STRENGTHENING TRADE UNION NETWORKS THROUGH INTERNATIONAL

FRAMEWORK AGREEMENTS. A CASE STUDY AT VOLKSWAGEN,

DAIMLER AND BOSCH IN THE INDIAN AUTO CLUSTER PUNE.
Paper prepared for presentation at the workshop Transnational industrial relations and the
search for alternatives. Greenwich University, London, May 31-June 1, 2012.

Anton Wundrak*

*Anton Wundrak holds a diploma in business economics. After some years working in the field of
marketing and event management, i.a. for the joint nation branding initiative of the German
Government and the Federation of German Industries, he moved on and did a master in social
sciences (Intercultural Conflict Management, M.A.). He now works as a freelancing project
manager, consultant and researcher in the context of intercultural challenges, globalisation and
labour relations, based in his hometown Berlin. The research summarised in this paper was made
possible by grants from the Otto Brenner Stiftung, the India Office of the Friedrich Ebert Stiftung,
and the Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ).
Please get in touch with the author prior to citing or sharing.
Contact: anton.wundrak@gmx.de
Berlin, May 2012

ABSTRACT
India has been following its New Economic Policy now for more than two
decades. One impact of that has been the further flexibilisation and
informalisation of work. The Indian labour movement has not yet been able to
develop adequate strategies to counter these problems. The traditional
national unions influence in the auto industry, particularly in the newer plants,
is limited due to the widespread existence of so called independent or
unattached plant level unions.

By looking at the implementation of International Framework Agreements

(IFAs) at the local level, this paper explores the union situation at three plants
in the automotive cluster Pune (Volkswagen, Daimler, and Bosch). It turned
out that knowledge of the IFAs was either absent, or, if the IFA was at least
vaguely known, the potential importance or use of IFAs was not recognised.
The local unions lack resources such as time, infrastructure, and detailed
knowledge on labour laws, to fulfil their trade union work more effectively and
inclusively. So far the unions do only include workers with permanent
contracts in their membership and negotiations. These workers, however,
account currently for the minority of the workers in all the studied plants.

It is argued that a more inclusive approach to IFAs, by the original negotiating

parties, one that ensures that local actors actually know and understand
IFAs, could improve the situation. Moreover, networking should be a priority
of all relevant stakeholders at all levels, with the International Metalworkers
Federation (IMF) as the sectors global networking coordinator. Effective
strategies need to be developed in order to build and strengthen union power
in transnational companies and their supply chains. Companies with IFAs,
such as the studied ones, provide with a number of potential starting points.

Keywords: globalisation, labour transnationalism, trade unions, informal

employment, international framework agreements, strategic campaigns

INTRODUCTION
The basis for this paper has been a three

integrated

November 2011. Six weeks in the capital Delhi

International

available case study literature that looks into

Framework

the very question if and how IFAs have been

Agreements (IFAs) do actually play in India,

implemented is still limited3. Our project was

especially locally at the plant level. Since the

study

was

supported

by

two

and

on IFAs (i.a. Papadakis 2008, Stevis 2010), the

The project was aimed at finding out more

role

dissemination

Despite a growing number of publications

were followed by another six weeks in Pune.

what

for

implementation of IFAs.

months long trip to India from September to

about

concept

initiated to address this gap.

German

foundations, the Otto Brenner Stiftung (OBS)1

Before our field trip to India we had a

and the Friedrich Ebert Stiftung (FES), this was

planning phase of roughly two months in

done by looking at three German global players

Germany. During that time we spoke to the

in the auto industry; namely, Volkswagen,

respective

Daimler and Bosch, and their plants in the

companies, compared the different IFA texts,

region of Pune.

and collected literature on Indian industrial

transnational

of

IFAs

corporations

along

(TNC)

of

the

three

were going to look at a trade union existed,

driven by the following assumptions: First, that

implementation

councils

relations. We learned that in all three plants we

Our2 general research approach was

the

works

however, only for the permanent workers.

a
The

global

Volkswagen

IFA

was

the

first

production and value chain must empower

agreement signed in the auto sector, dating

workers and their organisations at the local

back already 10 years (June 2002). Daimler

level. Second, that the local actors need to

followed in September 2002 and Bosch signed

know, understand, and recognise IFAs. And

its IFA in March 2004. Compared to more

third,

recent

that

the

particularly the
(GUFs),

need

IFA

negotiating

Global
to

have

Union
a

parties,

all

three

IFAs

have

relatively weak and vague language, especially

Federations

strategic

agreements,

when

and

it

comes

to

implementation

and

monitoring measures.4 By far the weakest one

The OBS is close to the German Metalworkers

Federation IG Metall, see http://www.otto-brenner-stiftung.de/;
the FES is close to the German Social Democratic Party
(SPD). See http://www.fes.de/.
2
The project has been realised in cooperation with
Rohan Raphael Seth from Delhi. His ability to speak Hindi, the
other official language in India aside from English, was
essential in making appointments and conducting interviews.

One complex research in this regard, comparing

cases in Brazil, India, Turkey, and the US, is the IFA Project
carried out by the Free University Berlin. See
http://www.polsoz.fuberlin.de/en/polwiss/forschung/oekonomie/gewerkschaftspolitik
/forschung/IFA-Projekt-en.html (last accessed May 25, 2012).
4
See Annex Table 1 for a tabular comparison of the
IFAs.
3

is the Volkswagen IFA.5 Despite the vague

this network we were able to fix appointments

language, the IFAs content can nonetheless

with trade union representatives at all three

be considered of potential use to advance

selected plants. On the management side,

workers rights. If not as a legally binding tool,

however,

then at least in terms of providing something

Volkswagen

with which to raise awareness for workers

instructions from Germany, the local Bosch did

rights and create pressure on the companies

not want to talk to us.

decision makers.

were

and

only

Daimler.

successful
Without

at

official

My extended written report in German,

Two pragmatic main questions resulted

which I started writing once I was back in Berlin

from the planning phase:

in December 2011, is now being used as an

internal

1.) What is needed so that the local

local

and/or

paper

by

IG

Metalls

has been published by the Otto Brenner

potential of the IFAs as a tool to make

against

working

international department. A shortened version

unions in Pune understand and use the full

demands

we

Stiftung.6

central

management?
2.) How could the local unions in Pune
use the IFAs to better the working conditions
for non-permanent workers?
To get a better idea of the Indian
circumstances, we used the time in Delhi to
conduct meetings with representatives of the
five biggest Central Trade Union Organisations
(CTUOs) as well as with two of the biggest
business federations and a couple of labour
activists and researchers. In Pune, we were
supported

by

labour

consultant.

He

connected us to a network of local trade

unionists, which was of great help. Through

With the Charta on Labour Relations from 2009

Volkswagen has, however, an instrument setting out much
more detailed minimum standards in the area of the
participation rights of employee representative bodies. It
focuses exclusively on the level of individual facilities of the
Volkswagen Group and is not considered an IFA though.

6
See http://www.otto-brennershop.de/publikationen/obs-arbeitspapiere/shop/obsarbeitspapier-nr-3-gewerkschaftliche-netzwerke-staerken-undausbauen-internationale-rahmenv.html (last accessed May 25,
2012).

TRADE UNIONS AND INDUSTRIAL RELATIONS IN INDIA

Unorganised and organised sector

sector. On the other hand, there are areas

such as agriculture that are literally closed

Indias economy is often subdivided in an

informal sectors. This is where a majority of

organised or formal, and an unorganised or

Indias informal women workers work. Women

informal sector. This distinction is not based on

are particularly affected by informal work; they

trade union density, but on whether basic

constitute 94 percent of all working women in

labour law and social security provisions apply

India.8

or are absent. According to Indias National

Commission for Enterprises in the Unorganised

Informal workers are defined by NCEUS

Sector (NCEUS),

as people

[the] informal sector consists of all

unincorporated private enterprises
owned by individuals or households
engaged in the sale and production
of goods and services operated on a
proprietary or partnership basis and
with less than ten total workers
(Naik 2009, p. 3).

working in the informal sector or

households,
excluding
regular
workers with social security benefits
provided by the employers and the
workers in the formal sector without
any employment and social security
benefits provided by the employers
(Naik 2009, p. 5).

India has been following its so called New

The latter already make up for around 50

Economic Policy (NEP) now for more than two

percent of the workers in the so called formal

decades. One obvious impact of the NEP has

sector (ibid.). In manufacturing they count for

been

and

around 75 percent (cf. Sinha 2006). In sum,

informalisation of work. In 1991, when this

circa 470 million people face a precarious

market liberalisation policy was introduced, the

situation, which is a vast majority of Indias

formal sector consisted of 8.5 percent. Ten

working people. They either have limited or no

years later, in 2001, only 7 percent of the

contracts at all, get paid insufficient wages, and

workers were in formal employment, which

are not covered by social security.

the

further

flexibilisation

means that the informal sector had grown to 93

A huge problem is the massive union

percent.7 The term formal or organised sector,

representation gap amongst informal workers.

however, can be misleading, since in many

Because of lacking trade union support and

industries previously formal employment has

education, many workers do not know what

been turned into informal employment, i.a. due

their rights are. The happening exploitation,

to outsourcing. Thus, there is no closed formal

then, is sometimes not even realised as such

and rather perceived as some sort of fate

This is the last official data available. Final figures of

the 2011 national census have not been released yet.
However, it is likely that the gap between formal and informal
employment has again widened.

