40TH SESSION OF INDIAN LABOUR CONFERENCE

TUs Unitedly Resist Retrograde Changes In Labour Laws

Tapan Sen

IN the present era of neoliberalism, the employers have been clamouring shamelessly for full freedom of retrenchment and closure. Now the same clamour is echoed from the highest seat of governance in the country exposing complete domestication of governance by capital. The inaugural address by the prime minister in the 40th Indian Labour Conference (ILC) held on December 9-10, 2005 at Vigyan Bhawan, New Delhi reflected such servile resonance of employers’ chants for labour-market-deregulation. The ILC ended without much substantive conclusion in the absence of any consensus among the three parties – the government, workers and employers. But the conflicting expressions signal a greater onslaught by the employer-government combine in the coming days on the working class.

The main agenda items before the ILC session were: 1) Social security for unorganised sector workers including agriculture sector workers, covering their service conditions, social security and other benefits and 2) Amendment of labour laws.

The CITU delegation to the ILC comprised M K Pandhe, president, Chittabrata Majumdar, general secretary, W R Varada Rajan, Tapan Sen, Dipankar Mukherjee, all secretaries and Raghunath Singh, vice president.

INAUGURAL SESSION

Prime minister, Manmohan Singh, addressed the inaugural session on December 9. Prior to his address, leaders from the central trade unions made brief interventions on the issues facing the working class and the trade union movement. M K Pandhe pointed to the growing onslaught on workers rights and livelihood, in the form of reckless contractorisation, downsizing, retrenchment and desperate violation of labour laws and attack on trade union rights by the employers. Almost on all occasions this is done with the direct patronage of the central government and most of the state governments. At the same time, the employers are demanding further dilution of the existing labour laws to legitimise and institutionalise labour law violations under the unscrupulous plea of encouraging investment, employment generation and upliftment of standard of living, asserted Pandhe. Pandhe also denounced the decision of the government to reduce interest rate on provident fund from 9.5 per cent to 8.5 per cent, announced just on the eve of the ILC session. Pandhe demanded of the prime minister to review such unjust decision and restore the interest rate to at least 9.5 per cent, even if not to the earlier rate of 12 per cent. Thampan Thomas (HMS), Gurudas Dasgupta (AITUC), Girish Awasthi (BMS), Sankar Saha (UTUC-LS), Ashok Ghosh (UTUC) and Naren Sen (NFITU) made a similar demand during their interventions.

The prime minister, in his address, practically echoed the demands of the employers for diluting the existing labour laws in order to introduce a ‘hire & fire’ regime. He was so generous in stating that “the working people supply the blood in the veins of the economy and they should get a better deal” but at the same time preached for the “extreme urgency” for making the labour laws “flexible” so as to introduce “hire & fire” policy. This was in line with and almost in the same language as employers preach on the plea of encouraging investment, employment generation and meeting competition.

Responding to the EPF interest rate issue, raised by the trade unions, the prime minister stated: “All I can say right now is that I can discuss with labour minister what can be done within the resources of EPFO”. But he preferred to remain conveniently silent on the categorical point raised by CITU president that the unilateral decisions, often through his intervention, in reducing the administered interest rate on Special Deposit Scheme (in which major part of the PF accumulation has been parked) has sucked the EPFO of the required resources to maintain a stable interest earning for the crucial social security scheme for the workers.

The main session of the ILC began with the general intervention by the trade unions, employers’ organisation and the state governments. Md Amin, labour minister of West Bengal, chaired the session in the absence of the union labour minister. In his brief remarks, Amin pointed out that the present day ills of unemployment, closures, downsizing etc afflicting our country are the fall out of the economic liberalisation policies. He asserted that all these are clear manifestations of the crisis of capitalism.

M K Pandhe debunked the theory propounded by the prime minister that so called ‘flexibilisation of labour laws’ (read hire & fire) will encourage investment and employment generation and result in upliftment of standards of living. Such a theory does not stand the test of logic, economics or empirical evidence anywhere in the world, including in India and it is unfortunate that an economist by profession as well as prime minister of the country could unhesitatingly preach for such illogical proposition, retorted Pandhe. It is the neoliberal economic policy regime that is responsible for gloomy investment scenario, aggravation of joblessness and deepening poverty in the developing countries including India and what is needed is a directional change in that retrograde policy regime. The UPA government does neither have the moral right nor the authority to plead for “hire & fire” as per the National Common Minimum Programme (NCMP), Pandhe pointed out.

CITU VIEWS

CITU submitted its views and comments in writing on the agenda note circulated by the labour ministry. At the outset, the CITU recorded its anguish over several of the recent unilateral actions initiated by the present government, both on the economic policy front and labour-related matters. It stated that such unilateral actions have been against the basic spirit of ‘consultation and consensus’ underlined in the NCMP. Such unilateral moves in the economic policy front include pushing through PFRDA bill, airports privatisation, so-called banking sector reforms – articulately designed for facilitating mega-merger of nationalised banks and take-over of private sector banks by foreign financial giants – hike in FDI cap in telecom and offering the cable-network created by public sector telecom companies for cheap exploitation by their private sector competitors, disinvestments move in profit-making PSUs, further move to liberalise imports, both in industry and agriculture, under pressure from MNCs etc.

