Labour Issues

Simmering discontent

Print edition : June 13, 2014

Striking workers outside a Maruti-Suzuki vehicle plant at Manesar in Haryana, in October 2011. Photo: AFP

There are pressing issues affecting the labour force that the new government has to address, including price rise and contract jobs.

IN his victory speech at Vadodara, Prime Minister-designate Narendra Modi described himself as mazdoor number one (worker number one). He declared that in the forthcoming 60 months, the country would not get a “worker like him”. He also dedicated his government to the poor, in his speech to his party colleagues in Parliament. For the working class of the country who are the worst affected by price rise and fluctuating employment, this declaration may spell hope, if Modi meant what he said. The trade unions, representing working class interests, would definitely look forward to substantive pro-working class policies, the absence of which dealt the United Progressive Alliance (UPA) a severe blow. It is an acknowledged fact that 90 per cent of the country’s workforce is in the unorganised sector, accounting for almost 50 per cent of the GDP. Given these realities, it is expected the new government can only ignore this section at its own risk.

Over the last few years, particularly since 2012, one of the consistent demands of the central trade unions, including the Bharatiya Mazdoor Sangh (BMS), the trade union wing of the Bharatiya Janata Party (BJP) and the largest trade union in the country, has been that the government should address, among other things, price rise and contractual labour. At a meeting in Rajasthan in March this year, the all-India general secretary of the BMS, B.N. Rai, reiterated the demands of the 11 central trade unions for a national floor-level minimum wage and monthly pension; the regularisation of the over one crore “scheme” workers, extension of social security benefits such as gratuity and pension to workers in the unorganised sector, and gratuity to all workers in the private sector. These demands were included in the charters of demand of all trade unions.

It was another matter that the Congress-led UPA government did not pay heed to the simmering discontent in the working class, which resulted in the Congress and its allies being voted out of power. The Congress failed to see the signs on the ground. Its own trade union wing, the Indian National Trade Union Congress (INTUC), joined hands with the Centre of Indian Trade Unions (CITU) and the All India Trade Union Congress (AITUC) to protest against what was broadly described as the anti-worker policies of the UPA government. Interestingly, there was not one but several joint platforms of struggles in the last few years.

The BJP’s manifesto, which at several levels is not very different from the Congress’, reiterates some of the contentious issues that might not find favour with the trade unions. For instance, the manifesto talks about “industrial family”, a concept CITU president A.K. Padmanabhan finds incongruous with labour issues. It talks about giving identity cards to workers, setting up a dedicated workers’ bank, a review of outdated and complicated labour laws and pension and health insurance safety nets. The call for a review of labour laws seems to be echoing the concerns of industry.

“Labour has an agenda but labour does not find itself on the agenda of any government. For the first time in the last five years of the UPA, the 11 central unions and national federations came together on a common platform,” said Padmanabhan. There is also a growing consensus that the jobs that have been generated do not qualify as “decent jobs” as defined by the International Labour Organisation.

At the 45th session of the Indian Labour Conference (ILC) held in May 2013, Prime Minister Manmohan Singh said that the demands of the workers relating to price rise and unemployment were connected to the welfare of the country’s working people. But the Congress failed to address the twin issues. It was not a coincidence that almost every political party, barring the ruling Congress, perhaps, focussed on these two issues in their campaigns. The main agenda of the unions included curbing of forward trading in food items, food inflation being the biggest component of general inflation, and making the public distribution system (PDS) universal. Interestingly, the BJP manifesto has been silent on these two issues even though its affiliate union has been quite vociferous about this. The ILC agenda last year included the regularisation of the almost one crore “scheme-based” workers employed in various outcome delivery schemes of the government. The trade unions’demand was that these workers, anganwadi workers, ASHA (Accredited Social Health Activist) workers and midday meal scheme workers, should be recognised as regular “workers” and therefore be entitled to social security benefits.

While there was overwhelming consensus among the trade unions to treat them as workers, the government was loath to consider the same. The other issue Padmanabhan pointed out was that of a minimum pension of Rs.1,000 that the Central Board of Trustees had agreed upon. He said that even “destitutes were getting more than this amount” in several States. While the Union Cabinet took a decision to implement the scheme from April 1, 2014, it was not brought into effect. Neither was the wage ceiling for eligibility for minimum pension under the Employees’ Pension Scheme raised fromRs. 6,500 to Rs.15,000 as agreed upon. The delay in reaching a decision on both counts benefited employers, the unions say. They feel that if the new government is serious about the working class, this is one of the things it should take up.

