Bata Lockout Case Study Essay

For Bata, labor had always posed major problems. Strikes seemed to be a timeless problem. Much before the assault case, Batas chronically restive factory at Batanagar had always plagued by labor strife. In 1992, the factory was closed for quatern and a half months. In 1995, Bata entered into a 3-year bipartite agreement with the workers, represented by the then 10,000 strong BMU, which also had the West Bengal government as a signatory. On July 21, 1998, Weston was severely assaulted by four workers at the high societys factory at Batanagar, while he was attending a business meet.The calamity occurred after a member of BMU, Arup Dutta, met Weston to discuss the issue of the suspended employees. Dutta reportedly got into a verbal duel with Weston, upon which the other workers began to shout slogans. When Weston tried to leave the dwell the workers turned violent and assaulted him. This was the second attack on an officer after Weston took charge of the company, the first one bein g the assault on the chief eudaemonia officer in 1996. In February 1999, a lockout was declared in Batas Faridabad Unit.Middleton commented that the closure of the unit would not have much impact on the companys revenues as it was catering to lower-end products such as canvas and Hawaii chappals. The lock out lasted for eight months. In October 1999, the unit resumed production when Bata signed a three-year wage agreement. On March 8, 2000, a lockout was declared at Batas Peenya factory in Bangalore, following a strike by its employee union. The new leading of the union had refused to abide by the wage agreement, which was to expire in August 2001. Following the failure of its negotiations with the union, the perplexity decided to go for a lock out.Bata management was of the view that though it would have to bear the cost of maintaining an idle plant (Rs. 3 million), the effect of the closures on sales and production would be minimal as the footwear manufacture in the factory coul d be shifted to the companys other factories and associate manufacturers. The factory had 300 workers on its rolls and manufactured canvas and polyvinyl chloride footwear. In July 2000, Bata lifted the lockout at the Peenya factory. However, some of the workers opposed the companys move to get an undertaking from the factory employees to resume work.The employees demanded revocation of suspension against 20 of their fellow employees. They also demanded that conditions such as maintaining normal production schedule, conforming to standing orders and the settlement in force should not be insisted upon. In family line 2000, Bata was again headed for a labour dispute when the BMU asked the West Bengal government to intervene in what it perceived to be a downsizing exercise being undertaken by the management. BMU justified this move by alleging that the management has increased outsourcing of products and also due to perceived declining importance of the Batanagar unit.The union said t hat Bata has started outsourcing the Power range of fully manufactured shoes from China, compared to the earlier outsourcing of only assembly and sewing line job. The companys production of Hawai chappals at the Batanagar unit too had come down by 58% from the weekly capacity of 0. 144 million pairs. These steps had resulted in lower income for the workers forcing them to approach the government for saving their interests. PS Weston resigned on January 30, 2001. This came as a severe setback to the Bata management.