Karunanidhi government boasts of bringing in Nokia to Tamil Nadu, pushing back states like Haryana and Maharashtra by offering attractive packages. Nokia was the third company in mobile phones production in the world after Motorola and Sony Ericsson before coming to Tamilnadu. But after coming to Tamilnadu Nokia has come to the number one position in mobile phone production.

Who Benefited? Nokia, or the Workers of Tamil Nadu?

A Citizens’ Research Collective report titled ‘The Public Price of Success: The costs of the Nokia Telecom SEZ in Chennai for the Government and Workers’ (EPW, Volume 44, Number 40, October 3-9, 2009) speaks of the difficulties it had to face to get access to the information through RTI on the concessions extended by the Tamilnadu government to Nokia in the MoU with Nokia. The information could be got only by exerting legal pressure on the Industry Department of Tamilnadu and through the CAG. The Tamil Nadu government is yet to come out with the details of exemptions and concessions extended to the foreign capital in a number of other MoUs.

According to the report, “The special agreement between Nokia and Tamil Nadu government signed in 2005 for the SEZ located in Sriperumbudur, Kancheepuram ensures that the government will refund VAT on domestic sales to the value of Nokia’s investments in infrastructure.” Further, “the MoU reveals that the State government offered an added fiscal incentive to Nokia by offering to reimburse the VAT paid by the company with a condition that it would not ‘cumulatively exceed the investment made by Nokia in eligible fixed assets within three years of signing of MoU.’ This adds up to approximately Rs. 638 crore that the State government would have reimbursed to Nokia for its investments in fixed assets, thereby in effect paying for Nokia’s infrastructure investments.” During the relevant period Nokia made an investment of Rs. 650 crores in two instalments. The VAT reimbursement indicates that Nokia had planned to sell most of its phones in the Indian market and not for export since VAT is only applicable when a product is sold within India.

Further, the TN government cut the lease amount of land by half and assured the company that “no other state/municipal levies would be applicable on purchases/sales made by units within SEZ”, the report said. 210.87 acres land was given on lease for 99 years and the lease amount was Rs. 8 lakhs per acre as per the first MoU. It was revised as Rs. 4.5 lakhs in the second MoU which was signed after 100 days. This resulted in a loss of Rs 7.4 crore for the State Industrial Promotion Corporation of Tamil Nadu, as per a 2007 report by the Comptroller Auditor General. The lease rent is Rs.1 per acre for one year for the first 98 years and Rs.2 from the 99th year. Nokia has ‘promptly’ paid this rent for 98 years already. Nokia was exempted from paying stamp duty on land and this concession amounts to Rs.38 lakhs.

In an annexure to the MoU, under the heading ‘Labour’ it is mentioned that the government would declare the SEZ as ‘public utility’ in case of any ‘labour indiscipline’. Nokia has not commenced its production and nobody was recruited in the Chennai facility when this MoU was made. Nokia and the DMK were obviously united in equating ‘labour with ‘indiscipline’ and in the bid to prevent ‘indiscipline’ (ie workers’ protests) well in advance. When the entire TN was reeling under power cut Nokia was ensured uninterrupted power supply.

The Work Force

In the Nokia SEZ, there are 10,000 workers in Nokia, 3000 in Perlos, 500 in Wintech, 8,000 in Foxconn, 2,000 in Salcomp and 1,500 in Laird. Nokia knows well the Marxist lesson that profit decreases as wage increases and profit increases as wage decreases. The Nokia plant in Germany was closed down a few years back as the workers there demanded increase in wages. Nokia terms the Nokia plant in Finland as High Cost-Low Volume plant and the Sriperumbudur Plant as Low Cost-High Volume plant. 50 percent of the instruments produced are exported to 140 countries and the rest 50 percent caters to the domestic market.

How Nokia Connects People

3,826 of the 10,000 workers of Nokia are permanent. The 2500 trainees who are paid Rs.4400 a month and 3500 contract workers of various contractors are involved in regular production along with the permanent workers. Workforce in the age group 20-30 includes workers who came out from ITI to those who have completed graduation and even post graduation in a few cases. More than 50 percent of the workforce is women.

The permanent workers are divided into 4 categories, A, B, C and D, by the DMK’s TU wing LPF and the management. In 2010 workers in the A category have put in 48 months service, the B workers 36-48 months, C workers 24-36 months and the D category 16-24 months.

