Ease Of Hindering Business In Kerala: How A Communist Trade Union Has Forced A Finance Company To Move Court For Security

Last weekend, the Kerala High Court ordered the Left Democratic Front (LDF) government to provide protection to all employees of Muthoot Finance Limited in the 568 branches and its regional offices in the state.

Justice A Muhammed Mustaque passed this order after Muthoot Finance managing director George Alexander filed a petition seeking police protection.

Alexander filed the petition following an attack on him on 7 January when some miscreants allegedly pelted stones on his car near his company’s headquarters in Kochi. He was injured and admitted to hospital, while two persons were arrested in this connection.

Justice Mustaque ordered that the police should ensure that no untoward incident occurred and the employees who are willing to work should not be prevented.

The government pleader, arguing against the petition which alleged that Alexander was attacked by members of Centre for Indian Trade Unions (CITU) — the trade union arm of the Communist Party of India-Marxist (CPI-M) — said the managing director was not ready to attend conciliation talks with workers despite being invited twice.

Workers under the wing of the Non-Banking and Private Finance Employees Association (NBPFEU), owing allegiance to CITU, have been on a confrontational path over the last four years.

The recent management-workers dispute is over wage hike for the company's sub-staff.

NBPFEU is seeking higher pay to the company's sub-staff. The union says they are earning only Rs 400 a day and it was inadequate to meet a family’s daily expenses.

The dispute has led to frequent strikes at Muthoot Finance offices across Kerala, forcing customers to shift to other firms. As a result, the company’s business got hit and its number of branches has declined from around 800 to 568 currently, the company's counsel told the High Court.

Justice Mustaque also directed Alexander and the employees’ association to appear before the labour commissioner for conciliation talks at Ernakulam.

This is the second time in four months that the Kerala High Court ordered protection for the employees of Muthoot Finance. On 5 September last year, the court ordered protection to the employees so that they could do their job without any obstruction.

Then, the court observed that though the government argued the Muthoot Finance management was not coming forward for conciliation talks on labour problems, all employees of the management were willing to work.

In early September, Alexander told the employees in an internal message that the company would be forced to shut some of its branches in Kerala as its employees were stopped from working by the striking workers of the union.

Muthoot Finance has 3,000 employees on its rolls and at least 450 of them owe allegiance to the employees’ association. These 450 had gone on strike in August last year demanding revision of wages.

This hit the functioning of some branches of Muthoot. Business operations at these branches came to a standstill, forcing Muthoot Finance to warn its employees.

Then, Alexander ruled out merging the branches that could shut with other ones. He said employees who would be displaced due to the closure of branches would not be redeployed.

The company said frequent strikes at these branches, affecting them for several days, had resulted in loss of business to its rivals.

Though a large number of the employees were not part of the strike, they were unable to open the branch offices as the striking employees with the support of CITU blocked them from attending work.

Some of its staff, most of them women, opposed to the strike, were threatened and assaulted, also leading to closure of some branches.

Muthoot Finance has over 800 branches across the country.

Workers, not members of NBPFEU, say though they had started their career in the company with a salary of Rs 3,000 a month, they were earning Rs 18,000 now. They also say that CITU had no role in their wage hike.

Opposition parties blame the Pinarayi Vijayan government’s inaction for the problems of Muthoot Finance, which has played a key role in offering loans against gold.

Muthoot Finance was among the firms that have been affected by problems created by the CITU in Kerala after the Left Democratic Front was voted to power in 2016.

Last year, Synthite Industries, one of the world’s largest spice extraction firms operating in the state since 1972, threatened to shift its base from Kerala as CITU created problems.

As of now, the labour problems have not affected Muthoot Finance financially. The company reported a 77 per cent rise in profit in the July-September 2019 quarter at Rs 857.92 crore compared with the same period a year ago.

Its shares have also performed well on the stock exchanges. Muthoot Finance shares were quoted at Rs 750 on the National Stock Exchange against Rs 600 in September when Alexander threatened to shut the branches facing labour problems in Kerala.