By taking a bold move, Samsung Electronics warns striking workers of the Chennai factory-“No work, no pay.” A looming threat of termination also hangs over the workers as Samsung Electronics tightens its stance amidst the ongoing protest.
Thousands of Samsung Union workers declare an indefinite strike. The biggest strike in the company's history.
Members of the National Samsung Electronics Union (NSEU), representing 30,000 workers (24% of Samsung employees), have led a strike demanding a 5.6% pay raise, improved… pic.twitter.com/4iUH1B2fQE
— Anonymous (@YourAnonCentral) July 12, 2024Background of the Strike
From 9th September, thousands of Samsung workers from the Samsung plant in Chennai disrupted their work due to some demands relating to their working conditions. In the Chennai factory of Tamil Nadu, Samsung employed 2000 workers. However, 1500 of them participated in the strike.
The Chennai factory, where the workers are striking is one two largest factories of Samsung for their earnings. The factory is located at Sunguvachatram near Sriperumbutur. It is 56 kilometres away from Chennai, the capital of Tamil Nadu. The southern state of India. Another significant plant of Samsung is located in Noida, Delhi, in the north Indian state of Uttar Pradesh (UP).
India is the fastest-growing market which makes the Indian market attractive and profitable for Samsung Electronics. A third of the annual revenue around $12 billion comes from the home appliances produced by the workers of the Chennai plant.
The striking workers occupied land near the 17-year-old factory for the last 12 days. Their key demands focus on officially recognising the newly formed Samsung India Labour Welfare Union (SILWU), better wages and the rejection of competing unions as about 90% of the workforce belongs to the SILWU.
The majority of the workers are members of SILWU and therefore, the workers believed that the formation of this union is essential for their negotiation ability for fair wages and reasonable working hours.
In the protest, the workers are claiming that their current wages of ₹25,000 ($298) per month are not appropriate to meet the rising cost of living. The striking workers demanded to 50% increment in their salary over three years so that they could provide financial relief to their families. The workers demand that if their salary increases they might be able to address the gap between wages and living expenses.
The workers also expressed concerns regarding their working conditions at the Chennai plant. The striking workers alleged that in the factory they were forced to continuously work without taking any break. They are forced to complete each product including refrigerators, televisions, washing machines and more within an unreasonable short timeframe of 10-15 seconds.
The Chennai plant Samsung runs on two nine-hour shifts; one is 8 am to 5 pm and the second one is 8 pm to 5 am. 800 workers worked in each shift. However, the workers have alleged they are forced to put in 11 hours daily for four days a week, which is counted as overtime and they are not paid for that.
The striking workers also alleged that the working conditions were not safe for them. They demanded that the company should undertake urgent steps to improve the working environment. Some of the workers also alleged that the company has threatened their families to control the labourers.
The secretary for the Central Indian Trade Unions (CITU) from the Kancheepuram district, E. Muthukumar, has been spearheading the worker’s protest. CITU is the most influential trade union in India affiliated with the Communist Party of India (Marxist) that focuses on the labour rights and welfare of workers.
Muthukumar has said that the strike will continue until the three demands of the workers are met. Even he accused Samsung of hiring contract workers to maintain their production during the protest. The member of CITU, A. Soundararajan, said, “The workers have decided to strike work indefinitely till their demands are met.”
Samsung Workers Protest: Police Arrest 100 Samsung Workers And Union Leaders For Unpermitted Protest pic.twitter.com/QV9hRcaBlO
— Solidarity (@1WhiteRabbitt) September 17, 2024Samsung’s response to strike
In the initial days of the strike, Samsung prioritised the workforce and said, “We have initiated discussions with our workers at the Chennai plant to resolve all issues at the earliest.” However, around 104 protestors got arrested earlier for not taking permission for protest, although, they got released in the evening.
