Dampening the Karnataka government's endeavours to scale up manufacturing activity, the Tumkur unit of biscuit manufacturer Parle Products is all set to close down operations based on an order passed by the state government on August 3, 2013, on a plea by the company seeking closure due to labour unrest.
The order was passed by the secretary, labour department, Karnataka government, M B Dyaberi under provisions of the Industrial Disputes Act, permitting the closure with effect from September 9, 2013.
Document detailing the background of the case by the labour department said that the unit with an investment of Rs 70 crore had made “negligible profits” in the past 12 years and was not “functioning continuously” for the past two years.
In August 2011, the suspension of one of the office bearers of new workers group, Parle Workers Union (PWU) led to abrupt stoppage of production and damage to property, the HR manager of PPL was also threatened. From August 18, the workers resorted to stay-in strike and “sabotage”.
Despite subsequent relief granted to the company by civil court and Karnataka High Court, workers continued to breach it by resorting to strike at the factory for 13 months, the document said, though a section of the workforce, numbering about 57, called off the strike and joined duty.
However, efforts to settle workers'demands of March 2, 2011 extending benefits to those workers who joined later, failed as PWU rejected the management's offer. As a result, production was affected.
The management retaliated by dismissing six workers on charges of “misconduct, which precipitated matters and led to workers resorting to stay-in strike from January 24, 2013 . The company was forced to stop production and suffer losses. It could not move merchandise from the factory. As a result of all these, it incurred financial losses for about Rs 1 crore. Finally, it declared lock out on March 15, 2013. Efforts of the judiciary and the conciliation machinery in reconciling the management and the union “miserably” failed, the order said.
The closure order was welcomed by Karnataka Employers'Association, whose president B C Prabhakar said, “The government has conveyed appropriate message to workmen and trade unions that it will not tolerate violence or workmen taking law in to their hands...for conceding their illegal and unjustified demands.” The president of PWU, K S Subramanya told Deccan Herald that the order is “malafide” and will be challenged in Karnataka High Court.