[Reader-list] Fwd: Labour Issues: Warning signals

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From: Vivek Sundara. <viveksundara at gmail.com>
Date: 26 June 2014 18:31
Subject: Labour Issues: Warning signals
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  [image: Return to frontpage] <http://www.frontline.in/>
   The Nation <http://www.frontline.in/the-nation/>
Published: June 25, 2014 12:30 IST | Updated: June 23, 2014 15:25 IST
 Labour Issues
Warning signals
   Show Caption
      Trade unions feel that the Rajasthan government's proposed amendments
to labour laws, which industry representatives have hailed, have serious
implications for workers. By T.K. RAJALAKSHMI

IF there is one area of governance in which the Bharatiya Janata Party-led
National Democratic Alliance government has been moving with alacrity, it
is labour law reforms. The President's speech, articulating the blueprint
for the government, was largely silent on labour, industrial as well as
agricultural, while a good portion of it appeared to have a pro-industry
tilt with a hidden emphasis on less government regulation. The BJP's
election manifesto had promised to review labour laws. The party stated
that it would invite all stakeholders to review laws that were outdated,
complicated and even contradictory. Interestingly, this was the stated
position of the previous Congress-led United Progressive Alliance (UPA)
government too, but it could not make any major changes in the laws as all
trade unions, including the Indian National Trade Union Congress (INTUC),
which is affiliated to the Congress, were opposed to the proposal. The BJP
is taking this policy forward. The first move in this direction was made
not at the Centre but in Rajasthan, where it runs the government.

The Vasundara Raje government cleared a Cabinet proposal to amend three key
laws--the Industrial Disputes Act, 1947; the Contract Labour (Regulation &
Abolition) Act, 1970; and the Factories Act, 1948--on the plea that it would
generate employment, encourage investment, and lead to economic growth.
Predictably, industry and wide sections of the mainstream media welcomed
the move and exhorted the Central government to follow suit. Some sections
even argued that liberalisation of labour legislation was a *sine qua non*
for employment generation. The amendments have to be passed by the State
Assembly. They become law after getting presidential assent. Article 254 of
the Constitution allows the States to enact laws on subjects listed in the
Concurrent List, contingent on presidential assent.

The Rajasthan government's proposals include applying the Contract Labour
Act to firms employing more than 50 persons rather than 20, which means
that units employing fewer than 50 workers are not bound by the contract
labour legislation. Similarly, it proposes to exempt units employing up to
20 workers and using power from the protective coverage of the Factories
Act. At present, the law applies to units using electricity and employing
up to 10 workers. Factories that do not use power and which employ up to 40
workers are exempted from these provisions. This effectively means that no
labour law will apply to units that are not registered under the protective
legislation of the Factories Act. More worryingly, under the proposed
amendments, employers can retrench up to 300 workers without the
government's permission--the present ceiling for retrenchment without
permission is 100. Even the formation of a union has been made difficult.
The existing law permits 15 per cent of the workforce in a production unit
to form a union. This has been raised to 30 per cent.

The Cabinet decision was taken on June 5 on the basis of a proposal
prepared by the Department of Labour. The Cabinet gave the green signal on
the grounds that the amendments would encourage employment, reduce
"inspector raj" as far as small units were concerned and reduce industrial
disputes. The proposed amendments have not gone down well with the trade
unions, including the State unit of the BJP-affiliated Bharatiya Mazdoor
Sangh (BMS). On June 10, during the debate in the Lok Sabha on the motion
of thanks to the President's address, the Congress' Leader of the House
Mallikarjun Kharge, who was Labour Minister in the UPA government, referred
to the reforms by the Rajasthan government. But Arjun Meghwal, BJP MP,
denied that any reforms had been introduced and claimed that they were only
proposals.

"It is a serious issue. All unions in the State have opposed it. The
Congress, which is in the opposition, is not doing anything about this. The
Left parties and the trade unions are going to take to the streets on the
issue," Vasudev, secretary, Communist Party of India (Marxist), told
*Frontline* from Jaipur. Ravindra Shukla, president of the State unit of
the Centre of Indian Trade Unions (CITU), said that all the State's trade
unions were on the same page on the issue. "What was the hurry? The
Assembly meets next month. The Chief Minister could have waited till then.
The idea is to get presidential assent before June 30 and then, after six
months, bring an ordinance to get the changed labour laws working," he
said. The most dangerous provision, he said, was the right given to
employers to retrench workers without notifying the government. "This means
that any unit employing 299 workers can be closed without a hitch. If this
is not hire and fire, then what is?" he asked, adding that this was easier
said than done. In 1982, Prime Minister Indira Gandhi proposed similar
amendments, but following opposition by trade unions she withdrew them.
Similarly, the proposed changes to the Contract Labour Act were fraught
with implications for the worker as essentially they removed all
liabilities from the principal employer, he said. "At present, the
principal employer gives the contract to a contractor who employs workers.
But in the event of any labour law violation, including non-payment of
wages, it is the principal employer who is held responsible. But with the
new changes, no one can be held accountable. The worker is completely
vulnerable," said Shukla.

