Why scores of employees of Muthoot Finance in Kerala have risen in protest

'Imagine a company that earns more than Rs 2,000 crore profit, not being able to pay a decent salary to their employee,' said one of the employees.
Why scores of employees of Muthoot Finance in Kerala have risen in protest
Why scores of employees of Muthoot Finance in Kerala have risen in protest
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It’s not the first time that the employees union of the Muthoot Finance Limited in Kerala is going on a strike. Sholitha, a manager of the financial corporation’s Pothencode branch in Thiruvananthapuram recalls that in 2016, just after the union was formed, the employees of the company went on a 17-day strike to protest the management's decision to suspend 50 of its employees as a reaction to the unionisation of the employees. Following the protest, the employees were taken back, although transferred to places outside the state.

Several minor protests later, the employees union of one of the largest gold financing companpies in the country, under the banner of Non-Banking and Private Finance Employees Association (NPFEA) has begun an indefinite protest against the management regarding several issues such as a basic hike in salary, lack of proper allowances, denial of proper bonus among many other issues.

“Imagine a company which is earning more than Rs 2,000 crore profit, not being able to pay a decent salary to their employees,” Sholita says, speaking to TNM from the protest venue at the zonal office of the Muthoot Finance in Kerala’s capital. The indefinite protest which began on August 20 had entered its 14th day on Monday and around 250 employees have been protesting from various branches across the district and more than 650 across the state as per the members of the union.

In the last quarter of 2018-2019, Muthoot Finance Limited had recorded a 11% increase in net profit year-on-year at Rs 1972 crore. The total income grew by 9% to Rs 6881 crore and the gold loan outstanding touched Rs 33585 crore showing a 16% rise, reported ET.

Protest against a poor salary structure, denial of bonus

Gireesh Kumar is among the many protesting employees who have been working in the company for more than two decades. “My salary after working for 22 years is Rs 16,000,” a dejected Gireesh tells TNM. He says that when he joined the company in 1997, there were hardly around 120 branches. “Right now, there are more than 5,000 branches and more than Rs 2,000 crore profit,” he adds.

But even as the company grew, Gireesh says that he feels disheartened that he couldn’t grow along with the company. “Many of us who have been working here for decades have put in our best and worked hard every single day without thinking about the time and money. But the company that grew because of our hard work has forgotten us,” he adds.

Gireesh Kumar

Employees like Gireesh are finding it difficult to run a family and sustain their livelihood with the salaries they are earning. Jidev, another branch manager of the corporation states that the starting salary of a clerk in the organisation is Rs 7,500 and if he works for 10 years his salary will increase to a meagre Rs 10,000.

Adding to the salary woes is the denial of a proper bonus. Sholitha, who has been working at the company for over 13 years says that the corporation finds different ways to deny the provision of the entire bonus amount. “If we are entitled a 20 percent bonus, the company will cite reasons such as previous incentives that were provided during our job and deduct that from the bonus amount,” she adds. 

Muthoot's threat of closure

The formation of unions have from time immemorial been a nightmare for company owners and management. While giving employees the power to question the authority, unionising has in many cases lead to arm twisting by the employees.

Citing poor working conditions and anti employee policies, several employees of the company had formed a union in 2016 known as the Muthoot Finance Employees’ Union (MFEU), much to the displeasure of the management, says Sholitha. The MFEU later became affiliated to the NPFEA, which is backed by the Left leaning CITU (Centre of Indian Trade Unions).

According to Gireesh, the company had a policy of providing the employees with a share of the company’s stocks after they have worked for a particular number of years. This plan is known as the Employees Stock Ownership Plan or ESOP. “This was not given to the members of the union despite being eligible according to the criteria of the company,” added Gireesh.

“Unionising is a political right of an employee according to the Indian law and for doing so, several of our union members have been targeted and denied their rights by the management,” claims an employee, who did not wish to be named.

There was a lot of discussion in the media and among the management that the protest is politically motivated due to the participation of CITU, the trade union affiliated to the CPI(M). However, the employees denied the allegation stating that the protest is not organised by CITU. “The protest is organised entirely by the employees of the company, who have affiliations with various political parties. It is just that we found support from the CITU,” says Sholitha.

According to media reports on August 29, a top official of the finance corporation warned the protesting employees that they would be forced to shut the non operating branches if the protest continues. This had sent a fear among the employees who were not part of the protest, that they would lose their jobs. “Such threats are issued as a trick to force the non protesting employees to come to work and hence ruin the protest and cause a rift among employees,” said a member of the union.

Muthoot in a statement three days ago said that a 'small minority of protesters' had forced at least 50 branches to close. The company said, "The company has taken a decision that branches which are not being able to be opened because of the physical obstruction by CITU workers will be closed. All employees of the branch will be retrenched after meeting all statutory compliance required in this regard."

Muthoot added that of its total business spread across the globe, only 4.57% was concentrated in Kerala.

"In spite of the low business volume, the company has shown keenness to continue its business in Kerala as it is our home state. But if the threatening and forceful closure of our branches by the CITU workers is continued and branch remain closed due to no fault of ours, we will have no other option but to close down those branches which remain closed due to this forceful closure and retrench the employees of those branches," it said. 

The CITU's role

Amidst the protest and the lock down of Muthoot Finance branches across the state, a visual alleged to be from a branch in Kottayam started doing the rounds on social media where members allegedly belonging to the CITU can be seen threatening the employees who had come for work.

In the video, a woman can be seen trying to break the lock of a shutter when a few CITU members stop her and rudely ask her to leave. “We have been waiting here from 5:30 in the morning. Will not allow anyone to enter the office,” the man can be heard saying. Later when the woman tries to push the man aside and opens the lock, he shouts back at her saying that he will attack her as well as her family members.

When asked about the incident, union members at Thiruvananthapuram did not deny it. However, they insisted that the protest was by employees and not CITU. "We do not want to hurt our fellow colleagues. We are protesting so that these non protesting employees also get better salaries. But many of them in our union are threatened by the management who said that if the strike continues, then they will shut down Muthoot finance which has scared a lot of employees who are coming to office despite the strike.”

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