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BW Businessworld

Workers Need More Security

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India's business elite has been hankering after legislative reforms to free the laws governing the labour market. The present phase of capitalist development began in the 1980s, when the post-war Bretton Woods system collapsed. To achieve this, the product markets were first restructured. Around the world, this was accompanied with violent repression of workers' rights. The International Labour Organization's (ILO) World of Work Report 2008 records that from 1990 onwards, wage inequality has risen across the globe including in India.


One of the most significant attack of industry has been on employment tenure. This started in the 1990s with a series of voluntary retirement measures in the private sector. Many factories laid off tenured workers, luring them with carrots of large sums of money, along with the stick of violence. The public sector soon followed suit in pressing voluntary retirement schemes (VRS), which was also a 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 lack the mechanism to check the veracity of corporate financial data.


Labour LogoWith the decline in tenured employment came a decline in trade union strength. A major casualty of this resulted in an attack on the right to collective bargaining. Instances of refusal by employers to negotiate with unions, or even recognise unions chosen by workers, are extensive and range from large Indian corporates such as MRF and KEC to MNCs such as Unilever, Hyundai and Bosch.


It was also the period when contract employment became the norm. Legislation for abolishment of contract employment stands diluted. In a bid to further de-regularise, "trainees" are hired to perform tasks of full-time workers. Even in sectors where tenure of employment exists on paper, lack of union strength and weak labour laws has made it a sham. As a result, non-payment of provident fund and gratuity, overtime without payment, harassment at workplace and arbitrary dismissals are rampant.


The only real wage protection, in today's scenario, 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 poverty level. At the end of 2004-05, about 836 million or 77 per cent of the population was earning a sum of Rs 20 per day, which is a fraction of the lowest possible minimum wage in the country (Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, NCEUS, August 2007).


Click here to view enlarged imageThe current 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. With the economic slowdown, workers are increasingly falling back on premature withdrawal of provident fund to tide over the present crisis.


This is the context in which trade unions in the organised sector function today. Unions in the private sector attempting to uphold the right to association and right to collective bargaining have to face the joint might of corporates and the state machinery.


However, the global meltdown has given an opportunity for political change. There is a definite move towards greater regulation and greater equity. This is a situation when trade unions are regrouping and confronting the political establishment for better regulation of labour rights, and greater control over industry and capital. For, in reality, Indian workers need more and not less regulation.


D. Thankappan, Vice-president, New Trade Union Initiative



(This story was published in Businessworld Issue Dated 24-08-2009)


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