These 4 categories of workers along with the trainees and contract workers together have produced 35 crore cell phones from January 2006 to June 2010. Together they are producing 4.5 lakh instruments a day and it will be increased by 6.8 lakhs a day soon.

While productivity increases constantly, the working conditions deteriorate progressively. All the workers including women workers have to stand all through the 7-8 hours of duty and for the extended overtime hours. Thus it is 9-10 hours of work a day. All of them collectively share a 6x3 feet cubicle as a rest room. The vast SEZ does not provide a place for adequate rest rooms and bathrooms for the women workers who made Nokia the ‘most trusted brand’. The canteen is quite far from the production floor and to eat within the allotted lunch time they have to run to the canteen, gulp their food and run back. Canteen food is not free of cost and they have to buy coupons for Rs.1200 per month.

LPF Exposed

A cell phone produced in the Finland plant costs Rs.75,000 and the wages too correspond to that level. Given the high level of production, sales and profits here, why are the Sriperumbudur plant workers not paid correspondingly?

The workers of all the 4 categories and the contract workers and trainees raised this question, united together and started demanding an increase in wages. The new generation of workers expressed their discontent in their flash strikes, which though not well organized signalled their potential.

Management expected that they would soon form a union and so brought in the leadership of LPF, the TU wing of ruling DMK and ensured that that union was registered. The Nokia Workers Progressive Union was registered in August 2009 and the first agreement between the management and the workers’ union was reached for the period from 1.4. 2009 to 31.03.2010 on 14.10.2009. Truth is stranger than fiction sometimes. A wage agreement between the union and management in a SEZ, in a MNC, in the times of globalization, amidst the clamour for No Trade Union Zone, was signed within 3 months of registration of the union and the agreement period was for one year! But, if you read between the lines one can understand the real intention i.e., this agreement was only temporary and a new agreement was to come into effect from 01.04.2010.

Nokia workers read that clearly and understood that LPF leadership is not for the workers but only for the management. They started their resistance, resorted to flash strikes, and this time, the management emboldened with the presence of LPF in the factory, suspended 62 workers who were vanguards in the struggle. This strike on 19-20-21 of January 2010 was a pointer to the increasing awareness of the workers.

Another strike took place on 13.07.2010. The TU President, a LPF leader prepared the demands himself saying workers do not know enough to prepare the demands. But the LPF leader did not know what the workers know – leading activists among the workers collected signatures of 1600 workers and prepared their own demands. The struggle intensified. Workers’ activists, who went to LPF office to put forth their views, were threatened by the local police in Chennai.

Labour Commissioner’s Betrayal

Few decades ago, Simpson workers waged a valiant struggle against DMK government’s efforts to force LPF leadership on their union. Then the DMK government sought to put down the struggle of the workers with an iron hand. But in the modern milieu, DMK seeks to hide its iron hand, and devise newer ways along with the management of the MNC to handle workers’ protest. There were threats of arrests and false cases. Principal Secretary and Commissioner of Labour, Mr. Hansraj Verma, IAS, acted as a mere rubber stamp in signing the agreement.

On 14.07.2010, in the late evening, the labour commissioner and the union leadership, ‘suggested’ that the 48 suspended workers (the rest were already taken back) will be taken back only if the strike is withdrawn and the workers’ representatives sign the agreement prepared by the management.

The commissioner put forth an ‘agreed advice’ by both sides. The advice copy reads that when the advice was accepted, there were 3 members and Mr. Shanmugam (LPF Leader) on the management side, and 7 members on the workers’ side. The advice copy lets slip, however, that Shanmugam is only a representative of the management and not of workers. Freudian slip indeed! The advice also suggested that talks for 12(3) agreement will be initiated on 15.07.2010. The workers were forced to sign a settlement on 19.07.2010.

An Agreement of Sorts

The only redeeming aspect of the 12(3) settlement signed before the Principal Secretary and Commissioner of Labour, Mr. Hansraj Verma, IAS, is that it is in Tamil, which all workers can read and understand easily. If a conciliation officer signs an agreement that reads ‘signed before me’ it means that he agrees that all the clauses in the agreement are fair and just. It should be noted here that a recent Madras High Court judgement had indicted Mrs. Kalaivani, a Labour department officer who has signed illegal agreements.
How ‘Just’ is the Settlement?