In the labour related matters as well, the government has been indulging in unilateral moves in clear violation of NCMP. Two bills, both pertaining to basic labour rights, have been introduced in parliament without any consultation with the trade unions. The bill titled “The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment and Miscellaneous Provisions Bill 2005” provides handle to the employers to ignore most of the crucial labour laws with impunity. Another bill titled, “Small and Medium Enterprises Development Bill 2005” contains dangerous provisions for taking away a large section of workers engaged in the small and medium enterprises out of the purview of labour laws. The CITU also resented over deliberate inaction of the labour ministry in not rescinding the notification on “Fixed Term Employment” introduced by the previous government despite the fact that the labour minister of the UPA government made announcement to that effect in parliament in July 2004. The CITU demanded immediate action in that direction.

The deliberately non-serious approach of the government towards the urgent task of drawing a comprehensive legislation on social security and service conditions of the unorganised sector workers and agricultural workers, to which the UPA government is committed as per the NCMP, has been pointed out by the CITU. During the span of their 19 months-long governance, the UPA government has been energetic enough to bring bills on SEZ/EPZ, on SMEs and on granting exemptions to employers from their obligations under various labour laws – all affecting the labour in a big way, but they could not feel the urgency of finalising the draft of the bill on unorganised sector workers representing 93 per cent of country’s workforce and contributing 65 per cent to country’s GDP. Despite unanimous recommen-dations made by all the trade unions on the provisions to be incorporated in the proposed Unorganised Sector Workers’ Bill on a number of occasions, whenever asked for, the government went on forwarding repeatedly almost the same draft to the trade unions without making any substantive changes. The government had just been playing with drafts – often posing to be serious on the issue while actually being least serious. In this ILC agenda note, four drafts were circulated without making any effort to synthesise the same to facilitate meaningful discussion to arrive at a quick consensus. For a successful exercise on the subject, the government must make a clear commitment on funding and a well-defined modality of resource mobilisation for the social security corpus to be constituted and the unanimous suggestions made by the trade unions must be factored in into the proposed scheme.

On the proposals made in the agenda note on the ‘Wage Related Labour Laws’, the CITU pointed out that the present wage ceilings in various labour legislations have become obsolete in the present day income levels of the workers for whom they are intended to apply. Hence, the upward revision of the existing wage-ceilings in all the labour laws should be decided on the basis of rise in the price index from the date of its last revision and thereafter the said ceiling should be inflation-indexed. The current upward revision of ceilings in the Payment of Wages Act 1936 should be reworked on the basis of above parameters. It was also stressed that the Payment of Bonus Act should be amended without further delay to remove all ceilings.

In respect of amendments suggested in the Minimum Wages Act 1948, the CITU urged that the Act must incorporate clearly-defined parameters for fixing the minimum wages by state governments as well as by the central government to avoid arbitrariness in the same wage-fixing exercise. Such parameters should be based on formulations made by the 15th Indian Labour Conference together with the direction given by the Supreme Court judgement in the Raptakos Brett case. The Act must also provide for statutory periodic inspection on the implementation of the Act by the enforcement agency and time-bound dispute solution machinery along with stringent provisions of penalty for violation.

In respect of major amendments suggested in the Industrial Disputes Act 1947, the CITU noted that the government had adopted the charter of demands submitted by the employers’ organisations on the issue as its own while the proposals made by the trade unions were totally ignored. The proposals made in the agenda note in this regard are designed to introduce ‘hire & fire’ regime in 85 per cent of the establishments in the organised sector itself and to empower the employers to play with the service conditions of the workers at their whims and fancies. The tenor of the proposals in respect of basic changes in the ID Act unfortunately reflects ganging up of the two social partners, the government and the employers against the third partner, the workers.

The CITU opposed the very idea of declaring the industries/establishments in Special Economic Zones, Export Processing Zones and 100% Export Oriented Undertakings as ‘public utility services’ under ID Act. The CITU also maintained that the establishments pursuing profit should be kept out of the purview of consideration as ‘public utility services’ or ‘essential services’. The approach behind the proposals made in the agenda note aims at liberally branding all kinds of establishments as ‘public utility services’ or ‘essential services’ in order to restrain trade union activities and curtail labour rights irrespective of the fact whether those establishments are having any real import with public utility or essentiality of services or not. CITU rejected such an approach outright. CITU also suggested that the provision for empowering governments to grant exemption from the purview of any or all provisions of the ID Act should be dropped altogether.