Census 2001, see http://censusindia.gov.in/.

(Sinha 2006, p. 7). With respect to this

Employment/Standing Orders Act (1946), the

phenomenon, it is important to mention that the

Industrial Disputes Act (1947), the Factories

caste system is still deeply rooted in large parts

Act (1948), and the Contract Labour Regulation

of Indias society. Regarding the informal

and Abolition Act (1970). These are all national

sector, Bhowmik (2011) e.g. highlights that

laws10; they only apply in the formal sector and

despite industrialisation the master-servant

are amended by various state level laws.11

relationship did not change to employer-

The

employee. In fact, he says, after 1991 [t]he

pre-industrial/feudal

relations

...

Trade

Unions

Act

defines

the

requirements for trade unions to become

were

officially registered by the authorities. Until

reinforced in this sector (ibid. , p. 1).

2001 any seven people working in a factory or

Indian Labour Law

industry could apply for registration. This

India has ratified only four out of the eight

number has been raised to 100 workers, or ten

ILO core conventions. Conventions 87 and 98

percent of the respective plant or industry,

are not among them; however, the Indian

whatever is less. However, not all trade unions

constitution guarantees the right to form trade

are officially registered, especially at the plant

unions.9 In the aftermath of the NEP, Indian

level. The same goes with legal recognition as

labour law has not yet been undergone a

the employers bargaining partner, which is

reformation. Though, it is constantly being

ruled by state law. As mentioned above,

debated and pushed for. In particular, big

forming a union is a constitutional right. If

business calls for more flexibility and less

management does not oppose the union and

regulation. Government authorities call Indian

enters

labour laws ... highly protective of labour, and

certification, registration and recognition are

labour markets ... relatively inflexible, however

not mandatory. This is different, of course,

highlight that [t]hese laws apply only to the

when

organized sector (Indian Government 2007, p.

bargaining with the union. Then, the only way

209). Trade unions and workers, on the other

to force the employer to negotiate is proven

hand, complain about the weak or absent

legitimacy by the authorities. A process though,

enforcement of existing law, though they partly

which can last very long and whose outcome is

into

negotiations

management

without

denies

official

collective

recognise a need for reformation.

Among the most important legislation are
the Trade Unions Act (1926), the Industrial
10

laws.

Article 19: All citizens shall have the right to form

associations or unions.

11

See http://labour.nic.in for a list of all central labour

India consists of 28 federal states and seven union

territories. The latter are under direct administration of Delhi.
6

often not in favour of the union, especially so in

accompanied

the case of management opposition.12

labour, this Act and has become central to

The

Industrial

further

increase

of

contract

many labour disputes. The basic controversy is

Employment/Standing

always around the question whether a certain

Orders Act requires employers with a minimum

kind of work done by contract labourers is of

of 100 employees belonging to the category

permanent or perennial nature. If it is ruled so,

workman13, to have working conditions laid

the employer has to abolish the contract

down in written form. E.g., all types of workers

labour. In the past, in some cases, it was also

must be classified according to the respective

ruled that the employer must then grant

employment status.

permanency

to

those

contract

workers.14

The Industrial Disputes Act regulates i.a.

However, this does not mirror current court

dismissal protection, strikes and so called

ruling anymore.15 For persons that can prove

unfair labour practices. E.g., if an employer,

they have worked a minimum of 240 days in

with more than 100 employees, wants to

one year, the possibility to claim absorption into

dismiss a worker with a permanent contract,

the category of permanent workers is also

this is only possible with prior permission of the

there under the act under some circumstances.

authorities.

Indias Trade Union Landscape

The Factories Act is concerned i.a. with

There are four main groups of Indian

questions of health, safety, work hours, and the

trade unions. On the national level there are

employers duty of care. Federal factory

currently 11 Central Trade Union Organisations

inspectors are meant to ensure compliance

(CTUOs). Attached to them are industrial

with the act.

federations. All CTUOs have offices in Delhi

Labour

and in the states where they are active. The

Regulation and Abolition Act regulates the use

CTUOs are historically linked to political

of

parties, though in recent years they show signs

Unsurprisingly,

contract

labour.

the

After

Contract

1991

and

the

of distancing themselves from the parties and

claim to be independent. Over time, other

12

The National Convention of Workers (2011) e.g.

demands a compulsory registration of trade unions within a
period of 45 days.
13
As per Industrial Disputes Act [w]orkman means
any person (including an apprentice) employed in any industry
to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward but does not
include any such person who is employed mainly in a
managerial or administrative capacity; or who, being employed
in a supervisory capacity, draws wages exceeding one
thousand six hundred rupees per mensem or exercises
functions mainly of a managerial nature. The wage ceiling has
been raised to 10.000 INR monthly in 2010 (154 EUR/as per
conversion rate of February 1, 2012).

federations without direct links to parties have

14

Ruled so by the Supreme Court e.g. in 1996 in the

case Air India Statutory Corporation Ltd. versus United Labour
Union (cf. Times of India 2001).
15
The 1996 Air India judgement was overruled in
2001. See the website of the Ministry of Labour, for a more
detailed overview on the contract labour issue in India.
http://labour.nic.in/annrep/files2k1/lab10.pdf (last accessed
May 26, 2012)
7

emerged. However, up to day there are few of

1951, four years after independence from the

them established at the national level. One

British was reached, there were already three

example is the New Trade Union Initiative

other CTUOs, all split-offs from AITUC due to

(NTUI).

an

political differences. Table 2 (p. 10) gives an

organisation that gives space for the co-

overview of the biggest official CTUOs plus the

existence

NTUI.

The

of

NTUI

multiple

sees

itself

as

progressive

political

tendencies. It pursues the goal of a plant level

union

organisation

based

on

In general, the Indian unions public

industrial

reputation is considered to be not good at the

coordination and participatory processes.16 The

moment (cf. Bhowmik 2011). The picture of

fourth group are plant level and - not very

unions that has been drawn by mass media in

widespread - company unions. They either

post-1991

belong to one of the CTUOs, or, if this is not

unions.

Among

the

is

one

of

inefficiency,

inflexibility, corruption, egoism and sabotage of

the case, are called unattached, unaffiliated or

independent

India

economic progress. It is not always totally

latter,

wrong and frustration at the unions basis has

however, some have links to non-party political

been there for a long time. One major concern

federations such as the NTUI.

of the workers is the unions prevalent powerfocused and centralised style of leadership.

The status of a CTUO requires a

minimum of 500.000 members spread over

Over the 1970s and 1980s the number of

different states and industries. The NTUI is

split-ups

currently applying for this status; however,

among the established CTUOs an initiative has
been brought on the way to tighten the

and

new

formations

of

unattached/independent

unions

increased

while

CTUOs

influence

the

traditional

decreased (Bhattacherjee 2001, p. 254-257).

requirements. The official status as a CTUO

This process has been going on. Thus, a

ensures regular and institutionalised contact

considerable part of todays approximately

with government authorities and the ILO. At the

70.000 officially registered Indian unions are

national level the Indian Labour Conference

unattached plant level unions.

meets once a year. Bipartite meetings between

Despite the fragmentation of the Indian

trade union and business federations were

labour movement, consensus on the most

reported to be the rare exception.

pressing
The All India Trade Union Congress
(AITUC) was the first CTUO, founded 1920 in
the course of the struggle for independence. In
16

Cf. http://ntui.org.in/ntui/intent/.
8

problems

is

there.

All 11 official CTUOs have come together

in the National Convention of Workers and
demand i.a. the following:
[s]trict enforcement of all basic
labour laws without any exception or
exemption;
universal
social
security cover for the unorganized
sector
workers
without
any
restriction; [n]o contractorisation of
work of permanent/perennial nature
and till then payment of wages and
benefits to the contract workers at
the same rate as available to the
regular
workers
of
the
industry/establishment;
[a]mendment of Minimum Wages
Act to ensure universal coverage
irrespective of the schedules and
fixation of statutory minimum wage
at not less than Rs.10,000/- per
month with indexation; [a]ssured
pension for all; [c]ompulsory
registration of trade unions within a
period of 45 days and immediate
ratification of the ILO Conventions
nos 87 and 98. 17

These demands are shared by the NTUI

as well.

17

So stated by the CTUOs in their joint declaration

from September 7th, 2011.
9

Table 2: Indian CTUOs at a glance

Name of CTUO

Year of
formation

General political
orientation

Party affiliation

Members
(2002 verification)

Members (own numbers,

officially non-confirmed)*

Bharatiya Mazdoor Sangh

(BMS)

1955

hindu-nationalistic

Bharatiya Janata
Party

6.215.797

10.000.000

Indian National Trade

Union Congress (INTUC)

1947

moderateconservative

Indian National
Congress

3.954.012

8.000.000

All India Trade Union

Congress (AITUC)

1920

communistic

Communist Party
of India

3.442.239

3.600.000

Hind Mazdoor Sabha

(HMS)

1948

socialistic

none, on formation
Praja Socialist
Party

3.338.491

5.300.000

Centre of Indian Trade

Unions (CITU)

1970

communistic-marxist

Communist Party
of India (Marxist)

2.678.473

3.400.000

Self Employed Women

Association (SEWA)

1972

support women in the

informal sector

none

688.140

1.250.000

New Trade Union Initiative

(NTUI)

2001

progressive-left
pluralistic

none

500.000

*These numbers are from the German Embassy in New-Delhi and its social-political report 2010.

