Interview with R.V. Kanoria, president of FICCI.
Subsequent to the violence in the Maruti Suzuki plant in Manesar, in which a senior manager lost his life, industry representatives have had confabulations on how to deal with labour. There is renewed talk of harmonisation of labour laws, a euphemism for the simplification of labour laws, which trade unions have resisted. R.V. Kanoria, president, Federation of Indian Chambers of Commerce and Industry (FICCI), spoke to Frontline on this and on other issues. Excerpts:
Have the contradictions between labour and capital deepened over the past few years?
I would say they have not changed for many years. We have thought about bringing about labour reforms in policy but not much has happened. Industry wants to hire; however, it seems that employment has not been incentivised enough. The biggest issue is of flexibility. The current laws are such that they protect employment. These are not flexible enough for industry and management to exercise their right to get work done properly.
There are apparently 44 laws that govern employment, with different States having different criteria. There is a need for harmonisation and for reducing the number of statutes. Some of these Acts have been diluted over the years. For instance, the Payment of Bonus Act has been diluted where the concept of minimum bonus has been introduced. When we speak of a gap between capital and employment, at the moment industry would rather take the help of technology as automation helps in productivity and quality. The existing laws do not facilitate bipartite understanding between management and workers. The prime concern of industry is to exercise our right to get good work out of people, and flexibility does not mean hire and fire.
Of late, industry has emphasised the importance of the dialogue process. Is it out of the compulsion of the present circumstances or is it a genuinely felt need?
The dialogue process is a genuinely felt need and it should be encouraged. It should not be influenced from outside. The political agenda has to be segregated from workers and managements agendas. Dispute settlement should be first attempted through a bipartite arrangement. The agenda of some union or political party is beyond that of the company. Unions should realise that India is no longer a demand-driven economy. The issue of capacity to pay by industry is critical. All that I am saying is that everyonetrade unions, the state and industry should not create expectations they cannot meet. A senior trade union leader made a very interesting point with regard to the need for industry to share information about turnover, profit, production, borrowing and so on with employees so that they feel that they are part of the company. For industry, our concern is the need to improve labour productivity and consequently create more opportunities for employment. Labour laws have to address not merely protection of labour but also the issue of efficiency, growth, standard of living of workers, etc. Our laws currently [lay] stress on employment protection and not on efficiency and growth. Our recent meetings, including the one on September 11, were to put these issues on the table.
Of late, there has been a larger unity of purpose among trade unions in terms of critiquing policies and raising the issue of a national minimum wage both with the government and with industry.
It is quite justified to raise these issues as the cost of living and inflation are matters of concern. There is no doubt that we have to ensure better livelihoods. Under the regime of the present labour laws framework, industry is shying away from employment because of the lack of flexibility and because of overprotection. It has to be realised that industry too has to make reasonable returns. There has to be a change of mindset to encourage skill development through vocational education.
Is the trend of contract labour likely to continue in the next decade or so?
We have to mainstream organised contract labour but we cannot do this without addressing the permanent workforce. The root cause of the problem doesnt lie in less payment to contract workers but overpayment to permanent workers. If there is a certain amount of flexibility, there will be greater convergence. There has to be some mechanism that will allow harmonisation of labour laws. There is the need for a better understanding of the psychology between the management and workers, and the need to be able to facilitate the same through a judicious legal system.
It is being said that the state has willy-nilly acted as an agent of capital in all instances of industrial unrest.
The role of the government is to create an enabling environment. We do not want the government to directly interfere between the management and the workers. A legal platform has to be created through progressive and pragmatic changes to foster good industrial relations and employment generation.
T.K. Rajalakshmi
