“They were brainwashed into thinking that way”“There were external forces behind the whole agitation”“We still need to find out the real reason. The truth will come out sometime”Thus reads the post-mortem report by the management of Kanan Devan Hills Plantation (KDHP) Company, South India’s largest producer and exporter of tea , of the strikes in September and October that had crippled its operations and brought life in idyllic Munnar , where the company is headquartered, to an unexpected halt.

Among the locals in the town in Idukki district in Kerala, there are more rumours swirling about amidst the mist that suddenly envelops the acres of verdant tea gardens: that the political parties of Tamil Nadu, which Munnar borders, were involved as part of a grander conspiracy to take over the border town; and that a shadowy Tamil activist named Anwar Balasingam had been active among the tea workers for years, culminating in the strike.

These views are not entirely surprising. The strike in September was without precedent in the annals of Kerala’s plantation sector. Keeping trade unions and politicians at bay, some 5,000 women employees struck work under the banner of “Pembilai Orumai” (women’s unity, in Tamil) demanding that their recently-announced bonus be increased from 10% to 20%. The company gave in after nine days. This was followed by another two weeks of strike, this time called by trade unions across plantations in the state, for an increase in wages.The management’s tone of disbelief could also stem from the fact that ten years ago, KDHP Company had made history of a different kind when the Tatas sold the majority of the stake in the firm to its employees, 98% of whom are shareholders in the company.But it was the bulk of that same workforce that decided to take to the streets of the little hill town, first for a bonus and later for a 100% raise in daily wages from Rs 232 to Rs 500, causing an estimated revenue loss of `28 crore and casting doubts on how empowering the business model has been for the lowest rungs in the company.For Mathew Abraham, it has been a trial by fire. Barely had the 48-year-old taken over the reins of the company as its managing director in August than it was plunged headlong into its biggest crisis.At KDHP House, the century-old graceful pale yellow building in the heart of Munnar that houses the company’s main office, Abraham says it was also the biggest crisis he had to face since he started working with the Tatas in 1991. But he, too, firmly believes there were external elements that engineered the entire agitation.“The 19 people arrested for trying to assault my head of industrial relations and I when the agitation began were all found to be outsiders,” says the genial Abraham, who adds that no property had been damaged, apart from one incident of stone-throwing at a factory. John Pereira, who heads purchase and logistics, points out that when all the other plantation workers in Kerala had struck work for 18 days in 2012, Kanan Devan workers had joined in only for a day, as a token.Pereira is of the view that the strike itself was a fallout of the company’s participatory management system that was supposed to empower employees. “Earlier, the workers were people with little education who were very shy. But now they have become more confident about voicing their concerns,” he says.The participatory management system Pereira is referring to, which has been a case study in business schools and lauded universally, came into effect when KDHP was formed on April 1, 2005. The Tatas had been running the company since 1983, when they took over from its Scottish joint venture partner, James Finlay group.But Tata Tea decided to exit plantation operations in 2004 after consecutive years of losses and concentrate on the branded tea business instead, through Tata Global Beverages (Tata Tea was renamed Tata Global Beverages in July 2010).

That’s when TV Alexander, a general manager who later went on to head KDHP till he died in 2012 of a heart attack, proposed the audacious plan of employees buying the majority stake in the company and becoming owners.



With outright sale of the land and a cooperative model ruled out, the House of Tatas agreed and pared their stake to 19%. Employees had to buy a minimum of 300 shares at a face value of Rs 10 and they cumulatively held close to 70%.

“I was absolutely sceptical when the plan was announced,” says Jeevan Raj, manager at one of the seven Kanan Devan estates. But such was the confidence Alexander inspired that Raj closed his provident fund and gratuity and used that money to buy 60,000 shares in their brand new company.“It’s the best investment I made. For the company, protecting the environment and the workers’ interests came first, and business after that,” says Raj, a graduate of the High Range School in Munnar, funded by Tata Global Beverages, and a third-generation Tata employee.Like Raj, many at KDHP, from the tea pickers to the top management, have Tata in their blood or have been with the company for decades. The current managing director, Abraham, is also a third-generation Tata employee. As another executive jokes, you are only taken seriously if you have been with the company for at least 20 years — anyone else is a Johnny-comelately. Understandably, loyalty runs deep.Shibu Mathew, a factory officer who joined Tata Tea in 1989 and is currently one of the two employee representatives on the board, bought 5,000 shares when ownership was transferred. “We were confident of achieving results.We felt a sense of ownership in the company and could maximise our performance,” says Mathew, who also credits the success to the late Alexander. Indeed, conversations about the company are incomplete without the mention of Alexander, recalled as a dynamic personality who turned it around with aplomb.In 2004, the last year the Tatas were a majority stakeholder, the company suffered a loss of Rs 8 crore. But from its inception, the new KDHP has been profitable, even turning a record profit of Rs 40.8 crore in 2009-10, helped by a surge in tea prices. Employee productivity has jumped from 20 kg per person to 47 kg, aided by increasing mechanisation. And the share price has risen seven-fold, according to the company.A range of initiatives put in place by Alexander helped deliver these near-miraculous results. The workforce was right-sized, with over 3,000 workers opting for voluntary retirement. The field and factory management were separated and 24 tea estates combined into seven to improve efficiencies. Abraham also credits the incentives the company pays for picking tea over and above what the law mandates and the sense of ownership among workers for factors that have helped the company get back into the black at a time when tea plantations in other parts of the country were bleeding. In addition, Kanan Devan began exporting its tea and cultivating green tea, besides launching its own brand of tea under the label “Ripple”.