10

AUTOMOBILE INDUSTRY AND THE PUNE REGION

Industry Overview

In

terms

of

employment

too,

the

predictions are quite astronomical. The Indian

Indias automobile industry has been

Government (2006) officially pursues the vision

growing intensively since 1991. Nearly all

that

globally operating companies have set up

until

2016,

the

auto

industry

shall

contribute ten percent to the GDP and create

plants in one of the three main auto clusters.

25 million additional jobs. Today, the industry

Aside from Pune, these clusters are located

employs

south of Delhi in the northern state Haryana,

between

450.000

and

700.000

people. Another ten million jobs are in one way

and in and around Chennai (Tamil Nadu) in the

or another linked to it (cf. Graham 2010).

south east. The biggest players are Maruti-

However, whether this vision will come true,

Suzuki and Tata Motors with the former

depends on an adequate infrastructure which is

dominating the passenger car segment and the

still widely lacking.

latter the commercial vehicle sector. According

to the International Organization of Motor

Numbers on the nature of employment

Vehicle Manufacturers (OICA), car production

vary and are hard to obtain. With regard to the

has been doubled since 2001 culminating in a

automobile

growth rate of 30 percent and 3.5 million sold

(Graham) speaks of at least 30 percent

vehicles in 2010. Although export rates are

contract workers and another 30 to 40 percent

increasing, it is the domestic demand that

people

made up for the vast majority of sold cars.

status.

Thanks to a growing middle and upper class.

industry,

with

2010

non-permanent

ILO

study

employment

18

Automotive Cluster Pune

Looking at the sheer numbers, around 10 cars

per 1.000 Indians, business analysts get

Pune lies in Maharashtra, Indias second

enthusiastic and predict a splendid future. Two

most densely populated state. After Mumbai it

percent of all Indians do have the money to buy

is the states biggest city with approximately

a car. This translates into a customer potential

5.5

of 20 million buyers, so the Chair of the

metropolitan areas. The citys infrastructure is

German

comparatively well developed. There is an

Automobile

Industry

Association

million

inhabitants

including

the

express motor way connection from Mumbai to

(VDA) lately.

Chakan, located around 30 kilometres from

Pune

centre.

Chakan

has

become

the

automobile industrys hotspot in the region.

18
According to the German Embassys 2010 sociopolitical report approximately 275 million people can be
counted as middle and upper class. This becomes however a
comparative small number when taking into account Indias
total of 1.2 billion people.

Promoted

11

by

the

Maharashtra

Industrial

Development Corporation (MIDC) Chakan is

legitimated, it becomes difficult for others to get

home to a Special Economic Zone (SEZ).19

a foot in the door.20

Over 750 large and small industries are based

Shramik Ekta Mahasangh

in the area. Volkswagen, Daimler and Bosch

Shramik

do have their plants in Chakan too. According

Ekta

(SEM) 21,

Mahasangh

formed in 2004, is an intersectoral initiative not

to a local labour consultant; the workforce in

affiliated to any of the traditional CTUOs. Its

Punes auto industry is of a rather young age

goal is to bring the regions isolated plant level

ranging from 20 to 40 years.

unions together under one roof. Some 80

The CTUOs AITUC and CITU have little

unions and more than 18.000 workers belong

ground in Maharashtra, however, HMS, INTUC

currently to SEM. According to an interviewed

and BMS have a considerable part of their

NTUI representative approximately 40 percent

membership in this state (cf. Sundar 2009).

of SEM members have links with the NTUI.

Traditionally, though, unattached plant level

Most members are from the automobile and

unions are a widespread phenomenon in

engineering sector, i.a. Daimler, Bosch, SKF,

Maharashtra. In 2005, they made up more than

Atlas Copco, Sandvik, GM, Bajaj, Hyundai,

40 percent of all registered unions (ibid.). This

Reiter, Tenneco, Wheels India, and Tata

nationwide trend has its roots in the Mumbai of

Yazaki. According to the SEM president, the

the 1970s (Bhattacherjee 2001). According to

organisations formation and work has been

interviewed

inspired by the IMF. Just recently, SEM

managers

and

unionists,

90

percent of the unions in Punes auto industry

became officially affiliated to the same.

are plant level unions.

Winning new members and education of
In addition to the central pieces of labour

the members is seen as the most important

law, it is, among others, the 1972 Maharashtra

challenge. SEM officials believe that knowing

Recognition of Trade Unions and Prevention of

and understanding labour law enables to

Unfair Labour Practices Act (MRTU & PULP

identify illegal practices by the employers early

Act) which is quite important. For instance, the

and to improve working conditions for both

act says that the right to collective bargaining

permanent and non-permanent workers. SEMs

can only be granted to one single union per

constitution

plant. So once a union has been officially

representatives to be workers themselves. This

requires

all

official

SEM

grassroots approach seems to have created a

20
For a list of state level laws applicable in
Maharashtra see
http://bombayhighcourt.nic.in/libweb/acts/listofmahacts.html
(last accessed May 26, 2012).
21
SEM means Workers Unity Federation

19

India is one of Asias pioneers in setting up SEZs.

By i.a. granting various tax exemptions in a certain
geographical area, the goal is to increase foreign direct
investment, typically by TNCs. See http://www.sezindia.nic.in.
12

high

degree

of

identification

among

the

members. On the other hand, because most

union representatives are not exempted partly
or full time from the job on the line to take care
of union work, meetings take place on an
irregular basis. Exemptions have to be asked
for in advance and depend on the respective
managements goodwill. This means, that
members have to come together in their rare
free time, e.g. at their only day off which is
either Thursday or Sunday. SEM does not
have an office; meetings are held in private
places

or

restaurants

etcetera.

These

infrastructural problems are i.a. due to SEMs

financial model. Member unions do only have
to pay a symbolic Rupee per member per year.
This sums up to 18.000 Rupees per annum. 22
Member dues are symbolic, SEMs president
expressed, because otherwise there would be
too much of a financial barrier to join SEM.
SEM representatives that we spoke to
had little to no knowledge on IFAs. To those
which had heard of them, their significance,
content, and potential use in the local context
were unclear.

22

This is circa 260 Euros as per May 10, 2012.

13

EMPLOYMENT AND UNION SITUATION AT VOLKSWAGEN, DAIMLER & BOSCH IN PUNE

Table 3: Selected plant numbers at a glance
No. of union
members
600

Union members wages

in 2012**
16.000 - 18.000
INR/month

in Euro***

Volkswagen

in Pune Total no. of

since
workers on site*
2009
4.000

Daimler

1995

650

146

32.000 - 40.000
INR/month

492 - 615

Bosch

2006

800

140

24.000 INR/month

369

Tata

1966

20.000

8.000

22.000 - 35.000
INR/month

338 - 538

246 - 277

*Mean numbers, incl. blue collar workers in the production facilities, outsourced services and contract work, excl. white
collar staff. Numbers given varied from interviewee to interviewee.
**Numbers are either according to the latest wage settlement (Volkswagen, Daimler) or were so stated by interviewed
unionists (Bosch, Tata). Numbers are Cost to Company (CTC), i.e. social insurance contributions, costs for canteen,
transportation etc., which the company may deduct, as well as income tax, are not considered here.
***Approximate value according to conversion rate from January 20, 2012.

Table 3 displays selected numbers of the

Attached to the plant is the Volkswagen

researched plants. Tata Motors has been

Academy, which serves for in-house vocational

included here in order to have a comparison

training

between an influential domestic and the foreign

vocational training is run by the Industrial

owned plants. At Tata too, we interviewed both

Training Institutes (ITIs). However, technical

management and union representatives.

equipment there is not up to date and so

purposes.

Volkswagen

Volkswagen India Private Limited

in

Traditionally,

coordination

in

with

India,

the

authorities has set up its own facility. The

Around 580 million Euros have been

training is oriented at the German model of

invested by Volkswagen in its Pune plant. Up

dual education. Currently there are 16 young

to now, this is the largest investment in India

men

made by a German company. In 2011 roughly

and

women

doing

three

year

programme in mechatronics. The local unions

110.000 cars were produced there, and for

name is Volkswagen Employees Union.

2012 the set target is a 20 percent rise. The

plant went operative in 2009, but Volkswagen

The average weekly work time is 48 hours

produces cars in India already since 2001. The

spread over six days. Sunday is the plants day

group runs a smaller plant under the koda

off. Workers with a direct employment relation

brand in Aurangabad, 250 kilometres north of

to Volkswagen are classified into seven distinct

Pune.

categories; permanent workman, probationer,

trainee, temporary workman, casual workman,
14

badli/substitute.23

apprentice,

and

Security,

one

year

after

the

unions

official

cleaning, canteen etc. are outsourced. Valid

registration. According to the union, which was

numbers on contract work could not be

formed by the permanent workers due to

obtained. According to the union there are

discontent with their then payment of only

much less of them today than earlier. Most of

8.000 Rupees per month, it was a very lengthy

the approximately 4.000 blue collar workers

process; a settlement would not have been

seem to be from the trainee category. They are

reached without the support of the central

not entitled to any benefit available to the

works council in Wolfsburg/Germany, which

regular workman. Trainees earn between 9.000

learned about the situation during a visit in April

and 13.000 Rupees per month (130/188

2011. One outcome of this visit was that the

Euro)24.

union has got an office now with regular daily

The

regular/permanent

workers

opening hours from 3.30 pm to 5.30 pm.

are

Furthermore, the unions president and general

currently around 600. Although membership is

secretary are exempted from the work on the

voluntarily, all of them are union members.

line. This is fixed in the settlement.

