions
on the state of labour in India in a time of economic pain.

Roy George, a 47-year-old vice president at PRICOL, was attacked by workers


wielding iron rods after 42 employees were dismissed from a unit of the auto parts maker.
These employees were fired after they disrupted work, company officials say. A senior
official was quoted as saying George was targeted because he was weaning away
employees from a union that was leading the protests.

PRICOL
workers

have

been agita

ting

for

two

over

years against the hiring of contract workers and on the non-payment of pay and other
benefits. The firm has said these strikes have high profitability and they could shift base.

Response of the Government:


The Tamil Nadu government in June prohibited the firm from employing temporary
workers in core operations and ordered it to hike wages, implicitly validating the demands of
the workers. If one reads PRICOLs latest annual report, the firm itself blames the economy
for its poor financials. There is no mention of an impact from labour unrest.
The International Labour Organisation, in its fundamental convention, says workers
must have protection against harassment for being members of a trade union. The ILO also
makes it a priority that wages must be decided through negotiations on an equal footing by
workers, employers and the government.
Indias Industrial Disputes Act too provides for protecting workers from being fired
for reasons like worsening sales. Severance payments have to be made and these workers
must be re-hired when conditions improve. Many firms have sought to bypass these rules by
increasingly hiring casual labour; a trend Indias labour ministry says is on the rise in the
automobile sector.

Reaction of the other industrialists in Coimbatore:

Mr Mahendra Ramdas, President, Indian Chamber of Commerce and Industry (ICCI),


Coimbatore, told Business Line that leaders of various industrial organisations are planning a
days closure to protest against the violence and express solidarity with PRICOL.
Mr Jayakumar Ramdass, President, Southern India Engineering Manufacturers
Association (Siema), Coimbatore, said unchecked, such incidents could lead to the return of
labour militancy to Coimbatore. He said Coimbatore has of late been attracting investments
by national and international companies, such as Suzlon, L&T, Flowserve, and Mitsubishi
Corporation, and labour militancy could affect inflows. It could also lead to local industries
making fresh investments elsewhere. Such violence may also scare away executives from
outside.
Various industrial associations of Coimbatore have in a memorandum to the Tamil
Nadu Chief Minister, Mr M. Karunanidhi, and the Deputy Chief Minister, Mr M. K. Stalin,
sought steps to ensure industrial peace in Coimbatore.

Similar Incidents in other firms:


PRICOL is not an isolated case of worker action in the state. Tamil Nadu has seen a
spate of agitations in recent times, most prominently in the factories of tyre-maker MRF,
South Korean car firm Hyundai and mobile phone giant Nokia. It also brings to mind
a similar incident last year, when the chief of the Indian unit of an Italian industrial gear
maker was killed by employees. This too was preceded by disputes over hundreds of
dismissed employees.
Asian peer China too has seen its share of worker unrest as the communist nation
moves towards a market economy and as workers fret and riot over the security of their jobs
in a weakening global economy. In July, workers in a steel mill threw their boss down some
stairs to his death, as he was managing the sale of the state-owned plant to a private firm.

Conclusion:
The experts have raised questions after the PRICOL incident 22 September 2009.
Do such unfortunate situations brought about by labour practices?
Court rulings in India have made it clear the right to life includes the right to practice a
dignified livelihood. Do arbitrary hiring and firing practices run counter to this?

And are these made harsher by the slump in the automobile industry, which has forced firms
to cut production and reduce the number of workdays per week?
Did the PRICOL incident come about due to criminal elements or was it an outcome of
frustration with the course of peaceful agitation?
And would such incidents scare away investors into the state and the country?

Suggestions:
Labours and employees are the Real Assets of the Frim
As the Executives we should treat our Assets from Depreciation such as Industrial
dispute by following the norms of Factories Act 1948 and Labours Welfare Measures.

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