However, all the allegations of the workers against Samsung are denied by mentioning that the company is complying with all labour laws and regulations. In an official statement, Samsung India said, “We categorically deny that workers are made to work for four hours at a stretch. All workers get suitable breaks in between.”
In the official statement it is also added, “Also, employees work on their given task of the manufacturing process as products are passed through the conveyor line. They are not required to ‘finish’ a product in such a time frame, which is not realistic. We reiterate that we are in compliance with all laws and regulations.”
The Tamil Nadu government interfered in the strike and CV Ganesan assured workers that their demands would be fulfilled. Samsung also assured that their demand has been prioritised and discussed to reach a possible solution faster. Still, the workers persistently strike with their demands because of growing frustration for years.
However, after seeing the consistent protest over 10 days, Samsung sent an email to the workers. By invoking Section 9 of the Payment of Wages Act 1936, the company expressed that this act allowed them to cut wages if the workers were not fulfilling their duties.
In the email, Samsung India indicated that the workers who remain on strike would not be given wages from the striking date of 9th September 2024 until they return to their work. The company introduced the policy of “no work, no pay.” Under this policy, the workers were specifically warned of cutting eight-day wage cut and asking the workers to return to their duties immediately otherwise they would be terminated from the end of the company.
The General Manager of the HR team of Samsung mentions the Industrial Disputes Act 1947 and its Section 23 and Section 24. According to the company, the protest of the workers is violating these sections as it violates the standing orders of the factory.
The email tried to resolve the issues of the workers but did not get any positive response from the workers who were striking. Despite getting a warning from the company, the workers continued their strike. Samsung has mentioned that it will resolve the issues without engaging with the union. They prefer directly talking with the workers by not integrating any third-party organisation or workers.
Worker rights and legal aspects
The strike of the Samsung workers from the Chennai plant is closely tied to the aspects of Indian labour law. Under the Trade Union Act, the worker’s approach to building the union of SILWU is legally supported in India to use it for collective bargaining. Samsung wants to have direct conversations with the workers regarding their wage demand without any interference from the SILWU union.
The Industrial Relations Code also emphasized that the employers of a registered trade union need to engage in good-faith bargaining with the workers. Moreover, Indian employment laws also mention that no employers can terminate workers without any reasonable cause. This might be significant for workers who are organising a strike to demand basic labour benefits and getting threats from their employer Samsung.
If the workers of Samsung’s Chennai plant are working in an unsafe environment, then Samsung needs to comply with the Indian Act related to workplace conditions. The Occupational Safety, Health and Working Conditions Code highlights that the employer needs to maintain safe working conditions in the workplace.
However, Samsung also cited two pieces of legislation in the email regarding the strike of workers. One is the Payment of Wages Act of 1936 and the other is the Industrial Disputes Act of 1947 to stop the protest and urge workers to return to their work.
The Payment of Wages Act of 1936 has several acts of timely and fair payment of wages. According to Section 3 and Section 5, the employer has the responsibility to pay the wages timely. However, Section 9 mentions the mention of deduction of salaries during the absence of the workers from their duties.
Samsung’s “no work, no pay” policy has been justified under Section 9. The HR team has mentioned in the email that if the workers do not perform their duties then they will deduct their wages from the starting day of the protest until the return of the workers to the duty.
The Industrial Disputes Act of 1947 outlines the legal framework to solve any industrial problems in India. It has different sections for lockouts, strikes, layoffs and retrenchments. However, the HR team of Samsung labelled the protest of the workers as illegal by depending on Section 24.
Section 23 of the Act refers to the general prohibition of strikes and lockouts and Section 24 indicates illegal strikes and lock-outs. Samsung has argued that the worker’s strike violates these sections because they are not obeying the factory’s standing orders and have not followed the proper legal process.
The broader implication of the Strike
The South Korean manufacturer, Samsung, became an important part of India for the manufacturing sector. Both the company and the Indian manufacturing sector are gaining profits with the operations of Samsung in India. Samsung became the largest mobile phone and consumer electronics company in India with two manufacturing plants, five R&D centres, one design centre, 200,000 retail outlets and over 70,000 workers.