Dues are 50 Rupees per month. There are no

union members from other categories and the

The interviewed union members showed

union expressed that they cannot officially

scepticism towards CTUOs and other forms of

bargain for other categories, however, in case

external organisations. Outside organisations

of

ask

would increase the risk of corruption so one

management to raise the others wages as well

argument. There is no contact to the union at

in order to not make the gap too high.

the Aurangabad plant. SEM is known but

wage

increase

they

would

membership is not considered an option at the

The interviewed union member explained

moment. In case of problems with the local

his way into the regular category as a process

management, they contact the central works

of nearly two years. Starting as a temporary, he

council. Recently, they were granted one seat

subsequently became a trainee, after that a

in

probationer and eventually got confirmed, as

the

Volkswagen

Group

Global Works

Council.

he put it, as a permanent workman.

The IFA and the Charter on Labor

The first wage settlement, only applicable

Relations did not play any practical role in the

to all confirmed Team Members /Workmen,

unions work so far; however, the documents

was reached in June 2011, more than two

seemed to be vaguely known. A human

years after the plant opening in March 2009

resources representative told us about the

23
24

drafting of an Indian version of the Charter on

See Annex Table 4 for definitions.

As per conversion rate of May 26, 2012.
15

Labor Relations. On this, however, the union

All 146 regular workers are in the union

denied any knowledge.

as compared to zero from the non-permanent

categories. The latest settlement speaks of the

Mercedes-Benz India Private Limited

union members as bargainable, permanent or

In Pune, Daimler is operating under its

eligible workmen. Between 1996 and 2011

premium brand Mercedes-Benz since 1995.

the number of the latter was stagnant with 121.

The Chakan plant was opened in 2009. Prior to

Recently, then, 25 trainees were promoted.

that, production took place in Chinchwad. The

According to the management, plans are to

capacity of the plant is 10.000 luxury car units

promote another 80 to 90 trainees. Trainees,

and 2.500 commercial vehicles per annum.

like at Volkswagen, account for the majority of

Daimler plans to shift the production of

the plants workforce; between 250 and 300.

commercial vehicles to its Chennai plant and

Trainees earn between 7.500 and 8.500

focus primarily on the luxury car segment in

Rupees per month (109/123 Euro)26. This is a

Pune. From March 2011 to March 2012 the

fraction of what is paid to the permanent

company sold 7.430 units in comparison to

workers/union members who earn between

5.819 units of 2010 to 2011 (cf. Sharma 2012).

32.000

and

40.000

Rupees

month.

The local unions name is Mercedes-Benz

Management pointed out that this is still more

Employees Association and exists since 2001.

than the 5.500 Rupees (79 Euro)27 minimum

Prior to the union there had been a so-called

wage required by the state for this sector.

coordination committee. Until recently the

According to the union, trainees start off

union had no office. With the latest wage

under the government subsidised Maharashtra

settlement this changed. There are no set

Employment Promotion Programme (MEPP). 28

opening times though.25 CTUO membership

After six MEPP months they work six months

has never been taken into consideration and

as temporary workers, before they get the

according to the interviewed union members

official trainee status for another year. After

none of the CTUOs tried to contact them yet.

that, they either have to leave the plant or, if

Since 2009, however, they are a SEM member.

there is a post available and they are chosen

Meetings with SEM were said to take place

for it, get promoted into the permanent

circa every two months and on special

occasions. They pointed out, though, that

26

As per conversion rate of May 15, 2012.

As per conversion rate of May 26, 2012.
28
MEPP exempts the employer from some obligations
under Indian labour law (Minimum Wages, Employees State
Insurance and Provident Fund Act). In addition, the state
contributes to the payment of each trainee employed under
MEPP. See
http://ese.mah.nic.in/~ese/employer/EmpEppFirst.php (last
accessed May 15, 2012).
27

negotiations and every decision they make are

handled absolutely independently.
25

Cf. original wording: suitable office space shall be

provided for Associations official work and with prior
permission from respective Team Leader
16

category. The latter option is less probable.29 In

reason for the comparatively wide spread of

fact, management said that trainees would find

unaffiliated plant level unions in Pune, the

jobs at other plants in the region without any

interviewed

problems,

or

both Indians - said that the peoples culture in

trainee-based

the region is rather peaceliking and not so

concept is not considered due to the high legal

demanding. Management could not imagine

barriers to dismissing workers in India as

how trainees or other non-employees, as they

compared to Europe, so the management

called trainees in this context, might join the

further. It is important to highlight here, that

local union. To them, it seemed not feasible.

trainees are not apprentices. They usually have

However, they said that those workers might

successfully completed a study or vocational

be able to join unions at the industrial level.

e.g.

Volkswagen.

at

Tata,

Changing

the

Mahindra

training.

management

representatives

The interviewed union members did not

Union members spoke of approximately

recognise the IFA, and management too did

200 contract workers whose exact salaries they

not seem very familiar with the document. A

did not know. However, they assumed it to be

concrete significance of the IFA for the plant

even less than what the trainees get. Contract

was not mentioned. Management, however,

workers would only work in cleaning, security,

pointed out various programmes and benefits

transportation, gardening and the canteen

that would well go beyond what is required by

under supervision of the respective assigned

the

service

management.

benchmark in the region when it comes to

According to the management there are around

labour relations.30 The proposed idea of

270 staff and 15 apprentices.

handing out the IFA in English and Marathi to

company,

so

the

IFA.

This

would

make

Daimler

all workers was met positively. Management

Regarding CTUOs, management claimed

said that in the future this could be included in

these organisations would not be interested in

the training for new joiners.

the workers well-being. A CTUO affiliated

union has no freedom of negotiation and

Contact between the local union and the

decision making. Thus, the local union would

central German works council was reported to

lose its flexibility should it join a CTUO. As one

be rare. Two visits took place so far, one in

2006 and another in 2011. The works councils

29

Apparently, it is even less probable for non-relatives

of existing permanent workers. In its charter of demands the
union asked that in the case of recruitment of employees the
relatives of existing employees shall be taken in the service of
the company, and in the final settlement it says recruitment is
managements prerogative. However, if the recommended
candidate possesses requisite qualifications, experience, skills
and aptitude, he may be considered for giving preference for
employment.

exact function was unclear to the union as well

as the Daimler World Employee Committee to

30

glance.
17

See Annex Figure 1 for employee benefits at a

which they are not a member. Despite this,

members,

they expressed the interest to learn more about

contracts. An office is there but without regular

the workers situation at Daimler in Germany

opening times. On average workers are in their

(i.a. working conditions, wages, and employee

early 30s. Dues are 100 Rupees per month.

benefits). They said this would enable them to

According to our interviewee, forming the union

have a better comparison of what is granted in

took a long way and became only possible in

Germany and in India, and to make more

2007 under Bosch ownership of the plant.

adequate demands. Of course, they added,

Kalyani had always followed a strong union

differences in living costs would have to be

avoidance stance.

considered.

all

of

them

with

permanent

Though, forming a union became possible

Bosch Chassis Systems India Limited

under the Bosch roof, the old management was

Bosch is active in India since 60 years

still in charge. According to the union, this

and today employs around 22.000 people

made the first collective bargaining process

spread over 15 locations. The companys

difficult and lengthy. It went on from April to

current focus lies on automotive and industrial

November 2007. They got help from a local

technology. Massive investments have been

labour consultant in drafting their charter of

made in recent years, nearly a quarter of it for

demands and handling the negotiations.

research

and

development

Production is growing.

31

purposes.

Until

2009,

no

contact

had

been

In Pune/Chakan,

established with the central works council in

Bosch took over a plant from the Indian Kalyani

Germany. Then, a dispute over refused pay

group in 2006, and since then produces

rises led to an 85 day long work stoppage.

primarily braking systems there. According to

Aside from demanding the negotiated pay

the

in

rises, the union had a progressive agenda

Germany, 11 of the 15 Indian plants have a

calling upon management to pay contract

union. Six of them are currently affiliated to a

workers equal wages for equal work. Parallel to

CTUO (3 CITU, 2 INTUC, and 1 AITUC). In

the

2010, the works council initiated a Bosch India

requesting the abolition of contract work of

Meeting

five

perennial nature, which is illegal under the

locations to enhance the contact among the

Contract Labour Regulation and Abolition Act.

unions from the different plants.

Solidarity and support with the fighting Bosch

companys

with

central

works

representatives

council

from

stoppage,

they

went

to

court

workers came from, among others, SEM, the

The unions name is Bosch Chassis

lMF

System Employees Union. There are 140 union

31

work

and

the

German

works

council.