Today, the company is the largest producer-exporter of tea in south India and the largest producer of green tea in the country. It is also entering the floral extraction business. With the state government recently allowing plantation companies to use 5% of land for other activities, tourism, too, is on the radar.



“Six lakh tourists visited Munnar last year and the sector is growing at 15% yearon-year,” says Abraham. The company had been using 21 of its planters’ bungalows for tourism but had to cease operations following a case filed by the local authorities over the use of land. The verdict is expected next month.

Two years ago, Tata Global Beverages increased its stake in Kanan Devan to 28% and the latter is now an associate company of Tata Global. A spokesperson said Tata Global had bought the shares of former Kanan Devan employees at their request, when they ceased to be in the company’s employment. “TGB bought those shares as a measure to help these shareholders in situations when they needed money. There are no strategic plans to increase stake in the plantations business,” the Tata Global spokesperson said.While the Tatas ceded controlling stake in Kanan Devan to the employees, Tata Global Beverages continues to support the welfare activities for workers it had begun in the region. This includes Rs 12 crore a year for a 150-bed secondary care general hospital where workers and immediate family can avail of free treatment, Rs 3.2 crore for the High Range School where half of the seats are reserved for labourers’ children who are exempt from paying fees and Rs 2 crore for the Srishti Trust, which runs a school and four vocational institutes for workers’ children with disabilities.On its part, apart from the welfare measures mandated by the Plantations Labour Act, 1951 such as providing housing for all workers, healthcare facilities and crèches for young children of labourers, Kanan Devan says it provides hot tea to its workers and 75 kg of rice at cost price every three months. Both, say Abraham, were suggestions put forward by employees during meetings of the division advisory committees, each of which has four workers as members and forms the basis of the participatory management system. “In contrast to the top-down approach to management in plantations, we have a bottom-up approach,” he says.There are employees like G Kanakamma, a factory supervisor and third-generation plantation employee, who agree with Abraham and view the company as a benevolent benefactor. “The company is like a temple for me,” says the 42-year-old, who stayed away from both the Pembilai Orumai strike and the one called by trade unions.And then there are others like Lissy Sunny, one of the leaders of the Pembilai Orumai, who rubbish the company’s claims that workers are now empowered and say their life is one hard struggle inadequately compensated for. “When the crop is good, we have to leave at 6 am in the biting cold to pick the leaves and get back only by 6 pm. We are given targets of how many kilos to pick,” says Sunny, in between preparing dinner after a long day’s work.Good workers, during season, pick up to 200 kg of tea leaves a day. “At times, we have to walk three kilometres carrying 80 kg of tea leaves.” As a result, she says, workers have to battle multiple medical problems, including hysterectomies.One of the gynaecologists at the general hospital denies that the number of hysterectomies in the area is disproportionately high but says an astounding number of women do report vaginal infections, possibly due to poor hygiene. Inadequate time to change sanitary napkins during work could be one trigger, she added.The women came out in large numbers to protest for a higher bonus because they felt hurt and betrayed by the company’s decision to reduce it to 10% this year, says Sunny. The argument that tea prices have fallen and the company’s profits shrunk by almost 70% does not cut any ice with Sunny, who has been working at Kanan Devan for 26 years. “Why is it that tea prices fall only when it is time to pay us the bonus or raise our salaries” she counters.The plantation labour committee, which decides wage hikes every three years, finally agreed to revise daily minimum wages to Rs 301 a day on Monday. In case the hike is not implemented with retrospective effect, Pembilai Orumai, which won three seats in the recent local body polls, would again take to the streets, she warns.But though the women presented a united front during the strike and during the polls, rifts have already appeared. Another leader, Gomathy Augustine, who successfully contested the local elections, was accused of being in talks with Tamil Nadu’s AIADMK, a charge she vehemently denied. In a dramatic turn of events on Friday, her husband told the police she had attempted to commit suicide because of the allegations though Augustine later told the media she had “accidentally” overdosed. Other women, too, expressed disenchantment with what had been hailed as a revolutionary struggle.Lakshmi R (name changed on request), who had been part of the Pembilai Orumai strike, says she has now returned to the fold of INTUC because the management did not recognise the women’s group and would therefore not negotiate with it. Lakshmi, who has been a labourer at Kanan Devan for 19 years, says not much has changed with the employees buying shares in the company. “I had to work here because I’m not educated, I didn’t have a choice. But I don’t want my children to do this,” she says firmly.Kanan Devan recognises that labour will become a bigger challenge in the years to come and the company is aggressively investing in motorised harvesters and replanting with highyielding clones. Up to 6% of the harvesting is now motorised, which will increase. The strikes, Abraham believes, were an aberration. “What has happened has happened. There will be no victimisation,” he says. But the agitations have shown that even a plantation company where workers are stakeholders and which is considered a better employer than its competitors has to contend with the rising aspirations of its workforce.