Industrial ties: Uncertainty looms amid divided demands

It came almost as a surprise when Prime Minister Narendra Modi declared in the 46th Indian Labour Conference that no amendment in labour laws would be made without arriving at a consensus. Though he defended all the amendments his government has proposed, he did agree to the proposition that workers should not be ignored while taking decisions about them. But, it was evident that even if he was proposing a dialogue, he was not subscribing to the views of the trade unions.

And this is what worries the trade unions most. Is it a temporary arrangement or some kind of ceasefire between the government and the trade unions on the contentious issue of labour reforms? Is the government buying peace to avoid an immediate confrontation or is it really ready to change its perception on the issue?

It was the remarks of the prime minister that largely shaped decisions at the Indian Labour Conference (ILC). The most important recommendation of the conference related to industrial relations which explicitly recognised the historic role of a tripartite mechanism (dialogue between trade unions, employers and the government) and accepted that all amendments would be discussed in the tripartite forum in detail, including broad and specific proposals.

However, the recognition of the role of the tripartite mechanism and PM’s declaration were only one aspect of the scenario. The other crucial thing was that none of them – the government, the employers or the trade unions – showed a readiness to make any change in their stated positions.

While the prime minister took a conciliatory note and the Minister of State for Labour and Employment Bandaru Dattatreya avoided taking any strong position, it was Finance Minister Arun Jaitley who put forward the government’s rigid stand. He made it clear that the present laws could not allow a better inflow of capital and if such inflow is blocked, the economy would suffer and employment-generation would become impossible.

A closer look on the assertions of the government only strengthens the perception that the Modi government will go ahead with its aggressive reforms. It is possible, however, that the standoff on the Land Bill, inside and outside parliament, has prompted the Centre to go slow on labour reforms as it cannot afford two confrontations at the same time – one with the farmers and other with the workers. This is why trade unions are reluctant to withdraw the proposed nationwide one-day strike on September 2.

“I do not think they are going to change their stance. They are under pressure from the corporates to amend all the labour laws which give protection to workers,” a senior trade union leader told Deccan Herald. And, this perception is not limited to only the Left trade unionists like CITU’s D L Sachdeva and Tapan Sen.

Even rightwing leader Virjesh Upadhya of the BMS has felt the same. He attacked the government for allowing the Rajasthan government to enact its “anti-labour” laws. Trade union leaders are of the opinion that the changes implemented in Rajasthan are bound to be replicated in other states too. The Central government, they feel, will encourage it in the name of state autonomy.

The changes in the Industrial Dispute Act by the Rajasthan government now allow companies to retrench up to 300 employees without any government permission. Earlier, only up to 100 employees could be retrenched. The state has also introduced a time limit of three years for raising industrial disputes. The registration of labour unions has also been made difficult as well.

The Rajasthan government also made an amendment in the Contract Labour Act, which exempts companies with more than 50 workers, instead of the current 20 workers, from the law. The changes in the Factories Act will also be applicable to factory premises with electricity and with a strength of up to 40 workers from 20 at present, and with 20 workers from 10 for premises without electricity.

Suspicion over ‘single code’

The Centre wants to merge the Industrial Disputes Act, Industrial Employment (Standing Orders) Act and the Trade Unions Act into a single code for industrial relations. Trade unions see this move as an attempt to make their activities far tougher. They say that whatever rights they have acquired through long struggles will be wiped out in one stroke. They also see Rajasthan Chief Minister Vasundhara Raje’s attempts in the state as a precursor to what will come at the Central level in other laws.

The Union government is ready to go ahead with Small Factories Act which will exempt small factories from most of the labour laws. The proposed amendments in the Apprenticeship Act are equally contentious. The Centre views them as a forward-looking move to boost employment in the country. However, trade unions suspect that this will only encourage low-wage employment as companies will hire workers in the name of providing apprenticeship at low wages with hardly any benefits.

Amid all this, the area of social security does appear to be without contention, but a deeper look into its various provisions present an entirely different picture. On the one hand, trade unions are demanding waiving all the ceilings in the Bonus Act, while on the other, employers are asking for provisions that take into account the paying capacity of the employer and the productivity of workers. They have also expressed apprehensions that waiving the ceilings would increase industrial disputes.

Similar is the case with extending social security scheme for contract workers. The unions are demanding equal pay for the same kind of work and social security benefits to all contract workers. However, employers, mainly of the garment industry, are opposed to it. They say this will increase the cost and result in loss of competitiveness.

The only area where there seems to be an agreement relates to social security of unorganised labour. Since most of the provisions entail expenditure from the state exchequer, both employers and employees are ready to accept them. But the government is cautious to not increase its own burden. The scenario of industrial relations, as it stands now, looks quite uncertain.