It

culminated in a 4.000 people strong rally to the

Cf. The Hindu Business Line 2010 & VDA 2012.
18

local labour ministry. The dispute was finally

Uncertainty was expressed about the role and

settled when the company agreed to pay the

influence the central works council really has.

outstanding pay rises and to reemploy a

Recently, the works council organised a Bosch

previously suspended union representative.

World Meeting in Germany; however, the three

The demand for equal work for equal pay was

present Indian representatives came from other

not met, but, following a later court ruling,

plants (Jaipur, Nashik, and Naganathapura).

contract work had to be abolished.

Regarding the IFA, on which they came

Now, according to the union, there is no

across in 2006 during their own internet

more contract work. However, since the unions

research, they regretted that nobody ever has

formation not a single worker got promoted into

explained to them in detail what exactly it offers

the

the

to them in terms of rights and their daily union

number of union members has been stagnant,

work. E.g. would they be interested in how far it

respectively falls, because at the moment

could help in sustaining union membership in

promotion into posts with better salary and

case of promotion. Beyond that, they too would

supervisory tasks is concomitant with having to

be interested to learn more about collective

resign from the union. This creates a dilemma

agreements at Bosch in Germany.

permanent

category.

Therefore,

for those workers offered a promotion, because

CTUO affiliation was not considered an

some would perceive it as having to make a

option by the union due to similar reasons as

decision for or against the colleagues with

heard by the other interviewees. They are SEM

whom they have fought together so intensively

in

2009.

Today,

there

are

140

members though, and described SEM as a

union

platform on which all independent unions come

members/permanent workers.

together. The union from Boschs Nashik plant,

The union further reported, that instead of

450 kilometres north of Pune, is also a SEM

contract workers, the majority of blue collar

member. Contact with unions at other plants

workers are now trainees and people employed

was said to be rare though. The 2010 meeting

under a so called earn and learn scheme; the

has apparently not changed that.

former earning 8.500 Rupees (123 Euro), the

latter 5.000 Rupees (72 Euro) a month.32

Contact with the German works council is

very

sporadic
32

and

not

institutionalised.

As per conversion rate of May 16, 2012.

19

DISCUSSION AND CONCLUSIONS

IFA implementation at the plant level

understand the IFAs.

33

Likewise, the workers

Our point of departure has been the

representatives involved in the original IFA

question what is needed so that the local

negotiations, which in the studied cases were

unions in Pune understand and use the full

mainly the companies global or euro works

potential of the IFAs as a tool to make

councils under the lead of the German central

demands

central

works councils, along with IG Metall and the

management; the inherent assumption being

IMF, have not done enough either with regard

that IFAs if actually communicated and

to Pune. Thus, of the IFA negotiating parties,

explained at the local level can contribute to

neither the internal company actors (works

the workers self-empowerment.

councils, central management) nor the external

against

local

and/or

actors (IMF, IG Metall) have been pursuing an

Knowledge

and

comprehensive

effective IFA implementation strategy yet.

understanding of the IFAs are inevitable for an

active use by the local unions. Such an

Even if considered rather weak by todays

understanding, however, could not be asserted

standards34, the Volkswagen, Daimler and

in the conversations held with local union

Bosch IFAs could still be used to press for the

representatives, neither at Volkswagen nor at

right to collective bargaining for all workers in

Daimler and Bosch. Hence, internal company

Pune, including the trainees and other currently

communication,

the

unrepresented worker categories. It should be

respective workforce knows and understands

in the interest of the IMF, the works councils,

the IFA, has not taken place in none of the

and IG Metall, to empower the workers in Pune

companies, at least not in the case of Pune.

through the IFAs. Otherwise, the IFAs impact

The

will continue to remain behind the possibilities;

workers

which

in

Pune

ensures

lack

that

detailed

explanation of the IFAs content, and a debate

reduced

to

sporadic

and

only

reactive

on how this content could be meaningfully

intervention by the companies central level

translated into the respective plants context.

actors.

Central management has obviously not

instructed the local management in Pune
properly on the IFAs. At least, it has not
monitored their implementation at the local

33

This refers to the interviews at Volkswagen and

Daimler, for Bosch a similar approach can only be assumed.
34
IFAs have been works in progress over the years.
Some newer IFAs, such as e.g. the one GDF SUEZ signed in
2010, comprise of much more detailed provisions, e.g. on
implementation measures.

level by making sure that workers know and

20

Isolated and exclusive plant level unions

Freedom of association and collective

bargaining in Indian labour law

The trend towards unaffiliated unionism,

According to an advocate from the High

spreading out from Mumbai in the 70s and 80s,

Court in Mumbai, there is no legal impediment

and the zeitgeist of market liberalisation

in

following the 1991 NEP, together with the bad

politics

workers

capability

of

undermining
bargaining

at

workers,

trainees,

principal, unions can bargain over wages and

foreign TNCs investing in India to follow a plant

labour

temporary

casuals, fixed terms etc. in joining unions.35 In

reputation of CTUOs, made it possible for the

centred

allowing

working conditions for all workers, permanent

the

and non-permanent. However, only if the

the

employer agrees to the same; and this is the

industrial and interplant level. It also created a

crux of the matter. Most labour laws do not

societal and political-economic situation, in

apply to non-permanent workers. In case of a

which employment in the formal sector came

dismissal there is no legal protection. Thus, out

under increasing pressure. This has been

of this insecure position the barrier to call for

resulting in the growth of insecure jobs, and a

ones right to collective bargaining is high,

concomitant division of the workforce into a

majority of non-bargainable and a minority of

especially so if the permanent workers do not

bargainable employees.

show a great deal of solidarity.

That

the

interviewed

Another apparent but common myth

union

concerns

representatives in Pune claimed labour law

would

not

allow

other

than

and

associations, given they have no authority to

employ or dismiss people. As with the non-

and interplant level. In Pune, this takes place

permanent blue collar workers, their problem

only under adverse circumstances, as the

too

example of SEM showed. Workers are often

is

with

collective

bargaining,

since

legislation covers this right only for supervisors

young and inexperienced in union work. They

themselves

staff

blue collar unions nor in forming their own

coordination among workers at the industrial

educate

office

legal impediment, neither in joining existent

need for respectively the lack of a debate and

to

of

functions. Accordingly, for staff there is also no

seems not to be the case, emphasises the

time

rights

employees with managerial and supervisory

permanent

employees to join their unions, while this in fact

lack

the

earning up to a maximum of 10.000 Rupees

more

per month (143 Euro)36. Hence, under the law,

extensively about their rights, and to reflect

employers cannot be forced to collective

more in detail on managements strategies that

negotiations.

undermine their collective power.

35
36

21

See Annex for the full correspondence.

As per conversion rate of May 21, 2012.

DCosta 2000). The cases of Volkswagen,

An in-depth analysis of Indian labour law

is beyond this papers scope. However, it is an

Daimler and Bosch in Pune illustrate this.

undeniable fact that freedom of association is a

guaranteed
Unions

Act

institutional
reinforces

right.
this

The
right

In sum, the situation can be described in

Trade
for

the

all

following

everybodys

workmen defining them as all persons

way:

On

freedom

of

the

one

hand,

association

is

constitutionally guaranteed; on the other hand,

employed in trade or industry, without any

collective bargaining, which is the necessary

restriction.

pendant to make actual use of your freedom of

It is the Industrial Disputes Act, the piece

association in the context of labour relations, is

that deals with collective bargaining, which

only granted to blue collar workers having

makes

regular

things

more

complicated.

Here,

workmen are defined as

permanent

contracts

and

no

supervisory functions.

any person including an apprentice

employed in any industry to do any
manual, unskilled, skilled, technical,
operational, clerical or supervisory
work for hire or reward.

IMF as a global networking coordinator

To improve the asserted situation of IFAs
being quasi insignificant to the local actors in

However, unlike in the constitution or the

Pune, broad networking efforts are inevitable

Trade Unions Act some restrictions are added

and must include all relevant stakeholders at all

in the Industrial Disputes Act, namely, that a

levels, local to international. The IMF and its

regional office have to play a central role in

workman does not include any

such person who is employed
mainly
in
a
managerial
or
administrative capacity; or who,
being employed in a supervisory
capacity, draws wages exceeding
[10.000] rupees per mensem.

this. Until now, the IMFs work seems rather to

be of an ad-hoc supportive nature than based
on

an

integrated

strategic

concept.

In

establishing new or strengthening existing

This opens the door for employers

networks, companies with IFAs could serve as

wanting to avoid collective bargaining. It gives

a starting point. Along with their global supply

them

collective

chains, these companies spin all over the world

bargaining with certain types of workers by

offering countless opportunities for workers and

categorising these workers as non-regular

unions to connect.

the

opportunity

to

deny

workmen. In fact, the label workman that once

If IFAs are seen as a step towards

included the majority of the workforce, has

transnational industrial relations (cf. Fichter &

become an equivalent for a small section of

Helfen

bargainable permanent blue collar workers (cf.

