Reforms and labour

Labour on hit list for three decades

Print edition : September 24, 2021

At a protest by Maruti Suzuki workers outside the company’s Manesar plant near New Delhi, on October 14, 2011. Photo: AFP

For three decades, successive governments have implemented various measures that undermine workers’ rights in the name of improving ease of doing business. The labour codes of the Modi government are the latest in the series.

On June 30, President Ram Nath Kovind promulgated the Essential Defence Services Ordinance, 2021, which empowers the Central government to prohibit strikes in essential defence services. The ordinance also provides for disciplinary action, including dismissal of employees participating in strikes or instigating “illegal strikes”. It confers powers on any police officer to arrest without a warrant anyone suspected to have committed any offence under the legislation. Naturally, unions were up in arms against the ordinance.

The ordinance was but part of a series of attacks on employee and worker rights, a regular feature in the last seven years. The repression of workers began long ago, but never has it been as severe as under the National Democratic Alliance (NDA) governments under Prime Minister Narendra Modi. Under the ordinance, the definition of “strike” goes beyond what is stated in the Industrial Disputes Act and the newly drafted Industrial Relations Code. Under the Industrial Relations Code, a strike means the cessation of work by a body of persons employed in any industry, acting in combination, or a concerted refusal, or a refusal under a common understanding of persons who have been employed including casual leave on a given day by 50 per cent or more workers employed in an industry.

As per the promulgated ordinance, a strike includes “refusal to work overtime” or any other conduct likely to result in cessation, disruption or retardation of essential defence services. Therefore, a “strike” under the new definition encompasses even non-strike actions such as expressing protest or dissent against decisions of the management.

The ordinance empowers the government to issue orders prohibiting a strike in the interests of the sovereignty and integrity of India, security of any State, public order, public interest, decency or even morality. This goes beyond the scope of the law, including the Trade Union Act of 1926.

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A person who commences a strike deemed illegal under the ordinance or someone who takes part in the strike would be liable for imprisonment of up to one year or a fine of Rs.10,000 or both. An instigator or an inciter could be punished with imprisonment up to two years or a a fine of up to Rs.15,000 or both.

The Centre of Indian Trade Unions (CITU) pointed out that nowhere was it defined who would declare the strike as illegal and that there were no provisions in the ordinance either for defending the accused or holding a dialogue with unions.

Reforms’ impact on labour

One of the less-discussed aspects in the 30-year experience with economic reforms deals with their impact on labour and labour reforms. In fact, labour law reforms and ease of doing business were among the pet themes of every government ever since the reform process was kickstarted in 1991. The tenor and mood was one in support of across-the-board deregulation and doing away with “inspector raj”. The common refrain was that rigid labour laws had prevented industry from realising its true potential. Labour laws that made firing, retrenchment and closures difficult were on the hit list. Trade union activity was an eyesore and, therefore, it was imperative that workers be discouraged from joining unions.

Permanent employment was seen as counterproductive to workers’ productivity and establishments increasingly began moving towards short-term employment contracts even in permanent forms of work (despite Supreme Court judgments) and outsourcing of work, including in government.

The concept of the “principal employer” began diminishing, as did the concept of employer liability. This was the period during which the public sector and any enterprise run by the government was constantly run down in the name of competition and free market. The popular belief was that if the worker was kept insecure, it would increase competition and worker efficiency. It was another matter that it did not work.

Industrial unrest

In 2005, the nation woke up to disturbing images of Haryana police lathicharging Hero Honda workers in Gurgaon. It was not the only one of its kind in the industrial belt of Haryana and was symbolic of what was happening elsewhere as well. One of the prime reasons for the Gurgaon agitation was that the workers had demanded their own union. There were several such instances of industrial action on similar grounds in automobile and auto parts manufacturing units all over the country, but much of it went unreported.

Agitations became the new norm and workers began holding managements responsible for reneging on wage agreements. State governments watched quietly and instead stepped up security in industrial areas, making it practically impossible to hold gate meetings. The message was clear: industrial unrest would not be tolerated. It became near impossible to form unions and labour inspections made a mockery of norms. The percentage of permanent workers began declining sharply, with employers preferring to hire workers through contractors.

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Satbir Singh, vice-president of the Haryana unit of CITU, , told Frontline that the situation was different in the 1980s and 1990s, adding that things changed for the worse after 2014. He recalled that in 2005, there was a Congress-led coalition government at the Centre, which made a difference regarding the outcome of the Hero Honda workers’ agitation. There was a huge uproar in Parliament over the police crackdown and the issue gained national and international notoriety. This forced the then Chief Minister of Haryana to meet the workers and their representatives. The union was restored and the workers were reinstated.

Contractualisation had already taken root even before the 1990s, but the ratio of permanent and contract workers was usually 60:40. Satbir Singh said: “Today, the norm is that only 30 per cent in establishments are regular employees and the bulk of the rest of the workers, 70 per cent and in some cases 80 per cent, are on contract. Similar trends can be observed in the vendor companies of big automobile majors. For every 100 regular workers in a particular vendor company, there are 600 contract employees.”

Also, layoffs and retrenchments have become more common, he added. For instance, he said, RICO Auto Industries sacked 250 workers in the Dharuhera industrial area of Gurgaon, including 119 permanent workers, in April 2021. The workers have been on protest since July 5. The company claims to have “settled” the dues and has not reinstated anyone.

Satbir Singh said: “Demand notices are kept pending for years altogether. Earlier, workers used to protest to gain some bargaining power, but given the repression by managements and their reluctance to enter into a dialogue, even organising a protest is a challenge.”

