D. Thankappan
India’s business elite has been hankering after legislative reform to free-up the laws governing the labour market. The present phase of capitalist development has come to be institutionalised from the decade of the 1980 onwards when the post-war Bretton Woods system collapsed to make space for capital to reassert its right to determine its own rate of return, and in order to do achieve this the product markets were first restructured. Across the world this restructuring was accompanied with aggressive and violent state repression of workers rights. The ILO’s World of Work Report 2008 records that from 1990 onwards wage inequality has risen across all countries of the world including India and with the exception of Brazil and China.
The significant attack of industry has been on employment tenure. This started in the nineties with a series of so-called voluntary retirement measures in private industry. Many factories were emptied of tenured workers, using the carrot of large sums of money, along with the stick of violence, coercion and management promoted unions. The public sector soon followed suit in pressing VRS, which was also a convenient prelude to give a push for gradual privatisation. Government regulation on industrial closure, while still on the statute books, became virtually non-existent. The procedures for obtaining factory closure also completely lack the mechanism to check the veracity of corporate financial data and hence allow companies to obtain permission through fraudulent data and information most notably by the leading multinational Unilever.
With the decline in tenured employment came a decline in trade union strength. A major casualty of this reduction in strength resulted in an attack on the right to collective bargaining. In the public sector, the periodicity of negotiations has increased from 3 years to 5 and even 10 years. In many private sector companies, trade unions for all practical purposes have lost the right to collective bargaining. Instances of refusal by employers to negotiate with unions, or even recognise unions chosen democratically by workers, are extensive and range from large Indian corporates like the MRF and KEC to multinationals like Unilever, Hyundai and Bosch.
The nineties onwards is also the period when contract employment became the norm in industry. Legislation for abolishment of contract employment stands seriously diluted. In an attempt at further de-regularisation ‘trainees’ are being hired to perform tasks of full-time workers. Even in the sectors of industry where tenure of employment exists on paper, lack of union strength and weakness in labour law regulation has made employment tenure a sham. Today, whether in the high end IT sector, or in the low end garment industry, there is no real barrier that management faces to a rule of ‘hire and fire’. Labour law violations like nonpayment of Provident Fund and gratuity; overtime work without payment; harassment at the workplace; arbitrary dismissals, are rampant in all these sectors. Individual workers find it difficult to stand up to these violations as job creation remains a mirage and unemployment extensive. Employers act with impunity, in the knowledge that the process of justice to workers through courts takes years, and even if workers succeed their victories are at best pyrrhic.
In today’s environment for most workers the only real wage protection is the Minimum Wages Act. However, the implementation of this Act is woefully inadequate. Minimum wages are low and revised infrequently making it impossible to eke out an existence above the poverty level. In many states the Minimum Wages Committees have not sat for up to ten years, even though they are mandated to sit and revise wages at least once every five years.
Even when wages are revised, management representatives get the revision stayed on one pretext or another. At the end of 2004-05, about 836 million or 77 per cent of the population were living below Rs. 20 per day (Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, NCEUS, August 2007). Rs. 20 per day is a fraction of the lowest possible minimum wage in the country. Hence even by the definition of the Supreme Court of India, which has, of course, in recent years ruled extensively against workers, defined wages below minimum wage levels as amounting to forced labour and hence bondage.
The present phase of liberalisation has also freed the cap on executive pay and profit sharing. This has contributed to the growing income inequality in the country. Furthermore, while there is no ceiling on executive pay, bonus for workers remains capped. In 2007, the bonus ceiling for workers was raised after a gap of 14 years and is still below the wages of skilled workers hence continuing to contribute further to the inequality. With the economic slowdown, as unemployment has increased workers are increasingly falling back on premature withdrawal of Provident Fund to tide over the present crisis. The Mumbai regional Provident Fund office alone received 15,000-20,000 withdrawal applications in excess of the normal count over the past couple of months.
This is the context in which trade unions in the organised sector function today. Unions in the private sector attempting militant struggles to uphold the two fundamental rights of workers of right to association and right to collective bargaining have to face the joint might of corporates and the state machinery. Attempts at union assertion are met with victimisation and mass dismissals. Police are used to forcibly quell peaceful struggles, as states compete with each other to show how investor friendly they are. The police attack on protesting Honda workers was not a stray incident. The never ending cycle of unfair labour practices committed by employers go unaddressed by the government and collect dust with the judiciary, significantly undermining trade union rights.
However the global economic meltdown has opened up an opportunity for political change. Across the world, there is a definite move towards greater regulation and greater equity. This is a situation when trade unions are regrouping and collectively confronting the political establishment for better regulation of labour rights, and greater control over industry and capital. However the regrouping has to be on clearly defined positions. It has to be in opposition to the dominant political parties, all of whom in less or greater degree, have an ideological position that is pro-capital and anti-worker. The advance has to within a framework of trade union democracy, at a time when the country is facing violent suppression of all forms of dissent. For in reality Indian workers need more and not less regulation.
The author is President of the New Trade Union Initiative.
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