2011,

Keune

&

Schmidt

2009,

Papadakis 2008), the IMF and the other GUFs

22

must have a lead in their dissemination,

long term planning and enormous growth

enforcement and development. Of course,

prognoses!

internal company channels need to be used to

However, for this to be done strategically,

spread the word on IFAs. However, without

the IMF, and the GUFs in general, would need

mobilising GUF driven forces from outside the

more authority and resources. GUFs face the

companies, IFAs will not become something

dilemma that the number of represented

significant with which to push for a global

workers has been increasing, mainly due to

industrial relations framework. Unlike internal

new joiners from the Global South and the

company works councils, external actors such

former Soviet states, while the available

as the GUFs can focus on and reach where the

resources have not. The contributions newer

former do not; provided they are properly

members are able to afford do not match the

staffed and organised. Whereas works councils

rise of requirements for the GUFs. Thus, there

could indeed support the closing of the union

is

representation gap among workers directly

discrepancy

between

the

obvious

necessity to increase the transnational capacity

employed by their company, they themselves

to act, and the further shrinking of this capacity

will hardly launch an organising drive in the

(cf. Linder 2011, Mller, Platzer, & Rb 2010).

companys supply chain. Thus, activities aimed

In order to overcome this discrepancy, better

at strengthening union power around TNCs

off unions from the Global North will have to

and their global supply chains are something to

commit themselves even stronger, politically

be coordinated by GUFs and their regional

and monetary, to the transnational challenges

offices.

and the GUFs, and must not reduce their

contributions.

In Pune and elsewhere too, an IMF

coordinated campaign could use IFAs to

As a global networking coordinator, the

exercise pressure on companies from different

IMF could support members with results from

angles; the tenor being: 1.) How can it be that

country specific research managed by their

renowned companies such as Volkswagen,

regional offices and/or project staff; spread

Daimler and Bosch, which have all recognised

relevant information to relevant actors; give

international labour standards, tolerate that a

recommendations for action; and initiate and

majority of their direct or indirect employees do

coordinate campaigns. In short, in such a role,

face a precarious living situation?; and 2.) Why

the IMF could become the recognised central

is it that only a small fraction of the workforce is

link for the sectors global workforce.37 With its

entitled to bargain collectively over their wages

and working conditions? And all this despite

37

The above ideas are inspired by Fichter et al

(2011): As network coordinators, i.e. actors that can deploy
23

Action Programme 2009-2013, adopted at the

companies are SEM members? E.g. Bosch

32nd World Congress, the IMF has already put

and Tata Yazaki were reported to supply

increased emphasis on building trade union

components to Volkswagen, a company which

networks in TNCs. The subsequently published

has signed an IFA but is not a SEM member.

Guidelines on Trade Unions Networks in TNCs

How have the companies structured their

reinforced the IMFs position and its will to build

regional supply chains? Who produces what for

strong networks also along the TNCs supply

whom? Where is the most money made?

chains.38

Which services are contracted out? What is the

respective union situation at the different

Networking ideas for the Pune region

plants? Which laws apply? What is the local

Through SEM, the IMF has a new

peoples opinion of the companies?

member which is well connected in the Pune

region.

Aside

producing

from

unions

companies

such

from
as

vehicle

Such an analysis could start off with the

Daimler,

IMF regional office requesting first hand

General Motors and Baja, there are also

information

various unions from companies that supply

assigning an expert team to research the

components

situation more in-depth at site. Parallel to that,

to

the

regional

auto

from

the

SEM,

followed

by

SEM members should be made familiar with

manufacturers.

the IFA instrument and the plan to use it as a

According to a recent ILO paper, SEM

tool to support the organising of new workers

also uses networks to address the issues

into unions. This will take time and effort and

concerning non-regular workers (Sundar 2011).

should be planned and realised carefully.

Thus, SEM not only opens up direct links into

Translations of the IFAs in the regional

the regional supply chain but is also already

language Marathi are inevitable, just as much

working on the most pressing problems. A

as somebody familiar with the local cultural

strategy of the IMF could be to analyse the

peculiarities.

present companies with IFAs starting with

basic questions such as which of the IFA

Once the analysis is completed, IMF and

companies are SEM members (e.g. Daimler,

SEM representatives could, jointly with those

Bosch, and SKF), and which suppliers of IFA

having worked out the report, discuss the next

steps and come up with an action plan. The
draft of the action plan should then be

their links to various other national actors and networks, GUFs

could become effective in coordinating the union side of overall
labour-management relations of a [global production network
(GPN)] and devising adequate responses of organized
labour to GPN. (p. 6)
38
For the guidelines see
http://www.imfmetal.org/files/11031809360610005/Guidelines_
en.pdf. (last accessed May 22, 2012.

presented to the relevant SEM members. Once

a consensus is reached, tasks should be
delegated,
24

according

to

the

respective

available capacities and resources. Since all

In

addition

to

these

approaches,

SEM representatives are workers themselves,

considerations should take place how SEM

the IMF should deploy staff to the region to

could enhance its role as the regional labour

support,

the

educator. A joint fight for the unconditional

activities. This would then be also the local

exemption for union work of at least one worker

interface ensuring regular communication with

per member union could be one of the

the IMF.

activities. This would leave them with more

accompany

and

coordinate

time for exchange among themselves.

In addition to more IFA-focused IMF

seminars,

initiate

A further step could lie in an affiliation to a

knowledge transfer in form of a joint workshop

national level federation with more resources

for unionists from German and Indian plants of

and full-time officers at its disposal. Party

the same German TNC. Such a workshop

political independence is a unifying element for

would provide space for the exchange on

SEM members. Therefore, NTUI seems the

problems and how they have been approached

only option in this respect at the moment, since

so far, and ideally lead to the identification of

it is the only federation without party political

common challenges. What mandate do the

links. Alternatively, the IMF could support

works councils have in Germany? How are the

networking activities among unattached unions

union representatives elected in India? How

at the national level too.

does

IG

Metall

coordination

at

could

the

also

company

and

Enforcing IFAs through strategic

campaigns

industrial level function in Germany and

Europe? What are the experiences with

As

contract labour in both countries? What legal

already

said

earlier,

if

global

networking around IFAs, aimed at building

protection exists and what are the legal gaps?

union power along TNCs and their supply

To whom do collective agreements apply and

chains, is to be pushed forward, it is not

how long is the average period of validity?

enough to rely only on internal company bodies

What does life cost in Germany/India? What is

such as works councils. Their sphere of

the actual wage after tax? ... to name only a

influence is limited and therefore not sufficient

few of possible questions for debate. Further,

to be the overall focal point for an integrated

those meetings could help in developing a

strategy. Works councils should rather become

more optimistic attitude towards interplant

an essential part of action programmes,

networking on side of the currently most

initiated by the IMF or its members, in which

isolated plant level unions in the region.

comprehensive

campaign

techniques

are

applied. Various literature concerning strategic

25

campaigns and other cross-border activities

councils could support organising drives of

has

non-regular

already

been

published

(i.a.

39

Bronfenbrenner 2007).

workers

management

to

by

call

asking
upon

central

the

local

management to remain neutral; this being done

To ensure that the right to collective

best in written form.

bargaining is granted to all workers at the Pune

plants of Volkswagen, Daimler and Bosch plus

Workers at suppliers could be taught that

their regional suppliers, an approach would

Volkswagen, Daimler and Bosch expect their

have to be pursued that goes beyond the

business partners to hold on to the same

capacity of the existent plant unions and the

standards. If these workers decide to fight for

central

their right to collective bargaining, pressure

works

appeals to

councils.

Besides

sporadic

managements goodwill,

it is

could be exercised through solidarity by the

pressure and publicity that is needed.

plant unions at Volkswagen, Daimler and

Bosch in Pune, orchestrated by support from

To achieve this, an analysis of the

the IMF, the central works councils and IG

companies economic, political and social links

Metall.

should be followed by an identification of

strategic points for attack. Topics need to be

In

case

central

management

shows

presented and explained in such a way as to

passiveness pointing to the independence of its

win the concerned working peoples interest

subsidiaries,

and commitment for the battle and to raise

should be escalated. Awareness could be

public awareness and criticism.

created

by

public

pressure

highlighting

the

in

Germany

discrepancy

between long term planning and short term

In order to be effective, the campaign

contracts given to most of the workers, and by

should not be limited to Pune but be launched

questioning the companies self presentation

in Germany as well. In India, an education

as socially responsible. Enlivening the debate

offensive making workers aware of their rights

in Germany could also increase the perception

could be launched. It should be emphasised

for

that despite lacking domestic requirements for

global

interdependencies

among

the

German workforces. Though to a lesser extent,

employers to bargain with non-regular workers,

problems with contract labour and two class

the companies have committed themselves in

wage systems have gotten worse in Germany

the IFAs to international standards which do

as well. In the long run, by supporting an

not exclude such workers. Central works

upward trend in India, German workers would

strengthen their own bargaining position and

39

Resulting from an earlier research project, I too

have developed a theoretical model for this context based on
the four concepts power, commitment, strategy and resources.
I have included it in the Annex section of this paper (Figure 2).
26

hinder employers in pushing on the global race

this may then translate into a notion of

to the bottom.

ownership and a proactive approach of local

actors towards IFAs, eventually strengthening

Tomorrows IFAs: Global ownership

through early inclusion of existent networks

workers at different sites and hence the global

trade union movement as a whole.

