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Print edition : Jun 09, 2001 T+T-

The 37th Indian Labour Conference sharply projects the united opposition of central trade unions to labour reforms and the government's "globalisation is inevitable" approach.

THE 37th Indian Labour Conference (ILC), held in New Delhi on May 18, provided an indication of the growing resentment among the central trade unions against the government's anti-labour policies and its endorsement of the second phase of economic reforms. For the first time in the four-decade history of the ILC, an important item - regarding the impact of globalisation on Indian industry, labour and employment - listed on the agenda was rejected outright by the trade union bodies. The government had hoped that the unions would realise the "compulsions" of globalisation. At the February 14 meeting of the Standing Committee on Labour, the subject of globalisation was underscored and it was decided that a more updated and in-depth discussion on the subject was needed at the ILC. But the unions did not accept the "globalisation-is-inevitable" approach.

What was significant was the unity displayed by all the central trade unions, including the Bharatiya Mazdoor Sangh (BMS), the trade union wing of the Sangh Parivar. At the ILC, the BMS was unsparing in its criticism of the government. Its chief, Dattopant Thengdi, had in fact sounded the bugle of dissent at the workers' rally held in New Delhi in April. At the meeting Thengdi described Finance Minister Yaswant Sinha as a "criminal". Two days prior to the ILC, BMS national general secretary Hasmukhbhai Dave had made a scathing criticism of the government's decision to allow 26 per cent foreign direct investment (FDI) in defence production. Apart from concerns of national security, it was felt that the decision would jeopardise the job security of some 1.40 lakh persons in some 39 defence factories across the country.

A joint statement issued at the conclusion of the ILC by 10 trade unions, including 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, the United Trade Union Congress (UTUC), the National Federation of Independent Trade Unions, the UTUC (Lenin Sarani) and the Trade Union Coordination Committee, condemned the decision on FDI and detailed a programme of action beginning July 3. Defence employees' organisations, such as the All India Defence Employees Federation, affiliated to the AITUC, and the Indian National Defence Workers Federation, affiliated to the INTUC, are expected to participate in the protests. Protest meetings are also planned between June 4 and 9. The unions plan to focus on five key issues: amendment to labour laws, legislation on agricultural labour, privatisation, quantitative restrictions (QRs) and unemployment.

While the issue of amendment to labour laws has become the rallying point of the unions, the other areas are by no means less important. As perceived by the unions, in its zeal to appease industry and the employer lobby, the National Democratic Alliance (NDA) government was keen to introduce changes in labour laws that would make 'hiring and firing' easy (by amending the Industrial Disputes Act), outsourcing more convenient (by amending the Contract Labour (Regulation and Abolition) Act) and union formation difficult (amending the Trade Union Act). Other drastic measures included the repealing of the Sick Industrial Companies Act and the winding up of the Board for Industrial and Financial Reconstruction (BIFR).

The unions are peeved at these and other recommendations, such as a slash in the rate of interest on the Employees Provident Fund, reflected in the pre-Budget consultations of the Economic Advisory Council (EAC). The unions had a minimal presence in the Council, and their point of view was not taken into account. The flashpoint came when Yashwant Sinha in his Budget speech referred to amendments to labour laws. He stated that "it was necessary to address the rigidities in our labour legislation" and proposed far-reaching changes in Section V of the Industrial Dispute Act (Frontline, April 13, 2001). He also called for drastic reforms in the Contract Labour Act to help promote industrial investment in labour-intensive and export-oriented activities for renewed industrial growth. Not only was the Finance Minister's pronouncements on labour laws considered misplaced but they were also construed as a blatant interference in the area of the Labour Ministry. It is learnt that although Union Labour Minister Satyanarayan Jatiya did not allay the fears about the proposed amendments, he was not particularly enthused by his Cabinet colleague's enthusiasm.

In a sense, it could be said that it was the NDA government that enabled the unity among the trade unions. The intentions of the government were most transparent on the inaugural day of the ILC when Prime Minister A.B. Vajpayee made an impassioned plea for economic and labour reforms. But the focus, at least from the prepared text of the Prime Minister's speech, reflected his concern for labour reforms and the need to relieve the economy of the "heavy weight of many growth-hindering rules, regulations, laws and systems". The world, his speech reminded the delegates, "was not going to wait for us, if we choose to be slow and half-hearted in our reform march." The inevitability of the World Trade Organisation (WTO) and the need to "re-orient" businesses was impressed upon. Such re-orientation, it was expressed, was impossible without the ability to restructure labour within individual businesses. The overall tenor was more on labour law reforms, essentially to free industry from the shackles of a fettered labour market. There was no assurance of any kind that the workers' interests would be protected or that their working conditions would improve. The delegates were instead "urged to view the proposed amendments to the labour laws in the broader perspective of how the economy can be made to grow faster." Although Vajpayee spoke extempore, his speech did not alter the message on economic and labour reforms.

