A Belaboured Class

- Dasu Krishnamoorty

The proceedings of the 37th session of the Indian Labour Conference yield ominous implications for the working class and the general public. First, the working class can no more trust the government to play the mediator in disputes with the employer. The tripartite mechanism has been jettisoned despite government protestations to the contrary and in the emerging bilateral relationship, the government has allied itself with the employer. If the trade union movement has failed to see what was coming for almost a decade it has to blame none but itself. A whole decade of economic reform was an exercise in the state disavowing its pledges to the electorate and genuflecting before the agents of globalisation and privatisation. The conference was convened to discuss Government's plans to amend labour laws, a move which will surely bring disaster to the doors of 85% of the country's organised workforce. Listening to Prime Minister Vajpayee addressing the conference, one wondered if it was Rahul Bajaj who was doing the playback for him.

The second implication for the public is the acceleration in the pace of economic reform, a euphemism for withdrawal of the state from the social sector. It appears that the state is in a hurry to privatise itself. Even as the trade union leaders came to the conference to discuss impending changes in labour legislation and to adjust to the new working environment that is emerging as a result of globalisation, the government reiterated its decision to amend the Industrial Disputes Act and the Contract Labour Act. Under the ID Act, it is mandatory for the employer of more than 100 workers to seek the permission of the government for closure. The amendment will raise this floor level to 1,000. This means an employer does not need government green signal to lay off if his workforce is less than 1,000. It is estimated that nearly 85% of the country's workforce in the organised sector are in establishments employing less than 1,000 persons.

It may be remembered that in 1984, this figure was brought down to 100 from the earlier 300. If this amendment is carried out, 85% of the workforce in the organised sector will be at the mercy of the employer. However, if there is such a layoff, the worker will be offered what is called a separation package. The worker will get an amount equivalent to 45 days of wages for every year of service instead of the previous 15 days. The workers fear that this will only encourage the employer to wrench free from the obligation to offer voluntary retirement scheme with better benefits. If the amendment is passed, it is not necessary that the employer should have tenable reasons to lay off workers.

The second law facing an amendment is the Contract Labour Act to enable employers to outsource or contract out manufacturing operations both in core and non-core sectors. Finance Minister Yeshwant Sinha said "It is proposed to bring in an amendment to facilitate outsourcing of activities without any restrictions and offer contract appointments. It will not differentiate between core and non-core activities, and provide protection to labour engaged in out-sourced activities in terms of their health, safety, welfare and social security. There is no doubt that the removal of restrictions on outsourcing will lead to a lowering of workers' protection levels. According to W. R. Varadarajan of the Centre for Indian Trade Unions, the end result of the reforms in contract law will be a recourse to perennial contractorisation of jobs. Another TU expert says it will lead to high-wage islands and increasing marginalisation of trade unions.

The hide and seek game by the government relating to the two proposed amendments reveals the not-so-human face of the administration. Government spokespersons first assured TU leaders that the amendment will come before Parliament only after the National Labour Commission submits its report probably by the year-end and after consultations with the trade unions and employers' organisations. The government, however, lost no time in contradicting this impression. The Prime Minister's Office categorically denied that the Prime Minister had ever given such assurance to workers' leaders.

From the days of mixed economy, successive governments have succumbed to pressures from the empolyers' organisations to tinker with labour laws. The first was the Industrial Relations Bill of 1978 which was allowed by the government to lapse following severe labour unrest. In 1988, the government introduced the Trade Union and Industrial Disputes (Amendment) Bill in the Rajya Sabha but public opinion forced its withdrawal. The aim of these bills was to limit regulate the formation or registration of trade unions and bar trade union leaders from holding office in registered trade unions. The bills also contained provisions lifting restrictions on closure, lay-off and retrenchment. Also, strike decisions were to be backed by a two-thirds majority.

The nineties saw the unleashing of the new economic policy by the Narasimha Rao government encouraging the captains of the industry to press for a restructuring of 'rigid' labour laws. The government caved in by introducing the Trade Unions (Amendment) Bill prescribing a minimum membership strength of 10% of the workers employed for the registration of a trade union. The bill had to be withdrawn following severe opposition from the workers. The anti-worker perceptions of the government were evident from a paper the Chief Labour Commissioner submitted at a seminar in June 1996. He told the seminar that there was no need to sacrifice business interests to protect organised labour. He was pained that in matters relating to adjustments, i.e., lay-offs, retrenchment, and closure, the state was directly consulting the workers before any change was made.

This was a signal that tripartism had outlived its usefulness. There are 36 statutory/advisory tripartite committees including the Indian Labour Conference and the Standing Labour Committee under the Ministry of Labour. These committees are hardly meeting, holding up many important labour-related issues unresolved. The government seems to have given up its regulatory role. The employers are demanding the system of shop-floor consultation to replace tripartite dialogue. To quote from the 1996 seminar paper: "More and more countries are now appreciating the advantage of individual employers negotiating with their workers on the basis of self-interest and mutual advantage." The target clearly is trade unionism. Vajpayee, however, told the 37th Labour Conference that the government would secure the future of the workers and for the purpose the process of consultation through tripartite and other mechanisms would continue to be used more effectively.

Somehow, what the Prime Minister says on tripartism does not agree with the rest of his speech. He flayed the trade unions and other critics of his government's economic policies by unequivocally asserting that there was no question of going back on economic reforms. Just a week before the conference, Union Labour Minister Satyanarayan Jatiya told newspersons that the Prime Minister had admitted that most of the problems facing the working class were a fallout of economic liberalisation. However, at the conference, the Prime Minster told the participants that reforms had not resulted in unemployment and ultimately they would help create employment and lead to growth. Is that jobless growth?

According to the Hindu (editorial, March 7, 2001) "The reforms decade of the 1990s saw a sharp rise in the number of registrations in employment exchanges, especially since 1995, and these must not be ignored in the efforts to continue with economic reforms. With 413 lakh job-seekers on the live registers of the nation's employment exchanges, it is imperative that the government initiates reforms that generate employment." As late as in 1994, employment in the organised sector covered only 274 lakh workers out of a total working population of 34.5 crores. But there is a direct link between the surge in unemployment and the failure of the government in 'enforcing' family planning norms. While the ability and also readiness of the industry to absorb job-seekers is shrinking by the day, there is a daily accretion to the size of the country's unemployed population.

The so-called paternalism of the state has failed to do justice to workers, though it must be admitted that there is a vast section of the labour force in the state sector which is pampered and which needs to be disciplined to make it more productive and accountable. It is in this area that downsizing becomes relevant. Every new technological advance brings in its wake huge lay-offs, adding to the displacements caused by mega mergers, which are symbolic of globalisation. The Times of India (editorial, May 5, 2001) says that "Even India's half-hearted embrace of globalisation has seen salaries and consumer choice rise to levels that were unimaginable during our socialist heyday." Who are they whose salaries have gone up? IT sector? What is the percentage of persons employed in the IT sector compared to the size of the job-seeking community?

Almost all major trade union organisations in the country have decided to launch a general strike. To prevent such an eventuality, the best course for the government is to call for fresh consultations with the representatives of employers and workers and identify a middle ground acceptable to all concerned and dispel the belief that the proposed labour law reform is at the behest of the industry, inevitable to smoothen the path and pace of globalisation. The reforms have slim chances of success unless the interests of the country's large workforce figure in any attempt to tamper with labour laws. Again, it is the government's responsibility to disprove that the changes in labour legislation are a response to pressures from globalisers to treat labour as a commodity and bring it under the purview of the World Trade Organisation.

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