In aid of unorganised workers

Print edition : March 02, 2002

A proposed piece of legislation that seeks to regulate the employment of Karnataka's more than one crore workers in the unorganised sector is seen as a step in the right direction.

A LAW to regulate and improve employment conditions for nearly one crore workers in various segments of the unorganised sector in Karnataka is soon to be enacted. With the growing casualisation and contractualisation of labour and the steep fall in numbers of the organised labour force, which is an outcome of the economic liberalisation of the 1990s, a comprehensive law for unorganised labour has been a major demand of the trade union movement in the country.

A workers' rally in Bangalore demanding the passage of a Bill in the Karnataka Assembly protecting the rights of unorganised workers.-

In Karnataka, a proposal for such a piece of legislation was mooted first in the 2000 Budget speech by Chief Minister S.M. Krishna. A draft Bill was circulated among trade unions and associations and their suggestions were sought. A second draft was then drawn up and cleared by the State Cabinet. The revised draft Bill that was to have been passed by the Legislative Assembly in its last session, is now likely to be taken up in the Budget session in March.

The Karnataka Unorganised Workers (Regulation of Employment and Conditions of Work) Bill, 2001, seeks to provide for "the regulation of employment of unorganised workers in certain employments... and for their conditions of service, and to provide for their safety, health, welfare, and security of employment..." The Act seeks to create an institutional mechanism that will stand between the employer and the employee to ensure protection to the worker in this low-wage sector where work conditions are generally unregulated and substandard. With the growing fragmentation of the labour force, workers in specific unorganised categories are generally not covered by other regulatory acts such as the Factories Act, as their numbers are low. As they often move from location to location (as in the case of construction labour), unionisation becomes difficult. Where it does occur, employers are able to crush quickly such efforts by firing the unionised workers and hiring anew.

A central feature of the legislation is the constitution by the State government of a Social Security Authority to ensure that provision is made for better terms and work conditions by formulating schemes for different segments of the unorganised workforce. These schemes will provide for the registration of workers and employees and regulation of employment, including wages, hours of work, medical and maternity benefits, overtime payment, leave, gratuity, provident fund, bonus, pension, insurance and housing. The Authority will be headed by the Chief Minister or his nominee, and will consist only of nominated members, including six who will represent employers and unorganised workers.

A second important feature is that it gives the State government the right to constitute boards for scheduled employment in any area. The members of the boards, nominated again, will represent the government and the unorganised workers. The board will be responsible for administering a particular scheme. The Act stipulates the creation of an Unorganised Workers Welfare Fund. Contributions to the fund will be made by employers and employees according to a set formula.

Trade unions have reacted with qualified support for the Bill. In the absence of comprehensive legislation for unorganised workers, the Bill is certainly a major step in the right direction. However, they also say that it could have been extended in terms of both reach and scope. "The Bill treads the beaten track of welfare legislation despite its title, which is that of regulation of employment and conditions of work of the unorganised labour force," V.J.K. Nair, State general secretary of the Centre of Indian Trade Unions (CITU), told Frontline. He argues that the Bill seeks to create a multiplicity of administrative structures, which will only lead to bureaucratisation of procedures and the growth of officialdom. The CITU leader said: "To regulate working conditions, what is required is one tripartite board that represents workers, employees and governments, with bodies under it down to the level of the labour inspector, and with tripartite representation at every level. These bodies can then really bring some regulation to the sector."

According to V.J.K. Nair, the basic thrust of the first draft Bill was only to provide for self-financing social security. Therefore the Bill did not break new ground, but instead tried to put the Kerala pattern of social security legislation (with its own inherent weaknesses) into an expanded framework. The CITU has called for several changes in this Bill. The Social Security Authority, V.J.K. Nair says, must be called the Unprotected Labour Regulatory Authority if it is to reflect the declared intentions of the Bill. The present structure of the Authority, which is to be headed by the Chief Minister, with all members nominated, will make it a body which is either non-functional or formal. It should instead have a tripartite character with a carefully chosen chairperson who is known to be both independent and committed. Boards for each or a group of schemes, as the Bill in its present form envisages, would only increase the numbers of administrative bodies, thus diluting the overall thrust and purpose of the move. Instead the Authority should have its own affiliated tripartite bodies down to the lowest level. Secondly, instead of stating that the Bill applies only to the specified 41 employment categories, it should be extended to all unorganised employment that is not already covered by any of the existing regulatory enactments such as the Factories Act, the Mines Act and the Plantations Labour Act. The workforce of all new or emerging employments in the unorganised sector would then automatically come within the scope of the legislation.

Formed in 1995, the National Centre for Labour, which is an apex body of independent trade unions that work in the unorganised sector, has been active in getting protective legislation framed for the sake of unorganised labour both at the Centre and in the States. The NCL and its affiliated unions have a membership of 7.25 lakh spread over 10 States in the unorganised sector. "We have been struggling for protective labour legislation for the last 15 years," said N.P. Swamy, secretary of the NCL and president of the Karnataka State Construction Workers Central Union. "The present draft Bill is better than existing Bills in the country. It envisages a Social Security Authority chaired by the Chief Minister and different boards which will have trade union representatives," he said. He added that having the Chief Minister as the chairperson of the Authority might be an advantage as decisions could be made and implemented quickly. Secondly, most other pieces of legislation do not have the scope of this Bill which will provide for provident fund, medical facilities, gratuity and so on for workers. In order to correct the negative aspects of the Bill, Swamy argued for strengthening its regulatory content by setting up tripartite boards which have an elected rather than a nominated membership. The NCL has also recommended the incorporation of a stronger dispute resolution mechanism that can replace the labour courts where industrial disputes often drag on for years.

It is estimated that there are over one crore workers in the unorganised sector in Karnataka. Employment in the organised sector has declined over the last decade in absolute numbers, and there has correspondingly been a substantial growth of the unorganised labour force. The government's decision to introduce protective labour legislation has come largely as a result of pressure from the trade union movement, which is unlikely to brook much delay in its enactment and implementation.

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