In Panipat and Sonipat districts of Haryana, many industries had shut down. A footwear company in Sonipat threw out 250 workers in one go. Satbir Singh said: “It was not a closure, lockout, retrenchment or layoff. He just shut it down.” In April-May this year, a cycle parts factory in Sonipat dismissed 230 workers.

On the government labour machinery, Satbir Singh said: “The Labour Department doesn’t intervene until the Labour Commissioner gives the go-ahead. Labour departments are in any case totally toothless. Employers don’t deposit Provident Fund and ESI deductions and when workers protest, there is repression. The social, political responsibility of the government today is non-existent. There are cases under Section 307 (attempt to murder) against workers.” In 2012, it was a repeat of 2005 but in a different auto major in the then Congress-ruled Haryana. Maruti Suzuki dismissed all contract workers, including 546 regular employees. Cases of murder and attempt to murder were registered against them. Thirteen workers are still in jail and the matter is pending in the High Court.

Satbir Singh said that there was a consensus among all unions that things had taken a turn for the worse after the introduction of the labour codes, which whittled down the protective features in existing labour laws. The Modi government amalgamated 40 labour laws, some of which predated Independence, and reduced them to four labour codes. All trade unions, including the Congress-led Indian National Trade Union Congress (INTUC), opposed the codes.

Opposition to labour codes

On January 2021, 10 Central trade unions, namely CITU, All India Trade Union Congress, INTUC, Hind Mazdoor Sabha, All India United Trade Union Congress, United Trade Union Congress, All India Co-ordination Committee of Trade Unions, Self Employed Women’s Association, Labour Progressive Federation and the Trade Union Co-ordination Committee rejected the rules framed for the four labour codes, which were earlier passed in the Lok Sabha without even a discussion.

The unions said that the government was succumbing to pressure from employers and corporates. The Left parties were the most vociferous opponents of the labour codes both within and outside Parliament. The Bharatiya Mazdoor Sangh (BMS), which owes allegiance to the Rashtriya Swayamsewak Sangh (RSS), has also felt compelled from time to time to oppose the NDA government’s decisions.

The attack on the country’s workforce, estimated at 500 million, was not without design. For the past five years, the annual Indian Labour Conference (ILC), a tripartite forum, has not been held. Normally, the Prime Minister would inaugurate the ILC and the Labour Minister would preside over it.

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Although the ILC had been reduced to a mere formality over the years, the NDA regime went one step ahead by doing away with the conference altogether, citing one pretext or the other. Tapan Sen, general secretary, CITU, said: “Tripartism doesn’t mean just a three-way meeting. They called a meeting on all the codes but did not change a single line.” He said that labour reforms were a part of the process of deregulation. The idea was to minimise costs of production by cutting down on labour costs. According to him, workers’ resistance and support from political parties slowed down labour reforms and privatisation too. Although changes to the labour laws were stalled, there has been no stopping of contractualisation, casualisation and outsourcing or offloading of work.

Tapan Sen said: “The concept of statutory minimum wages was there but only 30 per cent of workers were getting it. The workforce in the labour department was reduced in the name of doing away with inspector raj.” He pointed out that after the Left parties withdrew support to the United Progressive Alliance (UPA) government, some changes crept in but the most drastic reforms were in Modi’s tenure. Most of the protective elements in some 29 labour laws have now been done away with.

The 16-page 1979 Migrant Workers Act has been replaced by the Occupational and Safety Health (OSH) Code. Tapan Sen said: “The rules in the repealed Act ran into 180 pages, detailing statutory obligations of employers and State governments. The OSH code does away with most of the statutory obligations. Codification demolishes all the basic rights and protection of labour. The government is now making rules and as labour is a concurrent subject, some State governments are also making rules while some others are opposed to it.”

Lockdown losses

In the second wave of COVID-19, he said, more than two crore people are estimated to have lost their jobs. The wages of some 23 crore workers went below the statutory rates. Tapan Sen said he was apprehensive that once the codes are formalised, the attack would shift to registered trade unions. Under the codes, if the registrar of trade unions was not satisfied that the registration of a union was improper, its registration could be cancelled.

According to Tapan Sen, the National Monetisation Pipeline (NMP) cleared by the Finance Ministry would have an impact on workers too. He said: “Earlier, the private sector had to bring money to buy the public sector unit; now, the entire facility is being handed over to them under the NMP. Some public sector unit sales happened in the Atal Bihari Vajpayee regime. Some 49 public sector units (PSUs) were listed for outright sale during Modi’s first term but they couldn’t do it until 2019. The private sector itself wasn’t confident as there was resistance within the PSUs and from the workers, hence the NMP…. This will have a direct impact on workers employed in these facilities. They might not continue to be employed.”

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The present government’s attitude towards the working class could be gauged when the pandemic broke out and the lockdown was imposed. Migrant workers had no recourse as establishments shut down. Compelled to leave for their villages, many were beaten up by overzealous policemen, based on administrative directions from the top, all in the name of enforcing the lockdown. Several died on the way home.

The government, meanwhile, told the Supreme Court—which was monitoring the situation of migrant workers—that it had no idea of the number of workers who had died during the pandemic as the Health Ministry did not keep separate records.

The four labour codes, on Wages, Industrial Relations, Social Security, and Occupational Safety and Health, are expected to roll out in October. The Code on Industrial Relations allows establishments employing up to 300 workers to retrench workers without seeking government permission. The previous threshold was 100 workers. Some governments, mostly BJP-ruled ones, have notified the rules but several others have not.

Despite the odds stacked against them, trade union leaders said that the nine-month-long farmers’ agitation would give an impetus to the struggles of the industrial workforce as they seen common cause in the issues they are fighting for.

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