As per the settlement, ‘Basic and DA’ is 40% and other allowances are 60%. It further says that, to begin with 360 workers in A category will get a hike of Rs.3100; 1300 workers in B category Rs.3000; 936 workers of C category Rs.1500; and nothing for 1330 workers in category D.

Next year, 360 workers in A category will get a hike of Rs.1600; 1300 workers in B category Rs.1500; 936 workers of C category Rs.1000; and Rs.750 for 1330 workers in category D.

The management has deliberately (it can be assumed that with the suggestions of union leadership and labour department) divided the workers into 4 categories; as they all stand together in the struggles, there has to be some wedge between them and this categorization would well serve that purpose and the management also expects this division will come to stay among future permanent workers too.

Before the agreement A category workers’ wage was Rs.8,200; it was Rs.8,000 for B, Rs.6,000 for C and Rs.5,500 for the D category. From July 2010, A category workers get Rs.11,300, B category workers get Rs.11,000 and C category workers get Rs.7,500. Canteen, incentive, free transportation, bonus, agreement through negotiation with the union etc are all there. LPF asks, what more do the Nokia workers want?

Nokia Workers’ Questions

The disciplinary action on the 48 suspended workers who were taken back after the strike is still in force. It is not withdrawn.

As stated in the Nokia website, there are 1,25,829 workers, including executives around the world. Their average global salary was 5,615 million euro in 2008; i.e., Rs.29 lakhs per year and 2.5 lakhs per month.

In the Sriperumbudur plant, the factory wheels never stop and run all through the year as workers work in 3 different shifts. 130 lakh (30 x 4.5 lakh) cell phones are produced in a month. Now, after the agreement, if it is assumed that the average salary for the 10,000 workers is Rs.7,000, it is Rs.7 crore for all 10,000 workers for a month. Again if it is assumed profit per instrument is only Rs.200, profit per month is Rs.260 crores. Even if Nokia pays Rs.21,000 per worker without any categorization, it will make Rs. 240 crores of profit in a month.(In 2007 Nokia produced 7.8 crores sets; in 2008, 12.5 crores sets; in 2009, 12 crore sets.)

Some questions for the Labour Commissioner and Labour Minister to answer

Are the agreements usually signed before the commissioner, that too before the Principal Secretary cum Commissioner of the Labour Department? If so, how many agreements in the recent past have been signed before the commissioner? Are there any files showing specific reasons for the commissioner himself becoming conciliation officer and signing the agreements and will those be made public?
How much is the Basic pay and DA in the agreement for Nokia workers? How much is basic and how much is DA? How will DA be calculated? Why these basic aspects are not quantified in the agreement?

Is there any single agreement signed before the labor department without mentioning how much is the basic pay and how much is DA?

Did the commissioner verify whether Mr. Kuppusami or Mr. Shanmugam enjoyed the majority workers’ support?

In every industrial dispute, legally, verification of records is done? Why was that not done in this case?

Even in July 2010 salary, why basic and DA were not mentioned separately?

Why the workers were divided into 4 categories like 4 varnas?

As per government records, Mr. Shanmugam is the President of Nokia India Workers Progressive Union till 14.07.2010. This union is not affiliated to LPF till date. Then, how did Mr. Kuppusami sign the 19.07.2010 dated agreement for Nokia workers on behalf of their union? Why the President of the union Mr. Shanmugam did not sign the agreement? Will the Labor Commissioner or Labor Minister explain on what authority Mr.Kuppusami signed the agreement? (M/s Kuppusami and Shanmugam are respectively the president and general secretary of Labour Progressive Federation.)

This is where, Nokia workers want to put the DMK rule in the dock. DMK government is selling the labour of the Tamil Nadu workers for the MNCs and Indian big corporates for a very cheap rate and to perpetuate this state of affairs, it joins with the corporate clamour for ‘No Trade Union Zone’, assures the corporate world that management and LPF are one and the same and forces anti-workers agreements on the workers of Tamil Nadu. It also demonstrated how far it would go to deal with the struggle of Tamil Nadu workers in its response to TASMAC employees’ strike and non-meals scheme workers’ struggle; i.e., with an iron fist.