The ongoing protest at the Sriperumbudur plant Samsung creates a broader tension not only for Samsung operations but also for the manufacturing sector of India. India is creating a position as a global manufacturing hub and will generate $560 billion from manufacturing output in 2023. This kind of strike might create a negative image of the country in front of global manufacturing companies.
From the operational perspective of Samsung, this strike might present a challenge to their production process and also their reputation in the market. 50% of production was disrupted on the first day of the protest in the Chennai plant. Although the company hired contract workers and with the help of non-protesting workers they are minimising the broader impact on their supply chain.
The company sources ensure that the impact of the protest on the current production of them is minimal. Samsung users will not face any delay in getting their orders due to a shortage of products due to the protests.
Labour disputes can create a negative image in front of their customers. If the company is not able to carefully handle the situation, then it might create negative attention from both local and international stakeholders.
A few months ago a protest was also organised by the employees of the South Korean factory of Samsung. The workers alleged lower wages, long working hours, fewer leaves and mental pressure to meet the high production targets.
The image of Samsung took a hit because the protest increased visibility on social media and gained public sympathy. The socially conscious customers might be hit with a negative image.
However, during the protest in South Korea, Samsung denied all the allegations and reassured the workers of better welfare and better engagement with workers. They wanted to do the same with Indian protest. However, all these protests create a negative image of the company in the global consumer electronic markets.
Ethical implication of the strike
The strike from India and South Korea against the labour rights of Samsung holds some ethical implications. Both strikes emphasized that the company is not complying with the basic labour rights of fair wages, efficient working hours and a safe work environment.
The allegation of not providing safe working conditions and unrealistic production demands against Samsung raises ethical concerns about the commitment of the company towards their employee welfare and transparent services. All of these allegations create ethical questions for the company of prioritising the health and safety of their workers or not.
The public image and customer trust of Samsung also come under the ethical dimensions. Consumers nowadays remain highly concerned about the ethical and environmental activities of a company to making purchase decisions. In this situation, the increasing protests might create a negative image of Samsung as a corporate social responsibility failure.
FAQ
What is Samsung’s “no work, no pay” policy?
Samsung introduced the policy of “no work, no pay.” Under this policy, the workers were specifically warned of cutting eight-day wage cut and asking the workers to return to their duties immediately otherwise they would be terminated from the end of the company.
What is the reason behind the Samsung workers’ protest in Chennai?
From 9th September, thousands of Samsung workers from the Samsung plant in Chennai disrupted their work due to some demands relating to their working conditions.
What are the demands of the workers striking at the Chennai plant of Samsung?
Their key demands focus on officially recognising the newly formed Samsung India Labour Welfare Union (SILWU), better wages and the rejection of competing unions as about 90% of the workforce belongs to the SILWU.
How did Samsung respond to the strike of Chennai workers?
However, after seeing the consistent protest over 10 days, Samsung sent an email to the workers. By invoking Section 9 of the Payment of Wages Act 1936, the company expressed that this act allowed them to cut wages if the workers were not fulfilling their duties.
Has the Tamil Nadu government taken any significant steps regarding the strike at the Chennai plant of Samsung?
The Tamil Nadu government interfered in the strike and CV Ganesan assured workers that their demands would be fulfilled.
How does the strike at the Chennai plant of Samsung reflect broader issues in the Indian manufacturing sector?
India is creating a position as a global manufacturing hub and will generate $560 billion from manufacturing output in 2023. This kind of strike might create a negative image of the country in front of global manufacturing companies.
Is the delivery of Samsung products delayed due to the protest?
The company sources ensure that the impact of the protest on the current production of them is minimal. Samsung users will not face any delay in getting their orders due to a shortage of products due to the protests.