In the era of globalisation-driven economic policy regime, the working people are the hardest hit. The productivity of the workers increased substantially and their earnings have simultaneously gone down in real terms along with phenomenal increase in joblessness both among the workers and fresh entrants in the job market. Quality of employment has also gone down substantially. The size of permanent and regular workforce has declined drastically while casual and contract employment increased in large proportion reflecting sharp decline in quality of employment and severe decent-work deficit. In this background, the overall profits have been increasing by leaps and bounds.

CITU SUGGESTIONS

In such a paradoxical situation, all exercises for labour law changes must be oriented towards widening the protection coverage to the most vulnerable section - the workers in the instant case. The CITU, therefore, made a few illustrative suggestions for such directional changes in the legislative exercises pertaining to labour as under:

• The employment level in an establishment for not requiring prior permission for retrenchment and closure as provided in the ID Act should be reduced from existing 100 to 20

• All labour laws must have universal coverage, i.e., there should be no stipulation on minimum employment level of any establishment for granting coverage by all labour laws

• The provision for granting exemption to any establishment either in public or in private sector should be dropped from all labour legislations

• Provisions for regular statutory periodic inspection should be incorporated in all labour related legislations, wherever it does not exist.

• The Minimum Wages Act must be amended to ensure statutory periodic revision of basic wages along with automatic revision of the DA component linked to changes in price index.

• Wage ceilings in Payment of Bonus Act, Payment of Wages Act, Workmen’s Compensation Act etc must be removed.

• Comprehensive legislation on service conditions, job-protection and social security for unorganised sector workers and agricultural workers

• Legislations for negating the pernicious impact of Supreme Court judgement on “right to strike”, the SC judgment nullifying earlier SC verdict on regularisation of contract workers deployed on permanent nature of jobs and also the recent judgment nullifying the right to ‘equal wages for equal work’

CONFERENCE COMMITTEES

On the second day, the ILC was divided into three conference committees to discuss the proposals made in the agenda note on three different subjects viz., 1) Social Security and Service Condition for Unorganised Sector Workers 2) Amendment of Wage related Labour Laws and 3) Amendment of Industrial Disputes Act.

The first group recommended expeditious finalisation of the draft bill on the social security and service conditions of the unorganised sector workers to cover all workers – including home-based and self-employed workers – and setting up of a tripartite committee to complete finalisation of a single draft within a definite time frame. The group also recommended that the central government should shoulder the funding responsibility for floor-level social security benefits. It should also bear the administrative and infrastructure expenditure for the initial period of five years.

In the second group on wage related labour laws there was no consensus between the workers and the employers side on removal of all ceilings under Payment of Bonus Act and even in Payment of Wages Act as pressed for by the unions. Only in respect of Minimum Wages Act, there was consensus on some of the proposals for improvements in the administration of the Act as made in the agenda note.

In the third group on Industrial Disputes Act, there was consensus only on the proposals for improvement of the existing Grievance Redressal Procedure, on empowering the industrial tribunals to enforce their awards and decrees, on salaries and terms and conditions of service of the presiding officers of the tribunals and on direct reference of the cases of termination/dismissal/retrenchment/discharge to tribunal. The group also unanimously recommended that the central government should be the appropriate authority for central PSUs and similarly the state governments for the state PSUs.

But under this item of discussion, the government had floated the substantive proposals for introducing ‘hire & fire’ regime and empowering employers to unilaterally change the service conditions of the workers. It was proposed to amend the chapter V(B) of the ID Act to increase the employment-level in the establishment from 100 to 300, for closure or retrenchment of which there will be no need to take prior permission of appropriate government. This would result in ushering in ‘hire & fire’ regime in around 85 per cent of the establishments. It was also proposed to change the section 9A of the Industrial Disputes Act to empower the employers to change the service conditions of the workers unilaterally. Along with this, the labour ministry also sought to amend the relevant section 2(n)(vi) of the Industrial Disputes Act to empower the appropriate governments to declare any establishment, all establishments in the Special Economic Zones, Export Processing Zones and all export oriented units even outside those zones as ‘public utility services’. It also sought to amend section 36B of the same Act to empower state and central governments to exempt any establishment, including those in private sector, all establishments in Special Economic Zones/Export Processing Zones, Information Technology Parks etc totally from the purview of the ID Act.

All these retrograde proposals, which are designed to empower the employers to retrench at will, change the service conditions of workers and take away all their rights under Industrial Disputes Act, including the right to strike, are measures of so-called flexibility in labour laws being preached by the prime minister in chorus with the employers under World Bank guidance. All these have been resolutely opposed by all the trade unions. Notable is that many of the state governments also opposed the proposals for amendment of chapter VB, section 9A and 36B of the Industrial Disputes Act.

Hence the 40th Indian Labour Conference ended with the outright rejection by the trade union movement of the atrocious proposals of the central government to impose the conditions of slavery on the working class. But the manner in which such an all round assault on labour rights is being planned and piloted from the highest seat of governance, signals the possibility of more aggressive moves in the days to come. The working class must prepare for united countrywide resistance to such designs of slavery.