Labour laws in this country don’t work. We were treated to a glimpse of the state of affairs a couple of days ago with a front-page photograph of Kasi, a bonded labourer, on his knees clutching the feet of Tamil Nadu officials, begging to be liberated. The caption story said Kasi and 41 others were little better than slaves working over 12 hours a day for timber units in Vellore and Kancheepuram.
Why did Kasi and the others suffer years of oppression despite a gamut of protective labour laws?
As many as 44 Central laws govern working conditions ranging from payment of wages to employment conditions. Many like the Trade Union Act, 1926, are of British vintage. In the recent Budget, Finance Minister Nirmala Sitharaman underlined the need to rationalise India’s multi-layered labour laws under four broad codes — wages, social security and welfare, safety in the work place and industrial relations.
To begin with, post-Budget, the Union Cabinet has approved the first bill that seeks to merge 13 labour laws, including the Factories Act and the Working Journalists and other Newspaper Employees Act.
Is the problem in the structure of the labour laws, which the government now wants to repair? Or, is it the lack of will to implement these laws?
Government thinking behind the labour reforms, as reflected in the Budget proposals, has little to do with providing better protective cover for employees. Rather, the perception is that these laws multiply disputes, make labour aggressive, and therefore, are a hindrance to expanding private and foreign investment.
Speaking on the rationale for merging labour laws, Sitharaman in her budget speech said, “With labour definitions getting standardised, it is expected that there will be less disputes.”
It’s not that the country is seeing a wave of militant worker agitations. In fact, the data available shows that in the three years from 2015 to 2017, the number of strikes across industrial units fell from 97 to 80; and the number of lockouts from 22 to 11. Similarly, the number of man-days lost on account of these labour disputes sharply fell from 29.8 lakh to just 13.5 lakh in 2017.
Looking at the size of India’s workforce, the numbers that got caught in disputes are insignificant. Improved industrial relations are also reflected in the Ease of Doing Business Index released by the World Bank. In the latest Doing-Business-Report released last October, India’s ranking at 100 jumped 23 positions to 77, among 190 countries surveyed.
Hire and fire
The changes in the basic provisions have not been unveiled yet; but one can guess that these will be close to those proposed in the Industrial Relations Code, 2017. They were introduced in the last Lok Sabha too, but were stalled after they ran foul of the trade unions.
One of the more unpopular proposals was that government permission for lay-offs, retrenchment or closure will be required only in establishments employing 300 or more employees. This will water down the current provision in the Industrial Disputes Act, 1947, which makes permission mandatory for all establishments with 100 or more workers.
The Industrial Relations Code also proposes to ban strikes for a period of two months after the mandatory 14-day notice period is over by triggering a mandatory conciliation process. Stiff fines for violations of up to `50,000 fine and/or a jail term have also been proposed. Trade unions have pointed out that a ‘legal’ strike will be virtually impossible under these provisions.
One positive move though is the proposed concept of a statutory National Minimum Wage for different geographical areas. Labour minister Santosh Gangwar has indicated that the base will be not less than `170 a day. Labour being a concurrent subject, states have legislated various levels of minimum wages, some of which are quite poor and discriminatory.
However, the merger of all laws in just four codes may roll back recognition to industry-specific workers. These include legislations like the Beedi and Cigar Workers Act, 1966; the Plantation Labour Act, 1951 and the Mines Act, 1952. Similarly, contract workers require specific protection under the Contract Labour (Regulation & Abolition) Act.
It’s become fashionable among economists and planners to dub our labour laws ‘archaic’ and roadblocks to progress. However, an elementary survey will show us that they are hardly implemented and state governments provide very little machinery to monitor and penalise defaulting employers.
There has been obvious haste in the ‘recodification’ of our labour laws. While examining the provisions, some thinking must also go into ensuring that benefits of the existing laws trickle down to those they were designed for.
Labour disputes on a decline, shows data
The data available shows that in the three years from 2015 to 2017, the number of strikes across industrial units fell from 97 to 80; and the number of lockouts from 22 to 11. Similarly, the number of man-days lost on account of these labour disputes sharply fell from 29.8 lakh to just 13.5 lakh in 2017