Why are workers at 12 govt-run major ports planning indefinite strike from tomorrow? Mc Explains

So far, the negotiations have failed to break the impasse.

The MoPSW recognises five federations, including the All India Port and Dock Workers’ Federation; All India Port and Dock Workers’ Federation (workers); Water Transport Workers’ Federation of India; Indian National Port and Dock Workers’ Federation; and Port, Dock and Waterfront Workers’ Federation of India. The current wage structure of 23,193 Grade-III and IV workers at major ports had expired at the end of December 2021.

What are the reasons behind the indefinite strike call?

On the face of it, workers across ports are protesting because the central government, which operates ports and pays for their salaries, have failed to sign a new five-year wage revision agreement after the old pact expired over two and half years ago.

On August 26, unions representing the port workers of V. O. Chidambaranar Port Authority, said the government usually increased the wages of Grade-III and IV employees once in every five years.

“The new agreement was slated to come into force from January 1, 2022. But the government was in no mood to honour it,” alleged union leaders.

R. Russel of the Centre of Indian Trade Unions (CITU); Suresh of Hind Mazdoor Sabha (HMS); Balakrishnan, a Thoothukudi Port Authority Member; Srinivasan of HMS Workers; Shanmugasundari of Anna Thozhir Sangam and P. Kathirvel of Indian National Trade Union Congress (INTUC) represented the workers.

The decision to strike work was taken indefinitely on August 8 and a notice to that effect was issued four days later.

Earlier, in March 2021, the government had signed a Bipartite Wage Negotiation Committee (BWNC) agreement. The deal was sealed after seven meetings that were held over 31 months. The same panel is slated to meet tomorrow.

Union leaders have criticised the ministry’s “illogical and illegal guidelines” for stalling the negotiations.

However, the ministry has deflected the criticisms by citing the negative impact of the Covid-19 pandemic that led to ongoing failed negotiations over the delayed pay revision.

The IPA cited that seven ports are facing financial challenges, as their debt burden is “exorbitantly high”.

The annual cargo handling capacity of major Indian ports such as Chennai, Kochi, and Mumbai is about 1.62 billion metric tonnes (MTs), according to the official figures.

Data showed that India exported goods worth $437 billion, with imports estimated at $677 billion in the current financial year, 2024-25.

Queries emailed to the MoPSW and  the Ministry of Commerce and Industry on Monday remained unanswered till the time of publishing this article the following day.

The MoPSW had also issued guidelines for the BWNC in 2022, drawing sharp responses from workers’ unions.

“ln case, any or all terms and conditions of the pay revision agreed by majority of Port Authorities and their unionised employees representatives, is not acceptable to a particular Port Authority due to its unsound financial condition, then such port authority management shall be free to exit the negotiation process, at any time during the negotiation process, recording the reason of such exit and then the negotiated terms and conditions shall not be applicable for that specific Port Authority,” the guidelines had stated.

Though some port authorities were allowed to revise the wages of their employees, the MoPSW reneged on its promise and refused  any hike to Grade-III and IV employees.

What are the demands of ports’ workers?

Key issues on the table include the revision of pay scales, fitment benefits, protection of existing benefits, implementation of previous settlements, neutralisation of dearness allowance (DA), and payment of arrears.

Union leaders have also expressed frustration over the non-payment of the Productivity Linked Reward (PLR), which is, usually,  disbursed annually during festival seasons. The delay has been attributed to the ministry’s failure to approve a statutory settlement under the new Major Port Authorities Act, 2021.

Port workers have also said that following the privatisation of berths at most major ports, the government has been reducing the strength of unionised workers by outsourcing workloads.

“The berths in revenue-spinning ports and even the entire seaports were being privatised even as no step had been taken to fill up thousands of vacancies in the Department of Shipping and Ports, destroying the hopes of several lakhs of unemployed youth,” alleged unions representing the port workers of V. O. Chidambaranar Port Authority.