Strategic campaigns are worth to consider

regarding the negotiation of new IFAs too.

further

aspect

concerning

the

Companies not willing to sign an agreement

negotiation of future IFAs is that of a lacking

could be put under pressure. If the instrument

set of intersectoral standards in language and

40

is to be further expanded geographically ,

content. Among the older IFAs almost no

campaigns will probably have to become part

agreement is actually called International

of the overall strategy right from the beginning.

Framework Agreement. Newer ones signed by

Where co-determination and social partnership

the IMF after 2008, e.g. MAN and Ford, do now

is weak or absent, international campaigns

include this formulation. However, other GUFs

could build the necessary pressure in order to

such as UNI continue to speak of Global

bring the respective decision makers to the

Agreements or Global Framework Agreements.

negotiation table.

If the GUFs could come up with a consistent

title, this would increase the instruments

The IMFs call for building networks in

recognition factor. What is more, if a certain

TNCs does also offer various possibilities for

wording, highlighting the need for a global

an early inclusion of diverse perspectives into

industrial relations framework and the GUFs

the IFA negotiation process. Of course, it will

importance in it, to be included in every

not be feasible to include too many actors

preamble, could be agreed on, this would

directly in the negotiations; these should be led

strengthen the GUFs position.

by the IMF in cooperation with the companies

central employee representations. However,

International solidarity: Globalisation as a

chance

through early information and feedback rounds

on drafts, the various networks across the

The worlds economic integration process

globe would feel part of the process. Ideally,

has made the local and national become

essential parts of the global. As already stated

40

The vast majority of the circa 70 companies that

have signed an IFA is still of an European origin. Though, there
are already cases in countries such as Japan, the UK, Canada
(cf. Stevis 2010), and since very recently even the US. There,
the IMF was able to sign an agreement with Ford. It also
includes the institutionalisation of a so called Global
Information Sharing Forum, held annually and aimed at
promoting cooperation and mutual support among Ford
workers all over the world. See
http://www.imfmetal.org/files/12050407470410005/IFA_FORD.
pdf (last accessed May 23, 2012).

earlier, this means that for workers rights in the

auto industry the improvement of working
conditions in Pune, in the end, must also be in
the interest of the people in Germany. In other
words, due to the global competition over
27

standortvorteile, and here especially over

differences in the unions political and financial

labour costs, German workers assertiveness in

power and influence. This is a real challenge

their demands is directly linked to the situation

and implies the ability to put oneself in the

of workers employed by the same company in

others place; the will to critically reflect upon

Pune. The ongoing undermining and erosion of

ones own situation; and to give up prejudices.

labour rights in India, which Indian employers

In the cases looked at for this study, this

and the Indian government had already started

could e.g. simply mean, to dig a little bit

before 1991 (Hensman 2009), together with

deeper. Is it actually true what the local

Indias integration in the global economy, only

management has said on the issue of non-

made it possible for employers to drive

regular workers and union membership? Who

standards down in industrialised countries such

would be a good person to crosscheck this

as Germany.

information? What do the wages paid mean by

German standards?

But workers and their unions, no matter

where, should question and reject the logic of

That this is something what Indian unions

concessions imposed on them, withstand to

would welcome is illustrated by the following

blame their colleagues abroad, and instead

NTUI statement, published in the aftermath of

make use of the chances globalisation offers to

an IMF meeting held last November in Pune:

them. As Rohini Hensman, a Mumbai based

At the meeting [it was]
expressed that substantive global
solidarity through company councils
could assist in unionising contract
workers and advance the right to
freedom of association if the unions
in the global north are willing to look
at the costs that global firms place
on their southern subsidiaries and
the inequality of standards of
employment adopted by northern
firms operating in the global south.
(NTUI 2011)

writer, independent scholar and social activist,

says:
If globalization has weakened the
ability of the nation-state to protect
employment and workers rights,
this problem is more than offset by
the potential for stronger protection
of labour rights on a global scale.
(Hensman 2009, p. 123).

Today, more than ever, it should be a joint

goal to achieve just and fair conditions

And indeed, the labour costs in India are

throughout the world. Pursuing such a joint

incredibly small compared to industrial Western

goal requires a genuine dialogue at eye level

countries.41 According to a study of the Indian

between representatives of unions from the

Institute of Management, average wages in

Global South and the Global North. The

India are almost less than 50 percent of wages

equal status of perspectives must not be

in

compromised

by

history,

which

developed countries;
41

created

and

even

after

With regard to the auto industry in Pune, an

interviewed local labour consultant spoke of two to four percent
labour cost share in the end products total costs.
28

factoring for lower productivity, the net cost

advantage is about 30 percent (Kamala &
Doreswamy 2007). These circumstances led
the Jus Semper Global Alliance42, an NGO
concerned with closing the global living wage
gap, to the remark:
Indias
real
wages
in
the
manufacturing sector are light years
away from reaching the quality of
what would constitute a living wage
in its economy. This makes the
quality of these wages what
constitutes, in todays globalised
economy, an outright modern slave
work ethos. (TJSGA 2010)

Even though, wages paid at Volkswagen,

Daimler, and Bosch in Pune might be above
the average, at least those of the regular
workers, they still would not constitute a living
wage by German standards after adjustment in
prices. Against this background, unions in the
Global North must ask themselves how
serious their current solidarity in fact is. How
strong mutual cooperation and support in the
future can really be, will not least depend on
the

GUFs

organisational

structure;

their

resources at hand; and how effective they will

be in building and strengthening global trade
union networks.

42

See http://www.jussemper.org/.
29

REFERENCES
Bhattacherjee, Debashish (2001). The evolution of Indian industrial relations: A comparative perspective. In:
Industrial Relations Journal 32, 3.
Bhowmik, Sharit K. (2011). Social and economic situation in India. Paper presented at the IMF Automotive
Working Group Meeting, November 2-4, Pune, India.
Bronfenbrenner, Kate (Ed.) (2007). Global Unions: Challenging Transnational Capital Through Cross-Border
Campaigns. Ithaca: Cornell University Press.
DCosta, Bennet (2000). Industrial Relations Problems in the Matter of Supervisory & Management Staff: Law,
Practice & Procedure. In: Workers Rights and Labour Laws: A backgrounder for the workshop on labour,
2931 December 2000 at the National Conference on Human Rights, Social Movements, Globalisation
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networks: A step towards globalizing industrial relations? Paper presented at the BJIR 50th Anniversary
Conference, December 12 - 13, 2011, London School of Economics.
German Automobile Industry Association (2012, 06.01.12.). Deutsche Automobilindustrie verstrkt
Marktprsenz in Indien. Pressemitteilung. http://www.vda.de/de/meldungen/news/20120106-1.html (May
26, 2012).
Graham, Ian (2010). Automotive Industry: Trends and reflections. Genf: IAO.
Hensman, Rohini (2009). Labour and Globalization: Union Responses in India. In: Global Labour Journal 1, 1,
112-131.
Indian Government (2007). Economic Survey 2005-2006. Ministry of Finance.
Indische Regierung (2006). Automotive Mission Plan 2006 - 2016. Neu-Delhi: Ministry of Heavy Industries and
Public Enterprises.
Kamala, T.N.; Doreswamy, A.G. (2007). Strategies for Enhancing Competitiveness of Indian Auto Component
Industries. Kozhikode: Indian Institute of Management.
Keune, Maarten; Schmidt, Verena (2009). Towards transnational collective bargaining? In: International
Journal of Labour Research 1, 2.
Linder, Dirk (2011). Anforderungen an die transnationale Gewerkschaftsarbeit. In: Gegenblende Ausgabe 12:
November/Dezember 2011.
Mercedes-Benz Employees Association (2011). Charter of Demands. In: own documents.
Mercedes-Benz India Private Limited (2011). Employee Benefits at a glance. In: own documents.
Mercedes-Benz India Private Limited, Mercedes-Benz Employees Association (2011). Memorandom of
settlement. In: own documents.
Mller, Torsten; Platzer, Hans-Wolfgang; Rb, Stefan (2010). Die globalen Gewerkschaftsverbnde vor den
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Naik, Ajaya Kumar (2009). Informal Sector and Informal Workers in India. Paper presented at the Special
IARIW-SAIM Conference on Measuring the Informal Economy in Developing Countries, Kathmandu,
Nepal, September 23-26, 2009.
30

National Convention of Workers (2011). Declaration. Mavalanker Hall, September 7, New-Delhi. In: eigene
Unterlagen.
New Trade Union Initiative (2011). Auto workers build global networks: IMF heads towards a Restructuring. In:
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Papadakis, Konstantinos (Ed.) (2008). Cross-Border Social Dialogue and Agreements: An emerging global
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Sharma, Vidyadhar (2012, May 15). Mercedes Benz Registered 30 Percent Growth in India in 2011.
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Sinha, Pravin (2006). Securing Labour Rights in a Globalising Economy: The Case of India. Workshop-Papier,
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Sundar, K.R. Shyam (2011). Non-regular workers in India: Social dialogue and organizational and bargaining
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31

ANNEX
Email correspondence with labour lawyer
from Mumbai (January 2012)
1.) In a nutshell what are the legal issues

2.) In the same line, are they any real

involved in allowing temporary workers such as

barriers in the law that prohibit managerial staff

trainees, casuals, fixed terms etc. join the

or supervisors and officers to join the same

union that so far consists only of permanent

union

workers?

alternatively to form there own association for

as

the

blue

collar

workers,

or

collective representation and bargaining?

