It was a sad reminder of another labor-related murder that I noted in India Business Checklists: In September 08, Lalit Kishore Chaudhury, the Indian CEO of an Italian-affiliated auto parts company in NOIDA (near Delhi) was also killed by angry workers. (For IIT alums reading this blog – he was IIT/K, I believe 1986.)

But managers aren’t the only ones getting killed; in October 09, Ajit Yadav, a 26-year-old worker was killed during a labor dispute at Rico Auto Industries in Gurgaon. Rico is also an auto components manufacturer.

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Quite aside from the human tragedy involved, this leads to the obvious question: Is India’s labor environment deteriorating? The data from the government’s Labor Bureau don’t appear to indicate that.

Industrial disputes in India, 1999-2007

This shows a decline in the number of disputes. The Labor Bureau hasn’t yet published any full-year stats after 2007, but the graph below is based on comparing the provisional or estimated Jan-Sept figures for 2007, 2008, and 2009. (I’ve adjusted the 2009 figures to make them roughly comparable.) That, too, seems to indicate things are getting better, not worse.

India Labor Trouble: Jan-Sept 07, 08, 09

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Yet anecdotal evidence suggest that the number of industrial disputes have risen sharply, particularly in new industrial areas. Some have linked this to national Unions attempting to gain traction with the workers, and companies resisting unionization, trying to substitute in-house unions instead.

Do the data tell the story? They are based on voluntary reporting, and companies may choose not to bother. Also, the estimated data for 2009 may be the least accurate of all; I’ve adjusted 5-month data into 9-month data, but may have underestimated it. The summer of 2009 was reportedly one of the worst periods. When the final numbers come out, in about 2 years, it may show an upsurge in labor trouble.

In this case, the anecdotal evidence is probably the more reliable. The combination of rapid economic growth, critical mass for unionization in some geographic areas, and a sudden slowing of growth in some sectors is a potent combination. Companies situated in new industrial areas need to be particularly cautious.

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Edited to Add:

I received this thoughtful comment from a reader:

” …You need to draw a distinction between legitimate industrial disputes (legal and necessary in any industrialized nation), unauthorized disputes and strikes and lastly, violence in the work place.

“Murder/ physical assault of management and/or workers falls in the last category and should be categorized as crimes – no different from violence resulting fom mob frenzy fomented by political or religious strife.

“So, the number of disputes and violent crimes are not necessaily correlated.”

Good point. The deaths may be more correlated with general levels of violence and and anger in society, rather than the number or severity of labor disputes.