They claimed that the number of Grade-III and IV posts have been drastically reduced from around 3.5 lakh to only 20,000 employees.

“Even the outsourced workers were not getting the salary promised to them. The ‘privatisation fury’ had not spared even the port hospitals across the country,” the union representatives further alleged.

Workers unions have also demanded that the BWNC process be carried out under the purview of  MoPSW's issued guidelines.

“The MoPSW guideline for BWNC is against the principles of bipartite mechanism/negotiations which has to be conducted without any preconditions,” said T. Narendra Rao, General Secretary of the Water Transport Workers’ Federation of India.

“The guidelines are an attempt to divide port workers’ unions and the port management authorities,” he added.

“It is demeaning that the ministry has issued preconditions to the discussions,” Rao said.

The union leader found gaping holes in the ministry’s argument. He cited that the managerial staff continued to get hefty raises, while the poor working class denied their legitimate dues for years.

In practice, the MoPSW wanted to reduce the pay disparity between Grade-I and II (workers) and Grade-III and IV employees (officers) and issued guidelines to that effect two years ago. The ministry had urged the BWNC and ports’ authorities to consider adoption of graded DA neutralisation and/or graded fitment during the wage negotiations.

But such directives had come with a rider: the ports’ management  to ensure that any increase in wages of Grade-III and IV employees did not lead to any increase in the accrued cost in running the facilities.

What’s the likely impact of the strike?

The Hindu Businessline estimated that “every day Rs 125 crore would be lost due to the strike".

Industry stakeholders Moneycontrol spoke with indicated that the indefinite cease work could have major repercussions in the long term.

Traders, freight forwarders and shipping lines said that they would be eagerly monitoring the situation, which threatens to be unprecedented in scale in recent times.

A couple of import-export traders expressed concerns that a nationwide strike could add to the congestion problems at major Asian ports such as Shanghai, Singapore, Ningbo and Chittagong among others amid fears of more shipments out of India getting delayed.

Ongoing capacity concerns have sent ocean spot rates on the India-to-U.S. East Coast route skyrocketing since mid-June. As of August 16, rates for 40-foot containers on that trade lane were $10,000 on average, a 410 per cent bump over just two months prior at June 14, according to S&P Global.

A further rise in rates could mean three per cent of the world’s clothing is hanging in the balance, according to estimates from the World Trade Organisation (WTO), with India exporting $15.4 billion in apparel in 2023. India is the fifth-largest apparel exporter in the world, after China, Bangladesh, Vietnam and Türkiye.

However, shipping lines indicated that the impact of the strike may be limited, as it will be restricted to government-operated ports and terminals.

Director=General (D-G) and Chief Executive Officer (CEO) of the Federation of Indian Export Organisations (FIEO), Ajay Sahai, said that exporters have reached out to the Ministry of Commerce and Industry and are also working towards finding a resolution to avert any disruption in trade.

“The government is constructively engaging with the workers, and there is another meeting on today [Tuesday] to reach a resolution. We have also reached out to the [commerce] ministry. However, the timing of the strike call is extremely unfortunate as there are already shortages of ships and containers, and a disruption at this point could hit the domestic industry as well as international trade,” Sahai said.

Sahai added that a disruption at this point could drive up air freight rates for essential goods and cause disruptions in the domestic industry too. Air freight rates have surged sharply as the Red Sea crisis has pushed demand for air transport.

Similarly, Anil Devli, Chief Executive Officer (CEO), Indian National Shipowners’ Association said that if unionised workers start disrupting operations of private terminals and ports and force the private sector labour to participate, the consequences  could be catastrophic.

Devli said the timing of the strike call is worrying since exporters are gearing up to cater for Christmas orders from Western markets, and a possible disruption could also hurt Indian imports of raw materials and fuel. He stated that a disruption in ports could also raise the risk of the congestion surcharge that container vessels charge.