The indefinite strike by a section of the employees of Kerala’s largest non-banking finance company (NBFC) and gold-loan major Muthoot Finance and the managing director joining a sit-in dharna outside the corporate office of the company against the strike certainly send wrong signals about the state of affairs in Kerala. The Muthoot group has said that if the situation continued, it might be forced to wind up its Kerala operations.
Already the State has earned ill-reputation for its once militant trade unionism that drove away investors, pushing it `backward’ in the case of development. But those are days of the past. Trade unionism has been on the wane, so also its militantancy, and the Muthoot strike is an attempt that can only be seen as a façade to revive that tag.
When things have not been all that fine for NBFCs which like their giants, the banks, are proxies of the economy and reflect the situation of the economy which has been struggling, despite rhetoric by the Finance Minister and her team of those in power.
It is a fact that Muthoot with over 5,000 branches across the country, according to the first quarterly report, registered an increase in net profit of 8 per cent at Rs 530 crore, as against Rs 492 crore in the previous year. Also, of its total business spread, only 4.57 per cent was concentrated in Kerala.
Muthoot’s managing director George Alexander Muthoot, during the sit-in claimed that over the last two years, business in the state had declined to 4 per cent from as high as 10 per cent, owing to the `non-cooperation’ of a section of the staff here.
When the company has been expanding across the country, it is but natural that business would be more in such places and there was a point of saturation in Kerala. Moreover, there are a number of gold loan companies on the Muthoot model functioning in Kerala which makes competition tough. Also, unlike other states, the co-operative movement in Kerala has been stronger and gold loans are offered by them at cheaper rates, making people flock to such agencies.
That things have not been all that fine for NBFCS in the country, including Muthoot, is better explained by the fact that the company has reportedly said it had temporarily discontinued eight of its gold loan schemes of very low interest rates, but having high loan-to-value ratio. The reason cited for the `prudent’ temporary discontinuation of the schemes was increased cost of funds.
This is not the first strike by the staff of Muthoot. Way back in 2016, just after the union was formed, employees went on a 17-day strike. Suspended employees were taken back, and like the practice, they were transferred to places outside the State.
This time, the employees gave the mandatory prior notice and launched the indefinite strike on August 20. Their demands included hike in basic salary and solution to lack of proper allowances and denial of proper bonus among many other issues. It remains a fact that a large section of the workers is poorly paid. Going for a strike in post-liberalisation days is the last resort, admit trade union leaders. The workers here were literally pushed to it, they claimed.
As one of the employees confided, women staff in several branches were asked to campaign for the sale of the company’s non-convertible debentures (NCDs). This, according to banking experts, is gross violation of rules as private placements of such NCDs should be done through Securities Exchange Board of India-designated agencies. If the allegation is true, action should be taken, they assert.
A meeting convened by the labour office failed to find a solution as there was no proper representation from the management’s side. Also, when Kerala High Court offered to mediate in the matter, while the union announced its willingness, the management decided to remain silent.
Labour Minister TP Ramakrishnan said he was convening a meeting to resolve the issue, but the management has not clarified whether it would be party to the deliberations.
The stand of the management is that only a minority of the workers had resorted to strike work. A solution to this vexed issue would be holding a referendum, as is the practice, which has not been done till date, three years after unionisation.
Labour leaders have said that failure to meet the terms of agreement signed by the management and the workers is gross violation of the Labour Act. But there has been no move on the part of even the Government to enquire why that happened. Striking staff are also evasive to queries about videos going viral of their, as part of the agitation, blocking employees coming for work.
The CITU, the labour arm of the CPM, to which the Muthoot workers have been affiliated, has also reason to be blamed for such a situation where the state is being portrayed as a land where militant trade unionism persists.
Like corporate managements, the CITU `management’ had been `mis-selling’ itself earlier, going in for strikes at the drop of a hat then. Post-liberalisation, it is the unorganised sector that has been facing the brunt of exploitation, but trade union `managements’ are found missing there. Successful strikes like the ones led by women of textile shops in Kerala was without the support of such trade unions. Since it was a genuine one as women in the showrooms had to stand for hours, the strike succeeded, despite attempts by unions to take a plunge when success was at the doorstep.
Unionisation is not bad, as was made by trade unions earlier which helped justify the arguments of managements, since it is the right of workers not to be exploited. In the Muthoot strike, the Government, which has been trying to portray an image of turning the State into an investor-friendly, did not take any timely action for reasons unknown yet obvious.