Contract labour and the labour law amendments required to absorb contract workers constitute another important issue that the new government should take up. Interestingly, industry too has been making some noises in this direction not because of its desire to treat workers properly but more out of a concern to stem widespread industrial unrest, an example of which was seen in recent times in a leading automobile factory in the country.

One of the main reasons of ferment in the Maruti Suzuki India Limited units in Gurgaon and Manesar in Haryana was the absence of wage parity between regular and contract workers for the same kind of work. The tendency of employers to keep the bulk of the workforce at depressed wages and on contract, as opposed to a very slim category of workers classified as regular, has been a bone of contention industry owners have had to deal with.

The All India Organisation of Employers observed in a report that following 2008, there had been a spurt in instances of industrial unrest in a period when strikes were on the decline. It described the “calamitous case of Maruti Suzuki India Limited” and listed industry majors such as Hyundai, Honda, Nokia, Bosch, Pricol and MSIL, which saw industrial unrest. In 2011, in Gujarat, 900 workers at the Halol plant of General Motors India Limited struck work opposing working conditions, not once but twice in a period of five months.

Therefore, it was no surprise that an editorial in a leading daily exhorted its readers and industry in particular with the catchphrase “amend the labour laws, absorb the contract hands”. The editorial was itself motivated following news reports that three industry majors—Mahindras, Tatas, Cummins India—and the state-owned BHEL had decided to absorb contract workers into the regular workforce. It was reliably learnt that a senior member of the Planning Commission had in fact initiated steps by forming a committee to engage with industry representatives and the trade unions on issues connected with contract labour. A set of voluntary guidelines had been proposed relating to matters of employment and payment of contract workers. Whether this committee continues with its work in the new government or not is unclear, but the importance of dealing with the unrest caused by contractualisation is significant.

Industry and its representatives increasingly find it difficult to manage worker unrest. Gujarat’s record is not exemplary. The State has very low daily wage rates for casual workers. In rural areas, for male workers, Gujarat’s rate of Rs.116 a day is on a par with the wages in two other BJP-governed States, Chhattisgarh and Madhya Pradesh, but below the all-India average of Rs.150. For female workers, it is slightly over the all-India average. But taken together, its average rate is 23 per cent lower than the all-India average and one third of the highest wage, which is paid in Kerala. Its urban daily wage rate of Rs.1,44.52 is 20 per cent less than the all-India figure and half of that in Kerala. These are daily wage rates paid to casual labourers. But industrial wages, too, are a mere Rs.20 more than the all-India average and about 40 per cent lower than the highest wage, in Jharkhand. Industrial unrest, too, is rather high in Gujarat. In fact, the Economic Survey in 2011 stated that Gujarat headed the list of labour unrest because of the highest number of strikes despite a favourable industrialisation policy.

In a hard-hitting report released in February, the Assocham observed that a “steep rise in contract workers by 39 per cent than regular workers in sectors like automobile manufacturers, telecom, IT, BPO, FMCG, health care, education, etc in 2013, posed serious risks to worker morale and corporate growth”. It said that the statistics were “sad and shocking”.

The high level of contract staff meant that labour laws were hurting formal and permanent employability. While the number of contract workers grew by 39 per cent, the number of regular workers came down by 25 per cent, observed the report, which was prepared on the basis of a countrywide study. The secretary general of Assocham, while releasing the report, said: “Apart from being paid less than regular employees on corporate payrolls doing similar tasks, contract workers have no job security and no benefits like medical aid, gratuity, provident fund, educational funds, pension and health insurance and leaves [ sic] benefits.”

In the light of all these developments, the deliberations of the tripartite body that is the ILC need to be taken up seriously by the new government. The proceedings of the ILC meeting last year contain prescriptive measures that it can ill-afford to ignore. Manmohan Singh went so far as to accept that the demands by the trade unions were such on which there could be no disagreement, that the demands for concrete measures for containing inflation, for generation of employment opportunities, for strict implementation of labour laws, were unexceptionable. He also assured the meeting that the government was at an advanced stage of consideration of the demands for universal social security cover for workers in both organised and unorganised sectors, creation of a National Social Security Fund, and fixing a National Floor Minimum wage as well as the provision of a minimum pension of Rs.1,000 under the EPS. Much of this remained on paper.

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