Prime Minister Narendra Modi’s labour law reforms, aimed at supporting his “Make in India” campaign, have been designed without any discussion involving the trade unions. Workers see them as a letdown, coming as they do from a government that promised “good days”. By T.K. RAJALAKSHMI
ON OCTOBER 16, amid much fanfare, Prime Minister Narendra Modi unveiled a slew of labour reforms named after one of the founder-ideologues of the Bharatiya Jan Sangh, the progenitor of the Bharatiya Janata Party (BJP), Pandit Deendayal Upadhyay. The programme was titled “Shrameva Jayate”, ostensibly in praise of labour. The Prime Minister also reiterated his commitment to “minimum government and maximum governance”. Labour was given fancy titles such as “Shram Yogi”, “Rashtra Yogi” and “Rashtra Nirmata”, while industry was exhorted to “make in India”. Nothing wrong per se with the announcements, except that they had little to do with the real concerns of the working class or with protecting the interests of labour in the country. Predictably, industry hailed the Prime Minister’s initiative.
The major announcements included doing away with the complex system of labour inspection and substituting it with a more technology-friendly, but not necessarily labour-friendly, mechanism; setting up universal account numbers (UAN), which will be lifetime numbers of Provident Fund holders; and launching a portal to ensure online compliance of labour laws. Instead of filling 16 forms for compliance with labour laws, employers will now be required to fill a single form online providing for self-certification as well as e-filing of returns, effectively putting an end to surprise checks by inspectors. The new regulations have virtually declared the role of the existing enforcement authorities in the Employees’ Provident Fund Organisation (EPFO), the Employees’ State Insurance Corporation (ESIC), the Labour Welfare Department and even the Chief Labour Commissioner redundant. Annual inspections, which number around eight lakhs now, were expected to come down due to the “easing” of regulations.
Union leaders and others have pointed out that the UAN, which allowed for portability of accounts, was not a new scheme as touted by the Prime Minister. Four crore EPF subscribers are already registered under the UAN.
Ironically, in the name of simplifying procedures, the Prime Minister has, in a single stroke, declared the present system of inspections by labour inspectors redundant. A computerised lottery system will decide which factory is to be inspected and which inspector will do the inspection. Inspectors will be required to file their reports within 72 hours of the inspection and any action will be initiated only after a proper scrutiny is made by a Central agency and on the basis of the compliance reports of the employer. Industry has more than welcomed this measure, for it has been saying that prospective investors were shying away from India in view of its complex labour laws, a claim trade unions have been unwilling to buy.
For quite some time now, a concerted campaign was on to create an impression that nearly 40 Central and nearly 150 State labour laws were redundant. The labour reforms, trade unions have averred, are aimed at making hiring and firing simpler and are not devised to protect labour. Their own recommendations made at meetings of tripartite bodies to simplify the laws, including those pertaining to small-scale industries, were not taken into consideration. Instead, a draft proposal for small-scale industries has been put up on the Labour Ministry’s website, exempting units employing up to 40 workers from at least 14 basic laws, which include exemption from the Factories Act, the Industrial Disputes Act, the ESI Act and the Maternity Benefits Act. This, in effect, has taken away a large chunk of workers from the ambit of basic labour laws, in addition to allowing a non-statutory body like the Insurance Regulation Development Authority (IRDA) to regulate contributory pension and health schemes.
It is an added irony that while the government was going full steam to simplify labour laws, there was no law as yet that provided for the mandatory recognition of trade unions despite India ratifying the International Labour Organisation (ILO) Conventions 87 and 98, which deal with the right to organisation and collective bargaining. The recent industrial conflicts in the National Capital Region, especially in Gurgaon (the city in Haryana whose growth has been compared to that of Singapore), were mainly over denying workers the right to form their own democratically functioning unions. About 147 workers of a leading automobile major, which recently unveiled its new product, have been languishing in jail since July 2012. In another part of the country, 13,000 contract workers of the Neyveli Lignite Corporation (NLC), a public sector Navaratna company, launched a protest demanding regularisation of jobs, among other things. The Prime Minister’s Office and the Union Labour Ministry seem oblivious to these facts.
While the proposals are problematic in their own right, their announcement without any discussion involving trade unions and the complete insouciance of the Prime Minister to tripartite commitments made by successive Indian Labour Conferences (ILCs) have raised the hackles of labour. The strong statements issued by all trade unions, including those with ideological affiliation to the BJP, indicate that there is not an iota of doubt in their minds about what these reforms are all about and who stood to gain from them. “Contract workers, many of whom are women, are not even given a subsistence wage,” A.K. Padmanabhan, president of the Centre of Indian Trade Unions (CITU), toldFrontline.