Industry representatives, such as the Indian Staffing Federation (ISF),
have welcomed the Vasundara Raje government's move as a test case for the
Centre and other States. The ISF, which provides temporary staff, aims at a
"suitable, legal and regulatory environment that is positive and conducive
to industry that will facilitate job creation". It believes that India
needs flexible labour laws in the formal sector and that flexi-jobs are
associated with higher labour market transition as well as higher
employability.

A leading staffing company went to the extent of saying that there was no
need for the Factories Act. In a statement issued on June 10, Sanjay
Bhatia, president of the All India Organisation of Employers (AIOE),
welcomed the proposed amendments as "bold and positive measures" that would
promote employment generation. Justifying the changes in the Industrial
Disputes Act, he said the introduction of the system of strike notice and
strike ballot, which is in vogue in developed economies, would curb the
number of unwanted and unjustified strikes. He said amendments in labour
laws were critical to meet the target of creating 100 million jobs and
increasing the share of manufacturing in the gross domestic product (GDP)
from the existing 16 per cent to 25 per cent.

Industry associations in Rajasthan were also quick to welcome the decision.
The chairman of the Rajasthan Committee of the PHD Chamber of Commerce and
Industry (PHDCCI) said "other reform-oriented States would soon follow suit
as its [amendments] consequences would lead to enhanced productivity of all
stakeholders in the labour market". He said the State government had
"signalled its sincerity and seriousness to implement measures, contained
in its agenda for labour reforms". The PHDCCI described the Rajasthan
government's proposals as a move in the right direction. Its president,
Sharad Jaipuria, said the move was "worthy of appreciation and deserves to
be vastly welcomed". He pointed out that industry had been seeking labour
reforms for enhanced productivity, work stability and a healthy work
culture for decades.

*Labour Ministry's proposal*

The day after the State Cabinet gave its nod for the proposed reforms, the
Union Labour Ministry issued a circular inviting comments and suggestions
from all concerned to effect amendments in the Factories Act, which include
relaxing the norms for women to work in certain industrial segments, and
increasing the number of working hours and overtime. The trade unions have
dismissed the method of inviting comments as ridiculous as they feel these
issues need tripartite dialogues and not a laissez faire kind of approach.

The Ministry has proposed some 54 amendments in 61 Sections of the
Factories Act. The amendments appear worker-friendly, making it difficult
for unions to reject them outright. They include enhancing the role of
State governments in establishing safety norms for health standards in
factories; providing for harsher penalties for health hazards, which
encompasses a new provision that enables the Central government to frame
rules relating to some important aspects of occupational safety and health;
and mandating the use of safe machinery and the provision of safe drinking
water, shelters, rest rooms, sanitation, lighting and staircases. One
amendment claims to introduce gender parity by seeking to allow the
employment of women in areas requiring examination of machinery and on
night shifts.

Other provisions include doubling the limit of overtime from 50 hours a
quarter to 100 hours in some cases and from 75 hours to 125 hours in areas
involving work in the public interest and reducing to 90 days from the
existing 240 days the period for which an employee must work to become
eligible for benefits such as leave with pay.

One union representative rejected the idea of sending comments on the
proposed amendments. "This is not the way. Unions cannot be treated this
way. There is an established process of dialogue and we expect the
government to follow those norms," he said. Allowing women on night shifts
is not new. "The unions have maintained that having women on night duty is
not a problem as long as adequate safeguards, including home drop
facilities, are provided. Besides, women are already working in night
shifts in the BPO industry. The managements are not ready to take
responsibility," said A.K. Padmanabhan, CITU president. As for overtime, he
said there was hardly any work, and so increasing the limit of overtime
hours would not help.

He said the Narendra Modi government with its minimum government and more
governance formula had given an impression that labour laws were a
hindrance to job creation. The Rajasthan government, he said, had promised
to create 1.5 million jobs, and easing labour norms appeared to be a
precondition for that. "We say implement the labour laws, the government
wants to reform the labour laws. If it is bonded labour that they are
talking about, we have no issues. We are against that. But it must be made
clear that if any labour law needs to be changed, it has to be done with
the consent of the unions. No sensible person will agree with the Rajasthan
government's proposal that diluting some crucial provisions in the three
labour laws concerned will create more jobs," he said.

Amendments were proposed to the Trade Union Act as well. At present for a
union to be registered, a minimum of seven people are required to give
their consent to move an application for registration. The Act prescribes
that either 10 per cent of the workforce or 100 workers, whichever is
fewer, who are engaged or employed in the establishment and who are members
of the trade union, can register a union. In the name of reducing the
burden of dealing with multiple unions, proposals were being mooted to make
the formation of unions difficult. It was pointed out that in all
agitations in recent times involving automobile majors, the problem was not
the multiplicity of unions but the reluctance of the managements to
recognise the worker-elected unions as opposed to the management-selected
ones.

Going by the Centre's silence on Rajasthan's proposals, it can be assumed
that there is support, if not overwhelming approval, for its measures. If
the observations of Modi on the state of the economy are any indication, it
will be no surprise if labour laws are diluted to make retrenchment easy
and hire and fire a convenient method of employment, all in the name of
tightening the belt and improving employability.

Printable version | Jun 26, 2014 6:28:23 PM |
http://www.frontline.in/the-nation/warning-signals/article6141733.ece

(c) Frontline


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