Graziano 2

Case Study on Graziano Transmissioni India Pvt Ltd “Death of A CEO”

Submitted To,

Submitted By,

Dr. Kapil Pandla**

Anil k. Bhati* Diganta Ghose* Prabhat Kumar* Ravindra S. Rawal*

---------------------------------------**Faculty Employee Relation & Labor Laws , GBU School of Management, Gautam Buddha University, Greater Noida. *MBA 2nd year students, GBU School of Management, Gautam Buddha University, Greater Noida.

At Sep 22, 2008, The Chief Executive Officer (CEO) of a private company at Greater Noida in Uttar Pradesh was beaten to death by dismissed employees.LK Chaudhary was the CEO of 'Graziano' company in Udyog Vihar of Greater Noida. The company manufactures gear boxes. Chaudhary wasattacked by a mob of angry employees inside the company premises on Monday afternoon. The workers had been dismissed nearly two months back and had been protesting since then. A meeting had been called by Chaudhary to resolve the dispute between the labors and management. However, the meeting turned violent when the workers started protesting. According to Noida Police, L K Chaudhary, the CEO of Graziano in Udyog Vihar of Greater Noida, was killed when the agitating workers turned violent and beat him up. During the clash, a security guard opened fire in air, said Police officials. About 20 people were injured. The assailants had been dismissed two months back for some reasons. They were protesting against their dismissal since then. The chief executive officer of a Greater Noida-based gear manufacturing company was lynched to death inside factory promises on Monday, allegedly by a group of dismissed workers. Lalit Kishore Chaudhary (47), CEO and India-head of the Rs 360-crore Graziano Transmissioni India Pvt Ltd, was killed when a meeting to discuss the dismissal of over 125 workers turned violent. Chaudhary was rushed to Kailash Hospital, where he was declared brought dead. Over 50 other employees also sustained injuries. “Around 125 dismissed workers armed with iron rods barged into the factory and went on rampage. They broke computers and machinery and smashed windowpanes. When Lalit tried to pacify them, they assaulted him with rods,” board of director Ramesh. The problem over the dismissed workers has been simmering for some time. “The company asked us to write an apology letter saying we had caused violence in the past

which forced the lockout. This made me the furious and the gathered workers started protesting,” said Avdesh, one of the workers. “However, we did not kill the CEO.” Another employee, Rajpal said: “We were demonstrating peacefully to get our jobs back. Outsiders may have assaulted the CEO leading to his death. Firing by the guards agitated workers and they clashed with staff”. Assistant labor commissioner for Ghaziabad had been recently deputed to resolve the conflict. According to him, on September 16, the management and labor leaders had agreed to take back the dismissed employees except for 15 of them whose services were terminated. It was agreed that workers will individually give applications tendering an apology letter. Law and order in industrial sectors has been deteriorating, said Association of Greater Noida Industries (AGNI) vice president Aditya Ghildiyal. "The way workers barged into the factory and assaulted the CEO shows that they have no fear of the police. MNCs hesitate to come to Noida or Greater Noida owing to such incidents." Contending that “simmering discontent” among workers was the reason for the killing of the CEO of Italy-based company Graziano, Union Labor Minister Oscar Fernandez said that it was a “warning” to managements which he asked not to “push” the employees “so hard” that they resort to such an action. A day after Graziano CEO L K Chaudhary was killed at his Greater Noida office, Fernandez said the policy of hire and fire would be discussed in the next Labor Congress, first to tackle such issues with regard to the PSUs and later with regard to the private sector. According to him, there are disparities in the wages of permanent employees and contract workers and the workers should not be pushed so hard that they resort to whatever has happened in Noida. He also said, “This should serve as a warning for the managements”. The union leaders gave a memorandum in December last year with the key demand to increase salary of the workmen. On 24th January, 2008, the management claimed it negotiated an

agreement with the workers’ representatives, which was also signed by AITUC, wherein it was agreed to substantially increase salaries and in return commitment towards efficiency and good conduct of the workers. But despite signing of the agreement, normal working in the plant did not resume. Thereafter, the union leaders started “instigating” the workers to become undisciplined and would stop production for very “flimsy” reasons, the statement by the company alleged. When the management did not confirm the five trainees for permanent employment in May this year, the union leaders “stopped all employees from doing set-up on the machines”, it charged. The Labor Enforcement Officer and the Additional Labor Commissioner told the union leaders that the decision of confirmation of trainees is at the discretion of the management. However, the union leaders refused to listen to reason and continued the strike, the company said adding “under these circumstances, the management had no option but to suspend 27 persons on May 19. In June, the workers jumped over the boundary walls and ransacked the company property and injured some of the persons working on the machines, the company alleged. The management accused the workers not only of slowing down production from June 2 but also threatening the temporary operators who were working on the machines. Marcello Lamberto, CEO of Oerlikon Drive Systems & Puglisi, the Production Director, had several rounds of negotiations with union leaders along with Labor Department representatives, distinct administration and police. However no conclusion could be reached, the company said. There had been numerous rounds of discussions and negotiations after which the company decided to lift the “lock-out” on those employees who did not report for duty, it added. Terming the incident as unfortunate, Chief Minister Mayawati said his government was fully committed to ensure security of industrial units and entrepreneurs. Nobody would be allowed to take law into their hands, she

said. On a directive of the Chief Minister, the SHO of Bisrakh Police Station had been suspended and junior police officials shifted, the officials said. Mayawati said stern action would be taken against those found guilty. She expressed her heartfelt condolences to members of the bereaved family. Italy shocked at Graziano CEO’s death. Expressing shock over lynching of the CEO of an Italian company in Noida, Italy today said it had repeatedly appraised both central and UP government officials about violent protests there and hoped such incidents will not recur. “The situation had been repeatedly brought to the attention of the competent Indian authorities, both at central and local level,” the Italian Embassy said in a statement here. “The incident is all the more worrying as the Italian company Graziano Transmissioni, after many successful years, had been facing several months of violent forms of protests by self-proclaimed workers representatives”, it said. The Embassy expressed the confidence that the Indian judicial authorities will prosecute and punish the perpetrators of such crimes and ensure that such tragic events will not be repeated and industrial disputes will be resolved without violence.