Trade unions are already unhappy with the recent proposal to amend the Factories Act and the Apprentices Act. The Factories Amendment Bill, 2014, allows State governments to raise the threshold of coverage from 10 workers to 20 workers in factories operating with power and from 20 to 40 in factories not using power. As a result, the bulk of factories and workers stand to be exempted from the purview of the Act, which essentially is a piece of legislation that regulates working conditions.
While the amendments to the Apprentices Act were passed in the Lok Sabha without any discussion with the trade unions, the amendments to the Factories Act were referred to a Standing Committee of Parliament after it was introduced in the Lok Sabha.
“If the government was pro-labour it would have implemented the amendments to the Contract Labour (Regulation and Abolition) Act, proposed by the Indian Labour Conference, a tripartite body, for equal wages for same and similar jobs. The amendments have been lying with the PMO [Prime Minister’s Office] since the last ILC,” Padmanabhan said. In fact, Manmohan Singh, as Prime Minister, perhaps realising that labour could not be sidetracked any longer, delivered some homilies while inaugurating the tripartite conference. He referred to the 10-point charter prepared by the Central trade unions as “unexceptionable demands”. Following the two-day strike called by all trade unions in 2013, an Empowered Group of Ministers (EGoM) was set up to look into the issues. Not only have the commitments to look at labour issues taken a back seat, but the new dispensation at the Centre seems to be trying to outdo the United Progressive Alliance (UPA) in this matter. Not surprisingly, the Congress leaders have been silent on this save for one former Union Minister, Mani Shankar Aiyar, who is critical of the proposed labour reforms. The changes proposed in EPFO management are not new.
K.R. Shyam Sundar, Professor at the Xavier Labour Relations Institute, told Frontlinethat labour law and governance reforms were a mixed bag. The portable EPFO accounts management, he said, was a long-pending one and that in the era of electronic management, this was expected and had been delivered. Press reports suggest that this will cover the employees in the organised sector. “While this is a welcome administrative rationalisation move and will hugely benefit employees who shift from one region to another, the key issue that is not addressed is the uncertainty of realisation and even non-delivery of PF dues with respect to contract and casual workers, who are in a vulnerable position,” he said. The second issue is that while e-governance is a welcome development, efficiency of telecom services is of vital importance in facilitating e-transactions in the light of the failure of Maharashramm, an e-governance initiative of Maharashtra (which came for much praise). The portal, managed by a private service provider, ran into serious problems, which are being contested legally.
Shyam Sundar described the so-called inspector-raj reforms as a “signal” to prospective investors, especially after the Prime Minister’s visits to Japan and the United States and in view of the government’s resolve to move ahead on the reform path. The reporting of inspection was a major administrative failure as far as State governments were concerned, he said. Inspection rates, that is, the proportion of registered factories that have been inspected, declined from 63 per cent in 1986 to 18 per cent in 2008. Notwithstanding data limitations, this decline is symptomatic of the poor state of inspections (see story on page 23).
There are some federal issues as well. He pointed out that if labour inspections were centralised and the command about the visits emanated from above, including control over visit timings, this would be in direct violation of ILO Labour Inspection Convention 81, which required the ratifying countries to create a labour inspection system free of external influences and to be held at any time and at any place if these were required by contextual circumstances. India ratified this convention in 1947. Quoting Labour Bureau statistics, Shyam Sundar said India was far from achieving the ILO-prescribed labour-inspector working population benchmark ratio of 1:40,000 for underdeveloped countries. For the implementation of the Minimum Wages Act, 1948, in 2012, he said an estimated 3,171 inspectors were expected to cover around 7.70 million establishments in the country, giving a ratio of 2,428 establishments per inspector.
Another moot issue, he said, was the skill mismatch and deficit which hurt companies the most. But the more important question was the funding of the skill-building exercise rather than the focus on labour laws. He said recidivism of child labour was related broadly to issues of vulnerable employment and security of blue-collar workers.
Hemalata, convener of the All India Coordination Committee of Working Women, said it was ironical that the government was speaking for the rights of women when the majority of women in the unorganised sector were out of the ambit of labour laws. While some States had welfare boards for domestic women workers, women employed in agriculture were out of the ambit of any protective legislation. The plight of the over one crore scheme-based workers involved in delivering various government schemes was another area that deserved attention. “The government is talking of simplifying labour laws. There are no labour laws to cover these women who deliver crucial government schemes, such as the Anganwadi Worker and Helper of the ICDS [Integrated Child Development Services] or the Accredited Social Health Activist [ASHA] of the NRHM [National Rural Health Management], the IKP [Indira Kranti Patham] or Grama Deepika workers of the National Rural Livelihood Mission or the various Shiksha Karmis involved in primary education or those involved in the National Child Labour Programme,” she said.
