Labour

Lip service on labour

Print edition : June 24, 2016

ON May 24, the Union Ministry for Labour and Employment held a press briefing on its achievements in the past two years. Conspicuous by its absence in the list of achievements was the “employment” component.

One of the things the government has proclaimed assiduously is skill development, ostensibly with a view to generating employment. Interestingly, the publicity jingles veering around the slogan of “ Mera desh badh raha hai” (my country is surging ahead) omitted mentioning the number of jobs created in the past two years.

The Ministry also omitted to mention the strong reactions from trade unions to controversial changes in the labour laws. For instance, several States have amended the Contract Labour (Regulation and Abolition) Act, which exempts contractors deploying 50 workers from the legal obligations of paying minimum wages and providing social security. Similarly, the Factories Amendment Bill tabled in Parliament, which enhances the threshold limit of employment for coverage (under the Act) from 10 to 20 for factories using power and from 20 to 40 for factories not using power, has had the effect of exempting most of the industrial units from the protective provisions of the Act.

The list of achievements included the raising of the eligibility limit on bonus to Rs.21,000 from Rs.10,000 and of the benefit ceiling to Rs.7,000 from Rs.3,500; a minimum pension of Rs.1,000 in perpetuity; an 8.8 per cent rate of interest on provident fund; a “new and pragmatic scheme” for the elimination of bonded labour; the amalgamation of 43 labour laws into four labour codes through tripartite consultations, where two of the codes had been finalised and approvals were being sought; the creation of the Shram Suvidha web portal to ensure “transparency and accountability in enforcement of labour laws and ease complexity of compliance”; the amendment of the Child Labour (Prohibition and Regulation) Act, 1986, with the objective of complete prohibition on employment of children below 14 years of age and making the punishment more stringent and the offence cognisable; and social security schemes under the Employees’ State Insurance (ESI) Corporation and the Employees’ Provident Fund Organisation (EPFO).

Notwithstanding these claims, what remained unsaid was the significant disaffection among the central trade unions barring, perhaps, the Bhartiya Mazdoor Sangh (BMS). The BMS was unhappy with the government for actively supporting changes in labour laws in several BJP-ruled States, but it refrained from openly sounding the bugle of protest. The Centre of Indian Trade Unions (CITU), the All India Trade Union Congress (AITUC), the Indian National Trade Union Congress (INTUC), the Hind Mazdoor Sabha (HMS) and seven other unions have been vocal in their criticism of the government and the Ministry and have given a call for an all-India protest on September 2. Interestingly, the BMS stood in defence of the government on the first anniversary of the NDA regime but refrained from any celebration this time.

EPF interest rate fiasco

There has been little to celebrate on the labour front despite the disproportionate attention it received from the government. The 8.8 per cent rate of interest on the EPF was “restored” after the Finance Ministry slashed it. The Central Board of Trustees (CBT), a tripartite body chaired by the Labour Minister, stepped in to restore order following protests from all the central unions, including the BMS. There were two other “rollbacks” on proposals on the EPF, which included a tax on withdrawals and a condition that prevented employees from withdrawing their entire PF before the age of 58. This time, industrial workers were joined by the middle class too in opposing the tax on the EPF. The Ministry’s roll-out of “achievements” were singularly silent on these controversial proposals.

The ceiling on eligibility for bonus and the benefit ceiling have been a bone of contention, with the unions arguing that “if there is no ceiling on profit, then why on bonus”. Besides, the “ceilings” were out of sync with the reality as even an unskilled worker in the organised sector drew a salary of more than Rs.21,000. Tapan Sen, Rajya Sabha member of the Communist Party of India (Marxist), told Frontline that bonus was calculated on the basis of a notional wage and not on actual wages. “So even if one is drawing a salary of Rs.20,000, the bonus will still be calculated at Rs.7,000,” he said. He added that the claims of social security under the EPFO were hollow because the government, despite repeated urging by trade unions, had failed to get more employees under the PF umbrella. “If there are 3.9 crore live subscribers, there is an equal number out there who are entitled but not covered,” he said. As for the ESI, the coverage was equally poor if not worse. Tapan Sen said that even in highly industrialised Gujarat there were only 11 lakh ESI subscribers, which meant that nearly 80 per cent of those employees were outside the ambit of any health insurance.

Neglected scheme-based workers

One highly neglected segment of workers that trade unions have been focussing on is the “scheme based” workers, including those in the Integrated Child Development Services (ICDS) scheme, the accredited social health activists for rural and urban India, and the midday meal scheme. Successive governments have not acted on the proposal made at successive Indian labour conferences (ILCs) to give them the status of workers and grant them a minimum wage.

TheLabour Ministry proposed to bring them under the ESI scheme but not before suggesting that they should contribute Rs.150 towards it. The unions protested against this as it amounted to anywhere between 5 and 7 per cent of their honoraria, whereas under the ESI employees were supposed to contribute only 1.75 per cent of their wages. The Parliamentary Standing Committee on Labour rejected the proposal.

The Rs.1,000 as pension, which the government claims as an achievement, is basically being met out of the EPFO and not as any additional social security benefit provided by the government. This was a decision taken by the CBT during the previous regime and sent to the Cabinet, but the then Finance Minister, it is said, did not give the go ahead.

“The NDA revived it but said it would be given only for one year. After protests, it was restored to what they now claim as pension for ‘perpetuity’,” said Tapan Sen. The Shram Suvidha portal was a “satanic scam” he said, as initially it did not capture even 10 per cent of the entire industrial workforce, and the system of inspection was based on randomised selection.

Tripartite consultations were one of the worst casualties in the last two years. Recommendations and decisions taken at tripartite bodies such as the ILCs and the CBT were repeatedly disregarded. In a sense, it has been deja vu for trade unions as the experience has not been very different from that under the UPA regime except that the latter did not make any grandiose claims of adhering to the spirit of tripartiteism.

Labour code opposed

The amalgamation of labour laws in codes has been opposed by all trade unions. “It is a farce. Even those who see some ‘positive’ outcome of this government say that tripartite dialogue has been a sham. All the suggestions of trade unions have been rejected time and again. In fact, the Centre has given the go ahead to States, just like the Land Acquisition Act, to amend labour laws as they deem fit,” said A.K. Padmanabhan, CITU president. He said that in some States, governments were intervening to take back benefits that managements had agreed to after sustained worker protests.

By allowing the employment of children under 14 in domestic enterprises and the entertainment industry “keeping in mind the country’s social fabric and socio-economic environment”, the government in effect diluted the legislation concerned. It is no surprise that India now tops the list in a study mapping global slavery. The government, of course, rubbished the report.

T.K. Rajalakshmi

A letter from the Editor


Dear reader,

The COVID-19-induced lockdown and the absolute necessity for human beings to maintain a physical distance from one another in order to contain the pandemic has changed our lives in unimaginable ways. The print medium all over the world is no exception.

As the distribution of printed copies is unlikely to resume any time soon, Frontline will come to you only through the digital platform until the return of normality. The resources needed to keep up the good work that Frontline has been doing for the past 35 years and more are immense. It is a long journey indeed. Readers who have been part of this journey are our source of strength.

Subscribing to the online edition, I am confident, will make it mutually beneficial.

Sincerely,

R. Vijaya Sankar

Editor, Frontline

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
×