Pushing a vigorous case for reforms, Vajpayee stated that reforms would lead to growth and create more employment. He called upon trade unions to reform themselves to serve better the interests of the working class. Needless to say, his pontification did not go down well with the unions, which refuted the theory that employment generation had improved in the reform period. In fact the agenda paper of the ILC, drafted by the Labour Ministry, painted a rather dismal picture of the economy and employment. It stated that there was a perceptible decline in formal and public sector employment, while the share of casual wage employment in total employment showed an increase. On the other hand, self-employment and regular-wage employment, it found, had shown a decline. Given these trends, the agenda paper stated, job security should be replaced by income security and wages should be made more responsive to changes in productivity and profitability. The agenda also suggests that the unorganised sector, which employs more than 90 per cent of the workforce, has experienced a much faster rate of employment as compared to the organised sector. There is evidence of a deceleration of growth in employment in the organised sector, while there has been an increase in the casualisation of the workforce, which also implied the loss of job security for many. The rate of unemployment has increased slightly even as the rate of growth of the labour force has slowed down considerably. The agenda also concurred that the impact of reforms and globalisation had not been uniform across all sectors of the economy and all segments of the workforce. However, it refrained from making any assessment of the impact of globalisation and reforms on the workforce. The understanding is that if inequities have resulted in the process of reforms and liberalisation, then it is more so because of the inability of a part of the workforce affected by restructuring to participate in the growth process. The onus was more or less placed on the inflexibility of labour laws.

In response to the agenda paper, the CITU prepared a memorandum stating that the agenda paper tended to glorify the liberalisation process by citing a higher annual growth rate in the post-reform period of the 1990s as compared to the 1980s, overlooking the mid-term appraisal of the Planning Commission, which indicated a slow-down in industrial growth. It attributed this to a slackening in aggregate demand on account of inadequate investment in the infrastructure sector and a slowdown in general investment. Even the data on declining poverty were challenged by the CITU, which held that the Economic Survey (1999-2000) as well as the International Labour Organisation in its World Employment Report, 2001, expressed doubts about reduced poverty levels owing to faster growth rates. The Economic Survey had observed that recent samples of household expenditures did not show clear trends of poverty reduction.

On the question of social security, the CITU memorandum criticised the government for not bringing more workers under the purview of the Employees Provident Fund Act. The move to cut the rate of interest on PF from 12 per cent to 9.5 per cent came under criticism. While the resolution on globalisation was rejected in toto with the INTUC making mild noises about the "inevitability of economic reforms", it was apparent that there was no major or minor dissent on this issue. The CITU and the other unions gave specific amendments to the two ILC resolutions on social security and regular consultation by the Central government with social partners on labour policies.

The BMS also brought in a dissent note to denounce the WTO. It demanded an alternative WTO led by developing countries. Hasmukhbhai Dave, general secretary of the BMS, expressed concern over the closure of several factories and small-scale industries. Addressing the ILC, in the presence of Vajpayee and Jatiya, he said that there was an urgent need to rethink on the economic reforms process in the context of the worldwide and nationwide economic crisis. Dave stated that there should be guaranteed job security and social security for the working class. Given the lack of tripartism, especially in the NDA's tenure, Dave observed that consultation by the government with its social partners was of utmost necessity (see interview). Any decision on disinvestment or privatisation should be preceded by discussions between the Ministries of Finance, Industry, Commerce, Labour and Disinvestment, and the tripartite committee should be taken into confidence, he observed.

Dave stated that no steps to amend labour laws be taken until the report of the second National Labour Commission was tabled. Any change, if necessary, should be discussed by the tripartite committee, he told the delegates. In a veiled reference to the interference by the Finance Ministry, he suggested the Labour Ministry be allowed to maintain its dignity.

In the course of the discussions on the three resolutions on globalisation, social security and consultation with social partners, it became increasingly clear that the employer councils and representatives of industry had little to argue about while the majority of the opposition came from union members.

On the issue of consultation with social partners, the unions were critical of the emphasis on bipartism, for they felt that the government was trying to absolve itself from employer-employee decisions. However, the resolution was passed without major hiccups as it was stated at the outset that all major issues concerning social partners should be discussed among themselves.

Concern was expressed at the lack of an adequate safety net for workers who lost their jobs and the absence of social security for the unorganised sector. An insurance scheme was suggested to provide minimum financial assistance to such workers until they found alternative employment. To this, the CITU added in a separate note that the "assistance should be sufficient to maintain their families" and that "an adequate fund be provided by the Central and State governments and industry". The group discussing the resolution expressed concern over the evasion and non-compliance as well as default in the remittance of contributions under the EPF and Employees State Insurance schemes. (The CITU note sought stringent measures against defaulters.) The group felt that the rate of interest credited to the Provident Fund accounts be decided by the Central Board of Trustees. The group on social security felt that schemes for the unorganised sector run by the governments of Karnataka, Gujarat, West Bengal and Goa needed to be emulated in other States.

Overall, the ILC left much to be desired by way of concrete amendments and proposals. If anything, it reflected the mood of the working class as well as the intentions of the government. More important, the ILC became a forum for trade union unity, which would be very difficult for the government to ignore in the coming months.