All these “workers” are outside the purview of any labour law. The ICDS, incidentally, completes 40 years next year even though its “workers”, many of whom are made to “retire” without any retirement benefits, are given a nominal incentive and the responsibility of delivering India and its children from the scourge of malnutrition. A.R. Sindhu, general secretary of the Anganwadi Federation, said a detailed memorandum about the long-pending demands of the scheme workers, including the ILC’s recommendations on minimum wages and social security, was submitted to the Union Women and Child Development Minister. “Their work has increased but their remuneration continues to be the same as it was in 2011,” she said, referring to the ICDS workers.
The 45th session of the ILC recommended that the scheme-based workers should be treated as workers, paid a decent wage and given social security benefits. They are as vulnerable as those working in other sectors employing women, such as garments or information technology, where the units are exempted from labour laws as they come under the ambit of Essential Services. A number of women are employed as home-based workers, where the entire family labour (including children) is employed, and draw piece-rate wages and yet are not covered by any protective labour law. The limiting of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to some districts and targeting the scheme will impact negatively on the livelihoods of women who seek work in large numbers. Women’s empowerment and dignity go beyond the provisioning of toilets.
The amendments to the Apprentices Act have raised concerns. While the penalty for violation of the Act has been diluted, employers are empowered to start training in a new trade without waiting for a government notification. Unions fear that in the name of skill development, those who pass out of the Industrial Training Institutes (ITIs) will be employed as trainees for long durations and paid 70 per cent of the minimum wages. “I was employed as a trainee/apprentice and after six months I was doing production work. It doesn’t take long for these skills to develop. Even an uneducated person can learn the art of spinning in a textile mill within a matter of months. The duration of apprenticeship has been increased, making exploitation legitimate. The ITIs need to be modernised but the private sector will not step in to do that. Companies have stepped in to modernise the ITIs with government help before, but it is primarily the responsibility of the government to invest in training. Industry will train as per its needs. Once that particular skill is not required, the worker will become redundant,” said a union leader.
On October 20, at a meeting called by the Union Labour Ministry to build a consensus on finalising the content of the Workers’ Participation in Management Bill, 1990, employer representatives vehemently opposed the idea of worker participation, arguing that such involvement was permissible only at the shop floor. Labour Minister Narendra Singh Tomar, perhaps sensing the mood of the employer associations and in order to placate trade union representatives who were also present, intervened to say that at the highest level such participation “should remain voluntary for industry and not statutory”.
Virjesh Upadhyaya, general secretary of the Bharatiya Mazdoor Sangh (BMS), the trade union affiliated to the BJP, is on board with other trade unions on the issue of labour reforms and disinvestment of public sector units. He told Frontline that the unions could have been consulted before making the announcements. “We object to the way it was done. The tripartite tradition should be observed,” he said. He said the BMS was opposed to the dilution of inspection of factories. Labour inspectors, he said, were responsible for the implementation of labour laws. The current move, he said, would give free rein to industry. He also wondered why industry was not coming forward to train apprentices. Of the 4.9 lakh apprentices, only 2.81 lakh got some training. “The reason for the gap is that those who have been trained have not been absorbed. And no labour laws apply to apprentices. This means that the government is providing a way out to employ cheap labour. We are not against industry but there has to be something for labour, too,” he said.
The amendments to the Apprentices Act was not done thoughtfully, he said, adding that the government’s move to reform labour laws were in a way affecting the recent attempts of industry to come closer to labour. An informal committee set up in 2013 during the UPA regime, under the chairmanship of Arun Maira, who was a member of the Planning Commission, has made some headway with industry and the unions. The committee was set up against the backdrop of heightened industrial conflicts. “The second National Labour Commission looked at all the laws comprehensively and there was unanimity over many areas. Why does the government not look at those recommendations?” he asked. “We are for development. But sabka saath is also important,” the BMS office-bearer said, referring to one of the favourite catchphrases of Modi.
It is evident that the thrust of the National Democratic Alliance (NDA) government is on making the environment conducive to industry. That trade unions have not been called to discuss issues affecting the industrial working class and the unorganised sector has not gone unnoticed. The cold shouldering of the grievances of all Central unions, such as the CITU, the All India Trade Union Congress, the Indian National Trade Union Congress and the BMS, on the one hand, and the exuberance of industry, on the other, is surprising. However, for a government which got its mandate on the basis of a promise to address the grievances of the reserve army of labour, its lopsided patronage of industry is a letdown. The NDA is no different from the previous UPA government in its approach to labour.