Lockout at Stump, Schuele, and Somappa A Citizens’ Fact-finding Report

Stumpp, Schuele and Somappa Springs Private Limited (SSSPL), a leading manufacturer of springs for cars, two-wheelers and commercial vehicles, declared a lockout at its Hosur Road factory for its contract workers on 1st March 2014, and five days later, also for its permanent workers. All these workers who were also union members were suddenly rendered jobless. Concerned about the lock-out incident, a group of citizens formed a team and decided to undertake a fact-finding investigation; the following are the details from the report.

In order to understand what exactly brought about the lockout since March 6th, one has to look at the work conditions of contract workers in the factory vis-à-vis work conditions of permanent workers. In the factory, there are only 88 permanent workers, while there are 620 contract workers (this includes various kinds of workers such as casual workers, and trainees). According to the workers, although contract workers, permanent workers, and workers designated by the company as ‘engineers’ do the same work on the same machine, the differences in their remuneration are huge, ranging from Rs.6000 for contract workers to Rs.12 – 15000 for permanent workers and Rs.20000+ for workers designated as engineers. Contract workers are also denied benefit of many of the 14 components of wages given to permanent workers.

In order to fight this blatant imbalance in the remuneration among different workers, the union felt the need to bring together the contract and permanent workers and create a common union. In September 2012, the union filed a petition before the Labour Commissioner seeking payment of the same wages as the permanent workers for contract workers as per Rule 25 of the Contract Labour (Regulation and Abolition) Act, as both the workers were doing the same work. The union was told by the management to keep out the contract workers from the Union and withdraw its support to their demands. When the Union stood by their demands, the Management declared a lock-out for 240 contract workers on 1 March 2014, and refused to allow them into the factory to work, and refused to come forward for any talks. In solidarity with the contract workers, on 6th March 2014, the permanent workers issued a notice for a tool down strike to the Management seeking for them to come for negotiations. However, enraged by the support given by the permanent workers, the Management declared a lock-out on 6th March 2014.

In the meanwhile, a surprise inspection, by a team of officials from the Revenue Department, found that the management after declaring a lockout illegally brought in more than 100 workers from other states and northern districts of Karnataka. The team found that they were being made to work under ‘inhuman conditions’ and were treated like bonded labourers.

The Labour Department then initiated a conciliation to resolve the crisis, but it failed due to the obstinate stance of the management, and the matter was referred to the government. The Labour Secretary referred the dispute to the Labour Court and passed an order on 7th April 2014, prohibiting the lockout by the management.

On 10th April 2014, the management stated that only the permanent workers would be allowed inside the factory; when the union protested, they assured the Union and the Deputy Labour Commissioner that they would be willing to allow the contract workers to resume work within a short period. With this understanding, the permanent workers were allowed to resume their work on 11th April 2014.

However, currently, the management is still adamant about refusing to lift the lockout for the contract workers, even though the workers are willing to negotiate and ready to resume work.

Findings of the Report

a) The contract workers and the permanent workers perform the same work, but their wages and working conditions are extremely different and arbitrary, in violation of the law.

b) As per the Contract Labour Act Regulation and Abolition Act, 1970, only seasonal, non-core activities can be contracted out. However, in SSSPL, almost all the workers are engaged in core and full production.

c) The lockout was used as a tool of intimidation by the management to suppress the just struggle of the workers despite workers clearly stating that they wanted to work.

d) The lockout by the Management has resulted in the loss of livelihood of around 240 contract workers, their families having to face grave financial difficulties.

e) Despite receiving information about labour malpractices in the company, the Labour Department failed to conduct inspections and take action. The inspector from the Labour Department who visited the premises after the lockout suppressed information about the actual number of workers on the premises.

f) The demand of the management– that the existing Union should only have permanent workers as its members, and that it cannot represent the contract workers–is illegal, unconstitutional, and violates the fundamental right of the workers to collective bargaining.


a) The lockout must be lifted immediately for the contract workers also in order to end the hardships faced by the workers and their families.

b) All contract and other temporary workers should be regularized and receive the same benefits as the permanent workers, commensurate with qualifications and experience.

c) The management should abolish the contract labour system in perennial and core nature of work in SSSPL.

d) The Union and the workers must take all trust-building steps to wipe out the trust deficit with the management and be responsive to the efforts of the Management towards a meaningful dialogue.

e) The Labour Department must ensure that SSSPL complies with the lockout prohibition order, and all contract workers are allowed to resume work.

f) The workers must discharge their roles with efficiency to ensure the success of the company.

g) The Labour department must on a suo muto basis conduct regular inspections, and the Labour inspector who filed false reports during the lockout must be immediately suspended and disciplinary action must be initiated.

Members of the Factfinding Team : 1. Dr. Ramdas Rao (People’s Union for Civil Liberties-Karnataka), 2. Shakun M. (Vimochana), 3. Arul Selva (People’s Union for Civil Liberties-Karnataka), 4. Pushpa Achanta (Journalist), 5. Gopika Nangia (Student and Member, Concern), 6. Dr. Kishor Bhat (St. John’s Academy of Health Sciences), 7. Partha Bopaiah (Student, Bangalore University), 8. Dr. Kaveri R I (Inspire Fellow, Hyderabad Central University), 9. Rajesh Srinivas (Sangama), 10. Ashok Kaliamurthy (Activist).

Note: Since the report was published, of the 240 locked-out contract workers, 55 were taken back, but the remaining are still locked out.

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