Answer: There is no legal impediment in

Answer:

allowing temporary workers, trainees, casuals,

Similarly

managerial

staff

fixed terms etc. in joining unions. Unions can

supervisors and officers can join same unions

collectively bargain and enter into agreements

as blue collar workers or alternatively form their

with employer for wages and service conditions

own associations and also enter into collective

of temporary and casual employees, if the

bargaining agreements with the employer so

employer agrees to the same. The problem

long as the employer is doing to voluntarily.

arises as trainees and fixed term etc. have no

The same union / association cannot take legal

protection of employment under law; hence

recourse in case the employer refuses to

their

bargain

service

can

be

terminated

by the

collectively with

managerial

staff,

employer with impunity once the fixed term

supervisors or officers, most of the labour

contract period is over. (Temporary and casual

legislation covers only blue collar workers and

workers have some entitlements if they have

supervisors earning less than a particular

worked with the employer for a certain number

amount.

of days in a year). Thus what happens is that

once terminated it becomes very difficult for the
casual, fixed term employees etc. to fight
against unlawful terminations as they do not
have a right of employment in the first place.
The employers take shelter of the plea of
'temporary employment to cover temporary rise
in

work',

'non-availability

of

regular

and

permanent work' etc. and hire employees as

'temporary' or ' fixed term' so that they can be
fired easily.
32

Table 1: The IFAs of Volkswagen, Daimler and Bosch in comparison 43

Volkswagen

Daimler

Bosch

Signed

June 2002

September 2002

March 2004

By (in order of
appearance)

Volkswagen Group Global Works Council,

Volkswagen Central Management,
International Metalworkers Federation

Daimler Central Management,

Daimler World Employee Committee,
International Metalworkers Federation

Bosch Central Management,

Euro-Committee of the Bosch Group,
International Metalworkers Federation

Scope

the countries and regions represented in

the Group Global Works Council
(Preamble)/
Volkswagen supports and expressly
encourages its contractors to take this
declaration into account in their own
respective corporate policy. It views this as
an advantageous basis for mutual
relationships. (2.2)

We respect and support compliance with

internationally recognized human rights, in
particular as regards those of our associates
and business partners. (1)

Reference to ILOCore Conventions,

Universal Human
Rights etc.

The social rights and principles described in

this declaration take the Conventions of the
International Labour Organisation
concerned into consideration. (Preamble)

The following principles ... have been

implemented by DaimlerChrysler worldwide
(Preamble)
These principles are binding upon
DaimlerChrysler throughout the world./
Daimler expects its suppliers to incorporate
these principles as a basis for relations with
Daimler./
Daimler regards the above as a favorable
basis for enduring business relations.
The following principles ... are orientated at
the conventions of the [ILO] (Preamble)
DaimlerChrysler respects and supports
compliance with the internationally accepted
human rights./
Daimler acknowledges ... the nine principles
that form the basis of the [United Nations]
Global Compact. 44 (Preamble)

The principles ... take their lead from the

[ILOs] basic labor standards. (Preamble)
All enterprises in the Bosch Group will
adhere to the stipulations of ILO Convention
no. 138 and no. 182. (5)/
We observe the provisions of ILO Convention
no. 100 with respect to the principle of equal
remuneration for work of equal value. (7)/
We respect and support compliance with
internationally recognized human rights, in
particular as regards those of our associates
and business partners. (1)

Emphasis in
relation to national
law

43
44

The realisation of the following goals

ensues under the consideration of
applicable law and prevailing customs in the
different countries and locations.
(Preamble)

[C]ollective bargaining] is subject to national

statutory regulations and existing agreements.
Freedom of association will be granted even
in those countries in which freedom of
association is not protected by law./
During organization campaigns the company
and the executives will remain neutral

All three IFAs are available at www.imfmetal.org/ifa.

For the ten principles see http://www.unglobalcompact.org.
33

Within the framework of respective legal

regulations insofar as these are in harmony
with the ILO Convention no. 98 we respect
the right to collective bargaining for the
settlement of disputes pertaining to working
conditions (6)

Paragraphs on

Freedom of Association, No Discrimination,

Free Choice of Employment, No Child
Labour, Compensation, Work Hours,
Occupational Safety and Health Protection,
Realisation

Forced Labor, Child Labor, Equal

Opportunities, Equal Pay for Equal Work,
Collective Bargaining, Freedom of
Association, Protection of Health,
Compensation, Working Hours, Training,
Suppliers, Implementation procedure

Human Rights, Equal Opportunities,

Integration of Handicapped People, Free
Choice of Jobs, Rights of Children, Relations
with Associate Representatives and their
Institutions, , Fair Working Conditions,
Occupational Health and Safety, Qualification,
Environment, Implementation

Salaries

correspond at least to the respective

national legal minimum requirements or
those of the respective economic sectors
(1.5)
The employees of Volkswagen will be
informed about all of the provisions of this
declaration. (2.1)/
Within the context of the respective plant
practice, unions or existing elected
employee representatives will have the
possibility to inform the workforce together
with representatives of management.
(2.1)/
At the suggestion of the Board of
Management of Volkswagen AG or the
Volkswagen Group Global Works Council,
this declaration and its realisation will be
discussed and considered with
representatives of management of
Volkswagen AG within the framework of the
meeting of the Group Global Works Council.
If necessary, appropriate measures will be
agreed upon. (2.3)

no less than the legally established

minimum-wage and the local job market

conform at the very least to national or local

statutory standards, provisions, or respective
agreements (7)

For all employees, including executives, the

principles will be set down in the Integrity
Code and then implemented./
These principles will be made available to all
employees and their representatives in an
appropriate form. The methods of
communication will be previously discussed
with the employee representatives./
The senior managers of each business unit
are responsible for ensuring compliance with
these principles; They will designate
contacts to whom business partners,
customers and employees can turn in case of
difficulty./
Corporate Audit will also examine
compliance with these principles in its reviews
and will include them in the audit criteria./
a general open line ... shall be the point to
accept allegation of non-compliance with
these principles at a decentralized level. Upon
indication of violation, Corporate Audit will
take appropriate action./
corporate management will regularly report to
and consult with the international employee
representatives on social responsibility of the
company and the implementation of these
principles

These principles will be incorporated into the

Management System Manual for Quality,
Environment, Safety, and Security in the
Bosch Group. Responsibility for their
implementation lies with the senior
management of the respective company
locations. (11)/

Implementation
agreements

34

Bosch will not work with any suppliers who

have demonstrably failed to comply with basic
ILO labor standards. (11)/
Following consultation with the respective
associate representatives, associates will be
informed through the proper channels about
the content of the above principles. (11)/
Complaints regarding possible breaches of
the above principles will be investigated; any
action required will be discussed and
implemented by the senior management and
associate representatives responsible. The
Executive Committee of the Europa
Committee of the Bosch Group will be
informed about any complaints that cannot be
dealt with satisfactorily at a national level. If
necessary, the implementation of this
declaration will be discussed at meetings
between the Board of Management and the
Europa Committee. (11)

Table 4: Designations and definitions of workers at Volkswagen Pune according to Certified Standing Orders
Designation/ Worker category
Permanent Workman

Definition
engaged on a permanent basis in a permanent post confirmed in writing by the
manager satisfactorily completed his probationary period

Probationer

Workman who is provisionally employed to fill a vacancy in a permanent post.

probation may be six months but it may be extended by a period of six months each at
a time

Trainee

a learner who may or may not be paid stipend during the period of training but does
not include an Apprentice. services can be terminated at any time without notice
or without assigning any reason. no obligation to provide employment after
completion of training period. not entitled to any benefit available to the
regular Workman. period of training shall not exceed two years.

Temporary Workman

employed for work which is essentially of a temporary nature and likely to be

completed within a specific period or
engaged temporarily as an additional Workman in connection with temporary additional
work of permanent nature or ...
employed in the leave vacancy of another Workman ...
engaged on trial basis preceding his employment being considered ...
services ... will automatically come to an end on the expiry of the period or on
completion of the work for which he was appointed. ...
not ... eligible for benefits granted to any other class of Workmen.

Casual Workman

employed in work of casual nature or ... unexpected and unforeseen work which is ...
not likely to last for a long period ... not eligible for benefits granted to any other class of
Workmen. ... services [may] ... be terminated without any notice

Apprentice

engaged under the Management Scheme for training on the job, trade or craft
essentially in learning any skilled work ... period ... shall not exceed two years ...
irrespective of his being paid a stipend or not ... No apprentice shall have any claim for
any appointment after[wards]

Substitute

engaged to the post of permanent Workman or probationer, who is temporarily absent

or on leave on any day ... will not be entitled to any wages or compensation for the day
on which he is not provided with the work.
35

Figure 1: Daimler in Pune. Employee benefits at a glance.

Source: Human Resources Department Pune/Chakan plant. The ticks mark the benefits granted to Trainees as well.
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Figure 2: PCSR A model for planning transnational trade union campaigns (Wundrak 2011)

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